FOMC Watch

The Minutes

Minutes Given recent manifestations, like Yellen´s Congressional Testimony last week, maybe the markets expected some confirmation about the Fed´s rate timetable. Markets were disappointed on that regard. Yields and the dollar moved down. So, somewhat surprisingly, did stocks. Interestingly, four years ago exactly, Yellen was worried about “The painfully slow recovery”. We can now see

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In “Looking back, looking ahead” Williams concludes: Although it has been a long, hard road back from the recession, the American economy is in good shape and headed in the right direction. We’ve reached our employment goal, and inflation is well within sight of and on track to reach our target. Given the progress we

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Harker today on the economy: Labor market Things are looking pretty good. Inflation Moving on to inflation, we’re seeing positive upward movement, although PCE remains below our 2 percent target. Headline and core PCE closed out last year at 1.6 and 1.7 percent, respectively. That’s a world of improvement over the end of 2015, when

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This from today´s Congressional Testimony: Incoming data suggest that labor market conditions continue to strengthen and inflation is moving up to 2 percent, consistent with the Committee’s expectations. At our upcoming meetings, the Committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment

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Statements from the FOMC have been eclipsed of late by more eagerly received comments on the US from Trump and Mnuchin. Last night Patrick Harker, a voter on the FOMC from the Philadelphia Fed, commented to journalists that he thought a March rate rise was on the table. Although we already know him as a hawk,

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In the December Meeting, inflation was still “tied down” by energy and import prices: The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to rise to 2 percent over the medium term

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While not strictly related to comments by the FOMC, Steve Mnuchin’s comment on the USD was very significant.  “The strength of the dollar has historically been tied to the strength of the U.S. economy and the faith that investors have in doing business in America,” Mnuchin said in a written response to a senator’s question about the

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Yellen: Preparing the terrain

This passage in the speech is illustrative, with Yellen all but guaranteeing rates will rise more than once this year: The extraordinarily severe recession required an extraordinary response from monetary policy, both to support the job market and prevent deflation. We cut our short-term interest rate target to near zero at the end of 2008 and

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When/if their time comes…they´ll have to ease!

In the recent American Economic Association Meetings in Chicago, a panel comprised of Potential candidates to head the Federal Reserve in 2018 suggested that monetary policy would be tighter if they were in charge. Speaking at the annual American Economic Association meeting that ended Sunday, Glenn Hubbard of Columbia University, along with Stanford University’s John Taylor

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FOMC Minutes: In the shadow of Trump

That´s clear: In their discussion of their economic forecasts, participants emphasized their considerable uncertainty about the timing, size, and composition of any future fiscal and other economic policy initiatives as well as about how those polices might affect aggregate demand and supply. Several participants pointed out that, depending on the mix of tax, spending, regulatory,

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