Tag: Jay Powell

The Fed Can’t Afford To Be Dovish

The Fed Can’t Afford To Be Dovish

Our view is that it will be difficult for the Fed to take a dovish position with CPI above 7% given a CPI target of 2%. Further, the entire Treasury yield curve remains in negative territory. Recall that Powell wants to see positive real rates across the yield curve as he said in his September … Continue reading The Fed Can’t Afford To Be Dovish

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed reduced its Treasury and Government Agency security holdings by $32.9 billion over the week ended November 30th. The Fed has reduced its balance sheet holdings by $79.7 billion over the last 4 weeks. Fed Balance Sheet – Treasuries: The Fed’s Treasury security holdings were $19.6 billion lower over the last week and $60.0 … Continue reading The Fed’s Balance Sheet Reduction (QT) Update

It Is Official. We Are In A Recession.

It Is Official. We Are In A Recession.

The Atlanta Fed's GDPNow Q2 Real GDP estimate was -2.1% as of July 1st. This marks the second consecutive negative Real GDP quarter which means we are officially in a recession. A recession in 2022 was an easy call for us to make as there was essentially zero probability of the U.S. economy growing in … Continue reading It Is Official. We Are In A Recession.

Will Powell Surprise To The Upside?

Will Powell Surprise To The Upside?

The Fed's FOMC meeting will take place this week on June 14th and 15th. Fed Chair Powell has lost control of the inflation narrative. The Fed needs to act boldly to capture control of the inflation narrative. Price inflation was obviously never going to be transitory given the Fed grew the money supply as measured … Continue reading Will Powell Surprise To The Upside?

Will He Or Won’t He?

Will He Or Won’t He?

Will Fed Chair Powell increase the Fed Funds Rate for three consecutive meetings? We say look to the credit markets. Consensus amongst investors seems to be that the Fed will execute two consecutive rate hikes but may pause before executing a third. Our view is that Fed Chair Powell will execute Fed Funds hikes at … Continue reading Will He Or Won’t He?

Jerome Powell Will Talk Tough This Summer

Jerome Powell Will Talk Tough This Summer

Powell was confirmed for a second term as Fed Chair on May 12th. His nomination was held up for months in the Senate. Powell's confirmation will provide him with temporary courage - enough to talk in a hawkish manner, enough to take the Fed Funds Rate to 2% by summer's end - but not enough … Continue reading Jerome Powell Will Talk Tough This Summer

Powell Acknowledges Inflation Could Persist Longer Than Anticipated

Powell Acknowledges Inflation Could Persist Longer Than Anticipated

Fed Chair Powell's statement to be made Tuesday at 10:00am ET to the Committee on Banking, Housing, and Urban Affairs acknowledges that inflation may not be as "transitory" as the Fed initially thought. Powell's statement to the committee is below. Powell knew this would be the case months ago but the Fed will never admit … Continue reading Powell Acknowledges Inflation Could Persist Longer Than Anticipated

The Second Domino Falls As Kaplan Steps Down From His Dallas Fed Post

The Second Domino Falls As Kaplan Steps Down From His Dallas Fed Post

Earlier today Boston Fed President Eric Rosengren announced his September 30th retirement. This afternoon Dallas Fed President Robert Kaplan announced he will step down effective October 8th. We first wrote about the Fed's poor governance earlier this month. Chair Jay Powell's resignation would be the icing on the cake but that news is not forthcoming. … Continue reading The Second Domino Falls As Kaplan Steps Down From His Dallas Fed Post

Boston Fed President Eric Rosengren Announces He Will Retire Sept. 30

Boston Fed President Eric Rosengren Announces He Will Retire Sept. 30

We recently wrote that it was outrageous for Fed officials to have traded equities as the Fed was doing deals with corporate issuers in 2020. One of the offenders - Boston Fed President Eric Rosengren - has been dealt with. The other direct offender was Dallas Fed President Robert Steven Kaplan. Frankly, Chairman Powell ought … Continue reading Boston Fed President Eric Rosengren Announces He Will Retire Sept. 30

A Fed Critique By Time Stamp

A Fed Critique By Time Stamp

We critique Fed Chairman Powell's recent FOMC YouTube clip comments (video below) by time stamp. 0:07 - The Fed continues to purchase Treasuries ($80 billion per month) and MBS ($40 billion per month), thereby artificially suppressing interest rates while inflating the money supply. The Fed's actions - increasing the money supply - are solely responsible … Continue reading A Fed Critique By Time Stamp