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Thread: Fed Talk

  1. #1

    Default Fed Talk

    I think most people surmised this after Friday's rally on the weak jobs report...


    Fed’s Evans says employment and inflation need to pick up before policy changes

    Chicago Fed President Charles Evans said employment and inflation will have to pick up before he will change his position on policy.
    Evans said he wouldn’t mind seeing inflation run around 2.5% for some time.

    He expressed optimism over the state of the jobs market, despite the disappointing growth in April.
    https://www.cnbc.com/2021/05/10/feds...y-changes.html
    Tom
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  3. #2

    Default Re: Fed Talk

    Slipping The European Union Fed into this thread but they had some gloomy statements in their Financial Stability Review today (5/19) ahead of the release of the U.S. Fed minutes.

    Some remarks from that review

    The central bank also warned about “the potential for abrupt asset price corrections” after the financial markets’ rallies of the last six months, coupled with rising prices in the European residential market.
    The banking sector’s market valuation may have risen in the past few months, but bank profitability remains low and prospects for lending demands are uncertain, the ECB said, calling for an increase in bad loans provisions.
    European Central Bank warns on heightened risks to financial stability
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  5. #3

    Default Re: Fed Talk

    Stocks and bonds slipping in the first 15 min since the Fed minutes released. Market reacting over the mention of unwelcome inflation and mention of the Feds plan to slow their bond buying program.
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  7. #4

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    Default Re: Fed Talk

    In March the People’s Bank of China moved to reduce leverage in the Chinese economy.

    On April 21, the Bank of Canada became the first major central bank reduce QE.

    On May 6, the Bank of England tapered their QE program.

    Now, expectations are rising that the ECB may taper QE at the June meeting.

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  9. #5

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    Default Re: Fed Talk

    Latest from Economist Intelligence Unit on why they don't expect runaway inflation.

    The labour-market recovery is likely to be slow, as key sectors such as leisure, hospitality and transport will only see consumer demand recover over a period of two to three years.

    In addition, we expect average wages to fall in 2021 compared with 2020, as workers at the lower end of the wage scale (including in food service) find employment and weigh down the national average compared with 2020.

    That said, we expect steady price inflation of around 2%, together with a recovery in the labour market, to push the US Federal Reserve (Fed, the central bank) to begin raising interest rates at the end of 2023.

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  11. #6

    Default Re: Fed Talk

    Fed's Quarles: There is potential gain in reducing the fed balance sheet down the line.

    https://www.financialjuice.com/News/...-the-line.aspx
    Tom
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  12.  
  13. #7

    Default Re: Fed Talk

    A full rundown of what to expect from the Federal Reserve on Wednesday

    The Federal Reserve is not expected to make any policy moves, but it is likely to signal to the market that it is thinking about changing its bond-buying policy.

    The Fed also releases new forecasts following its two-day meeting Wednesday, and it could pencil in a first rate hike for 2023.

    Economists do not expect much detail on the tapering of the bond-buying program, but they expect to hear it mentioned and the Fed could discuss it more definitively later in the summer.
    https://www.cnbc.com/2021/06/15/a-fu...wednesday.html
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

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  14.  
  15. #8

    Default Re: Fed Talk

    Powell says the Fed is still a ways off from altering policy, expects inflation to moderate

    Federal Reserve Chairman Jerome Powell said Wednesday the economy is “a ways off” from where it needs to be for the central bank to change policy.

    “Conditions in the labor market have continued to improve, but there is still a long way to go,” he said, adding that inflation has “increased notably” due mostly to temporary factors.
    https://www.cnbc.com/2021/07/14/powe...-moderate.html
    Tom
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  16.  
  17. #9

    Default Re: Fed Talk

    Fed Ramps Up Debate Over Taper Timing, Pace

    Officials are set to consider tactical planning at next week’s meeting over how to reduce asset purchases

    Federal Reserve officials are set to accelerate deliberations at their meeting next week over how to scale back their easy-money policies amid a stronger U.S. economic recovery than they anticipated six months ago.
    $Pay site, but you get the drift: https://www.wsj.com/articles/fed-ram...d=hp_lead_pos2
    Tom
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  19. #10

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    Default Re: Fed Talk

    So I guess today we watch and see if the word "substantial" is used. Best to just sit back and watch the algo-bots do their thing. From Bloomberg:

    Many market participants expect the Fed to signal it could scale back stimulus soon by dropping the word "substantial" from its statement that it will maintain the current pace of asset purchases until "substantial further progress" has been made towards its goals, Commerzbank currency analyst Ulrich Leuchtmann says. "But that is not our house view." That means the dollar should end the day lower, Leuchtmann says.

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  21. #11

    Default Re: Fed Talk

    I like to watch Federal Reserve Chairman Jerome Powell for his public appearances. He is calm, collected, and careful with his words. But has he been a good leader of the Federal Reserve since 2018? Joe Biden will have a chance to replace him in February 2022 but its likely he'll remain at his position. To say Powell and the rest of Federal Open Market Committee have had a challenging year and a half is an extreme understatement. Simply put their reaction has been to flood the economy with free money with little other action. There has been criticism from congress members to other Federal Reserve members on the lack of monetary tightening and its consequential effect on inflation.

    What do you think? Is the Federal Reserve doing the right thing? Do you want to see Jerome Powell to hold his seat for the next four years?


    Biden to reappoint Jerome Powell as Fed chair, say economists
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  23. #12

    Default Re: Fed Talk

    He seems fine and goes along with the program. The question is whether he'll be able to make the tough decisions to pull in the reigns that will, in the end, be better for the economy, knowing the stock market won't like it.
    Tom
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