Bank Deals Blog: Fed / Banking News

The Fed’s two-day meeting started today. The meeting announcement is scheduled for 2:00 PM ET Wednesday. In addition to the meeting announcement, the FOMC forecasts will be released. These include the “dot plot” which shows the projections of future federal funds rates. Lastly, at 2:30 PM, Fed Chair Jerome Powell will be holding a press briefing.

No rate change is expected at this Fed meeting. If that happens, it will be the first break of the Fed’s quarterly rate hike pattern. The Fed has been consistently hiking rates after every other...

The February jobs report that was released last Friday and today’s CPI release point to the Fed being patient with rates. The FOMC meeting next week (March 19-20) will most likely prove that the Fed’s policy has changed from gradual rate hikes to a rate pause.

The February jobs report was a disappointment. The report showed only 20,000 jobs were created in February which was way below the consensus forecast of 178,000 jobs. The report did raise concerns among investors that more weak economic reports might be coming. However, some economists...

The next Fed meeting is scheduled to take place just over two weeks from now (March 20-21). Based on what the Fed said at its January meeting and based on recent speeches by Fed officials, the odds appear to be essentially zero that we’ll see a rate hike at the March meeting.

In a Tuesday speech, Eric Rosengren, president of the Federal Reserve Bank of Boston, suggested that the Fed will be waiting several meetings before it decides on another rate hike. The following is an excerpt of his speech:

Last week’s release of the minutes from January’s Fed meeting did provide a few insights about what the Fed is thinking. Economist Tim Duy summarized the minutes in his Fed Watch blog post by saying:

Tim Duy thought that the minutes indicated a slight hawkish bias. The following excerpt from the minutes shows this slight hawkish bias and it shows the two camps. The dovish camp wants to see a rise in inflation before considering another rate hike. The hawkish camp may be swayed to hike rates just based on strong...

Signs still point to the Fed holding steady on rates for at least the first half of 2019. As more economic data comes out in the coming months, we’ll have a better idea on the odds of Fed rate hikes in the second half of 2019. Recent economic data does point to a slowdown in 2019, but that doesn’t mean that a recession is coming. Economist Tim Duy described this condition in his recent Fed Watch blog post. In his bottom line, he says:

If the slowdown is minor, it might...

There were more signs in the last week that the Fed won’t be raising rates anytime soon. In recent speeches, Fed Chair Jerome Powell and other Fed officials have suggested that the Fed will be exercising patience in the first half of this year. As economist Tim Duy described in his latest Fed Watch blog post:

The best chance we have for a rate hike in the second half of this year is if the economic data surprises on the upside. In the speeches, the Fed officials have been optimistic about...

After last week’s Fed meeting, it appears the December Fed rate hike may be the last one for this rate hike cycle. It’s possible that if the economic data surprises on the upside, the Fed could do another rate hike later this year. However, the odds of this doesn’t look promising.

Economist Tim Duy gave his review of last week’s Fed meeting in his Fed Watch blog post, “Setting the Doves Free”. In the review, Tim Duy said:

Recent economic data has been stronger than expected. In particular, the January jobs report...

This is my new weekly review of the Fed, the economy and what we can expect of future deposit rates. This used to be part of my weekly summary, but it will now be a separate post. My weekly summaries will now be focused entirely on deposit rates and deals, and they will be published on Tuesday evenings. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out...

This is my new weekly review of the Fed, the economy and what we can expect of future deposit rates. This used to be part of my weekly summary, but it will now be a separate post. My weekly summaries will now be focused entirely on deposit rates and deals, and they will be published on Tuesday evenings. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out...

This is my new weekly review of the Fed, the economy and what we can expect of future deposit rates. This used to be part of my weekly summary, but it will now be a separate post. My weekly summaries will now be focused entirely on deposit rates and deals, and they will be published on Tuesday evenings. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out...