The message was loud and clear from multiple Federal Reserve officials: interest rates will stay higher this year, the benchmark rate might increase, and it is unlikely there will be any rate cuts this year. Inflation is an issue that is still plaguing monetary policymakers, and restoring price stability, even in the face of a…
Federal Reserve Officials Plan for Higher Rates as Inflation Threat Persists
Fed Officials Say Don’t Bet on Rate Cuts Even If There’s a Recession
Two senior Federal Reserve officials threw cold water on investor hopes for interest-rate cuts anytime soon as they both expressed concern about stubborn inflation. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, highlighted the stickiness of inflation while saying that he does not anticipate any interest-rate cuts this year and, if anything, “we may have…
Jay Powell: Anti-Hero
Commentary If you’re looking for a spirited argument in favor of preserving and perpetuating the independence of a central bank from political pressures and the whims of the mob, you won’t find better than the words of none other than Federal Reserve Chairman Jerome Powell. “Long experience, in the United States and in other advanced…
Recession Odds Rise to Highest in 40 Years: Fed
The odds that the United States will fall into a recession at some point over the next 12 months have risen to a 40-year high, according to a probability model from the New York Federal Reserve. The probability that the country will enter a recession within the next year has risen to 68.2 percent, according…
Biden Nominates Philip Jefferson as Federal Reserve Vice Chair
Federal Reserve Governor Philip Jefferson has been nominated by President Joe Biden to serve as the central bank’s next vice chair. If confirmed by the Senate, Jefferson would replace Lael Brainard, who resigned from her position in February to become the president’s chief economic adviser. He was widely expected to become the next Fed’s second…
Federal Reserve Governor: Climate Change Doesn’t Pose ‘Material’ Risk to US
May 12, 2023
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Federal Reserve Gov. Christopher Waller said that climate change does not present a “sufficiently unique” risk to the U.S. financial system. Regarding climate change, or the theory that the Earth’s temperatures are warming due to human activity, “I do not believe it poses a serious risk to the safety and soundness of large banks or…
Top Fed Official Warns Inflation Still Too High and More Rate Hikes May Be Appropriate
A senior Federal Reserve official said that the latest price data show inflation is still too high to warrant an easing of monetary policy and may even require further interest rate hikes The remarks deliver a counterpoint to growing market expectations for a so-called Fed pivot. Michelle Bowman, who sits on the Fed’s Board of…
Large Banks at Risk of Deposit Runs, Despite Size
Commentary Putting aside fraud or criminal activity, banks typically fail in one of two ways: either through insolvency or illiquidity (or both). Insolvency occurs when the bank doesn’t have enough assets to cover its liabilities. Insolvency tends to emerge gradually; for example, when it develops from deteriorating “main street” economic conditions. On the other hand,…
Banks Tighten Lending Standards in Wake of Failures: Fed Survey
A Federal Reserve report Monday showed banks raised their lending standards for business and consumer loans after the collapse of three large banks. More lenders are tightening their standards in the wake of increasing turmoil within the banking sector, according to the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey (SLOOS). The survey also found…
Bank of England Suffers From Groupthink, Peers Told
The Bank of England (BoE) needs to increase its intellectual diversity in order to combat groupthink, a House of Lords committee heard. Martin Wolf, chief economics commentator at the Financial Times, said members of the bank’s Monetary Policy Committee (MPC) appeared to have voted “all in lockstep for a very long time.” But the risk of…
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