Category: Weekly Update

The following FOMC participants spoke, all before the employment report on Friday: Harker, Kaplan, Kashkari, Evans, Powell, and Lockhart. We saw three themes. First, while some members continued to say that September is on the table, they didn’t seem to be very convincing. Second, participants had somewhat different preconditions for the next hike: improvement in […]

There were remarks, by Williams, Kaplan, and Dudley, which focused on the interpretation of the Q2 GDP report and its implications for near-term monetary policy. President Williams gave a press conference on Friday, shortly after the release of GDP data. He saw part of the weakness in Q2 as the result of volatility in inventories, […]

The following FOMC participants spoke: Bullard, George, Harker, Lockhart, Mester, Kaplan, and Kashkari. There were several themes across last week’s speeches and interviews. The first was that FOMC participants generally downplayed any effect of Brexit on the near-term U.S. outlook. Harker, for example, said “Brexit is low on my list of risks.” Lockhart said “I […]

Following the release of the FOMC minutes for the June meeting, the theme was clearly uncertainty. For a number of participants there has been a resounding theme of hesitation when it comes to recent developments in the economy. That uncertainty, revealed in discussions about the neutral fed funds rate along with topics such as the […]

Governor Powell was the first FOMC participant to weigh in on the effect of Brexit on the outlook. Other participants’ remarks did not add much beyond what he said. He noted that Brexit added new headwinds and new uncertainties and had resulted in a modest tightening of U.S. financial conditions so far, but that it […]

Last week’s data did not affect our views about the outlook for monetary policy. But the financial repercussions of Brexit did. This week we will make a preliminary judgment about how much the worsening of financial conditions, if sustained, might affect our forecast for growth and inflation. Given that the effect will be to slow […]

The dots did the talking last week, not the statement (link). The dots showed a dramatic change in sentiment about the likely path of the funds rate. While the median still implied two hikes in 2016, the distribution changed dramatically, with fewer projecting more than two hikes and many more projecting only one. There was […]

The dots did the talking last week, not the statement (link). The dots showed a dramatic change in sentiment about the likely path of the funds rate. While the median still implied two hikes in 2016, the distribution changed dramatically, with fewer projecting more than two hikes and many more projecting only one. There was […]

There was a rush for FOMC participants to get their talks and remarks out before blackout. That meant a talk and remarks even on a Saturday (Mester), and four last Monday, by Rosengren, Lockhart, Bullard, and, most notably, Yellen. Blackout began before the Michigan survey came out so we will be monitoring closely for discussion […]

Anything said before the employment report is already dated and not very informative with respect to the prospects of a June or July hike, with an important exception. What remains relevant is what was said about Brexit. In our view, Brexit had already pretty much taken June off the table. And the outcome of the […]