Correspondent, Chicago
Ann's Feed
Jun 8, 2015

Minneapolis Fed seeks ‘thought leader’ as dovish chief leaves

By Ann Saphir

(Reuters) – The Federal Reserve Bank of Minneapolis on Monday launched a search for a “strategic thought leader” to replace current president Narayana Kocherlakota, who is returning to academia after years of failing to persuade colleagues in the U.S. central bank to support more accommodative monetary policy.

Kocherlakota, a university professor before becoming Minneapolis Fed president in 2009, will start work as a professor of economics at the University of Rochester, in New York state, on Jan. 1.

Jun 8, 2015

Fed ‘dove’ Kocherlakota returning to academia

By Ann Saphir

(Reuters) – Minneapolis Federal Reserve Bank President Narayana Kocherlakota said on Monday he was returning to academia, after years of failing to persuade colleagues in the U.S. central bank to support more accommodative monetary policy.

Kocherlakota said in a statement he had accepted a job as a professor of economics at the University of Rochester, in New York state, starting Jan. 1. He had said he would leave by February 2016. Before taking his job in 2009, he had been a professor at the University of Minnesota.

Jun 5, 2015

Fed seen raising rates in October as job market firms

By Ann Saphir

(Reuters) – After an unexpected surge in U.S. job gains in May, traders are now betting the Federal Reserve will start raising interest rates as soon as October.

Federal fund futures contracts show that traders see a 52 percent chance that the first Fed rate hike will come at the Fed’s second-to-last meeting of the year, based on CME FedWatch, which tracks rate hike expectations using its Fed funds futures contracts.

Jun 4, 2015

Fed doves’ ranks may be growing, possibly pushing hike into 2016

SAN FRANCISCO (Reuters) – Federal Reserve Chair Janet Yellen insisted only two weeks ago that the U.S. economy remained on a path that would allow the central bank to raise rates in 2015 for the first time in nine years.

Now however, some of her colleagues are suggesting it might be better to wait until late this year or even 2016, citing concerns about the international economic outlook and U.S. consumers’ reluctance to open their wallets.

May 21, 2015

Fed minutes too detailed, can hinder policy debate, Williams says

PALO ALTO (Reuters) – Minutes of the Federal Reserve’s regular meetings have become so detailed and such a central focus for investors and the news media that the quality of policy debates may be suffering as a result, a top Fed official said on Thursday.

The Fed publishes minutes of its policy-setting meetings three weeks after the fact. While the minutes do not specify what individual policymakers said, they do describe whether views were expressed by “some” or “a few” or “many” members. Traders often use those characterizations to try and determine where monetary policy may be heading.

May 12, 2015

Wage growth may be on tap as more Americans quit jobs

SAN FRANCISCO (Reuters) – Americans are becoming more apt to quit their jobs, a government report showed on Tuesday, a sign that a stronger labor market and falling unemployment rate could result in healthier wage growth and inflation.

The three-month quit rate for non-government jobs rose to 6.6 percent, the report showed, the highest since the second quarter of 2008 and up from 6.5 percent in the final quarter of 2014. Both wages and inflation tend to follow a rise in the quit rate by a couple of quarters, research from the Chicago Federal Reserve Bank shows.

May 7, 2015

Wary of bond ‘cliff,’ Fed plans cautious cuts to portfolio

NEW YORK/SAN FRANCISCO (Reuters) – The Federal Reserve is sketching out plans to prevent an abrupt contraction in its massive balance sheet next year, when some $500 billion in bonds expire and risk disrupting markets and the U.S. economic recovery.

Though it ended a stimulative asset-purchase program last October, the Fed is still buying mortgage and Treasury bonds to replenish its $4.5-trillion portfolio as holdings mature. The central bank has said it will keep reinvesting until some time after it begins raising interest rates later this year.

May 1, 2015

Fed rate hike in June ‘on the table,’ two policymakers say

/PHILADELPHIA (Reuters) – The Federal Reserve could well raise interest rates as soon as June, two top U.S. central bankers said on Friday, so long as economic data strengthens as expected from a dismal first quarter.

That view – from the hawkish-leaning chief of the Cleveland Fed and from the centrist head of the San Francisco Fed – is at odds with the view of many traders, whose bets in the interest-rate futures markets suggest they have all but discounted a June rate hike and now expect the Fed to wait until December before raising rates for the first time since 2006.

May 1, 2015
via MacroScope

Monetary policy: New T-shirt needed?


San Francisco Fed President John Williams  believes deeply that monetary policy is data-dependent, so much so that he has printed the mantra on T-shirts that he is giving away coast to coast. On Friday at Chapman University in Orange, Calif., however, he didn’t discuss the current state of U.S. economic data or the stance of monetary policy. Instead, he focused on why forcing the Fed to follow a strict monetary policy rule to make interest rate decisions would be, well, a problem ( It’s a view that a number of his colleagues, including Fed Chair Janet Yellen, have publicly embraced. Monetary policy — it’s independent. Sounds like something you could put on a T-shirt.

May 1, 2015

CME Group suspends two gold futures traders for allegedly spoofing

By Ann Saphir and Tom Polansek

(Reuters) – CME Group Inc on Thursday suspended two
traders from its markets for allegedly colluding to enter orders
repeatedly with no intention of trading, a strategy that has
been fingered as a key contributor to the 2010 Wall Street flash

Heet Khara and Nasim Salim, both traders of CME Group’s gold
and silver futures contracts on its Comex exchange in New York,
are prohibited from trading for 60 days, according to a
disciplinary notice released by the futures exchange.