Showing posts with label Janet Yellen. Show all posts
Showing posts with label Janet Yellen. Show all posts

2017-12-13

Federal Reserve FOMC Interest Rates Announcement & Press Conference

FOMC Press Conference December 13, 2017:

LIVE Wednesday, Dec 13, 2017: Fed Chair Janet Yellen's FOMC press conference scheduled for 2:30 pm EST. Her previous FOMC Press Conference was September 20, 2017 (pdf), video available here.

UPDATE: The U.S. central bank--the Federal Reserve (domain: federalreserve.gov) or "the Fed"--started its two-day monetary policy meeting on Tuesday and its FOMC (Federal Open Market Committee) and on Wednesday made its announcement on interest rates:
"The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on required and excess reserve balances to 1.50 percent, effective December 14, 2017 ... Effective December 14, 2017, the Federal Open Market Committee directs the Desk to undertake open market operations as necessary to maintain the federal funds rate in a target range of 1-1/4 to 1-1/2 percent, including overnight reverse repurchase operations (and reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions) at an offering rate of 1.25 percent, in amounts limited only by the value of Treasury securities held outright in the System Open Market Account that are available for such operations and by a per-counterparty limit of $30 billion per day."--source: Dec 13 Implementation Note
Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Randal K. Quarles. Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate. Read more:
FOMC Statement: PDF | HTML; Implementation Note; Projection Materials PDF | HTML

Note: The Fed was expected to hike near-term interest rates, especially after last Friday's strong jobs report.

Roach: Fed Should Move Aggressively to Normalize Rates

Bloomberg.com video above published Dec 11, 2017: Stephen Roach, senior fellow at Yale University, discusses debt levels in Asia, including China, and his outlook for interest rate hikes from the Fed. He speaks on "Bloomberg Daybreak: Asia."

President Trump's nominee, Jerome Powell, will take over as Chair of the Board of Governors of the Federal Reserve System at the end of Janet Yellen's term, subject to confirmation by vote of the full U.S. Senate. On December 5, 2017, the Senate Banking Committee approved Powell's nomination to be Fed Chair in a 22-1 vote, with Senator Elizabeth Warren casting the lone dissenting vote, and therefore his nomination is expected to be confirmed before the next meeting of the FOMC.

See also:
Fed Policy, Interest Rates and the FOMC:
"The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
"The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
"Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services."--source: federalreserve.gov.

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2017-10-24

Political Economics: Technocracy, President Trump, and the Next Fed Chair

The MacroView from Three Perspectives:
Hawks and Doves: The Five Fed Chair Candidates. On Oct 23, 2017, President Trump said he was 
"very very close" to a decision on who would be the next Chair of The Federal Reserve.
1. Next Fed Chair (videos)
Powell Is a Force at the Federal Reserve, Says Wallace

Bloomberg.com video published Oct 23, 2017: Kim Wallace, head of Washington policy at Renaissance Macro Research (domain: renmac.com), examines the leading contenders to be Federal Reserve Chairman and the warning from Billionaire Ray Dalio for the Fed to watch a U.S. economic divide. He speaks on "Bloomberg Markets" on October 23rd.

DomainMondo.com's prediction: Trump will pick Powell to be Fed Chair. Trump's Treasury Secretary Steven Mnuchin has reportedly recommended Powell privately to Trump.

A Powell, Taylor Fed Hawkish to Markets, Says Zentner

Bloomberg.com video above published Oct 23, 2017: Ellen Zentner, chief U.S. economist at Morgan Stanley and Steve Barrow, head of FX strategy at Standard Bank, examine what a combination of John Taylor and Jerome Powell on the Federal Reserve could mean to markets. They speak on "Bloomberg Daybreak: Americas."

What's at stake?
"Whereas Janet Yellen, Bernanke’s successor, ended the Fed’s Q.E. program in 2014, the European Central Bank Chairman Mario Draghi’s version of it is still going, which has led to the “manipulation” that so concerns Jeffrey Gundlach. European interest rates “should be much higher than they are today,” Gundlach has said, “. . . [and] once Draghi realizes this, the order of the financial system will be turned upside down and it won’t be a good thing. It will mean the liquidity that has been pumping up the markets will be drying up in 2018 . . . Things go down. We’ve been in an artificially inflated market for stocks and bonds largely around the world.”"
2. Political Economics by Jeffrey P. Snider | AlhambraPartners.com 20 Oct 2017, excerpt: "Who President Trump ultimately picks as the next Federal Reserve Chairman doesn’t really matter. Unless he goes really far afield to someone totally unexpected, whoever that person will be will be largely more of the same .... Trump’s candidacy, as Bernie Sanders’, as an ideal was a grave threat to the status quo because it started with the premise that, no, this isn’t as good as it can be and that we need to look for real solutions. Whether he forwards that ideal as President is and has been another matter, and who he picks as Fed Chair might be some small indication of where he currently stands consistent with that idea, or perhaps having second thoughts about it. The technocracy doesn’t work because it isn’t technically competent (thus 2008).

