San Francisco Federal Reserve Governor Daly Says Open to Pulling the Reins Back on The Economy

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    Helmholtz Watson

    Fed’s Bostic:

    50 basis points is a pretty aggressive move, Fed can stay at that pace
    By the end of 2023, Fed needs to be somewhere in the neutral range, defined as 2-2.5%
    All options on the table at every meeting, depends on how economy responds
    There is a lot of momentum in the economy
    We have a strong job market
    Maybe there’s some evidence of inflation softening just a hair


    Today’s Fed Bonus
    Federal reserve Chairman #Powell speaks at 12:20 PM ET.
    This is a forerunner for the The Fed minutes tomorrow at 2 PM ET.
    Yesterday Atlanta Fed Pres. Bostic implied the Fed may be able to pause in September after 2 50 basis point hikes.


    FOMC meeting minutes for May 2022:

    inflation risks are skewed to the upside
    All participant voted for 50 basis point hike
    Several participants commented on the challenges that monetary policy faced in restoring price stability while also maintaining strong labor market conditions
    China lockdowns and Ukraine increased risks
    restrictive stance on monetary policy may well become appropriate
    should assess the risk the economy later this year after the rate hikes
    Fed should move expeditiously to neutral
    some felt inflation expectations could become unanchored
    50 basis point increase is likely appropriate to the next couple of meetings
    a number supported selling mortgage-backed securities
    several thought the potential for unanticipated effects in the financial markets from the run off of the balance sheet
    concerned about the risks from higher income commodity prices
    many expect tight labor market and wage pressures to continue for some time
    China and the Ukraine war posed heightened risks for both United States and and economies around the world
    new inflation pressures received from China as well as the Ukraine war, and were likely to weigh on economic activity
    Members judged that the implications of the war for the U.S. economy were highly uncertain
    higher wages and input prices were being passed on to consumers
    inflation risk being skewed to the upside
    Many participants judged that expediting the removal of policy accommodation would leave the Committee well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments.
    COVID-related lockdowns in China were likely to exacerbate supply chain disruptions
    although overall economic activity had edged down in the first quarter, household spending and business fixed investment had remained strong
    Job gains had been robust in recent months, and the unemployment rate had declined substantially.
    inflation remained elevated, reflecting continued supply and demand imbalances, higher energy prices, and broader price pressures.

    Helmholtz Watson

    The San Francisco Federal Reserve Governor Mary Daly said we (The Fed) know we want to be at 2.50% by year end. She was speaking in interviews with CN
    [See the full post at: San Francisco Federal Reserve Governor Daly Says Open to Pulling the Reins Back on The Economy]

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