Federal Reserve Largest Raises Rates Most Since 1994, Up 75 Basis Points as Expected

The Federal Reserve raised rates by a 75 bp at their June meeting. The market was pricing in an 87% chance of a 75-basis point hike with the balance on 50 bps. It was not a unanimous vote, however. Kansas City Fed President George dissented, preferring a hike of only 50 basis points. Out the Fed funds futures curve, the terminal top was in May 2023 at 3.982% with a path of 75/75/50/50 priced in for the next four meetings, … Continue reading “Federal Reserve Largest Raises Rates Most Since 1994, Up 75 Basis Points as Expected”

Federal Reserve Beige Book Highlights Price Increases Through Districts

The Federal Reserve released its Biege Book Wednesday with the focus on pricing. Most Districts noted that their contacts had reported strong or robust price increases, especially for input prices. Two Districts noted that this rapid inflation was a continuation of trend; however, three Districts observed that price increases for their own goods or services had moderated somewhat. About half of the districts observed that many contacts maintained pricing power, passing costs onto clients and consumers, often with fuel surcharges. … Continue reading “Federal Reserve Beige Book Highlights Price Increases Through Districts”

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

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 CNBC and Fox News. She added says she’s not forecasting beyond the next couple of meetings. The Fed raised rates by a half of a percent at their May meeting. That was the first time the bank raised rates this much since May 2000 when the Fed was led by Alan Greenspan. … Continue reading “San Francisco Federal Reserve Governor Daly Says Open to Pulling the Reins Back on The Economy”

Federal Reserve Raises Rates 50 Basis Points First Time Since 2000 as Expected

The Federal Reserve raised rates by a half of a percent at their May meeting. This was the first time the bank raised rates this much since May 2000 when the Fed was led by Alan Greenspan. The Central Bank raised interest rates by 0.50% (to a target of 6.5%) back then. That was the last time the Fed would ever raise interest rates by that much in one move until day. The rate hike was priced in. The Balance … Continue reading “Federal Reserve Raises Rates 50 Basis Points First Time Since 2000 as Expected”

Uncertainty About the Economic Outlook Remains Extraordinarily High says NY Fed Williams

The New York Fed president John Williams, who is a voting member was speaking to a symposium at Princeton University continued with his hawkish tilt. He said the process of reducing the size of the Federal Reserve’s balance sheet could start at the next meeting, May 3 & 4. He also focused on familiar themes saying and risks to the inflation outlook are particularly acute. The Fed holds around US$9 trillion of Treasury bonds and mortgage-backed securities. “These actions should enable us … Continue reading “Uncertainty About the Economic Outlook Remains Extraordinarily High says NY Fed Williams”

Federal Reserve Raises Rates for First Time Since 2018 as Expected by 25 Basis Points

The Federal Reserve raised rates by a quarter of a percent at their March meeting, The QE Taper pace as scheduled ended in March. The rate hike was priced in; however, the surprise is seven 7 hikes in the dot plot. The market has priced that in, but expectations are that generally the Fed lags the market. Last meeting the dot plot showed four hikes in 2022 Federal Reserve FOMC Statement  Federal Reserve Announcement Wednesday 16 March 2022 14:00:00 ET The … Continue reading “Federal Reserve Raises Rates for First Time Since 2018 as Expected by 25 Basis Points”

Hawkish Bullard Says Harden Up on Inflation Doubles Down on 100 bps by July 1

Fed Governor speaking on CNBC doubled down his hawkish down Monday morning about raising rates bigger and sooner to try and get ahead of inflation. This isn’t a new stance, recall back in November he said, US Core PCE Is “Quite High” and added that the Fed should take towards a more hawkish policy in the next couple of meetings. He said 3%-4% Rate `Is Not My Base Case’ Feds Bullard CNBC Highlights Says he will try to convince is … Continue reading “Hawkish Bullard Says Harden Up on Inflation Doubles Down on 100 bps by July 1”

Federal Reserve Leaves Rates Unchanged, Taper Pace Unchanged in Measured Response as Expected

The Federal Reserve kept rates unchanged at their January meeting, The QE Taper pace left unchanged, scheduled to end in March as expected. Fed says it expects that it will soon be appropriate to raise the target range. Risks to the economic outlook remain, including from new variants of the virus. Dot plot shows four hikes in 2022 vs four hikes expected Federal Reserve FOMC Statement  Federal Reserve Announcement, Wednesday 26 January 2021 14:00:00 ET FOMC Benchmark Interest Rate Target Range … Continue reading “Federal Reserve Leaves Rates Unchanged, Taper Pace Unchanged in Measured Response as Expected”

Federal Reserve Launches QE Infinity buying Treasuries, MBS and Commercial Paper

The Federal Reserve launched QE infinity Monday, establishing TALF for open-ended Treasuries, MBS and corporate bonds in amounts needed. Fed followed up last week’s surprise rate slash and expanded QE as Cornoavirus damages the economy.

Federal Reserve Emergency Rate Cut To Zero in Coordinated Global Central Bank Action

The Federal Reserve in a surprise move Sunday evening slashed rated 1.00% to zero after an emergency meeting  with Jerome Powell as Chairman.  Fed expanded QE $700 Billion on Cornoavirus damage to economy. The Fed corinated the move with other central Banks