The Federal Reserve is planning to slow the pace of its $120 billion in monthly asset purchases even as it keeps its policy rate at zero, it suggested in its policy statement released on Wednesday. … READ MORE >
Federal Reserve
FOMC meeting: Prelude to tapering amid global financial turbulence
This week’s FOMC meeting is not likely to include any meaningful announcement on tapering its monthly asset purchases and only a modest change in the Fed’s Summary of Economic Projections and dot plot interest rate forecast. … READ MORE >
Fed Jackson Hole conference: Powell reaffirms market expectations
Federal Reserve Chairman Jerome Powell’s widely anticipated comments on the economic outlook did not disappoint on Friday. He reaffirmed market expectations of a slowing in the pace of monetary accommodation before the end of the year while retaining flexibility around the rising economic risks linked to the delta variant. … READ MORE >
CHART OF THE DAY: Why the Fed is likely to talk about the unemployment gap at Jackson Hole
The focus on economic inequality and how monetary policy can address it is at the core of the Economic Policy Symposium hosted by the Kansas City Fed on Friday. The symposium features the theme of “Macroeconomic Policy in an Uneven Economy.” … READ MORE >
Jackson Hole preview: Delta variant, tapering, inequality and climate change in focus for the Fed
Federal Reserve Chairman Jerome Powell is in no hurry to front run the FOMC and announce the timing, magnitude and roadmap of tapering operations that we expect to start in December. What is more likely is that Powell will emphasize the risk to the economic outlook linked to the delta variant. … READ MORE >
Interest rate update: Inflation expectations remain subdued
At present, and because of greater price volatility due to the sudden reopening of the economy, the surge in consumer demand and subsequent supply chain issues, expectations are for the inflation rate in the next few years to move above 2.3% before settling back to roughly 2.25% over time. … READ MORE >
Federal Reserve policy and interest rates in 10 charts
Why the FOMC decided to maintain is accommodative monetary policies, as told in 10 charts. … READ MORE >
FOMC July meeting: Dovish monetary policy remains in place
While the Federal Reserve delivered on the dovish expectations implied by pricing action and market talk, the brief period of extreme optimism inside policy circles has clearly ended. … READ MORE >
CHART OF THE DAY: Yield spread flattens as inflation trade unwinds
The Federal Open Market Committee unleashed a sharp change in market expectations following its Wednesday meeting, helping to curtail inflation fears. The idea of the first rate hike being pulled forward into 2023 with a possibility of 2022 elicited a change in the inflation trade and a resetting of market expectations of inflation. … READ MORE >
A 2021 ‘taper tantrum’? Not likely, but requires monitoring
The potential pulling back or altering the composition of the Fed’s accommodation to the economy via the financial channel will have an impact on interest rates that will directly affect what consumers pay for homes, autos and credit card interest. … READ MORE >