The Federal Reserve is looking to cut its policy rate three times this year, according to information inferred from the Summary of Economic Projections and policy statement released on Wednesday. The cuts would reduce the policy rate by 75 basis points, from the current range between 5.25% and 5.5% ... READ MORE >
monetary policy
Bank of Canada holds rates steady at 5% amid weak growth
As expected, the Bank of Canada on Wednesday maintained its policy rate at 5 per cent and continued its restrictive monetary policies. At the same time, though, its public statements signed a more dovish tone. In softening its rhetoric, the central bank noted the slowdown in the global and domestic ... READ MORE >
Fed signals end of rate hikes and projects cuts in 2024
The Federal Reserve signaled at its meeting on Wednesday that it is done raising its policy rate and is poised to reduce it by 75 basis points next year, with more cuts after that. The Fed also reduced its inflation forecast for next year to 2.8% from 3.3%, and to 2.4% from 2.5% for 2025, which ... READ MORE >
R-star: The role of the natural rate of interest in monetary policy and economic growth
The pandemic has spurred profound changes in the global economy like a tight labor market and elevated inflation that policymakers are only beginning to understand. But one result is clear: The days of historically low interest rates are over. Now, policymakers are wrestling with the question of ... READ MORE >
RSM revises its Fed call as inflation proves sticky
The common thread between the inflation reports for January was a reacceleration in service-based inflation that is proving sticky and is not likely to abate enough for the Federal Reserve to pull back on interest rate increases. For this reason, we are changing our call on the path of monetary ... READ MORE >
Blowout January jobs report likely exaggerates hiring
Seasonal noise always presents problems when estimating the January jobs picture at the Bureau of Labor Statistics, and the first employment estimate of the year serves as a useful reminder not to overinterpret one report. The blowout 517,000-job increase in total employment for January, ... READ MORE >
American consumers grow more cautious as spending falls
American consumers pulled back on their spending for the second month in a row in December amid a continuing economic slowdown and elevated inflation. Also contributing to the decline were weak income growth and the decreasing stock of excess savings. Spending fell by 0.2% in dollar terms and by 0.3% ... READ MORE >
The pandemic response: Improving policies in future crises
This is the third article in a series examining major economic policy responses to the pandemic that targeted small and midsize businesses. The first article looks at the Paycheck Protection Program, and the second looks at the Main Street Lending Program. The economic collapse that accompanied the ... READ MORE >
Home sales dropped by 17.8% last year in biggest drop since 2008
Sales of existing homes fell for the 11th straight month in December, finishing their worst year since 2008, the National Association of Realtors reported on Friday. Still, there is some room left for sales to fall further as the Federal Reserve has signaled that it will continue to tighten monetary ... READ MORE >
U.S. inflation eases in December, supporting a moderation in Fed rate hikes
A third straight month of improvement in top-line inflation data implies that conditions are moving in the direction where the Federal Reserve can consider further moderation in the pace of its rate hike campaign to restore price stability. The tone and tenor of the data imply an underlying ... READ MORE >