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Post by Admin/YBB on Jun 14, 2023 12:01:42 GMT -6
FOMC Statement, 6/14/23www.federalreserve.gov/newsevents/pressreleases/monetary20230614a.htmJune 14, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators suggest that economic activity has continued to expand at a modest pace. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated. The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5 to 5-1/4 percent. Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued June 14, 2023www.federalreserve.gov/newsevents/pressreleases/monetary20230614a1.htmYBB NotesHawkish-hold, so the fed funds remain at 5.00-5.25%, but it could go up by 25-50 bps by 2023YE; the (bank) reserve balance rate is 5.15%; the discount rate is 5.25%. The pause now is to let the effects of Fed actions so far work given some lag. The 2-yr is a good indicator of where the fed funds may be going. The Fed doesn't want to surprise the markets (so, monitor CME FedWatch). Any Fed rate cuts may not be for 2 years. The QT continues at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS. The large Treasury issuance will further reduce financial liquidity. The Fed balance sheet is declining. The Fed is keeping an eye on money-markets. But the Fed only watches the Treasury and fiscal (by Congress) actions. The economy has slowed. The inflation has moderated but is still high (PCE +4.4%, core PCE +4.7%). The service inflation is sticky. The goal remains average +2% inflation to be achieved without causing much damage to the economy. Soft landing is possible. The labor market is tight and wages will rise, but slower growth will be desirable; labor demand still exceeds supply. The consumer spending is also strong. The Fed can only watch the news on labor strikes. Housing has slowed due to higher mortgage rates and lease renewals have been weak. Regional banking has stabilized. Credit conditions have tightened. Many small banks have significant CRE exposures and some may have trouble. The Fed is keeping an eye on systemic risks in banks and nonbank financials (that is where problems were during the pandemic). Edit/Add, 6/15/23. The CME FedWatch has to adjust a LOT to fit the Fed's narrative of possibly 2 more hikes in 2023, and no cuts for almost 2 years (Powell said so). Powell also said that he/Fed/FOMC don't want to surprise the markets, so expect lot of Fed speakers jawboning the markets into line. The CME Fed watch this AM shows hike-hold-hold-hold-cut.... www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
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Post by Admin/YBB on Jul 26, 2023 12:01:28 GMT -6
FOMC Statement, 7/26/23 www.federalreserve.gov/newsevents/pressreleases/monetary20230726a.htmJuly 26, 2023 Federal Reserve issues FOMC statementFor release at 2:00 p.m. EDT Recent indicators suggest that economic activity has been expanding at a moderate pace. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated. The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued July 26, 2023www.federalreserve.gov/newsevents/pressreleases/monetary20230726a1.htmMore details to follow. YBB NotesFED FUND rate hiked by +25 bps to 5.25-5.50%; bank reserves rate 5.4%; discount rate 5.5%. Discount Window use is up and that is being encouraged. More rate hikes are possible but at slower pace. Monetary policy is restrictive as the real fed fund rate is positive. No rate cuts in 2023, but may be in 2024 as inflation approaches +2% average target. Credit conditions have also tightened, an expected effect of Fed tightening. QT continues for Treasuries at -$60 billion/mo, for MBS at -$35 billion/mo. QT may moderate when it's time to cut rates. INFLATION is still too high, but headline inflation is down more than core inflation. Longer-term inflation-expectations are moderate. Pandemic and Russia-Ukraine war (economic) effects have normalized. The expiration of the safe grain-corridor deal has raised grain prices some, but that isn't a huge concern for now. JOBS market remains strong, unemployment rate remains low despite fed rate hikes. HOUSING, being rate sensitive, is affected as 30-yr mortgage rates are 7%. Existing homeowners don't want to move because of their low-rate mortgages, but supply of new homes is coming. ECONOMY remains resilient and strong. Effects of monetary policy lag, but these days, there are also some anticipatory moves. The Fed staff doesn't see recession, but only a soft landing. REGIONAL BANK situation has stabilized. The latest BANC + PACW merger is normal consolidation among the affected regional banks. But the Fed is keeping an eye on the situation.
