A simple look at PCE, core PCE, CPI, core CPI, PPI, and core PPI illustrates that they all reside above the current federal funds policy rate, not to mention the Federal Reserve’s 2% inflation target. … READ MORE >
Federal Reserve
Fed tilts hawkish as Warsh promises price stability
While we think that the July FOMC meeting will be a status quo event, the September meeting will be a live policy meeting where the committee could see movement toward a rate hike if not an outright increase. … READ MORE >
Market Minute: At the FOMC meeting, a rate hike to be determined later
Recent events have caused a reset of investor expectations regarding what and when the Federal Reserve’s next move will be. … READ MORE >
Market Minute: Warsh will face a searing credibility test
How will the new Fed chair balance his stated receptiveness to rate cuts with the recent rise in inflation? … READ MORE >
Inflation heats up as stress on households grows
The personal consumption expenditures index arrived hot for the second straight month in April while inflation-adjusted spending cooled. … READ MORE >
Market Minute: A new inflation regime awaits Warsh
Five-year breakevens since Feb. 27 have increased from 2.445% to 2.72%, the 10-year from 2.25% to 2.5% and the 30-year from 2.19% to 2.3%. … READ MORE >
Fed holds rates steady as debate intensifies
The Federal Open Market Committee maintained its policy rate between 3.5% and 3.75% on Wednesday amid vigorous debate. … READ MORE >
Market Minute: FOMC preview and Powell’s big decision
We expect the Federal Reserve to keep its federal funds policy rate in a range between 3.5% and 3.75% on Wednesday. … READ MORE >
Market Minute: The Fed’s SOMA holdings and the challenge of balance sheet run-off
The System Open Market Account’s weighted average years to maturity is 14.56 years—which is heavily weighted to long-term securities. … READ MORE >
Market Minute: Kevin Warsh and Fed independence
The nominee to succeed Jerome Powell as Fed chair will face pointed questions before the Senate Banking Committee on Tuesday. … READ MORE >