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Post by Admin/YBB on Aug 11, 2021 13:43:02 GMT -6
Monetary PolicyDec 21, 2020 at 7:13pm QuotelikePost OptionsPost by Admin/YBB on Dec 21, 2020 at 7:13pm ybbpersonalfinance.proboards.com/thread/16/monetary-policy#MonetaryPolicy refers to the actions of the US #FederalReserve [The Fed] – rate-setting [fed fund rate, discount rate, interest on bank reserves, etc]; buying/selling Treasuries & agency mortgage-backed securities [agency MBS], a process often called QE/QT; serving as lender of last resort to banks; controlling the amount of currency in circulation; providing dollar swap lines to other central banks, etc. Some lesser used tools include setting required bank reserve ratios; initial stock margin [Reg T], etc. So, almost everything related to dollar & money except printing of the currency & issuing the US debt – those are done by the US TREASURY. Federal Reserve Board [FRB] governors/members [full strength 7] are nominated by the President & confirmed by the Senate. The same for the Fed Chair but his/her term is offset by almost 2 years from the Presidential election years. The Federal Reserve system also consists of 12 district FEDERAL RESERVE BANKS headed by their own Presidents – these are mostly privately run but have some public regulatory authority. The NY Federal Reserve Bank [NY Fed] has special role & authority. The Federal Open Market Committee [FOMC] is the US monetary policy making body that has 7 FRB governors [at full strength] & 5 of the 12 district Federal Reserve Bank Presidents on rotating basis. Although all 12 district Federal Reserve Bank Presidents participate in the FOMC meetings, only 5 can vote each year [NY Fed President is always 1 of the 5]. The FOMC meets regularly [8+ times per year]; note that the FOMC has both public & private representations. Monetary policy actions of the FOMC are final & not subject to any further review or approval. FISCAL POLICY is in the hands of Congress. It can legislate tax incentives & spending for infrastructure & other programs to boost the economy. It has done so especially in the times of recession or depression [1929-39]. To be most effective, monetary & fiscal policies should be coordinated, but the reality is different. The Fed can act much quicker on monetary policy. But the Congress is often slower with fiscal policy because the consents of the House, Senate & President are required. Think of fiscal policy as a slow & long political process. #PersonalFinance 12/15/20. ybbpersonalfinance.proboards.com/thread/16/monetary-policyFOMC Statement, 1/27/21 www.federalreserve.gov/newsevents/pressreleases/monetary20210127a.htmJanuary 27, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic. Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Notes www.federalreserve.gov/newsevents/pressreleases/monetary20210127a1.htm
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Post by Admin/YBB on Aug 11, 2021 17:48:55 GMT -6
FOMC Statement, 3/17/21 www.federalreserve.gov/newsevents/pressreleases/monetary20210317a.htmMarch 17, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak. Inflation continues to run below 2 percent. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Notes www.federalreserve.gov/newsevents/pressreleases/monetary20210317a1.htm
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Post by Admin/YBB on Aug 11, 2021 18:16:15 GMT -6
FOMC Statement, 4/28/21 www.federalreserve.gov/newsevents/pressreleases/monetary20210428a.htmApril 28, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Notes www.federalreserve.gov/newsevents/pressreleases/monetary20210428a1.htm
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Post by Admin/YBB on Aug 11, 2021 18:19:19 GMT -6
FOMC Statement, 6/16/21 www.federalreserve.gov/newsevents/pressreleases/monetary20210616a.htmJune 16, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. Progress on vaccinations has reduced the spread of COVID-19 in the United States. Amid this progress and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Notes www.federalreserve.gov/newsevents/pressreleases/monetary20210616a1.htm
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Post by Admin/YBB on Aug 11, 2021 18:22:52 GMT -6
FOMC Statement, 7/28/21 www.federalreserve.gov/newsevents/pressreleases/monetary20210728a.htmJuly 28, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy continues to depend on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Notes www.federalreserve.gov/newsevents/pressreleases/monetary20210728a1.htm
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Post by Admin/YBB on Sept 22, 2021 12:06:50 GMT -6
FOMC Statement, 9/22/21 www.federalreserve.gov/newsevents/pressreleases/monetary20210922a.htmSeptember 22, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy continues to depend on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Note issued September 22, 2021 www.federalreserve.gov/newsevents/pressreleases/monetary20210922a1.htm Edit/Add: Notes from Fed Chair POWELL's press conference. Low rates will continue with rate liftoff possibly in late-2022 or 2023. QE-taper is coming soon, possibly starting from the November 2021 FOMC meeting & ending around mid-2022. Progress on inflation (still transitory) has been achieved but not yet on labor/jobs; Covid-19-Delta is having adverse impact on labor & economy. Policies about the Fed officials holding & trading assets affected by the FOMC decisions are being reviewed.
