![]() Harker argued that more needs to be done, but the Fed “is close” to being finished with its hike cycle. What Did Fed Officials Say Between Meetings?įebruary 3 – Daly (San Francisco president) said “the most important thing to convey to listeners is that the direction for policy is for additional tightening and holding that restrictive stance for some time.”įebruary 6 – Bostic (Atlanta president) commented that a higher peak Fed funds rate could be necessary following the strong January US jobs report.įebruary 7 – Powell (Fed Chair), in an interview at The Economic Club of Washington, D.C., stated that the FOMC “think(s) we are going to need to do further rate increases,” indicating that rates may need to stay higher for a longer period as well.įebruary 8 – Waller (Fed governor) warned that “it might be a long fight, with interest rates higher for longer than some are currently expecting.”Ĭook (Fed governor) remarked that she favored more measured rate increases moving forward, as “this will give time to evaluate the effects of our fast actions on the economy.”įebruary 10 – Harker (Philadelphia president) said that he favors “a couple more” 25-bps increases.įebruary 13 – Bowman (Fed governor) commented that “we are still far from achieving price stability.”įebruary 14 – Barkin (Richmond president) said that the Fed might need to go higher for longer with interest rates, and that “inflation is normalizing but it’s coming down slowly.” Alas, with systemic issues now afoot, markets are expecting a less hawkish tone from the Fed moving forward. The rationale was that a resilient US labor market coupled with a still-growing US economy meant that Fed policymakers had more work to do in order to bring down price pressures. 25-bps rate hike expected in Marchįed Chair Jerome Powell spent his, as did other FOMC officials, in the run up to the Fed’s communication blackout window extoling the benefits of a ‘higher for longer’ interest rate regime. Accordingly, with much of the recent turmoil in markets coming after the Fed’s blackout window began, the slew of commentary made by Fed officials, largely geared towards inflation and effectively nothing geared towards financial stability, appears to be stale. Initially, between the February and March 2023 rate decisions, rates markets began the process of discounting a 50-bps rate hike. (Updates with more Bostic comment from fifth paragraph.Ahead of the Federal Reserve’s March monetary policy decision, we’ll review comments and speeches made by various Fed policymakers before the communications blackout window. While the Fed targets a different yardstick of annual price movements - the personal consumption expenditures gauge - all measures are running at more than double its 2% target pace. Excluding food and energy, the so-called core inflation rate also moderated. Prices climbed 4.9% from a year earlier in April, consumer price index data released Wednesday showed, the first sub-5% reading in two years. “All of those suggest that there’s still going be upward pressure on prices. Consumers have been really resilient in terms of their spending and labor markets remain extremely tight,” he said. ![]() What we’ve seen is that inflation has been persistently high. “If I had a bias between going up and going down as our next action, I would say we might have to go up. But he also suggested that the next move may be more likely to be up than down, given the persistence of price pressures. ![]() ![]() The Federal Open Market Committee raised rates by a quarter percentage point at a meeting earlier this month, bringing its benchmark to a target range of 5% to 5.25% and signaling it may be ready to pause its tightening cycle at the next meeting in June.īostic made clear that he now favors putting policy on hold to see the impact of aggressive Fed tightening since last year, with the economy also facing headwinds from tighter credit amid banking strains. And so that’s a long distance still to go.” “If you look at most measures of inflation, they’re still two times where our target is. “My baseline case is we won’t really be thinking about cutting until well into 2024,” Bostic said Monday in an interview on CNBC. (Bloomberg) - Federal Reserve Bank of Atlanta President Raphael Bostic pushed back against bets in financial markets that the central bank will cut interest rates this year and cautioned against taking further hikes off the table if inflation doesn’t cool. ![]()
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