Federal Funds Rate

Why Cooler Inflation Isn't Lifting Markets

Mar 13, 2025 2 min read paid

February's inflation data provided conflicting stories. Both the CPI and PPI came in cooler than expected, but neither cheered the stock and bond markets. That's because the components of both gauges that feed into the Fed's preferred PCED inflation rate were actually a bit hotter. In addition, January's PPI increase was revised up from 0.4% to 0.6%. So it'

Ed Yardeni
Eric Wallerstein

Fed's Hawkish Rate Cut Triggers Pausing Tantrum

Dec 18, 2024 3 min read paid

The Federal Open Market Committee (FOMC) cut the federal funds rate (FFR) by 25bps today, as widely expected. That takes the target range for the overnight rate down from 5.25%-5.50% to 4.25%-4.50%, a full percentage point lower since the Fed's rate cutting cycle started on September 18. A cut was all but guaranteed. Yet the S&P 500 fell almost 3%

Ed Yardeni
Eric Wallerstein

Powell's Mixed Message Remains Dovish

Nov 7, 2024 3 min read

The Federal Open Market Committee (FOMC) cut the federal funds rate (FFR) by 25bps today as widely expected. We expected it as well, though we still believe that the now 75bps cut in the FFR since September 18 is too much, too soon because both the economy and the labor market remain strong. In his press conference today, Fed Chair Jerome Powell acknowledged several times that both remain solid. He

Ed Yardeni
Eric Wallerstein

Bond Vigilantes Started Voting Early

Oct 23, 2024 3 min read

The US presidential and congressional elections aren't until November 5, but the Bond Vigilantes are voting early. The 10-year US Treasury bond yield has risen a whopping 63 basis points to 4.25% since the Fed's September 17-18 meeting (chart). In exit polls, the Bond Vigilantes are saying they are voting against Fed Chair Jerome Powell's dovish monetary policy because the economy is running

Ed Yardeni
Eric Wallerstein

Powell Declares Mission Accomplished

Sep 18, 2024 3 min read

The Fed cut the federal funds rate (FFR) by 50bps today. This marks the end of the Fed’s monetary policy tightening cycle that started during March 2022, which was aimed at bringing inflation back down to 2.0% even if that caused a recession. Inflation isn't quite there yet, but it is close enough. So today, in his presser, Fed Chair Jerome Powell reiterated that the Fed&

Ed Yardeni
Eric Wallerstein

Fed Easing Monetary Policy Into An Economic Boom?

Sep 16, 2024 2 min read paid

Ed Yardeni
Eric Wallerstein

Fed Not Even Thinking About Thinking About Cutting Rates

Nov 21, 2023 2 min read paid

That's the basic message of the FOMC's minutes released today. The word "restrictive" was mentioned seven times mostly in the following context: "In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time." The core PCED was up

Ed Yardeni

Market Call: Refreshing Pause For Bulls & Reindeer

Nov 19, 2023 2 min read paid

The federal funds rate futures market is anticipating two 25bps cuts in the federal funds rate over the next 12 months (chart). That makes sense to us and is consistent with the September FOMC's Summary of Economic Projections. More rate cuts could occur if a recession is coming our way in 2024, but that's not our forecast. We still think that the 10-year Treasury bond yield

Stephen Rybka

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