The Fed

Powell Reappointment Likely

Update 579 — Powell Reappointment LikelyBut Progressive Fed Majority Could Follow This morning, the Consumer Price Index showed a flattening in inflation rate gains. Overall CPI is up 0.5 percent in December with year-over-year inflation coming to 7.0 percent compared to November’s numbers of 6.8 percent year-over-year. In his renomination hearing yesterday, Fed Chair Powell pointed …

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Assessing Asymmetrics, Crypto and Climate

Update 564 — Emerging Fin. Systemic Risks:Assessing Asymmetrics: Crypto and Climate Feverish negotiations on BIF and BBB continue on the Hill. Elsewhere in Washington, broader issues will get more attention once the big-ticket items are disposed of this fall. The Financial Stability Oversight Council (FSOC), created by the Dodd-Frank Act after the 2008 financial crisis, will face new, growing …

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Naming Names…Slowly

Update 560 — Naming Names…SlowlyStatus of Economic Policy Nominations To date, the administration has nominated candidates for about a third of the executive branch appointments that require Senate confirmation. Around a third of those have been confirmed. This applies to economic, fiscal, financial policy positions, to departments like Treasury, and agencies like the SEC. The nominations …

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Last Rodeo at Jackson Hole?

Update 553 — Last Rodeo at Jackson Hole?Rush to Renominate Fed Chair Powell Slows Investors and observers await Federal Reserve Chair Jerome Powell’s speech tomorrow at the Kansas City Fed’s annual Jackson Hole Conference. Issues abound: inflation, the still-recovering labor market, tapering down Fed’s balance sheet, and the economic uncertainty from the Delta variant. Unspoken is whether …

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Powell Promotes Recovery

Update 545 — Powell Promotes Recovery;Accommodates Growth and Mild Inflation Federal Reserve Chair Jerome Powell testified this week before the House Financial Services and Senate Banking Committees. Since his last testimony in February, the economy has begun to improve, with strong GDP growth expected this year. Inflation, as expected, has increased.  He has much to say about …

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Optimal Levels of Inflation

Update 535 — Optimal Levels of Inflation:What to Hope For and Expect in Recovery The May jobs report, out today, reflects an economy in transition, headed steadily toward recovery. U.S. employers added 559,000 jobs last month and the unemployment rate went down by 0.3 percent. The favorable trajectory still leaves open the length of recovery …

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Megabank CEOs Hit Hill

Update 534 — Megabank CEOs Hit Hill:Issues, Attacks Heard; Less So Consensus The CEOs of the six “megabanks” testified before the Senate Banking and House Financial Services Committees this week, addressing issues ranging from the pandemic response to climate risk to racial justice to wage disparities. Some questions arose concerning the banking sector itself but …

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Yellen Moves Markets

Update 527 — Yellen Moves MarketsAnd Can Remove FSOC Roadblocks The Federal Reserve surprised no one last Wednesday by continuing its near-zero interest rate policy and large-scale asset purchases. But markets tumbled Tuesday after Treasury Secretary Janet Yellen mentioned the possibility of raising rates, at some point, to prevent the economy from overheating.  In the …

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Powell Faces Fiscal, Macro Policy Potpourri

Update 516 — Support for Recovery (Act)?Powell Faces Fiscal, Macro Policy Potpourri Federal Reserve Chair Powell and Treasury Secretary Yellen both appeared before the House Financial Services (HFSC) yesterday and Senate Banking today. The main takeaway from them: the economic recovery needs additional federal support.  The ARP will boost the economy and the Fed projects …

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