No surprises from the Fed–for 2017 anyway
At today’s meeting of the Federal Reserve’s Open Market committee, the central bank kept its benchmark short-term interest rate unchanged at 1% to 1.25%, and announced that it would implement its plan to shrink its $4.5 trillion balance sheet by $10 billion a month beginning in October. The balance-sheet reduction would follow the framework released in June. All of that was expected by the financial markets. But there were some mild surprises in the Fed’s outlook for 2018.
Notes You Need for August 9: Oil inventories, U.S. productivity, Fed balance sheet, North Korea, gold, MCD China
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Trick or Trend: The markets have decided that the Federal Reserve will not raise interest rates in September, but what about the other tightening that month?
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Will tomorrow’s jobs number be too strong for the markets?
The U.s. government is set to release the jobs report for May at 8:30 a.m. New York time. Economists surveyed by Briefing.com are looking for the economy to add a net 180,000 jobs. That projection could be low, however, since the private ADP Employment Situation Report released yesterday showed the economy adding a much stronger than expected 263,000 jobs.
Financial markets take-away from today’s Fed minutes: Shrinking the balance sheet on tap in 2017
What the financial markets fastened on in the minutes from the Federal Reserve’s March minutes, released this afternoon, was a indication that the Fed would start to shrink its $4.5 trillion balance sheet of Treasuries and mortgage-backed securities later in 2017.
Will Trump’s hostility toward the Fed lead Janet Yellen to push up the day when the bank starts to cut its balance sheet?
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