Category: Weekly Update

Some speakers favored a move this year because of the proximity to full employment and the risk of having to go faster later if the FOMC does not raise rates soon; others said that, while they believed the economy has running room, they still supported one hike this year. Their arguments were conditional on the […]

Both the patient and ready-to-go camps were well represented in remarks by participants over the last week. Those in the patient camp continued to advocate a cautious approach to raising rates, but one member of that cohort, Evans, signaled that he might be prepared to support a hike in December. This is what we have […]

As far as Fed communication, it was mostly more of the same from the ready-to-go and patient camps last week. There is nevertheless more agreement on what each camp sees as the more important issue for the Committee, and it is about pace: slow, very slow. Many FOMC participants shared their views on monetary policy […]

The three official dissents to the decision by the Fed to keep interest rates unchanged last week revealed the intensity of the split on the Committee between the ready-to-go camp and those who counsel patience. As a result, it was no surprise that outspoken policymakers on each side of the debate made their case immediately […]

Last week, the doves had the floor to themselves, for a change, and Brainard, Kashkari, and a new  dove, Lockhart, spoke just before the pre-meeting blackout took effect on Tuesday and before the weaker-than-anticipated data on retail sales were released. Brainard gave a forceful presentation of the dovish argument for continued accommodation, focusing on the […]

Not much data, but the markets were on edge about a September rate hike, and equities fell sharply, reportedly spurred by remarks by Rosengren that we, at least, have heard before. Another factor that put markets on edge was the announcement that Governor Brainard would give public remarks and participate in a panel discussion today. […]

Lacker and Evans offered contrasting views of the implications of simple policy rules. Lacker drew support for a more rapid pace of normalization from Taylor rules that suggest that the funds rate should be “should be significantly higher than it is now,” centered between 1.5% and 3.3%. That apparently depends of the specific policy rule, […]

Last Week in Fedspeak Nine FOMC participants spoke last week, with many speaking while attending the Jackson Hole conference. Many of them spoke multiple times. The most prominent remarks came from Yellen. [See our recent commentary on this topic.] Most participants left the door open for a September hike, while others leaned in that direction. […]

We saw three themes in remarks of FOMC participants last week. Most of the speakers saw at least one hike as likely appropriate this year, based on initial conditions—basically at full employment and confidence inflation headed to 2%—and a relatively optimistic forecast. The “show me the inflation” camp was not well represented last week, but […]

We have noted that Williams is in the so-called “initial conditions” group that bases its monetary policy views on the proximity to full employment and confidence that inflation is headed toward the 2% target. Still, his view of appropriate policy has moved from four hikes in 2016, at the beginning of the year, to appearing […]