Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Rates: Fed funds held at 4.25-4.50%, bank reserves rate at 4.40% (generous), discount rate at 4.50%. Treasury QT continued -$5 billion/mo, MBS QT at -$35 billion/mo. Vote was 9 yes, 2 no (Bowman, Waller), 0 abstain, 1 absent (Kugler).
The economy is solid & growing moderately - H1 growth smooths out variations in Q1 & Q2. Tariff impacts on GDP so far have been through the import/export data.
Job market is good. Unemployment is low, but the pool of labor is also shrinking. Wage growth is moderate.
Inflation remains above +2% average target. Goods inflation is up, services inflation down. Tariff effects are small so far as some tariffs have been absorbed by manufacturers/producers & intermediaries. Insurance premiums have been catching up with prior inflation.
Housing is weak. But mortgage rates move with long-term rates. There is also a national housing shortage.
Uncertainties from government policies, tariffs & trade deals remain. Expectations are that inflationary effects of tariffs may be one-time effects.
Independent central bank is a feature of modern developed economies & is desirable so long as it serves the public well.
He passed on commenting in detail on fiscal policy (that's for Congress), dollar (that's for Treasury), cuts in federal budget for economic data services (but that good data is good for everybody), Fed HQ renovations (it's a long-term project that also includes historical preservation of the Fed buildings), & whether he will stay on as Governor (his term as Fed Chair to 05/2026, as Fed Governor to 01/2028; this may affect whether the new Fed Chair is from within the Fed or external).
Correction - I had looked at copper prices in the minutes after the Fed news conference and had assumed the steep drop in price (near just 20% today) was a result of the rate call. Posted that above. Actually, as I learned later, it had more to do with Trump imposing tariffs on copper today - a move that had been anticipated.
Comments
Rates: Fed funds held at 4.25-4.50%, bank reserves rate at 4.40% (generous), discount rate at 4.50%. Treasury QT continued -$5 billion/mo, MBS QT at -$35 billion/mo. Vote was 9 yes, 2 no (Bowman, Waller), 0 abstain, 1 absent (Kugler).
The economy is solid & growing moderately - H1 growth smooths out variations in Q1 & Q2. Tariff impacts on GDP so far have been through the import/export data.
Job market is good. Unemployment is low, but the pool of labor is also shrinking. Wage growth is moderate.
Inflation remains above +2% average target. Goods inflation is up, services inflation down. Tariff effects are small so far as some tariffs have been absorbed by manufacturers/producers & intermediaries. Insurance premiums have been catching up with prior inflation.
Housing is weak. But mortgage rates move with long-term rates. There is also a national housing shortage.
Uncertainties from government policies, tariffs & trade deals remain. Expectations are that inflationary effects of tariffs may be one-time effects.
Independent central bank is a feature of modern developed economies & is desirable so long as it serves the public well.
He passed on commenting in detail on fiscal policy (that's for Congress), dollar (that's for Treasury), cuts in federal budget for economic data services (but that good data is good for everybody), Fed HQ renovations (it's a long-term project that also includes historical preservation of the Fed buildings), & whether he will stay on as Governor (his term as Fed Chair to 05/2026, as Fed Governor to 01/2028; this may affect whether the new Fed Chair is from within the Fed or external).
https://ybbpersonalfinance.proboards.com/post/2118/thread
Will create separate thread for info corresponding with original post.