Instant Reaction: The Fed Decides
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What is the main topic discussed in this episode?
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This is a breaking news update from Bloomberg.
Instant reaction and analysis from our 3,000 journalists and analysts around the world. The Fed decision seconds away. Unchanged is the expectation with the call is Mike McKee.
Well, pretty much as expected, John, no change in rates and the Fed leaves open the option of cutting rates in the future. Stephen Myron and Chris Waller dissent in favor of a rate cut. Michelle Bowman does not. Waller's dissent, of course, could be read as an effort to retain his place as a finalist to replace Jay Powell later this year. The statement keeps the line about considering the extent and timing of additional adjustments to the target range, suggesting more rate cuts are possible. There's no hint, however, of what that would lead them to do that or when. The economic assessment is very short and relative to recent statements. slightly positive. Available indicators suggest that economic activity has been expanding at a solid pace, it says.
Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated. The officials say uncertainty about the economic outlook remains elevated, but they don't emphasize jobs as they have the last three statements or inflation as the major concern. The committee is attentive to the risks to both sides of its dual mandate, the statement says. The open market desk at the New York Fed is again told to maintain an ample level of reserves by buying Treasury bills or, if necessary, maturities of up to three years or less. It's all about as plain vanilla as you can get, which shifts the focus, of course, to Chairman Powell's news conference at the bottom of the hour.
What does he say about the future of interest rates? And what does he say about his future as a member of the Fed? Stay tuned.
Mike McKee, we will stay tuned. The news conference about 28 minutes away. You run into that. Mike McKee there, world-class as always. A Fed decision, unchanged. The vote, interesting, 10-2 to hold rates steady. The two, Governor Myron and Governor Waller. TK, is it unfair? to describe the Governor Waller dissent as an audition to take the top job at the Federal Reserve.
1991 is classic paper on game theory. I just think we saw a little Waller game theory going on to say the least. I don't have a strong opinion on it, but definitely that's a setup for the president to make a Waller decision.
This has been an individual, Torsten, who has provided thought leadership on this committee, effective thought leadership now for a number of years. That dissent will be described by many in this market as an audition for the top job at the Federal Reserve.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–5:57
2
What is the Federal Reserve's latest policy decision?
5:57–7:40
3
What are the implications of the Fed's unchanged interest rates?
7:40–7:49
4
Who dissented in the Fed's decision and why?
7:49–9:00
5
How does the Fed's statement reflect economic conditions?
9:00–13:25
6
What are the potential future actions the Fed might take?
13:25–27:37
7
What insights does the former Fed Vice Chair provide?
27:37–32:02
Speakers
9 identifiedMore from Bloomberg Talks
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