FED

World economy 6th July 2023

Consensus at Fed for a pause, but majority of policymakers believe further hikes appropriate in future

Bankinter: The minutes of the Fed’s 13/14 June meeting show a broad consensus on the decision for a pause in rate hikes although a majority of directors (16 out of 18) believe that some additional rate hikes in the future from the current level of 5.00%-5.25% are appropriate. There is also a consensus that rates should remain in tightening territory until inflation reaches its 2% target. The minutes hardly change…

In the World 22nd June 2023

Fed focuses message on inflation control and banking sector stability, but without concrete proposals

Bankinter| In his appearance before Congress, Powell maintained the tone and vagueness of his message. Congress has focused most of its questions on banking regulation. Meanwhile, Powell focused his message on inflation control, but without specifying the future. Analysis team’s view: The Fed governor reinforced the stability of the banking sector. But, he did not specify the future of regulation. Powell expects to receive a proposal during the summer. However,…

World economy 15th June 2023

Fed takes a breather and pauses rate increases after 10 consecutive hikes

CoM | The US Federal Reserve (Fed) decided on Wednesday to pause interest rate hikes and keep them in a range of between 5 and 5.25%, after a historic round of ten consecutive rate hikes since March 2022. “Recent indicators suggest that economic activity has continued to grow at a moderate pace. Employment growth has been solid in recent months and the unemployment rate has remained low,” the agency said…

Relevant News Item 25th May 2023

Fed minutes show split on the need for further rate hikes

Link Securities| The minutes of the May Federal Open Market Committee (FOMC) meeting showed that its members were divided on the need for further increases in the benchmark interest rate. In this regard, it was said that, based on expectations of a slow return of inflation to 2%, a further firming of monetary policy at future meetings was likely to be warranted. In general, participants were unsure how much further…

In the World, World economy 20th April 2023

Fed’s Beige Book notes that global economic activity and the outlook have remained unchanged

Link Securities | The Federal Reserve’s latest Beige Book indicates that overall economic activity and the economic outlook have remained broadly unchanged in recent weeks in most districts, although two districts saw a deterioration in their future outlook. The report noted that consumer spending and manufacturing posted flat or slightly lower growth, although auto sales were steady and travel and tourism rebounded. Banks also recorded a tightening of their lending…

In the World, World economy 14th April 2023

Fed minutes show consensus to raise rates by +25bp, but debate in favour of no rate hike intensifies

Bankinter | Fed members unanimously decide to raise rates by +25bp, the same rate hike they did in February and which compares to the +50bp hike in December. The minutes reiterate the message of the previous meeting that inflation remains elevated and that its deceleration is slower than expected. Strong labour market and GDP growth support price increases. All members approve of raising rates by +25bp and continuing to reduce…

In the World, World economy, World politics 13th April 2023

Mild recession in the United States this year

Santander | It is one of the first headlines from last night’s FOMC minutes. Fed staff members go from assigning a near 50% probability, to now forecasting a mild recession. With the Fed also nearing the end of the cycle, it is no surprise that some dissenting voices are beginning to appear, opening the door to new bouts of volatility that have not favoured the credit market (MOVE/Main correlation of…

In the World, World economy 23rd March 2023

Reaching 2% inflation to be a long schlep for the Fed: aiming for 3.6% this year, 2.6% in 2024 and 2.1% in 2025

Intermoney | The same could be said of the update of the macro picture forecasts. Economic projections are not necessarily a roadmap for policy and are subject to change. In fact, they have been changing from quarter to quarter. The projections point to inflation at 3.6% this year, one tenth of a percentage point higher than forecast in December. In 2024 it will moderate (2.6%), but it will not be…

In the World, World economy 17th March 2023

Fed to consider stricter regulation for medium-sized banks

Banca March | The collapse of SVB and Signature Bank has prompted the Fed to consider extending regulatory restrictions that so far only apply to large Wall Street banks. This would include stricter capital and liquidity requirements, as well as annual stress tests. Specifically, according to Reuters, the institution is currently reviewing the capital and liquidity requirements it imposes on banks, especially those with assets of between $100 and $250…

World economy 2nd February 2023

Powell’s dovish hints water down Fed’s stance

J.P. Marín-Arrese | The Fed’s message was tough enough, warning that the hiking cycle will go on unabated, even if it loses some steam, until inflation comes fully under control. The markets expected the quarter per cent rise in the Federal funds would prompt Powell to offset such a slowdown with a hawkish performance. Yet, in the press conference, he provided enough dovish hints to send the stocks bouncing back…

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