Prosecutors Storm Fed Renovation Site, Get Turned Away
NEW: Prosecutors from U.S. Attorney Jeanine Pirro’s office showed up unannounced Tuesday at the construction site for the Federal Reserve’s headquarters renovation, a new provocation in their investigation of the central bank. They were turned away. https://t.co/PzlKEBrlpn
Fed Holds, Iran Shock Won’t Stubbornly Raise Inflation
Bessent says the Fed is right to wait and see how the economy handles the Iran shock but expects it will not seep into inflation expectations, allowing cuts to eventually resume. "If ever there was ‘Team Transitory,’ it’s this."
Hormuz Closure Could Add 0.8% Core Inflation
Economists at the Dallas Fed try to model the effects on PCE inflation of a one-, two-, or three-quarter disruption of oil shipping through the Strait of Hormuz The DSGE model projects WTI prices peaking at $110, $132, or $167 per...
Anchored Inflation Expectations Reduce Fed Urgency on Oil Shocks
For a thorough answer to this question, I would highly recommend reading Bernanke's 2004 speech on this subject. Especially this part: "The public's expectation that inflation will remain low minimizes the second-round effects of oil price increases, which (in a virtuous...
Dallas Fed: Feb PCE Inflation at 1.
The Dallas Fed trimmed mean inflation gauge suggests firm February PCE inflation reflected larger increases in a smaller subset of items. Trimmed mean PCE inflation printed at a 1.8% annualized rate in February. The 12-month reading fell to 2.3%, the lowest since...
Job‑changer Wage Premium Resurfaces as Growth Accelerates
It's a low churn labor market ... but ... The wage premium for job changers that disappeared in 2024 appears to have returned. Wage growth ticked up to 3.8% for the 3-months ended March for job stayers (vs 3.5% in December). Wage growth...
Oil Shock Inflation Temporary, Fed Should Keep Cutting Rates
Kevin Hassett tells @MariaBartiromo the inflation from the oil-price shock will be temporary and should allow the Fed to continue cutting interest rates: "There are a lot of people who are currently at the Federal Reserve that understand that, that this...
Fed Sees Slower Inflation Progress Amid Tariffs, Oil, Fragile Expectations
The Fed minutes showed "the vast majority" of officials thought inflation progress could be slower than expected, driven by three overlapping concerns: tariff effects on goods prices that may take longer to fade, oil prices bleeding into core inflation, and...
Cease‑fire Trims Fed’s Demand‑risk Tail More than Inflation Upside
A durable cease-fire narrows the tail risks for the Fed on both sides, but it may do so asymmetrically: it cuts off the demand destruction tail that could have forced near-term cuts arguably more than it cuts off the upside...
Core PCE Holds Steady at 3% Amid Iran Shock
Wall Street forecasters estimate the core PCE index (due Thursday) rose 0.39% in February, which would round to 0.4% for the third straight month. Because the Feb 2025 comparison is favorable (it was even higher a year ago), the 12-month rate...
Post‑pandemic Inflation Driven by Services Wages, Models Miss
Fed research suggests the inflation engine may be running differently across advanced economies since the pandemic: 1/ More categories continue to see price growth above 3%, with broad-based wage growth in services appearing to be a key driver 2/ Even categories with...
AI Cuts Payroll, Nudges U.S. Unemployment Higher
Goldman tries to quantify the net effect of AI both substituting for and augmenting U.S. employment. Their conclusion: AI substitution in occupations like phone operations and insurance claims administration have reduced monthly payroll gains by around -25K and raised the...
Zero Job Growth Seen as Full Employment, Yet Fragile
22,500 jobs a month would have set off alarms two years ago. Today it might be fine. Fed officials are still grappling with how to explain that. “Conveying that a zero-job-growth economy is consistent with full employment is not easy,”...
Judge Upholds Ruling, Opens Appeal Over Fed Subpoenas
The judge who ruled that Pirro's subpoenas of the Fed were improper denied the government's motion to reconsider his ruling, paving the path for an appeal that could continue the brinksmanship with Tillis over the Warsh confirmation https://t.co/dp3pXhJdjy
March Workweek Dip Stalls Payroll Growth, 12‑month Rise at 3.9%
From the March payroll report: INCOMES: A drop in the average workweek in March led to very little growth in the index of aggregate weekly payrolls for private-sector workers (which combines hiring, wages, and hours). The 12-month change ticked down to...
March Jobs Data Removes Fed Trade‑off Pressure
What does the March jobs report mean for the Fed? It keeps one of the harder problems off the table. Powell said this week the war created the possibility of a greater inflation/labor market tradeoff but said the Fed didn't face...
