LHMeyer/Monetary Policy Analytics
The only policymaker comment released last week was from Rosengren (Sep. 17). He reiterated his warning about testing the limits of a hot labor market and indicated a willingness to enter restrictive territory to avoid excessive overheating: “If the economy is growing when we get to 3 per cent then I wouldn’t necessarily stop just […]
Brainard’s speech (Sep. 12) was particularly noteworthy because she has a dovish reputation but her remarks suggested a hawkish path of rate hikes. She argued that “continued gradual increases in the federal funds rate are likely to be appropriate to sustain” full employment and price stability. Evans’ views have also turned more hawkish of late. Last week, […]
Kaplan (Sep. 7) said, “We ought to be moving toward neutral. Everything that’s in this jobs report today just causes me to reaffirm that view. We’re at or near full employment, or past it.” The wage data in particular encouraged him: “There is wage pressure, and I think it’s building.” His estimate of neutral was […]
Kashkari (Aug. 28) warned of the urgent need to resolve trade disputes between the U.S. and Canada given their important trading relationship: “I’m cautiously optimistic that we end up in a better place, but it’s very uncertain.” In contrast, he characterized the U.S.-China trade negotiations as “shadow boxing right now” (Sep. 4). Speaking about the […]
Kevin Burgett Chairman Powell’s speech at Jackson Hole provided a broad defense of FOMC policy while avoiding saying anything that would move markets substantially (see our analysis). He appeared to be comfortable with the near-term outlook as well as the market’s understanding of FOMC policy. Therefore, his comments did not affect our views of the monetary […]
The most noteworthy event this week with respect to Fed policy is the annual Jackson Hole symposium. Chairman Powell will be giving a speech on Friday morning titled “Monetary Policy in a Changing Economy.” This year’s theme is: “Changing Market Structure and Implications for Monetary Policy.” His speech could address the key themes of the […]
The impact of ongoing trade negotiations continued to concern policymakers, but they pointed out that those concerns should be weighted in the context of an outlook that is otherwise strong. Market participants paid close attention to Evans’ remarks, as some of his comments could have been interpreted as being more hawkish than anticipated (Aug. 9). […]
Simon Potter (head of the New York Fed’s Markets Group) gave a detailed speech defending the current policy implementation framework, and, by implication, the current balance sheet normalization plans (Aug. 3). The speech was titled “Confidence in the Implementation of U.S. Monetary Policy Normalization.” It is significant because the FOMC was likely presented similar information […]
Powell’s semiannual testimony before Congress (see our commentaries on Day 1 and Day 2) was the principal communications event last week. Chairman Powell’s prepared remarks for his semiannual monetary policy testimony were largely consistent with his recent comments, though they were relatively watered down. He reiterated that the economy is strong and the outlook is positive, while emphasizing […]
The most significant event this week will be Chairman Powell’s semiannual testimony before Congress on Tuesday and Wednesday. We expect the Chairman to highlight the strength of the economic outlook while emphasizing the uncertainties (click here for our preview). We don’t expect Powell’s prepared remarks for the semiannual testimony to deviate from his June FOMC […]