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The Federal Reserve raised rates by 25 bp to a target range of 5.00-5.25% in unanimous vote at their April meeting as expected. Market Fed futures pri
[See the full post at: Federal Reserve Raises Rates 25bps as Expected, Removes Additional Firming May be Appropriate]Powell Press Conference
The US banking system is sound and resilient
We’re committed to learning the right lessons from banking rout
We remain strongly committed to bringing inflation back down to 2% goal
Looking ahead, we’ll take a data dependent approach
There are some signs that labor supply and demand are coming back into balance
Nominal wage growth has shown some signs of easing and job ads are down
But overall, demand far outweighs supply of labor
The process of getting inflation back down to 2% has a long way to go
It will take time for effects of rate hikes to have full effect, especially on inflation
Economy likely to face pressure from tighter credit conditions
The extent of effects of credit tightening remain uncertain
Future policy actions will depend on how events unfold
We are prepared to do more if warranted
Reducing inflation is likely to require below-trend growth and some softening of jobs marketPowell Q&A:
We will be driven by incoming data, meeting by meeting
It is a meaningful change to no longer say we anticipate more firming of policy
My own assessment is that we will have continued growth
Staff sees a mild recession, it’s independent at last meeting and was broadly similar today
A decision on a pause was not made today, we will decide on June in JuneFed emergency loans to US banks dropped
– Federal Reserve Discount Window borrowing USD 5.3bn (on May 3rd) v prior week’s $73.9bn (April 26)
BUT “Other Credit” to $228.2bn from prior week’s $170.4bn now includes First Republic & BTFP borrowing
– The Federal Reserve has $81.1 b of loans outstanding to financial institutions through two backstop lending facilities in the week through May 3, compared with $155.2 billion the previous weeksmallest amount since the banking-sector crisis started in March
Fed emergency loans to US banks dropped
– Federal Reserve Discount Window borrowing USD 5.3bn (on May 3rd) v prior week’s $73.9bn (April 26)
BUT “Other Credit” to $228.2bn from prior week’s $170.4bn now includes First Republic & BTFP borrowing
– The Federal Reserve has $81.1 b of loans outstanding to financial institutions through two backstop lending facilities in the week through May 3, compared with $155.2 billion the previous weeksmallest amount since the banking-sector crisis started in March
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