Jonathan's Feed
Apr 14, 2015

Wary of natural disaster, NY Fed bulks up in Chicago

NEW YORK, April 14 (Reuters) – The New York branch of the
U.S. Federal Reserve, wary that a natural disaster or other
eventuality could shut down its market operations as it
approaches an interest rate hike, has added staff and bulked up
its satellite office in Chicago.

Some market technicians have transferred from New York and
others were hired at the office housed in the Chicago Fed,
according to several people familiar with the build-out that
began about two years ago, after Hurricane Sandy struck
Manhattan.

Apr 9, 2015

Sagging productivity behind slow U.S. wage gains, Fed study finds

April 9 (Reuters) – Prospects may be dim for American
workers looking for wage gains in the years ahead, according to
Cleveland Federal Reserve research that finds that gains partly
hinge on U.S. productivity and labor’s share of income, both of
which have been dropping.

Economists at the Cleveland Fed conclude that these
longer-term changes in the U.S. economy, which have picked up
over the last decade, played a role in the slow real wage growth
since the 2007-2009 recession. (bit.ly/1Dp2Sv1)

Apr 9, 2015

Fed officials say June rate hike still in play, hinges on data

NEW YORK (Reuters) – The Federal Reserve could still hike interest rates in June despite weak recent U.S. data and investor skepticism, two influential officials with the central bank said on Wednesday, putting the spotlight squarely on the economy’s performance in the next two months.

Disappointing U.S. jobs growth, manufacturing activity, and retail sales over the winter had pushed market expectations for a rate hike to later in the year. June has long been seen as the earliest the Fed could tighten policy, after more than six years of near-zero rates.

Apr 8, 2015

Fed mulls selling bonds to potentially trim repo use: minutes

NEW YORK (Reuters) – Federal Reserve officials are considering selling short-term bonds if, after they tighten U.S. monetary policy, it becomes necessary to trim usage of a new tool they plan to use to help lift interest rates.

The option, revealed in minutes of the U.S. central bank’s March policy meeting, was one of several on the table. But it could come as a surprise given the Fed has all but ruled out sales from its $4.5 trillion portfolio of Treasury and mortgage assets.

Apr 8, 2015

June rate hike still in play as Fed officials eye data

NEW YORK (Reuters) – Two influential Federal Reserve officials said they could still hike U.S. interest rates in June despite weak recent economic data and skepticism among investors, putting the spotlight squarely on the economy’s performance over the next two months.

Disappointing U.S. jobs growth, manufacturing activity, and retail sales over the winter had pushed market expectations for a rate hike to later in the year. June has long been seen as the earliest the Fed could tighten policy, after more than six years of near zero rates.

Apr 7, 2015

Record 2014 income on Fed portfolio seen dropping

NEW YORK (Reuters) – The record $106 billion in net income on the Federal Reserve’s portfolio of assets last year is seen dipping to a third of that size by 2018, according to an annual report by the New York Fed.

The New York Fed’s projections, based on bond market assumptions and surveys of primary dealers, see net income falling to about $35 billion by 2018, with the portfolio reaching an equilibrium size by the end of 2020.

Apr 7, 2015

Fed watching recent U.S. weakness; rate-hike timing unclear: Dudley

By Jonathan Spicer

NEWARK, N.J. (Reuters) – The timing of the Federal Reserve’s interest rate hike, which would be its first in nearly a decade, is unclear and for now policymakers must watch that the U.S. economy’s surprising recent weakness does not signal a more substantial slowdown, a top Fed official said on Monday.

New York Fed President William Dudley’s comments were the latest sign that a string of disappointing economic data, including a sharp drop in jobs growth last month, is derailing a Fed plan to tighten monetary policy around mid-year after more than six years of rock-bottom rates.

Apr 6, 2015

Fed watching recent weakness; rate-hike timing unclear – Dudley

By Jonathan Spicer

NEWARK, N.J. (Reuters) – The timing of U.S. interest rate hikes are uncertain and the Federal Reserve must watch that the surprising recent weakness in the U.S. economy does not foreshadow a more substantial slowdown, an influential Fed official said on Monday.

New York Fed President William Dudley said the weak March jobs report released last Friday, as well as softer than expected manufacturing and retail sales in recent months, likely reflected “temporary factors to a significant degree,” including the harsh winter in much of the United States.

Mar 30, 2015

With blog, Bernanke has new platform to make old argument

By Jonathan Spicer

(Reuters) – Ben Bernanke launched a blog on Monday, giving the former Federal Reserve chairman a new pulpit from which to make an old argument: why interest rates need to be so low.

Bernanke, who handed the reins of the U.S. central bank to Janet Yellen last year, has been hitting the conference circuit more in recent months ahead of the planned publication of his book this autumn.

Mar 26, 2015

Insight – Fed market gurus prep rate hike amid last-minute anxieties

NEW YORK (Reuters) – The New York Federal Reserve officials tasked with prying interest rates off the floor have been meeting with bankers and traders to plot how best to do it, amid deep uncertainty over how much control they will really have over short-term lending markets.

With the U.S. central bank expected to raise rates later this year, Simon Potter and his team of market technicians have the tricky job of implementing higher rates using some new and lightly tested tools as well as some that may not work as well as in the past. They’ll be operating under intense global scrutiny that’s centred on the prospects for the world’s biggest economy.