Category Archives: Fed Flash

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.

Catch-up from Winter Doldrums not Enough

Today’s employment report showed us that the weather did indeed have an impact on hiring in previous months and now that spring is underway (all is relative), we are seeing a catch-up. The drop in the labor force and precipitous drop in labor force participation, however, underscores how far we still have to go. The [...]

Weak GDP to Affect How Fed Talks about Data

Real GDP grew a negligible 0.1% in the first quarter of 2014, after expanding 2.6% in the fourth quarter of 2013. Much of the weakness is attributed to extreme weather, although some decreases were larger than expected. It’s important to note that GDP for this initial estimate is compiled from the earliest data available for [...]

CPI Rebounds from Winter Lull

The Consumer Price Index (CPI) rose  0.2% in March from February, well in-line with expectations and was up 1.5% from a year ago, a little hotter than we saw just a month ago. The portions of the country that escaped the polar vortex suffered a drought, which is pushing up feed prices. In response, prices [...]

Private Sector Recovers Job Numbers, not Quality

Payroll employment jumped 192,000 in March and was revised up by 37,000 for the previous two months; that puts the total number about where we expected it. Private sector employment crossed its previous peak. The quality of jobs generated, however, is not comparable in any way to those we lost. The overwhelming majority of job [...]