LHMeyer/Monetary Policy AnalyticsIn her speech last week at a college graduation ceremony, Chair Yellen did not directly comment on the economic outlook or monetary policy but offered her views on the labor market for recent college graduates. She noted that, “while I expect workers will continue to face some challenges in the coming years…job prospects and career opportunities […]
Presidents Lacker and Bullard spoke following the December FOMC meeting and Yellen’s press conference. On the three hikes implied by the median 2017 dot, Lacker’s view was “we are going to need more than that.” He sounded a note of caution regarding the uncertainty surrounding new fiscal policy proposals, but generally expressed optimism: “I am […]
The blackout period for policymaker speeches ahead of this week’s FOMC meeting began on Tuesday. As a result, the only remarks given after the publication of last week’s Weekly Update came from Bullard. He pointed out that “new policies brewing in Washington may have some impact” on theprevailing low level of short-term interest rates, but […]
Last week saw FOMC policymakers continuing to indicate their support for a December rate hike. Powell pointedly remarked that “The case for an increase in the federal funds rate has clearly strengthened” since the November meeting. Dudley said that he “would favor making monetary policy somewhat less accommodative over time by gradually pushing up the […]
Other than the FOMC minutes, the only notable Fed communications were Stanley Fischer’s speech and his interview with CNN International. In response to questions about fiscal stimulus, he remarked, “Fiscal measures that increase growth on a sustained period would be terrific.” In the interview, he added that, “to the extent that fiscal policy affects [inflation […]
FOMC participants continued to focus on the case for a rate hike in December. The policymakers who spoke appeared to share the view that a rate hike in December would be appropriate. Treasury yields responded strongly to Dudley’s comment that “we should be increasingly optimistic that we will reach our inflation objectives over the next […]
Clearly the most important development last week was the presidential election. Trump’s win was far more important for financial markets, the economic outlook, and monetary policy than the incoming economic data, which were very thin. Things are far from settled at this point, but we see the near-term outlook for the economy and monetary policy […]
The FOMC participants who spoke last week gave their views on Friday after the release of the October employment report. Board Vice Chair Fischer’s speech was the most significant. He participated in a panel on “Policy Changes After the Great Recession,” concluding his brief opening remarks by saying that uncertainty about near-term productivity growth “will […]
All the speakers last week—Jim Bullard, Charlie Evans, John Williams and Patrick Harker—supported a December rate hike, though only Williams and Harker set out a strong case for doing so. Still, all four are part of the strong consensus for a hike in December. Bullard and Williams noted that, while the increase could come in […]
In a discussion of low interest rates, Fischer pointed to secular forces holding down interest rates (such as aging of the population, low productivity growth, and weak investment). This could make setting monetary policy more difficult by increasing the frequency that the FOMC faces the effective lower bound and could threaten financial stability by promoting […]