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Post by Admin/YBB on Nov 3, 2021 13:30:31 GMT -6
FOMC Statement, 11/3/21 www.federalreserve.gov/newsevents/pressreleases/monetary20211103a.htmNovember 03, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Share The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the summer's rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In light of the substantial further progress the economy has made toward the Committee's goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities. Beginning later this month, the Committee will increase its holdings of Treasury securities by at least $70 billion per month and of agency mortgage‑backed securities by at least $35 billion per month. Beginning in December, the Committee will increase its holdings of Treasury securities by at least $60 billion per month and of agency mortgage-backed securities by at least $30 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Note issued November 3, 2021 www.federalreserve.gov/newsevents/pressreleases/monetary20211103a1.htmNote: So, the QE-taper is at the rate of -$15 billion/month, and if not adjusted, the QE should be over in 8 months.
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Post by Admin/YBB on Dec 15, 2021 13:21:18 GMT -6
FOMC Statement, 12/15/21 www.federalreserve.gov/newsevents/pressreleases/monetary20211215a.htmDecember 15, 2021 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Share The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months but continue to be affected by COVID-19. Job gains have been solid in recent months, and the unemployment rate has declined substantially. Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus. 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 keep the target range for the federal funds rate at 0 to 1/4 percent. With inflation having exceeded 2 percent for some time, the Committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment. In light of inflation developments and the further improvement in the labor market, the Committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. Beginning in January, the Committee will increase its holdings of Treasury securities by at least $40 billion per month and of agency mortgage‑backed securities by at least $20 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. Implementation Note issued December 15, 2021 www.federalreserve.gov/newsevents/pressreleases/monetary20211215a.htmNOTES Post-Press Conference The QE-taper pace doubled to -$30 billion/mo for December 2021, quadrupled to -$60 billion/mo for January 2022 (vs -$15 billion/mo for November 2021). Prior to November 2021, the QE was at the level of $120 billion/mo ($80 billion/mo for Treasuries, $40 billion/mo for MBS). Rate hikes only after the QE is over, possibly starting at the FOMC 3/16/21 or later. May be 3 rate hikes in 2022. Fed balance sheet reduction/runoff will not be anytime soon. Once the QE is over, & a few rate hikes are done, may be then. He noted possible adverse market reaction that the Fed would like to avoid. Nothing more on Covid-19-Omicron beyond what is in news. Just watching. Nature of inflation now is different from what was thought earlier. Supply-chain disruptions, semi chips shortage, labor behaviors are different from what was anticipated. This new Fed course was set before the President announced his re-nomination.
