Fed Archives

Curse of Easy Money: US Government Interest Payments on the Ballooning Debt v. Tax Receipts, Higher Interest Rates, Inflation

March 31, 2024 Mariel Alumit

Biggest Drunken Sailors of all. Average interest rate on the Treasury debt spiked but is still only half of what it was in 2001. By Wolf Richter for WOLF STREET. Interest payments as a percent of tax receipts is […]

Fed’s Wait-and-See about Rate Cuts Supported by Highest-since-July Six-Month Core PCE & Core Services PCE Inflation

March 29, 2024 Mariel Alumit

By Wolf Richter for WOLF STREET. The core PCE price index, the inflation index that the Fed is focused on and refers to all the time, was revised up today for January to an annualized month-to-month growth rate […]

The Fed’s Liabilities: How Far Can QT Go? What’s the Lowest Possible Level of the Balance Sheet without Blowing Stuff Up?

March 23, 2024 Stu Turley

Reserves, Domestic ON RRPs, Currency in Circulation, the TGA, and official foreign RRPs determine how far QT can go. By Wolf Richter for WOLF STREET. The Fed has been talking a lot about its liabilities recently, including Powell […]

Fed Still Sees 3 Rate Cuts in 2024, But 2-Cut Scenario only 1 Participant Short, Holds Rates at 5.50% Top of Range, QT Continues as Planned

March 20, 2024 Mariel Alumit

Raises longer-run rate projection (higher for longer), and projections for inflation and GDP in 2024. By Wolf Richter for WOLF STREET. FOMC members voted unanimously today to maintain the Fed’s five policy rates, with the top of its […]

Fed’s QT Going Forward: the Treasury Maturity Schedule & Roll-off under Current QT Plan, and How a New QT Plan Might Fit

March 11, 2024 Stu Turley

Treasury QT will naturally slow in June 2025 when the Fed runs out of T-bills. Fed governors have teased us with interesting options. By Wolf Richter for WOLF STREET. The Fed has started laying out some basic principles […]

There’s a “New Upside Risk” in Town: “Pent-up Exuberance” – Fed’s Bostic

March 5, 2024 Stu Turley

If it’s unleashed at the “first hint” of a rate cut, it “would create upward pressure on prices.” But it may be too late, it has been unleashed by rate-cut mania. By Wolf Richter for WOLF STREET. Atlanta Fed […]

Gold price hits two-month high as momentum builds for Fed rate cut

March 1, 2024 Mariel Alumit

Gold prices rose by nearly 1.5% to a two-month high on Friday as disappointing US factory data and a drop in consumer sentiment reinforced bets on the possibility of interest rate cuts later in […]

Fed Balance Sheet QT: -$1.34 Trillion from Peak, to $7.63 Trillion, Lowest since March 2021

February 2, 2024 Stu Turley

By Wolf Richter for WOLF STREET. The Fed’s Quantitative Tightening continued on track in January. Total assets on the Fed’s balance sheet dropped by $51 billion in December, to $7.63 trillion, the lowest since March 2021, according to […]

Wow, Fed’s Statement Pushes Back against Rate-Cut Mania and End-of-QT Mania. Holds Rates at 5.50% Top of Range, QT to Continue as Planned

January 31, 2024 Stu Turley

Ok, so that push-back in the statement was unexpected. By Wolf Richter for WOLF STREET. The FOMC statement released today by the Fed after its two-day meeting pushed back aggressively against the market’s massive rate cut expectations this […]

Fed’s Balance Sheet QT, Liabilities: RRPs -$1.78 trillion from Peak, to $590 Billion, but Reserves Rise to $3.6 Trillion as Liquidity Drains and Shifts

January 19, 2024 Stu Turley

RRPs heading to their normal level of zero. And it’s time to talk about the revived Standing Repo Facility. By Wolf Richter for WOLF STREET. As the Fed’s Quantitative Tightening hums along on autopilot, its assets have fallen […]