Jonathan's Feed
Dec 15, 2014

Preview – Fed faces big decision over a few choice words

NEW YORK (Reuters) – Federal Reserve officials will decide this week whether to make a critical change to their policy statement that would widen the door for interest rate hikes next year and effectively bet the United States will continue to shine in a gloomy global economy.

In one of the last major wild cards for financial markets in 2014, the U.S. central bank’s policy-setting committee is to issue the statement and fresh economic forecasts on Wednesday at 2 p.m. (1900 GMT), following a two-day meeting. Fed Chair Janet Yellen will then hold a news conference at 2:30 p.m. (1930 GMT).

Dec 15, 2014

Fed faces big decision over a few choice words

NEW YORK (Reuters) – Federal Reserve officials will decide this week whether to make a critical change to their policy statement that would widen the door for interest rate hikes next year and effectively bet the United States will continue to shine in a gloomy global economy.

In one of the last major wild cards for financial markets in 2014, the U.S. central bank’s policy-setting committee is to issue the statement and fresh economic forecasts on Wednesday at 2 p.m., following a two-day meeting. Fed Chair Janet Yellen will then hold a news conference at 2:30 p.m.

Dec 11, 2014

Bank of Canada says housing-market crash not in the cards

NEW YORK (Reuters) – The Bank of Canada does not foresee the sort of sharp rise in joblessness or mortgage rates that would trigger a major housing market correction, Governor Stephen Poloz said on Thursday.

Speaking to reporters in New York a day after the central bank said it estimates the Canadian housing market could be overvalued by 10 to 30 percent, Poloz said the probability of such a big drop in prices is low.

Dec 11, 2014

Poloz: Financial regulation should not stifle innovation

NEW YORK, Dec 11 (Reuters) – Increased regulation stemming
from the global credit crisis need not stifle the financial
innovation needed to help push economic growth forward, the head
of the Bank of Canada said on Thursday.

In prepared remarks for a speech he was giving in New York,
the central bank’s Governor Stephen Poloz urged the financial
industry to find a balance between risk and innovation.

Dec 5, 2014

Fed needs to acknowledge rate hikes are coming: Mester

WASHINGTON (Reuters) – The Federal Reserve needs to adjust its policy statement to acknowledge clear signs of economic strength and, in particular, stop telling the world that interest rates won’t rise for a long while yet, a top Fed official said in an interview on Friday.

Cleveland Fed President Loretta Mester told Reuters she is more optimistic about the economy than most of her colleagues at the U.S. central bank, and would probably be willing to tighten monetary policy sooner. But as the Fed approaches a key policy meeting on Dec. 16-17, she has not decided whether to dissent if the message remains too dovish for her taste.

Dec 1, 2014

Fed welcomes energy drop, shrugs off disinflation threat

NEW YORK (Reuters) – The Federal Reserve is welcoming the sharp drop in global energy prices, with two influential policymakers on Monday cheering the boost it should provide American pocketbooks and shrugging off any pressure on already low inflation.

Soft oil prices in particular, which hit a five-year low on Friday, will only temporarily dampen overall U.S. prices, Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley said at separate events. The pair painted a mostly rosy outlook for the world’s largest economy, suggesting the central bank is not letting energy markets distract it from lifting rates some time next year.

Dec 1, 2014

Fed rate hikes to depend on markets, not just economy -Dudley

NEW YORK, Dec 1 (Reuters) – The Federal Reserve will not
just tighten policy based on how the U.S. economy is faring, but
on how well financial markets respond to the eventual
interest-rate hikes, an influential Fed official said on Monday.

New York Fed President William Dudley said the U.S. central
bank will unleash more aggressive rate rises if financial
markets do not tighten as expected, and vice versa. He flagged
short- and long-term interest rates, equities, credit spread and
availability, and the dollar as areas the Fed will watch.

Dec 1, 2014

Insight – U.S. Fed rattled by elusive inflation, but loath to sound alarm yet

NEW YORK/SAN FRANCISCO (Reuters) – With the U.S. economy humming along at its fastest clip in more than a decade, the Federal Reserve should be confident about its ability to weather a global slowdown and start lifting interest rates around the middle of next year.

But then there is inflation.

Interviews with Fed officials and those familiar with its thinking show the mood inside is more somber than the central bank’s reassuring statements and evidence of robust economic health would suggest. The reason is the central bank’s failure to nudge price growth up to its 2 percent target and, more importantly, signs that investors and consumers are losing faith it can get there any time soon.

Dec 1, 2014

Fed rattled by elusive inflation, but loath to sound alarm yet

NEW YORK/SAN FRANCISCO (Reuters) – With the U.S. economy humming along at its fastest clip in more than a decade, the Federal Reserve should be confident about its ability to weather a global slowdown and start lifting interest rates around the middle of next year.

But then there is inflation.

Interviews with Fed officials and those familiar with its thinking show the mood inside is more somber than the central bank’s reassuring statements and evidence of robust economic health would suggest. The reason is the central bank’s failure to nudge price growth up to its 2 percent target and, more importantly, signs that investors and consumers are losing faith it can get there any time soon.

Nov 28, 2014

Fed’s latest invention holds promise for controlled rate rise

NEW YORK (Reuters) – The Federal Reserve’s latest market proposal could help it smoothly raise interest rates and bring far more banks into direct contact with the U.S. central bank in a way that another tool, unveiled last year, could not.

Analysts have applauded a draft Fed idea to offer lenders segregated cash accounts to be used as collateral for transactions with private investors. Such accounts could be an “additional supplementary tool” as the central bank returns to a more normal policy stance, according to minutes of the Fed’s Oct. 28-29 policy meeting, which were released last week.