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)
Forecasts for when the Bank of England will raise rates have been put off into the future for the seventh time since Mark Carney became Bank of England Governor nearly three years ago.
The world economy may be set for another year like 2015, with modest growth in developed economies offsetting persistent weakness elsewhere but generating very little inflation and keeping interest rates low.
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 Federal Reserve’s planned smooth and gradual rate hike path may be bumpier than anticipated if U.S. economic growth over the next several months and punishingly cold winter weather follow a well-established recent pattern.
Not long ago, the big debate was over who would raise rates first, the U.S. Federal Reserve or the Bank of England. Now with the Fed giving clear signals it’s on the brink of hiking and the BoE appearing to be pushing that day further off into the future, one could naturally conclude that the inflation outlook in both economies is vastly different.
It’s probably a good thing the Federal Reserve concluded its latest policy meeting with a strong signal of its intentions, because GDP growth data expected later on Thursday are unlikely to cement rate hike views one way or another.