The Federal Reserve Bank of San Francisco produces some of the U.S. central bank’s best research on labor markets and monetary policy. And it’s from there that the Bank of Canada plucked its newest deputy governor,
By Lindsay Dunsmuir
The Fed’s Beige Book, a compendium of anecdotes from business contacts across the U.S. central bank’s 12 regional districts, is not known for tickling detail. But it seems one regional Fed district – Boston to be precise – is paving the way in bringing a bit of relatable life to the usually dour document. In January’s report it pointed out that a toy company in its district reported strong sales “largely driven by the new Star Wars movie.” This time, it seems that all that movie-related spending has left locals with little money to spend on love. “Sales of Valentine’s Day items usually spike a few days before the holiday, but this year sales were lackluster,” the Boston Fed reported. Next time around, will we find out that children were deprived of their chocolate Easter bunnies? It’s anyone’s guess, but it seems like the researchers in Boston are minded to let us know.
San Francisco Fed President John Williams on Thursday said he still thinks gradual interest-rate hikes are the “best course” (http://reut.rs/1RaUTa9), a view that fails to harmonize with that of fellow Fed policymaker James Bullard, president of the St. Louis Fed who said late Wednesday further rate hikes would be “unwise” (http://reut.rs/1XAnEjh)
San Francisco Federal Reserve President John Williams earlier this year got so sick of answering reporters’ questions about when the U.S. central bank would raise rates that he had his son design a Tee-shirt that he could just give out.
The U.S. November jobs report is expected shortly, and in all likelihood it will be a solid one. But forecasts around future employment are not quite so optimistic.
from Ann Saphir:
John Williams, chief of the San Francisco Federal Reserve Bank, happens to have the same name as the guy who wrote the music for the Star Wars films. Judging from his speeches of late, the Fed’s own Williams is something of a sci-fan himself. Thursday in Salt Lake City he borrowed from the iconic greeting of Star Trek’s Spock with a talk titled “The Economic Outlook: Live long and Prosper.” Earlier this month he riffed on Star Wars, with a speech subtitled “May the (economic) force be with you.” In July, he spoke about “The recovery’s final frontier” (see http://www.imdb.com/title/tt0098382/). So it is quite logical that the enterprising captain of the Fed’s farthest-flung Western outpost would be keen on exploring strange new worlds. And here I don’t just mean voyaging to Los Angeles, where he was on Monday, or to Spokane, Wash., where he treks next week. Williams, like most Fed officials, believes that after nearly seven years of extraordinarily easy monetary policy, the U.S. economy is finally ready to leave near-zero interest rates behind. On Thursday, Williams repeated his view that the Fed should raise interest rates this year. Not all U.S. central bankers agree – one can almost hear Minneapolis Fed’s Kocherlakota or Chicago Fed’s Evans echoing Princess Leia’s warning, “I have a bad feeling about this.” Certainly, if the Fed can successfully raise rates without quickly needing to cut them again, it will have pulled off what several other global central banks – the European Central Bank, the Bank of Japan, Sweden’s Riksbank -- have tried to do, but failed. Raising rates this year, as Williams hopes and expects to, would indeed be a bold move; and if the first hike is followed by others, he would indeed be taking the Fed where no other central bank has gone before.
U.S. non-farm payroll numbers came in well below forecast on Friday but may not have tolled the death knell on a September date for the first Federal Reserve rate hike in almost a decade.