Federal Reserve Leave Rates Unchanged as Expected. See 5.6% Fed Fund Rate at Year End

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  • #57870
    TradersCom
    Keymaster

    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 market

    #57871
    TradersCom
    Keymaster

    Powell 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 June

    #57960
    TradersCom
    Keymaster

    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 week

    smallest amount since the banking-sector crisis started in March

    #57961
    TradersCom
    Keymaster

    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 week

    smallest amount since the banking-sector crisis started in March

    #57866
    Helmholtz Watson
    Participant

    The Federal Reserve left rates unchanged in a target range of 5.00-5.25% in unanimous vote at their June meeting as expected. Market Fed futures prici
    [See the full post at: Federal Reserve Leave Rates Unchanged as Expected. See 5.6% Fed Fund Rate at Year End]

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