FED

Jay Powell

Did Powell tame inflation?

J. P. Marín-Arrese | Jerome Powell boasts having curbed the recent inflation flare through resolute tightening of monetary policy.  While the need to perform rate hikes seems obvious, it seems far from evident it stood as the paramount driving force. For, as is now clear, the Fed delivered negative rates throughout the inflationary bout and only undertook lukewarm efforts to drain the excess liquidity fearing the danger of a credit-crunch….


fed powell nov 2023

Fed cuts interest rates by 0.5 points

The Fed has lowered interest rates by 0.5 points, thus aligning with the market, which anticipated a roughly 70% probability of a 50 basis point cut. As a financial institution noted this morning, “the risk for credit markets is that a 50 basis point cut may be interpreted as an emergency measure. Consequently, the gradual approach and soft landing that have benefited this type of asset could be disrupted. On…


fed powell nov 2023

Most economists polled by Reuters believe Fed will cut rates by 25 bps at each meeting for remainder of year

Link Securities | According to a Reuters poll, a majority of economists surveyed believe that the Federal Reserve (Fed) will cut its policy rate by 25 basis points at each of the three remaining policy meetings this year (September, November and December). Moreover, only nine economists out of 101 surveyed expected a cut of half a percentage point next week, when the Federal Open Market Committee (FOMC) meets, while 92…


fed jerome 3mayo23

Fed acknowledges cuts could start in September if data hold

Bankinter: Fed minutes of the 30/31 July meeting: Main messages: (i) Current situation: the economy is advancing solidly, albeit at a markedly slower pace than in 2H23, the labour market is cooling and inflation is moderating, although it remains somewhat elevated. (ii) Outlook: lower growth in 2H24 due to a weaker labour market, but growth in 2025 and 2026 will remain in line with its long-term potential. Unemployment could pick…


fed enero 2024

US: Fed shifts rate cut outlook from 2024 to 2025 and 2026 as CPI falls to +3.3% in May

Bankinter: The Fed meets expectations and keeps interest rates (Fed Funds) at 5.25%/5.50%. With respect to the macro picture, it maintains the GDP forecasts for 2024, 2025 and 2026. However, it revises upwards both Inflation (PCE) and Underlying Inflation in 2025 and 2026 and continues to miss the 2% target until 2026. The Unemployment Rate is also revised slightly upwards in 2025, 2026 and in the longer term. With regard…


fed enero 2024

Fed members talk of “patience”, first cut not likely until end of year or even 2025

Banc March: Round of statements from Fed members, where the word “patience” has been recurrent in their speeches and they delay the first cut to the end of the year and even 2025. The Atlanta Fed president believes that inflation is too high and does not consider it appropriate to lower the cost of money until the end of the year. He also said he was open to raising rates…


fed powell enero 2024

Fed chairman confirms policy rate spike but will not cut rates until confident inflation is close to 2%

BancaMarch: Federal Reserve Chairman has confirmed the peak in official interest rates. Jerome Powell, has kept his January speech unchanged, indicating that monetary policy will change course at “some point this year”, without specifying a date. He also emphasised the risks of bringing forward the cuts too soon, resulting in a return of inflation and the need for an even tighter policy. Thus, the Fed will not cut rates until…


fed edificio

US banks ready to use Fed funding mechanism, Standing Repo Facility, that has been dormant for over two years

Norbolsa| Banks are finally signing up for a US Federal Reserve funding mechanism that has been largely dormant for more than two years, putting them in a stronger position to cope with any stress. It is unclear, however, whether they will want to use it in the event of a crisis. The Standing Repo Facility allows banks to borrow emergency overnight cash from the Federal Reserve through a repurchase agreement,…


fed powell enero 2024

Most Fed advisers warn of risk of cutting interest rates too soon

Bankinter: The main messages to come out of the 31 January meeting are: Growth outlook revised upwards after a solid Q4. Employment and wages remain strong but have moderated. The overall and underlying PCE readings will continue to decelerate in 2024, but are still off target. Uncertainty in the projections remains high, but has been reduced. Risks to the inflation projections stand out. Fed members put on the table the…


fed powell nov 2023

Powell looking for time

BancaMarch: Powell’s first press conference of the year. At this meeting, the top US monetary authority will try to buy time in the face of the markets, reaffirming the message of caution in the face of inflation far from the 2% target and a resilient economy. We do not expect any changes in interest rate policy and it does not seem to be the time to announce anything regarding the…