The Federal Reserve maintained its policy rate in a range between 5.25% and 5.5% on Wednesday while revisions to its Summary of Economic Projections strongly imply that the central bank no longer expects a recession, which it did just six months ago, and is increasingly confident of a soft landing in the ... READ MORE >
policy rate
Fed pauses rate hikes while signaling a tightening bias
The Federal Open Market Committee on Wednesday kept its policy rate in a range between 5% and 5.25% while signaling that it will most likely hike the federal funds rate by 25 basis points at least twice before the end of the year. This implies a possible policy peak of 5.75% later this year. ... READ MORE >
March inflation data points to a Fed rate peak in May
The inflation outlook improved in March because of a mix of year-over-year base effects and a significant decline in energy prices, all of which caused the top-line reading to decline to 5% from 6% previously. The core estimate, which excludes food and gasoline, eased to 5.6%, while the ... READ MORE >
Financial shock sending Fed proxy rate into restrictive terrain
The financial shock affecting the U.S. economy will most likely result in tightened lending standards, tip the economy into recession this year and cause mild disinflation. The quandary faced by the Federal Reserve—balancing price stability, full employment and financial stability—requires an ... READ MORE >
Coordinated central bank action follows the Credit Suisse-UBS merger
Global financial stress accelerated over the weekend, requiring coordinated action by central banks to stem dollar funding pressures in financial markets as investors digested the forced merger of Credit Suisse and UBS. Large additional tier one bondholder losses amid the $275 billion ... READ MORE >
February’s jobs report is likely to generate more questions than answers
The February jobs report will most likely provide another questionable estimate of labor conditions in the American economy, overstating the pace of hiring in the private sector. We expect a net change in total employment of 310,000 when the data is released on Friday, with many of the gains ... 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 >
FOMC preview: Fed to slow pace of rate hikes to 25 basis points
The easing of inflationary pressures, a slower pace of consumer spending and hiring, and the moderation of wage increases are coalescing in such a fashion that the Federal Open Market Committee next week should be comfortable slowing its rate increases. We anticipate that the FOMC will increase its ... READ MORE >
FOMC decision: Fed lifts policy rate to range of 4.25% to 4.5%
The Federal Reserve on Wednesday laid the groundwork for an eventual pause in interest rate increases early next year, even as it indicated it intends to continue lifting rates into a slowdown. The projection of a slowdown, which is in the Summary of Economic Projections released after the Federal ... READ MORE >