Two signal events occurred in the financial policy space this week. The big bank CEO hearings this week in the House Financial Services and Senate Banking Committees are becoming an annual event featuring both chieftains of banking and important consumers of other public policy issues. CEOs of seven major U.S. banks appeared before Congress and …
Now that Michael Barr has been confirmed to join the Federal Reserve Board’s Vice Chair for Supervision, the Board’s last vacancy has finally been filled and a regulatory agenda held in abeyance can now see action. The nation’s banks may have survived the pandemic with capital intact, but problems like Too Big To Fail — …
Update 624 — Another 75 bp Hike by FedRole of Consumer in Recession Risk Ahead The Federal Reserve announced by unanimous vote an increase in its target interest rate by 75 basis points for the second month in a row this afternoon. Though expected, this and last month’s rate hikes— both the largest since 1994 …
Update 620 — CPI for June up 9.1%But Trends Complicate Inflation Story The CPI report for June, showing a 9.1 percent hike in prices from a year ago, up from 8.6 percent in May, may alarm some and immediately suggests another 75 basis point interest rate by the Fed at its next meeting, July 26-27. …
Update 616 — Fueling Uncertainty:Fed Fights Inflation, Recession Risk Federal Reserve Chair Jerome Powell took the hot seat this week during the semiannual Humphrey-Hawkins hearings before Congress. Recently re-confirmed as Chair, Powell had to manage his way through cross examination regarding the Fed and inflation, following a hot 8.6 percent May CPI rise in inflation …
Update 609 — Raising the Barr:Vision Behind Fed’s Supervision For the first time since its creation 12 years ago, the Federal Reserve’s Vice Chair for Supervision position will be filled by a Democratic nominee. Yesterday, Senate Banking held a confirmation hearing for Michigan Law Professor Michael Barr, an architect of Dodd-Frank, the law that established …
Update 607 — Inflation Eases an InchBut Hits Home(s): Prices, Sales, Rents The main takeaway from yesterday’s CPI report: inflation remains high, though decelerating marginally. CPI increased for consumer goods by 0.3 percent in April, down from the 1.2 percent increase in March. Increases in prices for food, airline fares, new vehicles, and shelter contributed …
Update 606 — Fed’s 50 bp Rate Hike:Tight Labor Market Cause and Effect Per this morning’s jobs report, the US economy added 428,000 jobs in April, average hourly wages are up 5.5 percent from a year ago, and unemployment stayed at a mere 3.6 percent – a near 50-year low – showing that Americans are getting back …
Update 602 — Symptom vs. Disease:Fighting Inflation by Relieving Costs There is a difference between battling inflation, which is the Fed’s errand, and battling its effects, which is more of a fool’s errand. With prices up 8.5 percent from a year ago and midterm primary season starting next month, the temptation is to focus on easing costs …
Update 593 — Fed Hikes Rates 25 bps:Brakes on Inflation, and Recovery Too? After fostering and assisting economic recovery in manifold ways, the Fed is reversing course. Today, Fed Chairman Jerome Powell announced the Fed will be raising interest rates by 25 basis points (or 0.25 percentage points). This is the first rate hike since December 2018 …
