Fed

The Fed Should Give It A Rest

Mar 20, 2023 1 min read paid

In his previous press conference on February 1, 2023, Fed Chair Jerome Powell mentioned the word “restrictive” 10 times. It was mentioned mostly in the same context as the following: “And we said that we continue to anticipate that ongoing increases in the [federal funds] target range will be appropriate in order to attain that stance of sufficiently restrictive monetary policy that will bring inflation down to 2%.”

Ed Yardeni

The Economic Week Ahead: March 20-24

Mar 19, 2023 2 min read

The FOMC always seems to take center stage in the financial markets these days, and will certainly do so on Wednesday, when the next two-day meeting of the FOMC will end around noon. It will be followed by the release of the FOMC's statement at 2:00 pm and Fed Chair Powell's presser at 2:30 pm. He should be less hawkish than he was during

Ed Yardeni

Inflation: Everything Everywhere But Less So

Mar 14, 2023 1 min read paid

And the Academy Award for the Biggest Economic Surprise of 2022 goes to . . . inflation. It has defied Fed expectations by being both transitory and persistent: Consumer goods inflation has been transitory, while consumer services inflation has been persistent. In any event, overall measures of consumer inflation continue to moderate. Consider the following: (1) The New York Fed’s consumer expectations survey was released on Monday with February’s results. It

Ed Yardeni

The Fed: Everything Everywhere All at Once

Mar 14, 2023 2 min read

Did the Fed just guarantee every bank deposit in America? That's really not the Fed's job; it's up to the FDIC to insure deposits up to a maximum of $250,000. By law, the Fed's job is to keep unemployment and inflation down. In addition to its legal "dual mandate," the Fed is ultimately responsible for maintaining financial stability. Our

Ed Yardeni

Disintermediation: New Problem For The Fed

Mar 10, 2023 2 min read

Yesterday's sell-off in the stock market was led by bank stocks. It was mostly triggered by fears that SVB may be the start of a financial crisis that leads to an economy-wide credit crunch and recession. As it has done often in the past, the inverted yield curve has been signaling since last summer that something could break in the financial system if the Fed continues to tighten

Ed Yardeni

Thus Spake The Fed Chair

Mar 7, 2023 2 min read paid

Fed Chair Jerome Powell is the high priest of monetary policy. His pontifications are carefully read and analyzed by his followers. We are among his followers because we are Fed watchers. Indeed, we often count how many times certain words appear in his public remarks. The word “disinflation” was uttered 11 times at Powell’s press conference on February 1. He was the only one who mentioned the word at

Ed Yardeni

The Fed Chair Testifies Before Congress

Mar 6, 2023 1 min read paid

Tomorrow (Mar. 7) and the day after (Mar. 8), Fed Chair Jerome Powell will testify in hearings before the Senate Banking Committee and the House Financial Services panel respectively, to discuss the bank’s latest semiannual Monetary Policy Report (MPR). The report was released on Friday. It reaffirmed the Fed’s commitment to bring inflation back down to 2% by 2025, according to the FOMC's December Summary of

Ed Yardeni

The Rent Is Too Damn High!

Feb 27, 2023 1 min read paid

As a result of the pandemic, the demand for single-family homes soared, and so did their prices. Rising mortgage rates last year clobbered affordability for first-time homebuyers, forcing them to rent. So tenant rent inflation soared from about 2.0% y/y in early 2021 to 8.6% in the CPI during January of this year (chart). Rising mortgage rates also reduced the supply of homes. Since many homes have

Ed Yardeni

Inflation Still Too High But Gliding Down

Feb 14, 2023 2 min read paid

January’s CPI release today showed that inflation is continuing to moderate, though perhaps more slowly than it did during the second half of 2022. The headline and core CPI rose 6.4% y/y and 5.6% through January down from 6.5% and 5.7% during December (chart). The CPI for all consumer goods rose 4.5% y/y in January, down from 4.8% in December and

Ed Yardeni

January's CPI Is Coming. Run For The Hills?

Feb 11, 2023 2 min read paid

The big event this week will be January's CPI release on Tuesday. Bond yields rose and stock prices fell last week as investors started anticipating a bad print. The Cleveland Fed provides a daily model-based Inflation Nowcast. On February 10, it showed the headline and core indexes increasing 0.65% and 0.46% last month. These are high compared to the MarketWatch consensus of 0.4% and 0.

Ed Yardeni

They're back!

Feb 8, 2023 2 min read

We warned you that they would be back soon. The FOMC's blackout period ended last Thursday. Fed officials have been squawking like hawks again since Friday. They are all sending more or less the same message. They are aiming to continue to hike the federal funds rate in 25bps increments a couple more times to 5.00%-5.25%. That should be restrictive enough to bring inflation down,

Ed Yardeni

Fed Chair Not Likely to Stir Things Up Tomorrow

Feb 6, 2023 2 min read

Fed Chair Jerome Powell isn't likely to upset the financial markets tomorrow if he says what he said at his press conference last week. The word “disinflation” was uttered 11 times at Powell’s presser on February 1. He was the only one who mentioned the word at his presser. He repeatedly acknowledged that inflation was moderating but still had a ways to go before reaching the Fed’

Ed Yardeni

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