All signs continue to point toward a hike next month. However, uncertainty about rate hikes after that are increasing.... Read More
Neither economic data nor stock market prices are likely to change enough prior to the December 19 FOMC meeting to force the Fed to rethink its planned hike.... Read More
FOMC statements in the Powell era remain short and to the point.... Read More
Talk is rampant that the Fed could cut Interest on Excess Reserves (IOER) by five basis points to better align the effective rate in the middle of its range of 2.00% to 2.25%. The Fed is not entirely sure why IOER has drifted to the upper end of the targeted range, but increased bill supply is one suspect.... Read More
An update of the Fed's balance sheet reduction... Read More
The fed funds futures market is fairly certain of a hike in December. After that the picture becomes less clear.... Read More
FOMC statements are becoming shorter and easier to understand, but Powell's presser yesterday left much to be desired.... Read More
The market's track record for predicting the outcome of Fed meetings is nearly perfect in the months leading up to the decision. The Fed does not want any surprises, so it offers complete transparency to achieve this outcome.... Read More
Ultra-low economic data volatility is being met with ultra-low rate hike timing volatility across major developed central banks.... Read More
Further tightening in 2019 will begin to rein in financial leverage, but run the risk of impairing credit and lending growth.... Read More
Tim Duy is making the case that Powell's decreased reliance on econometric models has made the Fed less predictable. We simply see the Fed pivoting to an increased focus on inflation.... Read More
An update of the Federal Reserve's quantitative tightening... Read More
Markets are skeptical that inflation will rise enough to justify the need for several more rate hikes.... Read More
What looks like a technical issue in the Fed's balance sheet reductions is becoming a bigger deal. While we would not be surprised if the Fed has someone discuss the mechanics of quantitative tightening next week, we doubt the Fed will be too forthcoming about the growing divergence in policy and reality.... Read More
FOMC statements continue to get shorter and easier to understand. According to the Flesch-Kincaid grade level test, readers don't even need a high school diploma to understand yesterday's statement.... Read More
The Bank of Canada is sitting out central bank week. But yesterday's strong GDP report and persistent inflation growth set the stage for another rate hike in October. ... Read More
The Fed was laughing all the way into the crisis. When the crisis hit in 2008 and things got serious, laughs at the FOMC meetings all but disappeared. ... Read More
The Fed will increase the monthly total of proceeds withheld from reinvestment to $24 billion this month. August will mark the end of reliable monthly reinvestment as purchases become a quarterly event. ... Read More
More eyes than usual will be watching Bank of Canada Governor Stephen Poloz this afternoon. After signaling a July rate hike, a series of economic misses, persistent infrastructure challenges and trade tensions have left the Bank's scope to tighten policy in doubt. ... Read More
The Fed has broken away from other western central banks, taking a hawkish path toward two more rate hikes in 2018. The ECB delivered on an end to asset purchases but was forced to acknowledge weakening growth with a forward guidance commitment. The Bank of England still has an opportunity to separate itself from the ECB, and we see potential for widening in the spread between U.K. and German 10-year yields.... Read More