Category Archives: Fed Flash

Fed Statement Evolves but Policy Unchanged

The Federal Open Market Committee (FOMC) erred on the side of caution by keeping the phrase “considerable time” in the statement, but not using it to describe policy moves going forward. Instead, members said they would be “patient” in raising rates. The change in verbiage is a bit of a bait-and-switch as the FOMC preps [...]

November Surge In Employment

Payroll employment jumped 321,000 in November and was revised up by 44,000 for the previous two months, bringing the last three-month average up to 278,000. Gains were broad-based, with particularly good gains in the business services sector (outside of temporary hires) where full-time, high paying jobs reside. This sector was among those hardest hit by [...]

Fed Offers Reassurance After Ending QE

The Federal Open Market Committee (FOMC) voted  today to end the large-scale asset purchase program  (also known as “quantitative easing,” or QE). FOMC members stated that they will maintain the size of the Federal Reserve’s balance sheet at the current $4.4 trillion level by replacing mortgage-backed securities and maturing Treasury bonds until the Fed starts [...]

Inflation Still Too Low

The Consumer Price Index (CPI) edged up 0.1% in September, after falling slightly the month prior. Increases in food prices tempered the drag from plummeting energy prices. This raises issues for consumers at the grocery store, as they will likely divert some of the money they are saving at the pump to deal with higher [...]

Primer for October 29 FOMC Meeting

The Federal Open Market Committee (FOMC) is slated to wrap up the large-scale asset purchase program (aka “QE3”) on October 29 with as little fanfare as possible. Federal Reserve officials believe they have prepared financial markets for this change and, despite recent market volatility, can still end the current purchase program quietly. The statement at [...]

Young Workers Looking for Work as Older Workers Are Hired

Payroll employment jumped 248,000 in September. The three-month moving average suggests payroll gains of 220,000 per month, which is in line with gains over the last year. Today’s data validate our view that the initial weak report for August was an anomaly.

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, [...]