Commentary Is the Fed trying to wean the markets off monetary policy? Such was an interesting premise from former British diplomat Alastair Crooke via the Strategic Culture Foundation, to wit: “The Fed however, may be attempting to implement a contrarian, controlled demolition of the U.S. bubble-economy through interest rate increases. The rate rises will not slay…
Is the Fed Trying to Wean Markets Off Monetary Policy?
January 7, 2023
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Fed’s Bullard Says Prospects for a US Soft Landing Are Rising
St. Louis Federal Reserve leader James Bullard expressed optimism on Thursday that the new year could finally bring relief from inflation, adding the risk of a U.S. recession has fallen in recent weeks. The rate-setting Federal Open Market Committee “has taken aggressive action during 2022, with ongoing increases in the policy rate planned for 2023,…
US Inflation Will Be Much Lower by End of 2023: Yellen
U.S. Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in U.S. inflation in 2023, barring an unexpected shock. “I believe by the end of next year you will see much lower inflation if there’s not … an unanticipated shock,” she told CBS’ ’60 Minutes’ in an interview released Sunday. Asked about the likelihood…
Fed’s Mester Says She Supports Smaller Rate Hike in December
The Federal Reserve can downshift to smaller interest rate hike increments from next month as it fine-tunes its policy actions to help bring down high inflation while keeping the economy humming, Cleveland Fed President Loretta Mester said on Monday. “I think we can slow down from the 75 at the next meeting. I don’t have…
Real Impact of Fed Hikes Likely Bigger Than What Target Rate Implies, Daly Says
San Francisco Federal Reserve President Mary Daly said on Monday the real-world impact of the U.S. central bank’s interest rate hikes is likely greater than what its short-term rate target implies. Against the Fed’s current short-term target rate of between 3.75 percent and 4.00 percent , Daly said some researchers have found “the level of…
Inflation Relief? Not Likely
Commentary Financial markets reacted gleefully to the Labor Department’s October consumer price index (CPI) release. It showed an extension of the modest relief from the terrifying figures of last spring. Investors seemed to think that inflation pressures were dissipating and that perhaps the Federal Reserve (Fed) might ease up on raising interest rates and on…
Fed May Slow Pace of Rate Hikes Soon: Brainard
The Federal Reserve will likely soon slow its interest rates hikes, Fed Vice Chair Lael Brainard signaled on Monday, as the U.S. central bank tries to figure out how high borrowing costs need to go and how long they should stay there to bring down inflation. “I think it will probably be appropriate soon to…
Policy Phase Lag Can Lead to Over Tightening
Commentary Since the previous Federal Open Market Committee (FOMC) meeting, where the Federal Reserve (Fed) reiterated a longer-than-expected rate hike and a later-than-expected rate cut, the shorter market rates then edged up. Yet, Fed funds futures show the terminal rate stayed at around five percent and moved within a small range of plus or minus…
The Treasury Market Is the Fed’s Next Crisis
October 24, 2022
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Commentary The Federal Reserve’s next crisis is already brewing. Unlike 2008, where subprime mortgages froze counter-party trading in the credit markets as Lehman Brothers failed, in 2022, it might just be the $27 trillion Treasury market. When historians review 2022, many will remember it as a year when nothing worked. Such is far different than…
Fed’s Harker Says Rate Hikes Could Be ‘Well Above’ 4 Percent by Year End Amid ‘Disappointing Lack of Progress’
Philadelphia Federal Reserve President Patrick Harker on Thursday said he expects the central bank will raise interest rates to “well above” 4 percent this year in an effort to tame soaring and persistent inflation. Harker made the remarks during a speech at an event with the Greater Vineland Chamber of Commerce in Vineland, New Jersey, CNBC…
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