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Post by Admin/YBB on Jan 26, 2022 13:04:44 GMT -6
FOMC Statement, 1/26/22 www.federalreserve.gov/newsevents/pressreleases/monetary20220126a.htmJanuary 26, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months but are being affected by the recent sharp rise in COVID-19 cases. Job gains have been solid in recent months, and the unemployment rate has declined substantially. Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus. 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 keep the target range for the federal funds rate at 0 to 1/4 percent. With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March. Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. 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 public health, 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; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Patrick Harker voted as an alternate member at this meeting. Implementation Note issued January 26, 2022Additional statements issued: Long-term monetary policy goals & strategy, www.federalreserve.gov/newsevents/pressreleases/monetary20220126b.htmPrinciples of Fed balance sheet reduction, www.federalreserve.gov/newsevents/pressreleases/monetary20220126c.htmNotes from releases & press conference:Rate hikes will start soon (March). The fed fund rate will become the primary tool of Fed monetary policy. Expected will be gradual +0.25% rate hikes, but +0.50% hikes were not ruled out. The QEs will be reduced in February & should end in early-March. The Fed balance sheet reductions will start (around mid-year) after the rate hikes begin (in March) & will run in the background. The MBS will be gone faster & entirely at some point. The balance sheet will shrink substantially to a level needed for Fed operations. The labor market is very strong. The current inflation is also very high but is expected to decline. People on fixed-income are affected more by high inflation. Less fiscal stimulus is expected. The Fed will remain flexible in its policies & actions. The yield-curve is normal now & will be watched. It will be a year of tightening. Risks include high inflation, various threats to economic expansion, Covid-19 factors, supply-chain disruptions (that should gradually clear), Europe, etc. The stock market has been very volatile this week. It was up strong on Wednesday morning but turned down after the press conference. Additional statements were issued on 1) long-term monetary policy & strategies, 2) principles for Fed balance sheet reduction.
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Post by Admin/YBB on Mar 16, 2022 12:11:56 GMT -6
FOMC Statement, 3/16/22 www.federalreserve.gov/newsevents/pressreleases/monetary20220316a.htmMarch 16, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Share Indicators of economic activity and employment have continued to strengthen. Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures. The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting. 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 public health, 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; Michelle W. Bowman; Lael Brainard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Voting against this action was James Bullard, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1/2 to 3/4 percent. Patrick Harker voted as an alternate member at this meeting. Implementation Note issued March 16, 2022 www.federalreserve.gov/newsevents/pressreleases/monetary20220316a1.htmNotes after Fed Chair-Pro-Tempore Powell's press conference Low probability of recession this or next year. Inflation should start to come down in 2022/H2 - some delay is due to the Russia-Ukraine war; supply-chain issues should lessen, base-effccts should be past. Rate hikes may be 25 bps at every FOMC meeting in 2022 & 50 bps hike is not ruled out - this will depend on data. The balance sheet reduction will cause further tightening. Talk-effect has led to some tightening already. Negative rates for a while still would mean easy monetary policy.
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Post by Admin/YBB on May 4, 2022 13:18:30 GMT -6
FOMC Statement, 5/4/22www.federalreserve.gov/newsevents/pressreleases/monetary20220504a.htmMay 04, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures. The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain. The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in conjunction with this statement. 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 public health, 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; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Patrick Harker voted as an alternate member at this meeting. Implementation Note issued May 4, 2022www.federalreserve.gov/newsevents/pressreleases/monetary20220504a1.htmQT/Roll-off Detailswww.newyorkfed.org/markets/opolicy/operating_policy_220504NOTES from Statement(s) and press conference
Factors of concerns include high inflation, supply-chain disruptions, Russia-Ukraine war, Covid-19 spread in China. +50 bps hike to 0.75-1.00% fed fund range. Possible +50 bps hikes at 2 next FOMC meetings; +75 bps hikes ruled out for now. Rate of 0.90% for bank reserves held at the Fed (banks like to lend money out at higher rate, but keep excess money at the Fed). QT/roll-offs for Treasuries at -$30 billion/mo from June-August, -$60 billion/mo from September; MBS -$17.5 billion/mo from June-August, -$35 billion/mo from September. Effects of balance sheet shrinkage are uncertain but they amount to additional and indirect rate hikes. Job market is very strong. Keeping 2% target for inflation for long-term. Fed policy will remain accommodative to neutral, not restrictive; Paul Volcker's very restrictive policy came up in Q&A several times but anything like that isn't anticipated. Current policy has been working good through expectations (= talking).
