Category Archives: Fed Flash

Fed Ready to Raise Rates: Decision not Unanimous

The minutes to the Federal Open Market Committee (FOMC)’s October meeting revealed the ongoing debate over the timing of the first rate hike and concerns about communications. The majority of members was either ready to move or believed that they would be able to move in December. There was significant pushback by two members

Listen for Dissonance or Harmony from the Fed

The key question when the minutes of the Federal Reserve’s October meeting are released today will be how far Chair Janet Yellen’s legendary gift of persuasion worked, particularly within her inner circle.

Inflation Offers Fed Confidence

The Consumer Price Index (CPI) rose 0.2% in October compared to one month ago and one year ago. Core (nonfood and nonenergy) inflation also rose 0.2% as the drag from energy prices abated and the push from medical care services intensified.

Producer Prices Drop

Producer prices unexpectedly fell 0.4% in October as services inflation fell well short of expectations for the second straight month. Another sharp drop in inflation in the services sector,

Catch-up in October Employment Seals the Deal

Payroll employment surged by 271,000 in October, reversing the weakness we saw over the summer. Moreover, gains were broad-based in everything from professional services, which include entry-level workers, to construction, retail, food services and hospitals.

Will Dissonance at the Fed Persist?

Key speeches by Federal Reserve officials are scheduled this week. Some are more important than others. Fed Chair Janet Yellen and Fed Governor Lael Brainard speak on regulatory issues Wednesday. On the surface, these speeches are expected to be benign. The Q&A, however, could be more interesting.

Inflation and Wages Still Muted

Personal income and outlays both rose an inflation-adjusted 0.2% in September. Falling prices at the gas pump continued to buoy spending. The personal consumption expenditures (PCE) index, which more accurately measures inflation than the consumer price index (CPI), fell by 0.1%.

Summer Swoon Transitory

Real GDP growth slipped to a 1.5% pace in the third quarter after averaging nearly 4% in the second quarter. A sharp drawdown in inventories and a widening trade deficit accounted for the bulk of that weakness.

Yellen Regains Flexibility

The Federal Open Market Committee (FOMC) voted to hold interest rates unchanged today, but successfully reopened the door to a December rate hike. The statement surprised many by affirming the strength of the U.S. consumer, a necessary component to carry the economy through the turbulence emanating from abroad. The statement also downgraded the concerns about [...]

Janet Yellen’s Punk Rock Moment

The Clash at the Fed: Watching the Federal Reserve and its communications regarding liftoff [the Fed’s term for exiting the zero bound on short-term interest rates] and initiating the first rate hike in nearly a decade is much like listening to the ambiguity in the 1981 song by the punk rock band The Clash. Should I [...]