May 4 FOMC Meeting: 50-bp Rate Hike Now, More On the Table

On Wednesday, the Federal Open Market Committee (FOMC) raised the federal funds rate by 50 basis points (bps; 100 bps equal 1.00%) to a new range of 0.75%‒1.00%. This was widely expected by the market, and the vote was 10-0.

Fed Balance Sheet: You Can’t Get There From Here

On May 4, the Federal Open Market Committee is expected to announce a 50-basis-point (bp; 100 bps equal 1.00%)—0.50%—increase in its target for the federal funds rate. It’s also likely to announce it will start shrinking its balance sheet. What will the balance-sheet reduction look like, and what might it mean?

Russia-Ukraine Special Edition: The Week That Was … The Week to Come

Brian Jacobsen provides perspective on the Russia-Ukraine conflict and other key topics of the current week—plus, his thoughts about what the week ahead may hold. Here’s his report for the week of March 12–18, 2022.

Walking the tightrope

The Federal Reserve (Fed) and the money markets seem to agree that it’s time for the Fed to shore up its inflation-fighting credentials. As economic data continued to come in hot over the past few months — showing a tight labor market and inflation not seen for generations — the prospect of accommodation removal in its various forms moved from a distant event to one likely to begin soon. The Fed has signaled it will raise rates at its March meeting; the main question over the past month or so has been whether the first increase would be 25 basis points (bps; 100 bps equal 1.00%) or 50 bps.

Federal Reserve: Under Pressure

In August 2020, the Federal Reserve (Fed) laid out its objective of flexible average inflation targeting. At the time, the trailing one-year rate of inflation was 1.3% and the trailing five-year rate was 1.7%. After years of undershooting its inflation target, the Fed said it wanted to overshoot its target to bring the average rate of inflation up to target.