Jonathan's Feed
Feb 11, 2015

Fisher floats changes to fix Fed’s New York, Washington bias

NEW YORK (Reuters) – The Federal Reserve should revamp its rules to address perceptions of conflicts of interest and regulatory capture in the power centers of New York and Washington, the outspoken head of the Dallas Fed said on Wednesday.

Richard Fisher, addressing a New York audience for likely the last time before stepping down next month as president of the Dallas branch of the U.S. central bank, again warned against delaying an interest rate hike in the face of weak inflation.

Feb 10, 2015

IMF chief economist says 2015 growth forecasts a bit too gloomy

NEW YORK (Reuters) – The International Monetary Fund was perhaps too pessimistic when it downgraded its forecast for 2015 global economic growth, in part because of the benefits of low oil and a weaker euro and yen, the IMF’s chief economist said on Tuesday.

“I think that our forecasts were probably a bit pessimistic,” especially on the positive effects of low oil prices, Olivier Blanchard said of the forecasts the IMF released last month. “They should maybe be a bit more optimistic.”

Feb 4, 2015

Only broad inflation drop should delay rate hike -Fed’s Mester

COLUMBUS, Ohio, Feb 4 (Reuters) – Only a broad decline in
U.S. inflation measures and slower economic growth would prompt
Cleveland Federal Reserve President Loretta Mester to back off
her recommendation for an interest rate hike in the first half
of the year, she said on Wednesday.

Mester, a pragmatic centrist at the U.S. central bank,
repeated her call for a modest policy tightening by June to
account for an economic recovery that she says continues to
build momentum in the face of some weaker price readings.

Jan 31, 2015

Exclusive: Treasury official among those eyed for regional U.S. Fed openings

By Jonathan Spicer, Michael Flaherty and Ann Saphir

(Reuters) – A U.S. Treasury official and a director at the New York Federal Reserve are among those who have been considered to replace two hawkish Fed policymakers, according to people familiar with the searches.

Final decisions are not imminent in the efforts to find successors to Philadelphia Fed President Charles Plosser, who steps down March 1, and Richard Fisher of the Dallas Fed, who retires on March 19.

Jan 16, 2015

Insight – Unfazed by market swings, Fed sticks to mid-2015 hike scenario

NEW YORK/SAN FRANCISCO (Reuters) – Tumbling oil prices have strengthened rather than weakened the Federal Reserve’s resolve to start raising interest rates around midyear even as volatile markets and a softening U.S. inflation outlook made investors push back the timing of the “liftoff.”

Interviews with senior Fed officials and advisors suggest they remain confident the U.S. economy will be ready for a modest policy tightening in the June-September period, while any subsequent rate hikes will probably be slow and depend on how markets will behave.

Jan 16, 2015

Unfazed by market swings, Fed sticks to mid-2015 hike scenario

NEW YORK/SAN FRANCISCO, Jan 16 (Reuters) – Tumbling oil
prices have strengthened rather than weakened the Federal
Reserve’s resolve to start raising interest rates around midyear
even as volatile markets and a softening U.S. inflation outlook
made investors push back the timing of the “liftoff.”

Interviews with senior Fed officials and advisors suggest
they remain confident the U.S. economy will be ready for a
modest policy tightening in the June-September period, while any
subsequent rate hikes will probably be slow and depend on how
markets will behave.

Jan 14, 2015

Fed’s Kocherlakota ‘uneasy’ about low longer-term rates

NEW YORK, Jan 13 (Reuters) – A top U.S. Federal Reserve
official said on Tuesday he was “uneasy” about the low long-term
yields on Treasury bonds because the situation indicates there
are fewer safe assets for investors, and it suggests rates could
be persistently low in the future.

Minneapolis Fed President Narayana Kocherlakota said the
puzzlingly low rates could complicate options as the U.S.
central bank prepares to tighten policy. But he added the Fed
would have to consider the bond-market reaction to an eventual
rate hike only to the extent that it affects the real economy.

Jan 13, 2015

Fed’s Kocherlakota backs goal-based policy, wants more stimulus

NEW YORK (Reuters) – Proposed U.S. legislation that would force the Federal Reserve to adopt a rules-based approach to policy is flawed, a top Federal Reserve official said on Tuesday, arguing that a goal-oriented approach is better and would suggest more stimulus is necessary.

Narayana Kocherlakota, the dovish president of the Minneapolis Fed, repeated his long-held argument that the U.S. central bank is planning a too-hasty retreat this year from near-zero interest rates.

Jan 11, 2015

Mind the gap in multi-speed world economy after oil plunge

WASHINGTON/NEW DELHI, Jan 11 (Reuters) – Robust recovery in
the United States, a moribund euro zone and slowing Chinese
growth reflect global splits which plunging oil prices are
likely to widen.

On the face of it, lower energy bills should give consumers
and companies more money to spend and boost economic growth, at
least for oil importers.

Jan 9, 2015
via MacroScope

Major central banks set to go their own way, with some risk

Real interest rates of world’s major central banks

The world’s major central banks have long followed the same general flight path, guided by the economic winds of growth, inflation and financial markets. It has worked pretty well for policymakers in the United States, Europe, Japan, and the United Kingdom: moving together to tighten or loosen monetary policy makes things more predictable for citizens, businesses and investors. It also serves as buffer to any volatile currency movements, at least among developed economies. But six years after the worst recession in decades, this could be the year central bankers split off and – with some risk – go their own way.

While the U.S. Federal Reserve and Bank of England are expected to raise interest rates in the next 6-12 months or so, emboldened by strong jobs growth in their respective countries, the European Central Bank and Bank of Japan are headed for yet more monetary stimulus to fend off deflation and stagnant growth. Plunging oil prices, while good in principle for these importing economies, is nonetheless unwelcome for ECB and BoJ policymakers trying desperately to boost prices with low rates and massive asset purchases. Boston Fed President Eric Rosengren, speaking in Wisconsin on Thursday, noted that the ECB is expected to expand its balance sheet later this month. Taking stock of the four central banks, he said: