Central Banks

Dallas Fed President and voting member Robert Kaplan was particularly hawkish today. This is just a few weeks after he said he was ‘lightly penciling in a rate hike’ next month. He reiterated the Fed view that the “US economy is at or near full employment” but also said “While real wage growth has been sluggish, we are beginning to see welcome signs of increasing …

[Read more...] about Wow, That Was Hawkish

With general agreement on the part of FOMC members that the labor market is operating near or at full employment, the eyes of followers thus shifts to what they think about inflation. My head is spinning on the commentary and I just can’t understand the obsession of 2%. The FOMC minutes said “Many participants judged that much of the recent softness in core inflation …

[Read more...] about The FOMC Minutes, I’m Now Ready to Take a Nap

We got a dovish hike from the BoE as it seems they will go really slow in raising rates further from here. They think inflation peaks right now at 3% and they expect it to “fall back over the next year.” They also harped highlighted “the decision to leave the EU is having a noticeable impact on the economic outlook.” While they acknowledge “the overshoot of …

[Read more...] about A dovish BoE hike

The FOMC statement was almost identical to the one in September. They said “economic activity has been rising at a solid rate despite hurricane related disruptions” after saying in September that “economic activity has been rising moderately so far this year.” On inflation they referred to non energy inflation as remaining “soft.” If they look at PCE which they do, …

[Read more...] about The FOMC said…

Here are important bullet points from the just released Fed Beige Book and I underlined some key parts: “Reports from all 12 Federal Reserve Districts indicated that economic activity increased in September through early October, with the pace of growth split between modest and moderate.” “Employment growth was modest on balance, with most Districts …

[Read more...] about Beige Book bullet points

I had to splash water on my face because I think I’m hearing a more hawkish Janet Yellen in her speech today. There is no question that dovishness runs thick as she is questioning their ability to get inflation and stabilize it around 2% (for reasons she gave like the internet and labor market dynamics) but she is also saying that “it would be imprudent to keep …

[Read more...] about I had to splash water on my face

Mario Draghi isn’t saying too much new but European bonds are off their highs as he did say “We are becoming more confident that inflation will eventually head to levels in line with our inflation aim, but we also know that a very substantial degree of monetary accommodation is still needed for the upward inflation path to materialize.” He repeated that “We will …

[Read more...] about Draghi and Dudley