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Post by Admin/YBB on Jun 15, 2022 12:16:33 GMT -6
FOMC Statement, 6/15/22www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htmJune 15, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures. The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is 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 1‑1/2 to 1-3/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. 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 public health, 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; Michelle W. Bowman; Lael Brainard; James Bullard; Lisa D. Cook; Patrick Harker; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. Voting against this action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1-1/4 percent to 1-1/2 percent. Patrick Harker voted as an alternate member at this meeting. Implementation Note issued June 15, 2022www.federalreserve.gov/newsevents/pressreleases/monetary20220615a1.htmNotesThe fed fund rate was raised by +75 bps (+0.75%) to 1.50-1.75% range & more 50-75 bps increases are coming; the QT is continuing as previously announced. The interest paid on reserves held at the Fed are now 1.65%; the discount/primary rate is 1.75%. The labor market remains strong & inflation data have surprised to the upside. Fed's goals are positive real rates & taming consumer demand because many other factors are out of Fed's control (global commodity prices, Russia-Ukraine war, Covid-19 issues in China). Headline inflation is what the public & the Congress care about, but the core inflation is more meaningful for the Fed to adjust monetary policy. Changing inflation-expectations via forward guidance is working as intended but the Fed is not locked into its previous guidance (so, it isn't bothered by "misses") & looks at the incoming data (current retail sales & housing data, UM Sentiment, etc) & some of it came during the blackout week this time.
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Post by Admin/YBB on Jul 27, 2022 12:21:39 GMT -6
FOMC Statement, 7/27/22www.federalreserve.gov/newsevents/pressreleases/monetary20220727a.htmJuly 27, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is 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 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. 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 public health, 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; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. Implementation Note issued July 27, 2022www.federalreserve.gov/newsevents/pressreleases/monetary20220727a1.htmNotes After Powell's Press ConferenceFed funds raised by +75 bps (again) to 2.25-2.5%; more hikes, small or large, would be data dependent. Fed average inflation target remains +2%. Reserve balance rate 2.4%; primary credit rate 2.5%. Balance sheet QT (-QE) continues at previously announced pace (note bump up in September). US is not in recession now & the Fed is trying to avoid recession; economic data are mixed. Initial Q2 GDP growth (due 7/28/22) will be subject to revisions (there are speculations whether it would be + or -). There is policy effect lag, but the economy is slowing down in some areas. Fed’s preferred inflation measure is PCE (due 7/29/22) although public watches CPI. UM Sentiment (due 7/29/22) was not mentioned at all. CME FedWatch at 7/27/22 EOD#FOMC Statement came out & Powell had his say at Q&A. Fed fund futures traders see, as of 7/27/22 EOD, 50-25-25 bps hikes thru December FOMC to 3.25-3.50% level & then the Fed PAUSING. This until the Fed OPEN MOUTH Committee people start talking gain. www.cmegroup.com/trading/interest-rates/countdown-to-fomc.htmlNews on GDP, 7/28/22BIG surprise this morning is NEGATIVE Q2 GDP! That is 2 quarters of negative GDP now. Atlanta Fed GDPNow has been predicting that for a while. When Powell was asked yesterday about it, he said that he had no clue about GDP but don't trust 1st reported GDP as it can be revised. I thought that was a weird comment, but on hindsight, he was already addressing possible negative Q2 GDP. He even said that he doesn't think that the US is in recession now. But this debate will start fresh. www.cnbc.com/2022/07/28/gdp-q2-.htmlNews on PCE & UM Sentiment, 7/29/22Among the post-FOMC data this week, Q2 GDP was yesterday (bad; -0.9%), and today were PCE (also bad; +6.8%, core +4.8%) and UM Sentiment (improved a bit to 51.5 from June low of 50 that spooked Powell at the June FOMC). www.cnbc.com/2022/07/29/inflation-figure-that-the-fed-follows-closely-hits-highest-level-since-january-1982.htmlnews.umich.edu/consumers-adjust-to-inflation-as-labor-market-expectations-worsen/Accessible from Morningstar (M*), Mutual Fund Observer (MFO), Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
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Post by Admin/YBB on Aug 17, 2022 12:42:21 GMT -6
FOMC Minutes, July 26-27, 2022 www.federalreserve.gov/monetarypolicy/fomcminutes20220727.htmTwitter Post(6/17/22 YBB) 1/2 #FOMC Minutes, "...following this meeting's policy rate hike, the nominal federal funds rate would be within the range of their estimates of its longer-run neutral level." But when Powell said this at his presser, many economists jumped all over... 2/2 FOMC was talking about its target average. Economists are looking at real fed funds as nominal - core PCE that remains negative.
