In another week the FOMC will have its final meeting of 2018 and its last with the current mix of policy makers. Already, the discussion has turned to what the Committee will do at that and subsequent meetings: Will it proceed with further 25bp increases in the target range for the federal funds rate, or […]
The November FOMC meeting is scheduled for November 7 & 8, one day after the November 6 midterm election. We are not looking, then, at the possibility of any further FOMC action on interest rates that might influence the election one way or another, but what about after the election? Is the FOMC likely to […]
The last few days, President Trump has made inflammatory and in some instances misguided remarks as to the nature of current Fed policy, its impact on the stock market and potentially on the economy. Examples follow: “It is a correction (the decline in the stock market) that I feel is caused by the Federal Reserve.” […]
As Treasury markets had correctly predicted, the FOMC raised its target range for federal funds by 25 basis points to 2.0%–2.25% at its meeting on Wednesday, Sept. 26. Perhaps more importantly, it also deleted the observation that policy remains accommodative, though Chairman Powell went out of his way in his opening remarks to point out […]
Cumberland has utilized separately managed accounts to execute its fixed-income strategy since its inception in 1973, long before separately managed accounts (SMAs) were popularized in the early 2000s. What exactly is an SMA? Per Investopedia: “A[n] SMA is a portfolio of assets under the management of a professional investment firm. In the United States, the […]
As is the custom for Fed chairs, Chairman Powell provided the kickoff address to the Kansas City Fed’s annual Jackson Hole symposium, broadly attended by many of the world’s central bankers. For those who are unfamiliar with the conference, the papers presented are generally conceptual economic policy documents with a distinctly longer-run, bigger-picture focus rather […]
In the wake of the turmoil in Washington, DC, over his performance in Helsinki, President Trump also took a sideswipe at the Federal Reserve, criticizing the FOMC’s recent efforts to normalize policy.
Most presidents – though not all – have understood that Fed independence ensures separation from the Treasury and serves as a check on fiscal excesses. When a central bank takes orders from the fiscal side of government, history shows that inflation and economic decline soon follow.
My colleague Bob Eisenbeis recently described the improved communications from the Fed and offered his current thoughts on Fed policy. His post-Fed-meeting notes are here: http://www.cumber.com/the-fed-decides/. Today we want to take a longer view of interest rates and offer some observations on what lies ahead. I write this after the FOMC June meeting and after […]