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Fed Watch

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  • Fed Watch
September 22

The FOMC met yesterday to announce their latest rate hike. As the market for Fed Funds Futures implied leading up to the meeting, the committee decided on a 75-bps hike. We wanted to provide a special update on where things stand with the Fed and...

Biggest lesson of Jan 2022 is market fearful of Fed.  But in 2010, fed fund futures expected 2.5% FF by 2012... but that did not happen for another 7 years
  • Fed Watch
September 2

The Smoke Clears After Jackson Hole, Jobs Report Encouraging

Hot labor market cooled moderately as employers slowed the pace of hiring, more people sought to rejoin the labor force, and pace of wage growth moderated. Deceleration came as a relief in contrast to the red-hot data characterizing much of the past two years. While the August jobs data reported...

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  • Fed Watch
August 26

Special Edition: Everything You Need to Know About Jackson Hole

Federal Reserve Chairman Jay Powell made his much-anticipated keynote speech at the Fed’s annual Jackson Hole symposium. While fixed income markets were largely positioned in anticipation of a hawkish message, equity markets retreated significantly, with the losses being the worst in high P/E equities. Powell had an abbreviated speech and...

  • Fed Watch
August 19

Fed Minutes: Despite Encouraging July CPI, Inflation Remains Far Too High

It’s not time for a victory lap just yet, even after markets have rallied substantially since their June lows, and an encouraging July CPI print pushed them higher. This week, the Fed released the minutes from its most recent policy meeting in late July. Fed officials, according to the minutes,...

  • Fed Watch
August 12

CPI and PPI Come in Below Expectations, Potentially Giving FOMC Some Breathing Room

There was finally some relief after a steady stream of hot inflation data. After 10 months of upside surprises, CPI finally came in lighter than expectations on Wednesday. Core CPI was slightly down and essentially flat, Food was slightly up, and Energy had the biggest drop and made the downside...

  • Fed Watch
August 5

Jobs surprise: U.S. economy added 528,000 jobs in July; CPI print coming next week

What recession? The good news: A much stronger than expected reading on July employment came in hot. The U.S. economy added 528,000 jobs in July, the Labor Department reported, far exceeding the 258,000 consensus estimate. The unemployment rate ticked down to 3.5% from 3.6%, while average hourly earnings climbed 15 cents,...

  • Fed Watch
July 29

Fed Raises by 75-bps But Signals More Normal Hikes Possible, PCE Comes in Hot

The Fed’s July meeting was on Wednesday and, as expected, the FOMC raised rates by 75 bps to a range of 2.25%-2.5%. This was the second consecutive jumbo rate hike. The two back-to-back hikes of 75 bps were actually the most stringent consecutive action since the beginning of the 1990s...

  • Fed Watch
July 22

All Eyes on FOMC Meeting Next Week Amid Hot Inflation

Federal Reserve officials have indicated they are gravitating toward another 0.75-percentage-point rate rise at their July 26-27 Federal Open Market Committee meeting, even as they have faced questions about their willingness to do more than that to bring down high inflation. Central bankers have signaled they will do whatever it...

  • Fed Watch
July 15

June CPI Report Comes In Hot, Fed Fund Futures Retreat After Initial Shock

The June CPI print came in at 9.1% on Wednesday on expectations of 8.8%. This was higher than expectations and the report did not give Fed officials any reprieve from persistently high price pressures. Shelter was problematic and so was gasoline. Hotels benefitting from revenge spending contributed as well. The...

FOMC minutes confirm Fed’s priority to fight inflation; US job growth remains solid

The FOMC minutes released this week showed further evidence that the Feds are centered on containing inflation. Investors cheered this week, though fears of a recession linger. FOMC policymakers judged that an increase of 50 or 75 basis points "would likely be appropriate at the next meeting" given the current...

Some Relief on Fed’s Favorite Inflation Measure; Powell Says The Clock is Ticking on Preventing Sustained High Inflation

The Fed’s favorite inflation gauge came in this week. The PCE rose 0.2% in May but fell 0.5% when inflation was considered. Personal incomes were a similar story as well. They rose .5% but after being adjusted for inflation the number was down 0.1% while prices continued rising in May...