Fed, Inflation
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Since 2009, the Federal Reserve's shift to a quantity-focused monetary policy under Bernanke has driven stable, supply-side-led economic growth. Evidence suggests long-term monetary policy trends, not fiscal deficits, have been the dominant force shaping U.S. economic performance and price stability. And that statement may be an understatement!
Minutes from September Fed meeting reveal a divide between members who support additional rate cuts and those worried about inflation.
The Bureau of Labor Statistics is slated to release September's Consumer Price Index report of inflation, which was delayed by the government shutdown.
"The Fed’s low tolerance for rate volatility and political pressures make another case for an earlier end to QT, as the Fed aims to avoid repeating September 2019 and maintain focus on its core mandate," the J.P. Morgan team, led by Teresa Ho, wrote.
With bank reserves falling and the economy weakening, the Federal Reserve will likely unveil plans to stop shrinking its balance sheet.
Average weekly mortgage rates are below 6.2%, and they could drift even lower if the Federal Reserve keeps trimming its benchmark interest rate.
Treasury Secretary Bessent remains viewed by Washington insiders as the leading contender to succeed Jerome Powell as chair of the Federal Reserve, according to Bank of America in a note on Wednesday.
Some Wall Street analysts now believe the Federal Reserve will pull the plug on its long-running effort to shrink its balance sheet at the end of the month.