Bankinter: Fed minutes of the 30/31 July meeting: Main messages: (i) Current situation: the economy is advancing solidly, albeit at a markedly slower pace than in 2H23, the labour market is cooling and inflation is moderating, although it remains somewhat elevated. (ii) Outlook: lower growth in 2H24 due to a weaker labour market, but growth in 2025 and 2026 will remain in line with its long-term potential. Unemployment could pick…
Bankinter: The Fed meets expectations and keeps interest rates (Fed Funds) at 5.25%/5.50%. With respect to the macro picture, it maintains the GDP forecasts for 2024, 2025 and 2026. However, it revises upwards both Inflation (PCE) and Underlying Inflation in 2025 and 2026 and continues to miss the 2% target until 2026. The Unemployment Rate is also revised slightly upwards in 2025, 2026 and in the longer term. With regard…
Banc March: Round of statements from Fed members, where the word “patience” has been recurrent in their speeches and they delay the first cut to the end of the year and even 2025. The Atlanta Fed president believes that inflation is too high and does not consider it appropriate to lower the cost of money until the end of the year. He also said he was open to raising rates…
BancaMarch: Federal Reserve Chairman has confirmed the peak in official interest rates. Jerome Powell, has kept his January speech unchanged, indicating that monetary policy will change course at “some point this year”, without specifying a date. He also emphasised the risks of bringing forward the cuts too soon, resulting in a return of inflation and the need for an even tighter policy. Thus, the Fed will not cut rates until…
Norbolsa| Banks are finally signing up for a US Federal Reserve funding mechanism that has been largely dormant for more than two years, putting them in a stronger position to cope with any stress. It is unclear, however, whether they will want to use it in the event of a crisis. The Standing Repo Facility allows banks to borrow emergency overnight cash from the Federal Reserve through a repurchase agreement,…
Bankinter: The main messages to come out of the 31 January meeting are: Growth outlook revised upwards after a solid Q4. Employment and wages remain strong but have moderated. The overall and underlying PCE readings will continue to decelerate in 2024, but are still off target. Uncertainty in the projections remains high, but has been reduced. Risks to the inflation projections stand out. Fed members put on the table the…
BancaMarch: Powell’s first press conference of the year. At this meeting, the top US monetary authority will try to buy time in the face of the markets, reaffirming the message of caution in the face of inflation far from the 2% target and a resilient economy. We do not expect any changes in interest rate policy and it does not seem to be the time to announce anything regarding the…
Bankinter| Fed Chairman Jerome Powell made a statement in which he considered that it is premature to talk about rate cuts. In fact, they are prepared to act by raising rates if necessary. They will continue to take decisions meeting by meeting but monetary policy will remain restrictive until there is certainty that they are close to the 2% target. On the labour market, conditions remain very solid. The recent…
Bankinter| The US Federal Reserve (Fed) met expectations and left the benchmark interest rate unchanged at 5.25%/5.50%. Assessment: The Fed’s statement did not introduce any new developments and the decision met expectations by repeating rates once again. However, the key to the meeting was Powell’s message. In line with the previous meeting, the tone remained cautious. The Fed Chairman once again said that the central bank “will proceed carefully”, avoiding…
J.P. Marín-Arrese | The Fed kept rates on hold this week. Yet, Jerome Powell shattered hopes they had reached a ceiling, announcing in the press conference that an extra hike was in the pipeline before the year-end. Inflation is still running too high and will likely take much longer than expected to match its medium-term goal. Powell was at odds in justifying why rate stiffening has neither cooled the economy…