March Adds 178k Jobs, Unemployment Drops to 4.3%
The economy added +178,000 jobs in March and the unemployment rate fell to 4.3%. But revisions sent February to -133,000 from -92,000. January was revised up to +160,000 from +126,000.
Near‑Zero Breakeven Job Growth Makes Payroll Declines Likely
A new paper from Fed board economists concludes that "breakeven" job growth is near zero, which means negative job growth would be almost as likely as positive job growth in any given month even if the economy is at equilibrium. The...
Dallas Fed Chief Defends Ample‑reserves, Rejects Tiered Quotas
In a speech this morning, Dallas Fed President Lorie Logan delivers a clear defense of the ample-reserves framework at a moment when others (Warsh/Bessent) have implied a course correction would be desirable. In the speech and a far more detailed...
Breakeven Job Growth May Be Slightly Negative, Says Dallas Fed
Dallas Fed: Using newly available microdata that measure net unauthorized immigration through December 2025, an estimate of breakeven job growth is lower than previously thought and could be slightly negative. Monthly job change of -3,000 per month would have been...
Fed President Signals Rate Hold, Open to Adjustments
St. Louis Fed President Alberto Musalem: “I expect the current setting of the policy rate will remain appropriate for some time.” "I could support additional easing if a greater risk of a weakening labor market becomes apparent, provided inflation and inflation...
President Regrets Appointing Central Banker Who Defied Rate Cuts
Wild story: President appoints someone to the central bank recommended by his own finance minister. The appointee resists the president's demands to approve bigger rate cuts, and now the president says he "stupidly" followed the minister's advice, leading to "the...
Fed Pledges Policy Actions to Sustain Low Inflation Expectations
Kansas City Fed President Jeff Schmid: Inflation expectations have been low because the central bank has previously acted to make sure inflation will stay low. "It is now our job to follow through with policy actions that validate those expectations."
Hiring Slumps, Layoffs Remain Low in Labor Market
The no-hire, no-fire labor market. The private-sector hiring rate fell to 3.3% in February, the lowest since Feb. 2010, when the unemployment rate stood at 9.7%. The layoff rate, however, continues to hold steady at low levels. https://t.co/oFDKXdikju
Job Openings Rise in January, but Overall Vacancy Rate Falls
Job openings for January were revised up, but the three-month moving average continues to gently grind lower through February There were 0.9 vacancies for every worker counted as unemployed in February, near the low for the current business cycle. https://t.co/5ET6aMzmsE
Fed Chair Must Remain Nonpartisan, Bipartisan Reappointment Essential
A question about the role of the vice chair for supervision led Powell to lay out his philosophy on how a Fed chair should operate more broadly (offered by way of explaining why he didn't want to get too involved...
Powell Refuses to Entertain Warsh's Rate‑cut Pitch
Powell is asked by an undergrad what he thinks about Kevin Warsh trying to come into the Fed and cut rates in the current environment. Powell: "That’s not something I’m going to swing at, that pitch."
Powell Warns Confidence Precedes Grasp of Rising Risks
Powell downplays dissent on the Fed's board and says you would expect disagreement when there are both downside employment and upside inflation risks that are growing. "Confidence is what you feel before you really understand the problem."
Energy Surge Deepens Fed Transition Crisis for Warsh
The run-up in energy prices is making a very awkward Fed transition even more fraught. This was already complicated. Kevin Warsh's confirmation is stalled by the DOJ probe and the Tillis blockade. Plus, unlike every incoming Fed chair since Volcker, Warsh...
Hyun Song Shin, Senior BIS Economist, Appointed BOK Governor
Senior BIS economist @HyunSongShin has been named by South Korea’s president to run the Bank of Korea https://t.co/NVLP6R3Dox
2‑Year Treasury Yields Surge to Highest Since July
Yields on the two-year Treasury note are up 0.516 pp since Feb. 27, the day before strikes on Iran, to 3.893%. That’s the highest close since July. The gain over the last three weeks is the largest since May 2023 (the...
Fed Governor Waller Balks at Rate Cut Amid Inflation Worries
Fed governor Chris Waller to CNBC's Steve Liesman: I was ready to dissent for a rate cut after the February jobs report came out. But the inflation picture is looking worse and has become more of a concern because the Strait...
Fed Ends Easy Cuts
Takeaways from the March Fed meeting: • The era of 'easy' cuts could be over. Last year's were a recalibration; the next ones have to be earned with better inflation data or downside risks being realized. • The dots weren't as hawkish...