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Post by Admin/YBB on Sept 20, 2023 12:01:22 GMT -6
FOMC Statement, 9/20/23www.federalreserve.gov/newsevents/pressreleases/monetary20230920a.htmSeptember 20, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have slowed in recent months but remain strong, and the unemployment rate has remained low. Inflation remains elevated. The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued September 20, 2023www.federalreserve.gov/newsevents/pressreleases/monetary20230920a1.htmYBB Notes
FED FUND rate held at 5.25-5.50%; bank reserves rate at 5.4%; discount rate at 5.5%. Possibly 1 more hike in 2023. Real & nominal rates may change differently. The base effect is in y-o-y, but the Fed also looks at monthly (m-o-m) and shorter terms changes over rolling 3m or 6m. There is some yield-curve adjustment - longer-term rates are rising more than short-term rates & that may be because stronger economy, higher supply of Treasuries, etc. Interest rate sensitivity of the economy isn't what it used to be - may be the business & household balance sheets are stronger, some consumer savings remain. QT continues for Treasuries at -$60 billion/mo, for MBS at -$35 billion/mo (Total QT -$95 billion/mo). New SEPs were available. INFLATION remains high. Fed's target remains +2% average inflation. Core PCE removes distortions from volatile food & energy, but nominal PCE is also important. Monetary POLICY remains tight - rates are higher, real rates are positive, neutral rate may be higher, ongoing QT, tight credit conditions, known lag effect of monetary policy. ECONOMY is solid. LABOR market is strong. SOFT LANDING is plausible. EXTERNAL FACTORS - high oil/gas/gasoline prices, labor strikes, possible government shutdown, etc. There are many uncertainties around. But pandemic related distortions seem to have unwound. CONSUMER confidence low. Consumer credit rising. Surveys tend to be more negative, but consumer spending is strong. Higher rates affect households differently according to their wealth levels. There are ad-hoc surveys of nonprofits and community groups to assess what may be going on with low/moderate income groups. HOUSING is mixed. Measurements are via OERs & rent/lease increases have moderated. Housing supply is constrained. High mortgage rates discourage existing homeowners (with low-rate mortgages) from moving.
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Post by Admin/YBB on Nov 1, 2023 12:26:59 GMT -6
FOMC Statement, 11/1/23www.federalreserve.gov/newsevents/pressreleases/monetary20231101a.htmNovember 01, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated. The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued November 1, 2023YBB NOTES Rates were held - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. 1 more hike is possible. Dot plots aren't policy, but just an indication of the current FOMC thinking. QT continues at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS; total QT -$95 billion/mo. No plans to tinker with it. Its impact on LT rates is small and indirect. Fed intent is for monetary policy to be restrictive so that it can slowdown from above-trend economic growth to below-trend growth. Moreover, the Fed policy works with some lag. The Fed is not devoting lot of time to theoretical matters such as the neutral rate, etc. The Fed is aware that there will be some pain from its policies. Housing has already been impacted by 8%+ mortgage rates. Small businesses are also suffering. But the inflation target remains at +2% average. The base assumption is still soft landing, not recession. Job market has been strong. But wage growth has moderated. LT rates have moved up due to a variety of factors, but the Fed only controls the ST rates directly. Higher LT rates do add some to monetary tightening. Banking conditions are being monitored for stresses (including for their HTM & AFS holdings losses). Sufficient liquidity will be provided and the current programs will be reviewed on expiration. Basel III capital proposals are still in the comments period. Caps on card swipe fees are also in the comments period. Risks include higher oil prices, labor strikes (UAW just settled), geopolitical - Israel-Hamas, Russia-Ukraine, etc.
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Post by Admin/YBB on Dec 13, 2023 13:06:52 GMT -6
FOMC Statement, 12/13/23www.federalreserve.gov/newsevents/pressreleases/monetary20231213a.htmDecember 13, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued December 13, 2023www.federalreserve.gov/newsevents/pressreleases/monetary20231213a1.htmYBB NotesRates were maintained - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. Rates are at/near peak. Rate cuts are possible in late-2024 or 2025. LT rate decline is market-driven. QT continues at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS; total -$95 billion/mo. Total QT so far -$1.2 trillion. The QT policy is independent of the rate policy. However, the Fed monitoring declining Fed balance sheet and bank reserves. Inflation has come down without hurting the jobs market, but it is still high. Fed +2% average inflation target is reiterated. The public may be unhappy because prices remain high, but low inflation won't fix that. May be rising wages can address some of that. Monetary policy is restrictive and acts with some lag. The Fed got behind the curve in starting the tightening and doesn't intend to repeat that error. Job market remains strong, but wage growth has moderated. Economy has slowed down. But it isn't expected to fall into a recession. Soft landing remains possible. Housing is flat due to high mortgage rates. New CPI data on Monday and PPI on Tuesday affected some of the SEPs.
