Fed minutes - Debate over inflation, Trump

Author

06 April, 2017

Most economists believe the USA economy is strong enough to sustain gradual increases in the interest rate, and that the Fed should now shift its focus to restraining emerging inflation.

"The December FOMC meeting is probably the most likely date to introduce this change", said Paul Ashworth, chief USA economist at Capital Economics in Toronto, following the publication of the minutes.

"Higher rates coupled with a smaller balance sheet, now at US$4.5 trillion, depict an outlook of diminishing headwinds on the dollar that could keep its longer run prospects biased higher", said Joe Manimbo, senior market analyst at Western Union Business Solutions.

In March, the Fed raised its benchmark interest rate for the second time in a year and said it expects two more rate hikes this year and three more next year.

The minutes from the Fed's March meeting showed continued uncertainty about how the White House's policies would affect the economy, with only about half of the Fed's voting members incorporating assumptions about fiscal policy into their economic projections.

"While the implications of prospective Fed rate hikes are most likely benign, key features of the current tightening cycle stand in stark contrast to historical experience - and could conceivably lead to more serious market and economic disruption", Oxford Economics said.

Ford Motor Company (NYSE:F) & GameStop Corp
Goldman Sachs Group Inc restated a neutral rating on shares of General Motors Company in a research note on Monday, March 6th. In addition, GM's average transaction prices were approximately $34,000 in March, in line with last year's levels.

Game of Thrones Season 7 trailer: Cersei seized the Iron Throne
Although Cersei Lannister ( Lena Heady ) is peacefully reclining on the throne in the Red Keep, her position doesn't look stable. Ever since its release, it has a massive worldwide fan following and has bagged various awards over the last couple of years.

Twitter eases 140-character limit in replies
The @usernames will be displayed above the message and users can still decide on whom they want to be the part of conversations. Now, this not only makes it easier to see who is being replied to but makes it a lot safer to have multi-user conversation.

Something else to keep an eye on: whether there was any sympathy for the dissent of Neel Kashkari of the Minneapolis Fed, who favored keeping rates on hold. The minutes showed that several Fed officials thought Trump's stimulus plans wouldn't likely begin before next year.

Policymakers at the Federal Reserve continue to see "considerable uncertainty" about the effects of possible fiscal stimulus from the Trump administration, according to meeting minutes released today.

Most believed Trump's plans had the potential to boost growth.

The expectation of tax cuts and deregulation has sent stock prices rising since Trump's November election victory.

Several Fed officials saw "limited risk of a marked pickup in inflation". The Fed's two goals are to achieve maximum employment and moderate inflation. Others argued that since inflation had run below 2 percent for so long, it would do no harm to allow prices to rise above 2 percent for a time.

While many factors make this effort to raise interest rates different from previous ones, a single challenge stands out: U.S. economic growth, employment, and inflation have consistently disappointed during this lengthy but slow recovery. Fed watchers were not expected such a granular discussion at the meeting, thinking it would wait until the May or June meeting.


More news


  • Club gets coach arrested following 12-0 defeat to Barcelona B team

    Club gets coach arrested following 12-0 defeat to Barcelona B team

    Saad said he found out that the arrangement was for the score to be 8-0 at halftime and 12-0 at the end. La Liga president Javier Tebas has said he will investigate the match-fixing allegations.
    Hardy Boyz return to WWE in WrestleMania 33

    Hardy Boyz return to WWE in WrestleMania 33

    In their first match back in seven years, the Hardy Boyz were able to capture the belts from atop the ladder. Matt and Jeff Hardy returning to the WWE seemed like the secret that wasn't exactly hidden.

    Swansea frustrated by Middlesbrough in goalless encounter

    Swansea have the most porous defence in the Premier League but there was no way through for Middlesbrough's shot-shy attack. Boro's threat was also fleeting in a first period that started brightly but quietened down as both teams began to settle.
  • Rice thickens the Trump spy plot

    Rice thickens the Trump spy plot

    But there are some likely explanations for why Rice would have been briefed on intelligence involving the incoming administration. That comes back to me, not to anybody broadly in the national security world, and that is necessary for me to do my job.

    Game of Thrones' new trailer has each rival sitting upon their throne

    A new official promo for the seventh season of the legendary HBO series Game of Thrones was released on Thursday. Daenerys' throne appears to be made of several jagged pieces of rock.
    Raiders-themed brothel to coincide with Vegas move, include team specials

    Raiders-themed brothel to coincide with Vegas move, include team specials

    Instead, the owners approved the Rams' relocation and gave the Chargers an option to join them, which they exercised this winter. Davis on Monday thanked Adelson for his "vision and leadership", saying the entire deal might not have happened without him.
  • Anthony Lynn believes Adrian Peterson will have 'a hell of a season'

    The Patriots have yet to re-sign top 2016 running back LeGarrette Blount and are reportedly preparing for him to sign elsewhere . Versatile back Dion Lewis and Super Bowl LI hero James White are already under contract with the Patriots for the 2017.
    Eagles to reunite for latest US mega-festival

    Eagles to reunite for latest US mega-festival

    Fleetwood Mac will headline on the Sunday, following performances by Earth, Wind & Fire and Journey . Nicks also commented on another Fleetwood Mac album, stating that the band would prefer to tour.

    Beto O'Rourke to announce Senate bid against Ted Cruz

    O'Rourke is still relatively unknown in Washington and in Texas, and El Paso has never produced a statewide elected official. O'Rourke first floated the notion of a Senate campaign to The Texas Tribune just before Election Day last fall.
  • House sends bill to Trump blocking online privacy regulation

    In the absence of strong privacy rules, people will have to rely on encryption to prevent service providers from tracking them. Republicans and industry groups have criticised that discrepancy, calling it unfair and confusing for consumers.

    One club for Alexis but my future's not sorted, says Arsene

    On the subject of his own future, Arsenal's manager since 1996 said: "I've always been very clear in my mind". For all the media talk that Wenger wants to stay, he knows he must produce something positive this season.

    First "Game of Thrones" Season 7 teaser debuts

    Earlier this month HBO revealed the highly anticipated Game of Thrones season 7 release date through a melting iceblock stunt. To add a little extra fuel to the wildfire of hype, HBO has released next season's first trailer.