Powell gymnast 3

A weekend article by Nick Timiraos in the Wall Street Journal. Says Federal Reserve officials are preparing to slow from a 50 basis point rate hike in December to 25 basis points this time around (meeting is Jan. 31-Feb. 1). And this new debate within the Federal Open Market Committee (FOMC) will focus on when to “pause” future rate hikes.

  • They could start deliberating from January 31 to February 31. 1 gathering how much further easing in labor demand, spending and inflation they would need to see before pausing rate hikes this spring.
  • In recent public statements and interviews, Fed officials have said that slowing the pace of rate hikes to a more traditional quarter-percentage point would give them more time to assess the impact of their increases to the extent that they determine where to stop.

    The Wall Street Journal is closed, here is the link to find out more if you can access it. but the above is the relevant essential.

  • Fed sets course for more moderate interest rate hike in February

In the ICYMI background, Timiraos has made a name for himself as a Fed insider.

In June 2022, Timiraos dropped the bombshell during the Federal Reserve blackout period:

“A series of worrying inflation reports in recent days is likely to lead Federal Reserve officials to consider surprising markets with a larger-than-expected interest rate hike of 0.75 percentage points during of their meeting this week,” he wrote.

The report is speculative, but it exploits old-fashioned Fed leaks. And, the post, just like Timiraos, was perfect.

Timiraos was thus crowned the new Hilsenrath (you may remember his role during Bernanke’s Fed as the Fed’s insider information provider).

Fed Chairman Powell

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