Fed Talk

[tsptalk]

Fed's Quarles: There is potential gain in reducing the fed balance sheet down the line.

https://www.financialjuice.com/News...cing-the-fed-balance-sheet-down-the-line.aspx

 

[Bullitt]

Latest from Economist Intelligence Unit on why they don't expect runaway inflation.

The labour-market recovery is likely to be slow, as key sectors such as leisure, hospitality and transport will only see consumer demand recover over a period of two to three years.

In addition, we expect average wages to fall in 2021 compared with 2020, as workers at the lower end of the wage scale (including in food service) find employment and weigh down the national average compared with 2020.

That said, we expect steady price inflation of around 2%, together with a recovery in the labour market, to push the US Federal Reserve (Fed, the central bank) to begin raising interest rates at the end of 2023.

 

[Bullitt]

In March the People’s Bank of China moved to reduce leverage in the Chinese economy.

On April 21, the Bank of Canada became the first major central bank reduce QE.

On May 6, the Bank of England tapered their QE program.

Now, expectations are rising that the ECB may taper QE at the June meeting.

 

[TommyIV]

Stocks and bonds slipping in the first 15 min since the Fed minutes released. Market reacting over the mention of unwelcome inflation and mention of the Feds plan to slow their bond buying program.

 

[TommyIV]

Slipping The European Union Fed into this thread but they had some gloomy statements in their Financial Stability Review today (5/19) ahead of the release of the U.S. Fed minutes.

Some remarks from that review

The central bank also warned about “the potential for abrupt asset price corrections” after the financial markets’ rallies of the last six months, coupled with rising prices in the European residential market.

The banking sector’s market valuation may have risen in the past few months, but bank profitability remains low and prospects for lending demands are uncertain, the ECB said, calling for an increase in bad loans provisions.

European Central Bank warns on heightened risks to financial stability

 

[tsptalk]

I think most people surmised this after Friday's rally on the weak jobs report...


Fed’s Evans says employment and inflation need to pick up before policy changes

Chicago Fed President Charles Evans said employment and inflation will have to pick up before he will change his position on policy.
Evans said he wouldn’t mind seeing inflation run around 2.5% for some time.

He expressed optimism over the state of the jobs market, despite the disappointing growth in April.

https://www.cnbc.com/2021/05/10/fed...ation-need-to-rise-before-policy-changes.html