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Post by Admin/YBB on Sept 21, 2022 12:07:14 GMT -6
FOMC Statement, 9/21/22www.federalreserve.gov/newsevents/pressreleases/monetary20220921a.htmSeptember 21, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is 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 3 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. 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 public health, 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; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. Implementation Note issued September 21, 2022Notes from above & Fed Chair Powell’s Press Conference
Rates: Fed funds +75bps to 3.00-3.25% & more hikes to come; for reserve balances 3.15%; discount rate 3.25%. Real rates to rise across the board. Further +100 to +125 bps rise in fed funds expected by the yearend, so people can guess 75 or 50 or 25 bps hikes at the 2 remaining FOMC meetings. Fed policy to remain restrictive. Fed pause may be at some point, but Fed easing unlikely any time soon. QT to continue at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS. Long-term inflation target is +2% average by 2024-25. The current PCE & CPI are too high. Future inflation-expectations are reasonable. Housing/rent (OER) contribution is high and sticky. No special consideration for housing. Post-pandemic economy will slow to below trend. Financial conditions will tighten; credit spreads will widen. Unemployment rate will rise (labor markets are too strong now, even out of balance). Wage growth will moderate. Soft landing is becoming less likely and recession more likely. Most global central banks are tightening. They share information but there is no global coordination. Complex global factors include pandemic, Russia-Ukraine war, supply-chain shocks, energy issues. Some improvements have been seen recently. Accessible from Morningstar (M*), Mutual Fund Observer (MFO), Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
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Post by Admin/YBB on Nov 2, 2022 13:29:54 GMT -6
FOMC Statement, 11/2/22www.federalreserve.gov/newsevents/pressreleases/monetary20221102a.htmNovember 02, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is 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 3-3/4 to 4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, 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 the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. 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 public health, 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; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued November 2, 2022, www.federalreserve.gov/newsevents/pressreleases/monetary20221102a1.htmNotes from above & Fed Chair Powell’s Press ConferenceFed fund rate hike by +75 bps to 3.75-4.00%. Bank reserves interest rate 3.9%. Primary credit rate 4%. More hikes are coming until the Fed sees slowdown in economic activity from the financial conditions tightening (but there is no numerical targe for a terminal rate). Inflation-expectations have stopped going up. The Fed watches core PCE and 3mo-18mo yield spread (media watches a variety of yield spreads). Over-tightening is preferable to under-tightening (or a premature pause); reason is that it is easier to fix over-tightening. QT continues at -$95 billion/mo (-$60 billion/mo for Treasuries, -35 billion/mo for MBS). Labor and job markets, and wage growth remain very strong. Consumer spending is robust. Housing is regional but isn't hot anymore. The Fed is aware of global concerns and regularly consults with other central bankers. But the Fed focus is on the US. US soft-landing is still possible but is becoming less likely due to persistence of inflation. Impacts of fiscal spending are mixed. Ethics issues at the Fed are being addressed with stronger disclosure rules and other restrictions. Edit/Add, 11/3/22. Yesterday, CME FedWatch wasn’t updated fully. Today, it is showing hikes of 50-50-25-25 (and moving around that) to the fed fund terminal rate of 5.25-5.50%. This is BAD news for both stocks and bonds (as if things weren’t bad already. Good seasonality (November 1-April 30) is a weak effect and may not help. www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