"That’s the real political debate in 2017 and going forward; technical incompetence where the defense of the technocracy refuses to even allow the suggestion that this might be true. I go back to Weimar Germany not because I expect a global hyperinflationary breakdown, but in how that one particular form of systemic breakdown exposed timeless flaws inherent in all economic and financial systems. They all run to some extent on trust and (good) faith:
"In other words, German monetary officials, particularly Reichsbank head Rudolf von Havenstein and Minister of Finance Karl Helfferich, denied that Germany had an inflation problem at all – right up until the end. Minister Helfferich declared that Germany had better gold coverage after the war than before it, despite that more than quadrupling of currency volume. One economics professor, Julius Wolf, wrote in 1922 that, “in proportion to the need, less money circulates in Germany now than before the war.”
"As much as the easy-to-see Versailles excuse played a part, there can be no doubt that beyond 1921 the German people themselves began to recognize that authorities had no idea what they were doing; worse, they came to see that even though policymakers were inept and incompetent, officials themselves would never admit as much and thus nothing would prevent Germany from its fate. That awakening meant an increase in danger that French occupation could never have unleashed on its own."
Hat Tip: ZeroHedge.com

 3. QT: Quantitative Tightening and the Fed:
Investors Ignore What May Be The Biggest Policy Error In History | Mauldin Economics (excerpt):
"... The chart ... shows the growing uncertainty over the future direction of monetary policy, is both terrifying and enlightening. The Federal Reserve, and indeed the ECB and the Bank of Japan, went to great lengths to assure us that the massive amounts of QE that they pushed into the market would help turn the markets and the economy around. Now they are telling us that as they take that money back off the table, they will have no effect on the markets. And all the data that I just presented above tells us that investors are simply shrugging their shoulders at what is roughly called “quantitative tightening,” or QT. I simply don't buy the notion that QE could have had such an effect on the markets and housing prices while QT will have no impact at all. In the 1930s, the Federal Reserve grew its balance sheet significantly. Then they simply left it alone, the economy grew, and the balance sheet became a nonfactor in the following decades. I don’t know why today’s Fed couldn’t do the same thing. There really is no inflation to speak of, except asset price inflation, and nobody really worries about that. We all want our stocks and home prices to go up, so there’s no real reason for the central bank to lean against inflationary fears; and raising rates and doing QT at the same time seems to me to be taking a little more risk than necessary. And they’re doing it in the midst of the greatest bull market in complacency to emerge in my lifetime. Do they think that taking literally trillions of dollars off their balance sheet over the next few years is not going to have a reverse effect on asset prices? Or at least some effect? Is it really worth the risk?..."

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2017-03-15

LIVE Video Replay: March 15 Federal Reserve FOMC Press Conference

FOMC Press Conference March 15, 2017, 2:30pm ET

Video above published March 15, 2017, by the U.S. Federal Reserve. Chair of the Federal Reserve Board of Governors is Janet Yellen.

 On March 15th, the FOMC raised the interest rate by 25 BPS as expected. Federal Open Market Committee statement--excerpt: "In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation."
Graphic: DJIA and S&P500 closed UP Wednesday after FOMC Rate Hike
DJIA and S&P500 closed UP Wednesday after FOMC Rate Hike
FRB: Monetary Policy: "Federal Open Market Committee Monetary policy is made by the Federal Open Market Committee (FOMC), which consists of the members of the Board of Governors of the Federal Reserve System and five Reserve Bank presidents. The FOMC holds eight regularly scheduled meetings during the year, and other meetings as needed."
Fed Statement Tracker | WSJ.com: The Federal Reserve releases a statement at the conclusion of each of its policy-setting meetings, outlining the central bank’s economic outlook and the actions it plans to take. Pundits and traders parse the changes between statements closely to see how policy makers’ views are evolving. Use the tool at the link above to compare any two statements since 2007.
@FederalReserve #FOMC:


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2016-12-14

U.S. Federal Reserve FOMC Press Conference LIVE Video Replay 12/14/16

FOMC Press Conference, December 14, 2016:

Streamed LIVE December 14, 2016, at 2:30 pm EST (US): Federal Open Market Committee (FOMC) Press Conference

See also:

About the FOMC (source: federalreserve.gov):

 The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.

 The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

 Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.

 Structure of the FOMC

 The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco. Nonvoting Reserve Bank presidents attend the meetings of the Committee, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.

 The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.

 For more detail on the FOMC and monetary policy, see section 2 of the brochure on the structure of the Federal Reserve System and chapter 2 of Purposes & Functions of the Federal Reserve System. FOMC Rules and Authorizations are also available online.

