The Federal Reserve on Wednesday signaled that it intends to use both conventional and unconventional tools to address risks to the economic outlook caused by inflation even as the economy remains short of full employment. The major changes to the Federal Open Market Committee statement released after the FOMC's meeting imply that policy normalization ... READ MORE >
Jerome Powell
FOMC preview: Shaping expectations for a major policy shift
The policy objective at Wednesday’s meeting of the Federal Open Market Committee will be to prepare market participants for the major shift in policy that lies ahead: a rate hike in March, another in June, and a balance sheet runoff likely to start in June or July. Policymakers and investors should anticipate no change in the policy rate but should ... 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. In our estimation, Powell’s performance during the worst of ... 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. We expect that the Fed will announce plans to reduce its monthly monetary accommodation of $140 billion in asset purchases by $15 billion a month—$10 billion ... 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 as 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. Should those risks proliferate ... READ MORE >
Jackson Hole preview: Delta variant, tapering, inequality and climate change in focus for the Fed
Each year, the Kansas City Fed’s Economic Policy Symposium in Jackson Hole, Wyo., presents investors and policymakers with the opportunity to consider the composition and direction of monetary policy. Over the past two decades, that policy has been the primary way to stimulate growth as political gridlock prevented the use, until recently, of the fiscal ... READ MORE >
FOMC July meeting: Dovish monetary policy remains in place
The Federal Open Market Committee on Wednesday retained its policy rate at a range between zero and 0.25% as it updated its policy statement to reflect a three-month surge in inflation. The meeting came as the spread of the delta variant spurs new questions about economic growth and brings rising risks to the path of policy and the economy. While the ... READ MORE >
Fed policy decision: Steady as U.S. economy at inflection point
The American economy has entered a period of recovery that will be followed by a robust expansion, leading it almost surely to the pre-pandemic level of output in the near term and a return to full employment in 2022. With the end of the pandemic in sight, the Federal Open Market Committee, at its meeting on Wednesday, noted an improvement in the rate of ... READ MORE >
FOMC preview: Fed to consider adjustments key to the middle market
Much is riding on the Federal Open Market Committee policy rate meeting next week, given recent changes in the economic landscape. Rising growth expectations, increasing interest rates, modestly higher inflation expectations and the recent challenge to the Federal Reserve’s flexible average inflation targeting regime by the fixed income market have ... READ MORE >
Powell statement: Market challenging Fed’s credibility on inflation targeting
The knee-jerk market response that sent the 10-year Treasury yield to 1.54% during Thursday’s speech by Federal Reserve Chairman Jerome Powell implies that the Fed may have to act to dampen yields at the long end of the curve. That may be necessary to reinforce its policy regime of flexible average inflation targeting adopted last year, and to bolster the ... READ MORE >