Federal Reserve

  • 2019-03-20 15:20


    WASHINGTON (MNI) - The following is a response of Federal Reserve Chairman Jerome Powell to a question from a reporter at his press conference following Wednesday's Federal Open Market Committee meeting.

    Question: The Fed has been allowing the average maturity of securities in its bond portfolio to lengthen. Is this aimed at consciously, aimed at flattening the yield curve? And is that going to be part of the Fed's longer run balance sheet strategy? And if flattening the yield curve is a conscious long-term strategy, are you concerned about the side effect of the heightening concerns about a flatter or inverted yield curve being a harbinger of recession.

    Powell: The basic answer to the question is no.

  • 2019-03-20 15:20


    WASHINGTON (MNI) - The following is a response of Federal Reserve Chairman Jerome Powell to a question from a reporter at his press conference following Wednesday's Federal Open Market Committee meeting.

    Question: Hi, Jean Yung from Market News. I wanted to ask, at what point do you expect to begin to allow the balance sheet to grow slowly again? How will you make that decision?

    Powell: As I mentioned, the balance sheet runoff will stop at September 30.

  • 2019-03-20 15:10


    WASHINGTON (MN) - The following is a response of Federal Reserve Chairman Jerome Powell to a question from a reporter at his press conference following Wednesday's Federal Open Market Committee meeting.

    Question: I counted five downgrades in the first paragraph of the FOMC statement. What conditions do you need to see in order for a rate cut or rate hike on the other side of that then?

    Powell: I think we wanted to be careful to go ahead and acknowledge the things, it's relatively little hard data so far this year but we were careful to point out lower retail sales, the weak November meeting, BFI, all those things, and that was the right thing to do.

  • 2019-03-20 15:07


    WASHINGTON (MN) - The following is a response of Federal Reserve Chairman Jerome Powell to a question from a reporter at his press conference following Wednesday's Federal Open Market Committee meeting.

    Question: On the size of the balance sheet, do you have a numerical estimate for where it will be at the end of September once the runoff is complete?

    Powell: In terms of the size of the balance sheet, the balance sheet will be of a size of approximately 17 percent of GDP, around the end of this year, down from 25 percent of GDP at the end of 2014. So significantly smaller relative to GDP than it was.

  • 2019-03-14 16:23


    --Repeating File Initially Sent at 10:55 ET/14:55 GMT Thursday

    WASHINGTON (MNI) - The slowdown in the U.S.

  • 2019-03-08 23:00


    By Jean Yung

    WASHINGTON (MNI) - Federal Reserve Chair Jay Powell on Friday said the balance sheet may reach its new normal size by the end of the year and repeated that the FOMC expects to announce plans to end asset runoffs soon.

    "The Committee is now well along in our discussions of a plan to conclude balance sheet runoff later this year," he said in remarks prepared for the Stanford Institute of Economic Policy Research in California. "We expect to announce further details of this plan reasonably soon."

    Current estimates of the "new normal" size of the balance sheet suggest "something in the ballpark" of its fourth quarter projected value, he said.

  • 2019-03-08 11:54


    By Jean Yung

    WASHINGTON (MNI) - The Federal Reserve's plan to conclude asset runoffs this year would still leave its balance sheet at levels that expose the central bank to potential political pressure, St. Louis Fed economist David Andolfatto told MNI, calling for the introduction of a standing repo facility as a way to reduce banks' demand for reserves.

    Policymakers aim to whittle down the Fed's balance sheet to the minimum level of bank reserves needed to control interest rates effectively.

  • 2019-03-05 08:35


    By Jean Yung

    WASHINGTON (MNI) - Federal Reserve Bank of Boston President Eric Rosengren on Tuesday said the FOMC should wait through "several" meetings before making a call on the next policy move. Weakness in financial markets at the turn of the year may or may not reflect slowing in the real economy, while slowing growth abroad and ongoing trade tensions remain unresolved, he said.

    "With less ebullience in financial markets and no immediate signs of inflationary pressures, patiently watching to see how the economy develops is the appropriate policy for now, and represents prudent management of risks to the forecast," he said.

  • 2019-02-27 12:32


    By Jean Yung

    WASHINGTON (MNI) - The FOMC is nearing consensus on a plan to cease reducing its balance sheet and will likely announce something "fairly soon," Federal Reserve Chair Jay Powell told lawmakers Wednesday, signaling that a decision will be made public at the March FOMC meeting.

    "We're close to agreeing on a plan that would light the way to the end of the process," Powell told the U.S. House of Representatives on the second day of his semi-annual report to Congress.

    The ultimate size of the balance sheet will be driven by demand for bank reserves, but the minimum level of reserves needed to control interest rates effectively is unclear, Powell said.

  • 2019-02-25 14:00


    By Jean Yung

    WASHINGTON (MNI) - The Trump administration's 10% tariff on Chinese imports has so far contributed 0.1 percentage point to consumer price inflation and 0.4 percentage point to price inflation for business investment goods, according to new research Monday from the Federal Reserve Bank of San Francisco.

    A 25% tariff on all Chinese imports, if implemented, would raise consumer prices an additional 0.3 percentage point and investment prices an additional 1.0 percentage point, the paper found. President Trump on Sunday extended his original Friday deadline to increase tariffs on $200 billion of Chinese goods as negotiations continued, but no new deadline has been set.