The Fed is falling short of planned balance sheet reductions. So far this is only a small deviation, but it bears watching.... Read More
Although the Fed has begun the process of normalizing its balance sheet, central bank balance sheets across the globe are still larger than ever.... Read More
Yesterday's FOMC minutes showed many participants eyeing a faster pace of hikes than previously expected. The markets remain unconvinced.... Read More
While the median forecast for three hikes in 2018 remains unchanged in the latest Summary of Economic Projections, a close look at each dot shows how close the Fed was to projecting four hikes.... Read More
Today the Fed increased the speed at which it will reduce its balance sheet to $30 billion per month. These charts track their progress so far.... Read More
So far Powell seems to be continuing the job started by Yellen. Statements remain shorter and easier to understand than those of the past 5 years.... Read More
Hawkish rhetoric is warranted given improved economic conditions and heightened financial leverage. But, inflation and wages need to rebound into the summer to support three-plus hikes by the Federal Reserve over the next 12 months. Languishing inflation would exacerbate the tightening of financial conditions, likely quickly testing Powell's tolerance.... Read More
While a hike is a virtual certainty at today's meeting, rumors that the Fed may begin holding pressers at every meeting have the potential to shift the Fed's timetable.... Read More
Consumer search trends reflect moderately slowing spending behavior, which is not supportive for rip-roaring inflation. The Fed remains hampered by a reversal rate near 150 bps. Inflation gains are required to maintain the premiums now built into U.S. Treasury yields and the hoped pace of tightening by Powell et al.... Read More
Powell is taking the helm of a Federal Reserve offering its strongest hawkish rhetoric since prior to the crisis. Confidence is rising given Brainard's latest speech, but the room for tightening is likely small. All in all, this may be steepening-friendly over the short-term for the U.S. Treasury yield curve.... Read More
Hawkish central bank rhetoric has become ubiquitous as investors and the financial media discuss the eventual end to stimulus. The Federal Reserve is no longer the most hawkishly discussed, passing the baton to the ECB and BoJ. Markets are becoming increasingly concerned with global sovereigns exhibiting a very tight, linear relationship to balance sheet expectations.... Read More
Rate hike expectations for the Bank of Canada appear too high according to hawkish and dovish news trends.... Read More
Jerome Powell discusses rate hikes in light of his economic outlook.... Read More
Central banks are tightening on average for the first time since late 2008, finishing the longest easing cycle on record of 108 consecutive months to close December 2017.... Read More