Jerome Powell, chairman of the Board of Governors of the Federal Reserve System wrapped up his semi-annual visit to Capitol Hill basically saying all is well with the Fed’s implementation of monetary policy. Chairman Powell assured both the House yesterday and the Senate today that the labor market was at or near maximum employment although … Continue reading Not much moved me about Chairman Powell’s testimony this week …
Kugler speech missed the mark … On 22 April 2025, Federal Reserve Board governor Adriana D. Kugler gave a speech on the transmission of monetary policy through the economy. Governor Kugler explained how the Federal Open Market Committee (FOMC) manages monetary policy by adjusting the federal funds rate, the rate at which banks make uncollateralized … Continue reading What Governor Kugler’s speech missed yesterday…
The Federal Reserve Bank of New York’s July 2024 survey of primary dealers determined that a number of America’s largest banks expected the chances of a 50-basis point cut in the fed funds target rate to be around five percent. Today, according to the CME FedWatch tool, the chances of a 50-basis point decrease is … Continue reading So why is the market betting on a 50-basis point cut?
Between 9:02 am and 11:26 am, the CME FedWatch tool reflected an increase in the chances that the Federal Open Market Committee would increase the federal funds target range by 50-basis points. Traders expect a 61% chance of a 50-point increase. Chances of a 25-point increase has slipped to 39% at the time of this … Continue reading Three U.S. senators recommend a 75-basis point cut in the fed funds rate.
As of 10:03 am today, Bloomberg reports a yield of 4.05% and 3.88% on two-year and 10-year U.S. Treasuries, respectively. Data as of 16 August from the Board of Governors of the Federal Reserve System reported two-year and 10-year yields of 4.08% and 3.92%, respectively. Meanwhile, the markets are betting on a cut in the … Continue reading As the Democratic national convention ramps up, what numbers are we looking at?
U.S. Senator Raphael Warnock, Democrat of Georgia, used his time during today’s U.S. Senate Committee on Banking, Housing and Urban Affairs hearing on monetary policy to tie the problem of affordable housing in Georgia to Federal Reserve System rate setting. Jerome Powell, chairman of the Board of Governors of the Federal Reserve System pointed out … Continue reading Senate hearings on Federal Reserve monetary policy: Warnock surprised me today.
The Federal Reserve Discount Window rate is up to 5.25% after the Federal Open Market Committee decided yesterday to increase its fed funds target range to 5.00% to 5.25%. At this writing, the Federal Funds Futures quote is 95.31 which reflects an average effective fed funds rate of 4.69%. Given that the target range was … Continue reading Interbank Market News Scan: What the fed funds futures market is telling me …
Over the next twelve months, as rates fall any cheerleading about an economic upturn should be tempered by a narrative that a close eye is being kept on the economy and that disciplined expenditures are being made to keep moderate winds blowing into the economy’s sails. Continue reading Interbank Market News Scan: Betting markets see the effective federal funds rate dropping and that the Fed will not hike rates.
Should Mr Biden speak specifically to the inflation report, I expect that he will give some amount of credit to his inflation reduction and infrastructure initiatives that he has been implementing over the past two years. In theory, fiscal spending usually takes 18 months to move through the economy. Inflation, however, is a monetary phenomenon where there is an increase in money supply and not enough production in the economy to absorb the money supply. Continue reading Interbank Market News Scan: Inflation slows. Expect Biden to take a victory lap.
Lawyers Write the Bets. Bankers Sell the Bets. 