FOMC Statements

HenryTo · Posted: Wed Jun 25, 2008 12:12 pm Post subject: FOMC Statements

FYI:

Press Release
Release Date: June 25, 2008

For immediate release

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.

Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.

The Committee expects inflation to moderate later this year and next year. However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.

The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time. Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Voting against was Richard W. Fisher, who preferred an increase in the target for the federal funds rate at this meeting.

rffrydr · Posted: Thu Jan 26, 2012 8:16 pm Post subject:

"More comfortable" indeed....two doves rotating out two hawks.

The FED is NOT a viable institution at 9% Unemployment--and they know it.
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HenryTo · Posted: Thu Jan 26, 2012 11:44 am Post subject:

Bridgewater's comments on yesterday's Fed meeting.

HenryTo · Posted: Tue Dec 13, 2011 1:58 pm Post subject:

Nothing new in FOMC statement; although it does point out "significant downside risks" which alludes to the European debt crisis.

Release Date: December 13, 2011

For immediate release

Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but business fixed investment appears to be increasing less rapidly and the housing sector remains depressed. Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Charles L. Evans, who supported additional policy accommodation at this time.

rffrydr · Posted: Mon Dec 05, 2011 7:55 am Post subject:

Zero means nothing. FED struggles with new ways to express itself:

http://online.wsj.com/article/SB10001424052970204083204577078601620105164.html?mod=WSJ_hp_LEFTWhatsNewsCollection

The problem here is that Business will just use this as a crutch as any zero rate regime will in and of itself be a world of "uncertainty." The 2013 pin on zero did nothing to ease that same uncertainty last year...and that's about as clear as you can get.
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HenryTo · Posted: Fri Sep 23, 2011 9:56 am Post subject:

Dr. Yardeni on Operation Twist:

http://blog.yardeni.com/2011/09/twist.html

HenryTo · Posted: Wed Sep 21, 2011 12:27 pm Post subject:

Operation Twist now in play; also, agency debt and MBS principal payments will be reinvested.

Release Date: September 21, 2011

For immediate release

Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.

rffrydr · Posted: Wed Aug 10, 2011 3:07 pm Post subject:

Yup.....Jamie says he's got more ways to skin a cat. We're gonna see if that's true.

http://www.cnbc.com/id/44090455
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nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Pension funding level/interest rate relationship has been hit on another thread, too, I think.

You mentioned Fannie/Freddie and that made me think about the convexity issue with MBS and ABS, slammed rates means more refinancing, which acts as a callable feature on the bond, lowering value of the security.
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rffrydr · Posted: Wed Aug 10, 2011 10:40 am Post subject:

I think you really nailed something here, Bill. Low rates are good but slammed rates are killers. In the context of the "bond bubble" institutional durations were shortened if not shorted--for them, it was prudent. For the Hedge Funds, it was the obvious bet. Even for the world's biggest bond fund.

This kills pensions and kills States (who technically shoulc've been downgraded with US) who are responsible for them. It also kills big corps responsible for most of our employment. Banks have been a giant tar-baby (not even QEII could dislodge the money) as far as the money goes; and court-house whipping boy for everything else.

Everyone with current, seasoned, Freddie/Fannie mortgage should get rolled to 4% within the quarter. Programs for equity stakes in return for principal writedowns (hedge funds were already doing this in '08 a la "Rex Agreement") on (investor)held loans...and worked on for bigger collateralized packages. Power to the people Exclamation

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nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

rffrydr · Posted: Wed Aug 10, 2011 8:45 am Post subject:

You got any names hanging on to some risk?
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nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Ven · Senior Poster Joined: 30 Dec 2009 Posts: 115

Fed has just signaled that intends to fix rates up the curve over the coming years.

2Y note has essentially become the new 3-month, with this latest statement.
As the months and years pass, the Fed will likely move up the curve.
Next, the 3Y will become the new new 3-month bill. Then the 5 year. Then right down the curve.

This is a sign that they intend to monetize every dollar of US debt over the next years / decades.

rffrydr · Posted: Wed Jul 13, 2011 7:59 am Post subject:

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rffrydr · Posted: Fri Jul 01, 2011 8:46 am Post subject:

I'm really skeptical translating QE into basis points "tightening"....I'm not even gonna say that the ECB raising rates has "tightened" anything. Greenspan was out yesterday saying QEII had no economic impact. The unstated intent and purpose was to squeeze the banks out of their comfort zone. No, not an obvious success (banks busy giving away years earnings to govt. via courts) but loan growth up and always hard to prove counterfactual.
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