FOMC September 2022: Another Big Hike

As expected, the Federal Reserve opted to raise rates 75bps, taking the target range to 3.00% to 3.25%, with a total of 300bps in policy adjustments since March…the fastest rise over a seven-month span in four decades. Coming into today, the debate was between 75bps...

Prepare for More Tightening

Another Hot Inflation Report   CPI came in above expectations yet again. In fact, headline inflation has only come in below expectations once in the past year. The U.S. CPI rose +0.1% m/m in Aug, and 8.3% y/y. The core CPI (ex food & energy) surged +0.6% m/m...

Quantitative Tightening is Here

The balance sheets of global central banks have grown drastically in the last 15 years. The United States balance sheet alone grew from ~$4 trillion to ~$9 trillion over the pace of 2 years during the pandemic. The surge in liquidity has had a drastic effect on...

They’re All Hawks Now!

Stocks Fall on the “No Pivot” Powell Speech   SPX down over -5% in the past 3 days since Jackson Hole. Additional Fedspeak: BARKIN: JOB MARKET STILL VERY TIGHT, DEMAND IS HEALTHY BARKIN: WON’T PREJUDGE SIZE OF NEXT RATE HIKE, DEPENDS ON DATA BOSTIC: COULD...

No Pivot in Jackson Hole

Powell focused on inflation and the willingness to tolerate “some pain to households and businesses” to bring inflationary pressures down. He also says that it will likely require maintaining a restrictive policy for some time. This is Fedspeak for: 1)...