Powell Plans Longer Tenure Despite Trump’s Anti‑Fed Rhetoric
Donald Trump has spent months talking about how badly he wants Jay Powell out of the Federal Reserve. On Wednesday, Powell signaled the administration’s own actions have had the opposite effect: He’s prepared to stay longer than he otherwise would...
Powell Says Now Is Time to Abandon SEP
Powell embraces the SEP to observe that there was "a meaningful amount of movement" toward fewer cuts and then later leaves the SEP by the side of the road. If there was ever going to be a time to skip...
Fed Holds Rates, Core Inflation Forecast Rises
The Fed held rates steady. There was one dissent. The median rate “dot” was unchanged, as was the 12-7 split on cuts vs. no cuts. The median core PCE inflation forecast revised to 2.7% from 2.5%. The median long-run rate “dot”...
Feb PCE Firm Yet Slightly Weaker Than Expected
Even though PPI in February printed high, the components that filter into PCE (including downward revisions for December) came in a bit lower than the sharp-pencils anticipated. February PCE is still expected to be firm, but a touch less so...
Fed Governors Finally Challenge Chair, Splitting Along Politics
A longstanding taboo around Fed governors dissenting against the chair has been broken. Recent fractures have fallen along political lines. On what that means for the institution—and for the next chair. https://t.co/7S1YacOpoW
Fed Faces Tension Over Near‑Term Rate Cut Projections
The Fed might prefer to say nothing this week. But the projections force them to sketch out a path. Two former Fed presidents told me they'd want to avoid projecting near-term cuts in the current situation. Whether sitting officials do...
Oil Spike Overblown, Prices Set to Fall Soon
Bessent says too much is being made of the run-up in oil prices from Iran's retaliatory measures to U.S.-Israel strikes, claiming coverage of the risks around the Strait of Hormuz is being amplified by anti-Trump media bias and is part...
Fed Independence Now Secured by Courts, Not Norms
The Fed won a sweeping court victory Friday. But the fact that it needed one tells you everything about how much has changed. The unsealed filings are something else—the Fed catalogued 100 Trump attacks on Powell and told a court...
Special Counsel Robert Hur Helps Fed Block Pirro Subpoenas
Robert Hur, the special counsel in the Biden classified documents case, has been representing the Federal Reserve's board of governors in its successful effort to quash the Pirro subpoenas
Judge Dismisses DOJ Subpoenas, Boosts Fed, Undermines Pirro Probe
NEW: A federal judge threw out a pair of subpoenas the Justice Department issued to the Federal Reserve, handing a victory to the Fed and dealing a heavy blow U.S. Attorney Jeanine Pirro's criminal investigation into Chair Jerome Powell.
Revised Data Shows Milder Job Opening Decline, Jan Ratio Improves
After downward revisions to the 2025 employment data, the drop-off in job openings at the end of last year looks less pronounced than it initially appeared. January shows some improvement in the job vacancy-to-unemployed worker ratio, which rose to 0.97 from...
Core PCE Inflation Jumps to 3.1% in January
Core prices rose 0.36% in January in the PCE index (Nov and Dec price levels were revised up slightly), raising the 12-month inflation rate to 3.1% This index had fallen to 2.6% in April 2025 Headline was +0.28% in January and 2.8%...
Iran Conflict Could Actually Push Oil Prices Down
The war in Iran will lower energy prices By Peter Navarro "Roughly a quarter of the world’s seaborne oil trade transits the Persian Gulf, much of it through the narrow Strait of Hormuz. When markets price crude oil, they must account for...
2‑Year Treasury Yields Spike to Highest Since August 2025
Yields on the 2-year Treasury note posted their largest daily increase since May 2, 2025 (the day of a surprisingly strong payroll report), and closed at their highest level since Aug. 21, 2025, the day before Powell signaled a likely...
War Amplifies White House Pressure on the Fed
Military conflicts have driven some of the most intense intervals of White House pressure on the Fed in the past. “I hope the Board will…not allow the bottom to drop from under our securities,” Truman wrote to the Fed chair...
President Urges Rare Intermeeting Rate Cut Before Scheduled Decision
The president expresses a desire for a rare intermeeting rate cut. The last one occurred on March 15, 2020, as the Covid shock overwhelmed financial markets. The Fed's next scheduled policy decision announcement—widely expected to be no change in rates—is in...
Senate Drops Powell Testimony Amid DOJ Probe
Senate Banking Committee Chairman Tim Scott suggested this morning that the committee had decided not to compel Fed Chair Jay Powell to produce his regular, Q1 monetary policy testimony, due to the fallout from the DOJ probe stemming from his...