Category Archives: Fed Flash

Fed on Path to Slow Exit from QE

The Federal Open Market Committee (FOMC) voted to further reduce its asset purchases by $5 billion each, which brings its current purchases of mortgage-backed securities down to $5 billion per month and its purchases of Treasury bonds down to $10 billion per month. Chair Yellen also went out of her way to reemphasize that the [...]

Employment Shortfall is a Fluke

Payroll employment rose a marginal 142,000, well below the consensus for the month of August, with downward revisions on net to the two previous months. The weakest part of the data was a shortfall in retail employment, partly due to a strike on the East Coast. Manufacturing flatlined

CPI Treads Water in July

The Consumer Price Index (CPI) edged up 0.1% in July from June, with widespread declines in energy prices offsetting a larger-than-expected uptick in food prices. Grocers and restaurants raised prices, attempting to tap into the discretionary spending that lower prices at the pump will hopefully bring. So far, however, increases in food prices have proven [...]

Employment Data Affirm Fed Strategy of Gradualism

Payroll employment rose a less-than-expected 209,000 in the month of July, with modest upward revisions for a net 15,000 additional jobs in the previous two months. This is the sixth month that we have seen job gains exceed the 200,000 threshold, but just barely. Indeed, private sector job creation fell slightly below the 200,000 level, [...]

Yellen Defends Gradualism

Federal Reserve Chair Janet Yellen has been succinct in her testimony to the Senate Banking Committee today. She emphasized that weakness in the first quarter was likely transitory, but still worse than anyone expected.  The Fed needs to be mindful on how much it can write off to weather problems. She also cited ongoing problems [...]

Employment Explodes for July 4th Holiday

Payroll employment jumped by 288,000 in the month of June, with upward revisions to both May and April. April now shows a rise of more than 300,000 as the economy continued to snap back from the winter doldrums.

Yellen Provides Road Map to Fight Bubbles

Federal Reserve Chair Janet Yellen shot a warning across the bow of financial markets today by laying out just how aggressive the Fed is willing to get in order to stem potential bubbles. She stressed the use of macroprudential, or regulatory policies, over direct changes in monetary policy to ensure financial market stability but did [...]

Fed Stays the Course but Shows Divisions on Exit Strategy

As expected, the FOMC voted to stay the course and continue its gradual tapering of asset purchases today, with a reduction of $5 billion in purchases of mortgage-backed securities to $15 billion per month and a $5 billion in Treasury bond purchases to $20 billion in July. The Fed marked down its forecast for the [...]

Two Steps Forward, One Back on Employment

Nonfarm payroll employment rose 217,000 in May, crossing the total level of employment hit prior to the crisis in early 2008. Government payrolls were up by 1,000, a modest but major shift from the drag we saw  government spending cuts place on the payrolls data during much of the recovery.  A gain in local government [...]

GDP Drop Expected to Reverse in Q2

Real GDP was revised down to show a 1% decline in the first quarter. Most of that drop was due to a larger-than-expected liquidation in inventories, which is good in that it leaves more room for a rebound in the second quarter. Manufacturing activity has already picked up on the heels of better weather.