Continued Financial Stress Argues for a Pause This is a fast-moving situation. While the economic data calls for additional rate hikes, the Fed does not hike rates in periods of
Monday Morning Notes, 3/13/23 Ironically, a common theme in our New York and London client meetings over the past two weeks was the seemingly uncanny ability of financial markets to
Powell Drops the Hammer Federal Reserve Chair Jerome Powell dropped the hammer in today’s testimony, making clear that the expected terminal rate will move higher and putting a 50bp rate
Monday Morning Notes, 3/6/23 If You Don’t Have Time This Morning Recent data is pulling Fed speakers toward a higher terminal rate than implied by the December SEP but they
Monday Morning Notes, 2/27/23 If You Don’t Have Time This Morning Last week’s core-PCE inflation numbers dashed hopes for a rapid decline of inflation. Indeed, claims that the disinflationary process
Stale Minutes Offer Little New Guidance The minutes of the Jan/Feb FOMC meeting gave no indication that there was anything but broad support for stepping down to 25bp but also
Tuesday Morning Notes, 2/21/22 If You Don’t Have Time This Morning Whereas the Fed expected the economy would continue slowing this year, incoming data indicates that first quarter activity firmed.
Now Waiting For The Next Round of Data The Fed left the last FOMC meeting unprepared for the economy to stabilize let alone re-accelerate in the manner suggested by incoming
Quick Note on CPI Core CPI for January came in at expectations, and has now firmed over the past two months: Core less shelter and used cars remains off the
Monday Morning Notes, 2/13/23 If You Don’t Have Time This Morning The Fed is searching for the terminal rate for this cycle and has its eye on 5.125%. The outcome,
Monday Morning Notes, 2/6/23 If You Don’t Have Time This Morning Last Thursday I thought that this would be a shorter note and that we could all catch a break
Quick Note on Powell Federal Reserve Chair Jerome Powell’s comments today fell in line with our expectations. Powell noted approvingly that financial markets tightened after last week’s data dump, appearing
Some Follow Up I have been fielding several good questions about my note last night. Below is a short note to highlight some of my answers. The Fed is focused
Market Participants Moving Past the Fed The Fed stepped down to 25bp rate hikes today as expected and signaled more to come. We think a March rate hike is a
Quick Note on ECI ECI came in on the soft side with deceleration in wages, benefits, and wages excluding compensation: Federal Reserve Chair Jerome Powell has elevated the importance of
Monday Morning Notes, 1/30/23 If You Don’t Have Time This Morning The Fed will downshift to a 25bp rate hike at the conclusion of this week’s FOMC meeting while indicating
Quick Note on Unemployment Claims Assuming inflation stays within the Fed’s expectations for 2023, the odds for a May rate hike depend heavily on the strength of the labor market.
Fed Committed to a March Rate Hike Bloomberg reports traders edging their toes into the water on a bet against a March rate hike: With the Federal Reserve’s Feb. 1
Quick Note on Brainard Markets shrugged off the more dovish comments from Federal Reserve Vice Chair Lael Brainard as any of her typical inclinations are arguably already priced into rates.
Thoughts on the Fed and Financial Conditions One of the most frequent questions we get from clients is about the Fed and financial conditions. Specifically, if the Fed pauses, won’t
