Citing a lack of progress in reducing inflation, the Federal Reserve kept its policy rate unchanged at 5.5% at its meeting on Wednesday, the same rate it has had since July. The policy rate continues to be highly restrictive and will keep the economy cool in the coming quarters. In the statement ... READ MORE >
quantitative tightening
Canada financial conditions update: Stabilization and recovery
Canada’s financial conditions remain underwater for now, signaling slow growth in the first and second quarters of the year after a contraction last year in the third and fourth quarters. As the Bank of Canada said in its December policy statement, higher interest rates are restraining spending. ... READ MORE >
FOMC policy decision: Setting the predicate for rate cuts
The Federal Open Market Committee on Wednesday left is its policy rate unchanged between 5.25% and 5.5% and maintained the pace of quantitative tightening. The committee, however, made major changes to the policy statement that implies a coming upward revision in its economic forecast and a shift ... READ MORE >
FOMC preview: Modest adjustments will lead to pivot by midyear
The FOMC next week will almost certainly leave its policy rate unchanged between 5.25% and 5.5% and maintain the pace of quantitative tightening. The hold in the policy rate should be understood as the Federal Reserve again signaling that it considers rates sufficiently restrictive to bring down ... READ MORE >
Bank of Canada raises rates by a half percentage point
In an effort to target inflation that is at its highest level in decades, the Bank of Canada on Wednesday increased its policy interest rate by 50 basis points, to 1%, and said it would begin to reduce its balance sheet, known as quantitative tightening. The move was widely expected following the ... READ MORE >
FOMC minutes: Fed prepares to shift its policy normalization into a higher gear
The Federal Reserve is preparing to launch the next phase of its policy normalization by drawing down its balance sheet as soon as May to boost rates out along the maturity spectrum and to keep inflation expectations anchored, minutes of the Federal Open Market Committee’s March meeting show. That ... READ MORE >
How the Fed plans to use its balance sheet to craft a soft landing
Key takeaways The Fed will begin reducing its balance sheet by midyear. Expect a roll-off of $2.85 trillion by the end of 2024. The roll-off can be put on hold if economic conditions merit. The Fed is unlikely to sell assets back into the market under current conditions. Risks to the ... READ MORE >