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Post by Admin/YBB on Jan 31, 2024 13:05:10 GMT -6
FOMC Statement, 1/31/24www.federalreserve.gov/newsevents/pressreleases/monetary20240131a.htmJanuary 31, 2024 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have moderated since early last year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued January 31, 2024www.federalreserve.gov/newsevents/pressreleases/monetary20240131a1.htmNotes by YBBRates were maintained - fed funds 5.25-5.50%, bank reserve rate 5.4%, discount rate 5.5%. Rates have peaked, but cuts may only be later in 2024. QT continues at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS; total QT -$95 billion/mo. Cumulative QT so far is -$1.3 trillion. The pace of QT may be lowered in the near future. Inflation is lower but is still too high vs +2% average target; inflation-expectations are lower. Monetary policy is restrictive as the fed fund rate > inflation-expectations. There was a lot of discussion on whether the Fed has enough confidence on the good progress made so far on inflation, economy and labor, but Powell won't commit to any timetables. Economy is strong. Labor market is tight. Both are normalizing. Housing is weak, being very rate sensitive. Lower equivalent-rents will show in the inflation data. But housing isn't Fed's direct concern; its focus is on inflation and jobs. Fed meeting with local businesses are useful for information not yet in the data.
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Post by Admin/YBB on Mar 20, 2024 12:06:54 GMT -6
FOMC Statement, 3/20/24www.federalreserve.gov/newsevents/pressreleases/monetary20240320a.htmMarch 20, 2024 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued March 20, 2024www.federalreserve.gov/newsevents/pressreleases/monetary20240320a1.htmPost Conference Notes by YBBRates were maintained - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. Rates may be higher for longer; need more confidence in progress towards inflation goal. No specifics provided for June cut. Current policy is restrictive. Financial conditions are tight. QT continues at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS; total -$95 billion/mo. Cumulative balance sheet reduction -$1.5 trillion. There was some talk of slowing down QT & being monitored are money-markets, bank reserves and liquidity. Inflation is still too high; there are some sticky areas. Target is +2% average "over time" (mentioned several times). Labor market remains tight, wages are going up at a slower pace, unemployment rate is near target. Economy is in good shape also. Housing contribution to CPI, PCE, etc is via OERs (owners' equivalent rent) & that should be lower in due course. Fed is studying & keeping up with the developments on digital currencies, CBDC, fin tech, but isn't working on a launch of digital-dollar unless Congress approves first. Fed transparency is good as-is. There were new SEP data.
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Post by Admin/YBB on May 1, 2024 12:04:53 GMT -6
FOMC Statement, 5/1/24www.federalreserve.gov/newsevents/pressreleases/monetary20240501a.htmMay 01, 2024 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage‑backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities. The Committee is strongly committed to returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued May 1, 2024 www.federalreserve.gov/newsevents/pressreleases/monetary20240501a1.htmPost-Conference Notes by YBBRates are maintained - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. Rate hike(s) unlikely, but may hold rates as long as necessary. Need more confidence in inflation data before rate cuts. Inflation target remains +2% average. Treasury QT will be reduced from 6/1/24 to -$25 billion/mo (vs -$60 billion/mo now), but MBS QT will remain at -$35 billion/mo; total QT from 6/1/24 will be -$60 billion/mo (vs -$95 billion/mo now). The Fed policy is restrictive (despite real rates < inflation rate or GDP growth). Stagflation fears are unreasonable. Economy is strong. Weak Q1 GDP growth may be a fluke. Some differences between the government and private data are normal as there are leads and lags. For example, the market-rents lead the rolling-rents. Labor market remains strong, but wage growth has moderated. The labor pool has increased due to higher labor-participation rates and immigration. This has contributed to both supply and demand side. Consumers see high prices, loan rates and mortgage rates. But significant pain or dislocations aren't expected. Divergent central bank policies aren't a concern because the economic conditions are different. Also, no turmoil is seen in the EMs. Discussions on Basel III are ongoing. The FOMC achieves consensus through discussions despite the impression created by many open-mouths of the FOMC. A customary denial - the Fed doesn't account for politics or elections.
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