LHMeyer/Monetary Policy AnalyticsA strong consensus has emerged for a rate hike in the near term, most likely by July, and June is clearly on the table. Many participants have said that at least two hikes would likely be appropriate this year if the economy performs as expected, and quite a few have said two or three hikes […]
The story last week was the FOMC minutes and comments from Williams, Lockhart, and Dudley. The data were a sideshow. The minutes indicated that the sentiment of the Committee was much more hawkish than appeared to be the case from reading the April statement and listening to the April press conference. The message was that […]
There were only two speeches last week, by Lockhart and Bullard, but there were public comments from a total of six FOMC participants. There was a contrast between Williams and Lockhart that likely reflected two camps on the Committee. Bullard is, we suspect, in a camp of his own. Williams said he would support a […]
In the only speech of the week, Kaplan said he believed output would improve over the rest of the year. He said that he “will advocate that we take actions to remove some amount of accommodation.” He echoed this view in an interview later that day: “We need to reconcile GDP data with job data. […]
Blackout interrupted the flow of speeches and interviews by Fed policymakers, though two squeezed a speech or interview in before the blackout began on Tuesday. Still, the limited number of talks and interviews repeated common themes for policymakers: policy adjustments should be “cautious and patient” (Dudley), but policymakers should, when it’s appropriate, resume normalization at […]
For a given period, there tend to be certain phrases that appear in every speech: Last week, the phrases were “data dependent” and “gradual.” Policymakers can view the same data differently, which makes disagree on how gradual they believe appropriate policy should be. In most cases, speeches last week repeated earlier themes. So we are […]
We view the speeches and interviews last week as consistent with the March dots: two or more hikes this year, realistically two or three, centered on two. There was a continuing emphasis that rate hikes would be cautious and gradual. Rosengren said that futures prices implied a path of rate hikes that was too few […]
The themes in last week’s speeches were an apparent contrast between Yellen and almost everyone else who has spoken since the March meeting; the focus on data dependency; and the emphasis on a very slow pace of normalization. Yellen’s talk was very dovish, as she essentially repeated the dovish tone of the March statement, macro […]
Themes The overarching theme from FOMC participants’ communications last week is that a number of participants who supported a pause in March saw that decision as a close call. And with the fears of January and February receding, they see a strong argument for continuing the process of tightening. That led this group, all of […]
Is Bullard changing sides again? Before the FOMC meeting, he indicated that he could not support a further rise in the funds rate because of the continued decline in market-based measures of long-term inflation expectations. In his first remarks after the meeting, though focused on a theoretical discussion of neo-Fisherian concepts, the emphasis returned to […]