Jonathan's Feed
Apr 30, 2015

Wage history signals U.S. employment nearly as good as it gets

NEW YORK, April 30 (Reuters) – If history is any indication,
U.S. unemployment may not fall much further after one of the
most reliable measures of wage gains jumped in the last quarter,
giving the Federal Reserve another reason to soon raise interest
rates.

Over the last three decades, the Employment Cost Index,
which is the broadest measure of U.S. labor costs and therefore
one of the Fed’s key guides as it mulls a rate hike, has begun
to climb a year or a bit more before unemployment fell through
an equilibrium level known as its natural rate.

Apr 23, 2015

Market liquidity drought raises alarm bells inside Fed

WASHINGTON/NEW YORK, April 23 (Reuters) – Sections of the
U.S. financial system that may be vulnerable to investor panic
are raising concerns inside the Federal Reserve, as policymakers
preparing for the first interest-rate hike in nearly a decade
seek to ensure the market is ready and able to handle it
whenever it happens.

Years of Fed bond-buying and new bank rules are seen to have
left the ultra-liquid U.S. Treasuries market more vulnerable to
an abrupt selloff. But in particular, the Fed is worried whether
the booming asset management industry can withstand a run of
redemptions in a financial crisis.

Apr 23, 2015

Fed eyes ability of asset managers to repay in a panic

WASHINGTON/NEW YORK (Reuters) – Sections of the U.S. financial system that may be vulnerable to investor panic are raising concerns inside the Federal Reserve, as policymakers preparing for the first interest-rate hike in nearly a decade seek to ensure that the market is ready and able to handle it whenever it happens.

The Fed is particularly worried about whether the booming asset management industry can withstand a run of redemptions in a financial crisis.

Apr 20, 2015

Bank of Canada’s January rate cut seems enough -Poloz

NEW YORK, April 20 (Reuters) – The Bank of Canada’s January
interest-rate cut appears to have helped the economy get back on
track, bank Governor Stephen Poloz said on Monday, repeating his
view that the cut provided enough “insurance” against the impact
of dropping oil prices.

It is a message he has delivered several times over the past
week, including last Wednesday, when the bank issued a statement
keeping rates on hold, and the market has gradually reduced its
bet on another rate cut this year to a 35 percent
chance.

Apr 16, 2015

Fed’s Mester makes case for U.S. rate hikes sooner than later

NEW YORK, April 16 (Reuters) – The Federal Reserve should
begin a gradual series of interest rate hikes “relatively soon”
as long as the economy rebounds from a soft first quarter, since
the benefits of delaying are running thin, a top Fed official
said on Thursday.

Cleveland Fed President Loretta Mester, a newer but
influential policymaker at the central bank, painted an
optimistic picture of the U.S. economy and delivered a
three-pronged thesis for starting to tighten policy sooner
rather than later.

Apr 14, 2015

Exclusive: Wary of natural disaster, NY Fed bulks up in Chicago

NEW YORK (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 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.