Economists and investors alike are speculating that the Fed could announce a second hike to the discount rate, after increasing its spread over the fed funds target rate to 50bps–compared to its historical level of 100bps. Some investors, despite Fed comments to the contrary, perceived the move as prelude to more significant tightening, be […]
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FOMC
Chairman Bernanke recently indicated that the Fed was considering an increase in the discount rate, which tends to mean it is going to happen and soon. It happened, the Fed this evening announced an increase in the discount rate to 0.75% from 0.50%, moving it closer to its pre-crisis spread to the Fed Funds Rate […]
According to CNBC, James Bullard,President Federal Reserve Bank of St. Louis, indicated in an interview today that *he does not believe the Fed will begin hiking interest rates, until after they start selling off some assets. He anticipates that the Fed could begin selling assets during the second half of this year. Bullard had this […]
As anticipated the FOMC reaffirmed that it “will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions…are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” But, a hawkish sign came in the form of a dissenting […]
As the invisible hand of the market continues wrestling the imprudent hand of governments; consequences will be felt across the globe as one hand hits the table… Government stimulus and monetary policy has undoubtedly led us out of one of the worst recessions since the Great Depression, but what impact will these policies have on […]
There is no doubt that this week’s FOMC meeting will steal the economic headlines, however, the result is likely to be rather anticlimactic. I do not anticipate any major changes to the FOMC’s statement, and certainly no shift in the target rate—despite last month’s better than expected employment data. The Fed will not view a […]
With the first week of November comes a wave of important economic data—plus a few key earnings announcements—important macro releases include October’s employment report, an FOMC announcement, and several other indicators that will help gauge the health of the consumer and overall economy. Also important to note is that the ECB, Bank of England, and […]
Overall, the statement seems more upbeat in terms of economic activity, but seems to place a potentially higher risk of deflation, “With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.” The Fed reiterated they will end […]
Undoubtedly the most important item on this week’s calendar will be Wednesday’s FOMC announcement, which is highly unlikely to show any changes to the current policy stance. But, as always, the market will be paying close attention the wording of the FOMC’s statement, which turned slightly more constructive last month indicating that financial markets have […]
Recently, concerns have been mounting over whether or not the Fed may need to consider a more hawkish stance over potential inflationary pressure. Increments over the past several days in the price indices for both the Manufacturing ISM and Non-Manufacturing ISM have only exacerbated these worries. To help quantify this situation I dusted off the […]