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Post by Admin/YBB on Dec 14, 2022 13:10:39 GMT -6
FOMC Statement, 12/14/22 www.federalreserve.gov/newsevents/pressreleases/monetary20221214a.htmDecember 14, 2022 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are contributing to upward pressure on inflation and are weighing on global economic activity. The Committee is 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 4-1/4 to 4-1/2 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, 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 the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. 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 public health, 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; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. For media inquiries, please email media@frb.gov or call 202-452-2955. Implementation Note issued December 14, 2022www.federalreserve.gov/newsevents/pressreleases/monetary20221214a1.htmNotes from Above + Powell's Press ConferenceFed funds rate +50 bps to 4.25-4.50%; (bank) reserve balance rate 4.4%; primary (discount) rate 4.5%. More rate hikes should be expected. Rates will remain higher for longer & rate cuts in 2023 are unlikely (despite the fed fund futures markets projecting so). The QT remains at -$60 billion/mo for Treasuries, -$35 billion/mo for MBS. New economic projections were released. The jobs market is strong & labor-participation rate is low. Layoffs are restricted to techs now. The labor market may weaken by late-2023. Housing prices have weakened. But housing contribution to CPI via rents/OERs will continue to go up and may start to go down only in late-2023. Services remain strong. Goods prices have come down. The Russia-Ukraine war has caused higher energy & food prices. Despite trending lower, the inflation remains too high vs +2% average target (it will not be changing). The inflation-expectations remain subdued. The GDP growth will slow but is expected to remain positive. Soft-landing is still possible, or a shallow recession. Financial conditions & credit markets have tightened. Longer term rates have come down. Stocks have been up. China reopening may not have an immediate net effect.
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Post by Admin/YBB on Feb 1, 2023 13:09:28 GMT -6
FOMC Statement, 2/1/23www.federalreserve.gov/newsevents/pressreleases/monetary20230201a.htmFebruary 01, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation has eased somewhat but remains elevated. Russia's war against Ukraine is causing tremendous human and economic hardship and is contributing to elevated global uncertainty. The Committee is 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 4-1/2 to 4-3/4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, 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; Lael Brainard; 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 February 1, 2023Notes from FOMC Statements & Powell's Presser
Fed funds rate hikes +25 bps to 4.50-4.75%; (bank) reserve balance rate 4.65%; discount rate 4.75%; gradual rate hikes with at least "a couple more" hikes. Wait to see the FOMC Minutes for discussions related to pause/pivot. The QT continues at -$60 billion/mo for Treasuries and -$35 billion/mo for MBS (total QT -$95 billion/mo). Financial conditions remain restrictive. Stock and bond markets are just one factor. The Fed and the bond market differ on how fast the inflation will be coming down. The Fed thinks that we are far from +2% average inflation target as PCE is +5.0, core PCE +4.4%. Price declines are visible in goods, but not in services yet. Housing has weakened, but the labor market and wage growth remain strong. Covid-19 is no longer seen as an economic risk. Debt-ceiling must be raise timely to prevent chaos; the Fed is an agent of the Treasury and cannot protect from consequences of failure; there is no coordination with the ongoing QT. State and local governments are flushed with cash and those projects may contribute to economic activity. Overtightening is preferred over under-tightening. Soft landing is possible and recession may be avoided. In the market actions that I kept an eye on, the stock market was strong and in the bond market, all Treasury rates fell (on a day of Fed rate hike announcement).
