The reduction of the Fed’s balance sheet is little understood, but it may end up challenging the conventional wisdom that the Fed will raise its policy rate four times this year. … READ MORE >
Federal Reserve
RSM US Financial Conditions Index: A move toward normal
After nearly two years of extreme accommodation in the financial markets, the RSM US Financial Conditions index eased to 0.96 standard deviations above neutral—a sign that markets are starting to price in more risk. … READ MORE >
Price stability now a paramount concern as inflation hits 7%
The Consumer Price Index rose to a 7% annual rate in December, presenting a challenge to the Federal Reserve as it attempts to restore price stability. … READ MORE >
Monetary and fiscal policy in a changing economy: The Fed’s mandate for price stability
In the year ahead, the economy and financial markets will be influenced by how the Federal Reserve strikes a balance between its dual mandates of full employment and price stability. We examine the challenge of keeping prices stable. … READ MORE >
U.S. December jobs report: Economy has strongest year of job creation on record
The total number of jobs created last year was roughly 6 million as the unemployment rate declined from 6.5% at the start of the year to 3.9%. … READ MORE >
FOMC meeting: Setting the stage for three rate hikes in 2022
The Federal Reserve on Wednesday set the stage for multiple increases in the federal funds policy rate next year by accelerating the tapering of asset purchases to $30 billion per month, up from $15 billion. The tapering should be wrapped up by March. … READ MORE >
U.S. Consumer Price Index: Inflation broadens out as shelter costs rise by 4.8%
The overall Consumer Price Index climbed by 6.8% on a year-ago basis in November, and by 0.8% on the month as inflation continued to broaden out. … READ MORE >
Powell reappointed to lead the Fed, with Brainard elevated to vice chairwoman
The Biden administration’s widely expected reappointment of Jerome Powell as chairman of the Federal Reserve on Monday is a strong step toward providing stability and clarity for financial markets at a time when the central bank is under pressure to accelerate efforts to address inflation. … READ MORE >
Fed slows asset purchases as it moves to end pandemic-era accommodation
The Federal Reserve announced on Wednesday that it later this month would start paring back its pandemic-era monetary accommodation even as it held its policy rate between zero and 25 basis points. … READ MORE >
FOMC preview: Tapering explained
Next week’s meeting of the Federal Open Market Committee will focus on the Federal Reserve’s exit from its pandemic-era asset purchase program that has sent its balance sheet above $8.5 trillion. … READ MORE >