 2016 Committee Members
Janet L. Yellen, Board of Governors, Chair
William C. Dudley, New York, Vice Chairman
Lael Brainard, Board of Governors
James Bullard, St. Louis
Stanley Fischer, Board of Governors
Esther L. George, Kansas City
Loretta J. Mester, Cleveland
Jerome H. Powell, Board of Governors
Eric Rosengren, Boston
Daniel K. Tarullo, Board of Governors

 Alternate Members
Charles L. Evans, Chicago
Patrick Harker, Philadelphia
Robert S. Kaplan, Dallas
Neel Kashkari, Minneapolis
Michael Strine, First Vice President, New York
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2016-06-16

Systemic Risk and Asset Management in the Post Crisis Era (videos)

Why the U.S. Can't Go It Alone Anymore on Monetary Policy

U.S. central bankers talk a lot these days. Even their formal statements have gotten much longer. But for all the talk, there's one thing they're still not saying. Bloomberg Gadfly's Lisa Abramowicz tells us why it's important for Janet Yellen and Fed officials to become more transparent about some of their conversations. (Bloomberg.com - June 15, 2016)

Asset management in the post crisis era | FT Markets:

The FT's Philip Stafford and Arjun Singh-Muchelle of The Investment Association discuss how the post-crisis trading reforms are affecting asset managers. (FT.com May 25, 2016)

 What is systemic risk?

See also: London School of Economics and Political Science (LSE), collection of videos from the Systemic Risk Centre.

In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. --Wikipedia



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2016-02-19

Monetary Policy, Return to Normal? Senator Toomey vs Fed Chair (video)



Senator to Yellen: Forget stock drop, normalize (CNBC - 11 Feb 2016): Sen. Pat Toomey [(R) Pennsylvania] said the Federal Reserve should continue moving monetary policy back to normal, despite the swings in the financial markets. "I'm going to try to be a voice for encouraging a normalization," Toomey told CNBC's "Squawk Box." The Pennsylvania Republican is member of Senate Banking Committee, where Fed Chair Janet Yellen appeared before the Committee in the second part of her semiannual testimony on the economy.

In testimony before the House Committee on Financial Services, Yellen kept her options open to further hike interest rates while acknowledging the financial market turmoil and concerns about China. "We shouldn't be shocked that some asset prices have a little bit of a rough ride along the way," Toomey said.

"We've got a Fed that's just been winging it by the seat of their pants … in one direction right, this unbelievable accommodative policy, this unprecedented policy, which I think is very dangerous," Toomey said. He contended that the Fed's stated goal was to boost asset prices with easy money, so it stands to reason that tighter policy could reverse things a bit.

Tweets about monetary policy





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2015-12-18

U.S. Federal Reserve to U.S. and Global Markets: We Have Actual Liftoff!

Space Launch Complex 40 on Cape Canaveral,  Florida, illuminated by a Falcon 9 rocket as it lifts off
carrying a Dragon capsule to orbit, rocket and capsule built by SpaceX.  Photo credit: NASA/Gianni Woods
The U.S. Federal Reserve succeeded Thursday in moving borrowing costs higher after announcing Wednesday the first interest-rate increase since 2006, and only needed to draw $105 billion from money-market funds to achieve the goal according to Bloomberg News.

Following the announcement Wednesday by Federal Reserve Chair Janet Yellen, the Fed on Thursday increased the federal funds rate by a quarter-point from near zero, where it had been since the 2008 financial crisis. Though money markets are still awash in nearly $3 trillion in excess cash injected by the Fed through bond purchases, and despite warnings and concerns of possible ramifications upon markets, markets operated normally Thursday, and the benchmark rate rose 0.2 percentage point, or 20 basis points, about the middle of the Fed’s intended range.

Bloomberg reported Thursday trading in the fed funds market went "extremely smoothly ... The whole fed funds market seemed to adjust with relative ease this morning and everything just set at a higher level," said Bill List, capital markets manager at Federal Home Loan Bank of Pittsburgh. The Fed turned to the repo market to tighten--conducting its first actual liftoff overnight borrowing operation in that market Thursday afternoon. The Fed drained $105 billion through reverse repos at a 0.25 percent rate, up from the $102 billion it borrowed Wednesday at the old 0.05 percent rate. That was all it took--$105 billion--although the Fed was prepared to do more, potentially as much as $2 trillion according to Bloomberg.

The Fed’s daily reverse repo borrowings will swell in coming weeks, and could reach $1 trillion by next year. Zoltan Pozsar, director of U.S. economics at Credit Suisse Securities USA LLC in New York and former researcher at the New York Fed and U.S. Treasury, told Bloomberg that as the Fed’s rate increase kicks in and money-market funds start advertising higher yields, hundreds of billions of dollars will be lured from deposits in banks, which the funds will lend to the Fed through reverse repos. "It’s going to take about a month for the money fund portfolios to turn over ... When investors start seeing yields in the money funds go up and yields on deposits not go up, that’s when they are going to start to move money."



 Sources: federalreserve.gov and bloomberg.com




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