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Post by Admin/YBB on Mar 22, 2023 12:13:03 GMT -6
FOMC Statement, 3/22/23www.federalreserve.gov/newsevents/pressreleases/monetary20230322a.htmMarch 22, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Recent indicators point to modest growth in spending and production. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated. The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is 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 4-3/4 to 5 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, 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 March 22, 2023 www.federalreserve.gov/newsevents/pressreleases/monetary20230322a1.htmNotes from FOMC Statement & Powell's PresserFed fund rate hike of +25 bps to 4.75-5.00%; bank reserve balance rate 4.9%; discount rate 5%. Guidance changed from "ongoing rate increases" to "tightening as necessary" based on future data and events. Rate cuts are unlikely this year despite market expectations. The Fed deals with fiscal policy as it comes and has no comments or input into it. Inflation is moderating but remains high; path to +2% average inflation may be long and bumpy. QT continues at -$60 billion/mo for Treasuries and -$35 billion/mo for MBS. The recent expansion of the Fed balance sheet due to temporary and short-term bank lending isn't really offsetting the QT that is for its longer-term securities. Labor market remains strong now but the unemployment rate may rise to 4.5% later this year. Economy is slowing overall. Services and consumer spending (possibly due to milder Winter) are strong, but goods and housing are weak. Risks now are to the downside, but soft landing is still possible. Banking crisis: Strong actions were taken to boost confidence in the banking system. This crisis may lead to some tightening of financial conditions. The new FTBP and Discount Window lending facilities available to all banks should protect deposits and avoid runs (some happened very quickly). The failed banks and several others were under Fed watch, but runs and collapses still happened. Fed VC Barr is leading a review of bank supervision and regulation. The CRE exposure of smaller banks isn't seen as an issue now. Resolution of Swiss Credit Suisse was a huge relief. Reaction of the stock market was mixed - first up, then down. Most Treasury rates fell on the day of fed fund rate hike.
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Post by Admin/YBB on May 3, 2023 13:58:55 GMT -6
FOMC Statement, 5/3/23www.federalreserve.gov/newsevents/pressreleases/monetary20230503a.htmPress Release May 03, 2023 Federal Reserve issues FOMC statement For release at 2:00 p.m. EDT Economic activity expanded at a modest pace in the first quarter. 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 to 5-1/4 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. In determining the extent to which additional policy firming 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 May 3, 2023 www.federalreserve.gov/newsevents/pressreleases/monetary20230503a1.htmNOTES Fed fund rate hike +25 bps (range 5.00-5.25%); discount rate 5.25%; bank reserve balance rate 5.15%. Data & events dependent policy flexibility is indicated going forward. The QT continues at -$60 billion/mo Treasuries, -$35 billion/mo MBS. The monetary policy is restrictive. Tight credit conditions at banks are being monitored. They may have the effect of some rate hikes, but that is unquantifiable. Inflation remains high, well above the Fed’s +2% average target. Inflation-expectations are now modest. Labor markets remain strong. There is excess demand. The FOMC will make decisions meeting-by-meeting, but cuts in 2023 won’t be appropriate. Economy has slowed down, but recession may be avoided. The US banking system is sound. This crisis has revealed some issues for small/medium banks, including unexpected & fast runs. The uninsured institutional money moved out first, and now, the retail money is moving out gradually. With the resolutions of the 3 biggest problematic banks, the banking crisis may be near the end. VC Barr has the sole and distinct constitutional role on supervision, but Chair Powell & other members do provide input. The focus now is on how the problems can be avoided in the future. Barr’s report will be implemented to the extent possible. US bank consolidations have been happening for decades. It is desirable to have small, medium & large size banks. But specific crisis-merger decisions are by the FDIC & it chooses the least costly option(s), makes related selections & any decisions on required waivers. Use of the overnight reverse repos by the money-market funds is being watched. Debt-ceiling is a fiscal issue that must be addressed timely. Consequences of a US debt default would be unknown but severe, & no one should expect the Fed to protect from those. Powell isn’t dwelling on the past but wants to control the controllable going forward.
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