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Rates are maintained - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. Inflation target remains +2% average. Base-effects have caused a slight bump in recent inflation data. Confidence in progress on inflation is low, so higher rates for longer can be expected. Neutral/equilibrium rates is a theoretical concept that is good only in hindsight. Ad-hoc evidence of price reductions is just that.
Treasury QT continues at the reduced level of -$25 billion/mo, but MBS QT remain at -$35 billion/mo.
Monetary policy is restrictive, although economic data remain flat now.
Labor market remains strong, but it isn't overheating.
Housing is weak. The OERs (owners' equivalent rent) remain elevated. There is an overall shortage of houses.
Consumer spending has been rising, so is the consumer debt. Household wealth is also rising. But many consumers are unhappy as lower inflation doesn't mean lower prices.
Banks are in good financial shape.
Dollar is strong, but that is Treasury's responsibility.
Internal review of the Fed will start later in the year.
New SEPs (Summary of Economic Projections) were released.
In my multi-tasking I did not catch this - "Internal review of the Fed will start later in the year." Could you please elaborate?
Also, did JP say that two months in a row of data is not sufficient for him to assess if there is a developing trend? I thought I overheard that but wanted to confirm with you to make sure I understood his thinking.
High D/E companies (and funds) which tend to be more in the Value camp did not do well today after the hawkish tilt during the presser. I would have thought the real news is the CPI release and today's presser really did not have any value but the market thought there was info value in today's presser. But moderating inflation was good enough for a lot of small caps to do well. The large cap tech trade has become an all weather trade.
Comments
Rates are maintained - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. Inflation target remains +2% average. Base-effects have caused a slight bump in recent inflation data. Confidence in progress on inflation is low, so higher rates for longer can be expected. Neutral/equilibrium rates is a theoretical concept that is good only in hindsight. Ad-hoc evidence of price reductions is just that.
Treasury QT continues at the reduced level of -$25 billion/mo, but MBS QT remain at -$35 billion/mo.
Monetary policy is restrictive, although economic data remain flat now.
Labor market remains strong, but it isn't overheating.
Housing is weak. The OERs (owners' equivalent rent) remain elevated. There is an overall shortage of houses.
Consumer spending has been rising, so is the consumer debt. Household wealth is also rising. But many consumers are unhappy as lower inflation doesn't mean lower prices.
Banks are in good financial shape.
Dollar is strong, but that is Treasury's responsibility.
Internal review of the Fed will start later in the year.
New SEPs (Summary of Economic Projections) were released.
https://ybbpersonalfinance.proboards.com/post/1512/thread
In my multi-tasking I did not catch this - "Internal review of the Fed will start later in the year." Could you please elaborate?
Also, did JP say that two months in a row of data is not sufficient for him to assess if there is a developing trend? I thought I overheard that but wanted to confirm with you to make sure I understood his thinking.
Thanks