All according to plan. The biggest news is the big move up in the "longer-run" funds rate dot to 2.75%. That's a long way below, but we haven't seen even that much optimism about the neutral rate since 2018.
Federal Reserve
Federal Reserve
Wednesday, May 1, 2024
The FOMC didn't disappoint -- it followed through on deceleration of balance-sheet run-off. If anything, the sharpness of the deceleration is an upside surprise.
Federal Reserve
Wednesday, March 20, 2024
Perfect. The Fed upgrades 2024 growth, but not the 2024 funds rate dot. They lift the other dots, including the first reading above 2.5% in more than five years for the "longer-run" representing their estimate of the neutral rate.
Federal Reserve
Wednesday, January 31, 2024
The inflation bias is gone. Risks are now in balance. The hiking bias is gone. It's now about adjustments. Nothing about the balance sheet. A dovish statement, but far from surprising.
Federal Reserve
Wednesday, December 13, 2023
This is it. The turning point. First time in this hiking cycle that the dots have been lowered. The 2024 dot was lowered a lot.
Federal Reserve
Wednesday, November 1, 2023
The Fed acknowledges tighter financial conditions. That takes a December hike off the table, and means the policy rate will undershoot the "dot." All to the good.
Federal Reserve
Wednesday, September 20, 2023
The "dots" for 2024 and 2025 are jerked higher. The geniuses on the FOMC are telling us now that the funds rate will only be 25 bp less than it is today at year-end next year. Madness.
Federal Reserve
Wednesday, July 26, 2023
Economic activity is now growing at a "moderate" pace, instead of a "modest" pace at the last meeting. That's worth a hike to a funds rate not seen in over two decades?
Federal Reserve
Wednesday, June 14, 2023
We wondered how this dovish "skip" would get reflected in the dots. The answer: the worst possible way. While marking down the expected unemployment rate, the FOMC marked up the 2023 year-end funds rate from 5-1/8 to 5-5/8, with CPI falling and PPI collapsing. Doesn't get worse than this craziness. No, wait. Powell hasn't started talking yet.
Federal Reserve
Wednesday, May 3, 2023
There it is. The pause. Now we wait for the presser when Powell will ruin it by telling us that the plateau at 5-1/8% will last "longer than expected."