US - Fed 04 (Apr 21 - Dec 25)

[behappyalways]

Chen Fengxin predicts that the US Federal Reserve will suspend interest rate hikes in June, and it is impossible to cut interest rates before the end of the year!

陳鳳馨預測 美國聯準會六月暫停升息 年底前降息不可能！【Yahoo TV】風向龍鳳配

https://m.youtube.com/watch?v=XwJYWmpgBrA

[winston]

FOMC Meeting

Federal Reserve Chairman Jerome Powell said on Wednesday that financial conditions are likely to allow the central bank to press forward with the drawdown of its massive balance sheet through the remainder of the year.

As the Treasury moves toward selling massive amounts of debt to rebuild its financial position after the resolution of the debt ceiling battle, Powell noted there is a “very high” level of reserves in the banking system and stashed away at the Fed’s reverse repo facility.

Because the system is so flush with cash, it gives the Fed ample room to press forward with letting Treasury and mortgage bonds run off its balance sheet.

“We don’t think reserves are likely to become scarce in the near term or even over the course of the year,” Powell said. That observation implied the Fed can continue to move just under US$100 billion per month from its balance sheet, as it has been doing since last summer, possibly into 2024.

The balance sheet drawdown has complemented the central bank’s more high- profile campaign of rate rises, which has seen its interest rate target go from near zero in March of last year to its current 5 per cent to 5.25 per cent range.

Source: Phillips

[behappyalways]

Fed holds off on rate hike, but says two more are coming later this year
https://www.cnbc.com/2023/06/14/fed-rat ... -2023.html


note the axis change. y-axis now goes up to 7%, not 6%
https://twitter.com/JackFarley96/status ... 9922878471

[behappyalways]

Fed Emergency Bank Bailout Facility Usage Hits New Record High; Money Market Funds See Small Outflow
https://www.zerohedge.com/markets/fed-e ... -see-small

[winston]

Powell Signals Higher Rates as Lawmakers Press Him on Bank Rules
Says the timing of rate moves will be decided at each meeting

by Natasha Solo-Lyons

Federal Reserve Chair Jerome Powell said policymakers expect interest rates will need to move higher to reduce US growth to below its long-term trend and contain price pressures. When that happens, however, will depend on the data.

“My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal,” Powell said in remarks prepared for the House Financial Services Committee.

“We will continue to make our decisions meeting-by-meeting, based on the totality of incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks.”

The Federal Open Market Committee paused its series of interest-rate hikes last week for the first time in 15 months, leaving rates in a range of 5% to 5.25%. But Fed officials estimated rates would rise to 5.6% by the end of the year, according to their median projection, implying two additional quarter-point hikes to wrestle with slowing-but-sticky inflation and a strong US labor-market.

Source: Bloomberg

https://www.bloomberg.com/news/articles ... #xj4y7vzkg

[behappyalways]

Fed Emergency Bank Bailout Facility Usage Hits New Record High; Money Market Funds See Another Small Outflow
https://www.zerohedge.com/markets/fed-e ... -funds-see

[winston]

Big US banks would lose $541bn in doomsday scenario, predicts Fed

by Joshua Franklin, Stephen Gandel and Colby Smith

The largest US banks would lose $541bn in a hypothetical doomsday economic scenario but still have more than enough capital to absorb the losses.

The passing grades given by the Fed on Wednesday to banks including JPMorgan Chase and Goldman Sachs lent support to claims from Wall Street executives and regulators that systemically important banks can withstand heavy losses.

Source: Financial Times

https://finance.yahoo.com/m/6636fa76-02 ... -lose.html

[behappyalways]

The June CPI report probably won't alter the Fed's planned July hike but it reduces the prospect of that second hike.
Most officials penciled in two more increases last month but did so on the assumption that inflation would decline more slowly.
https://twitter.com/NickTimiraos/status ... 7259547648


Despite the better-than-expected CPI report today, the probability of a July 26 rate of 25 basis points to 5.25% to 5.50% barely moved.
The market is strongly expecting a hike in two weeks.
https://twitter.com/biancoresearch/stat ... 8656804870

[behappyalways]

Total assets on Fed's balance sheet now decisively through low prior to banking stress in March; lowest since fall of 2021
https://twitter.com/LizAnnSonders/statu ... 7194147840

[winston]

The Federal Reserve has $910 billion in losses

The Fed’s own financial statements show that their unrealized losses amount to over $910 billion. Given that the Fed only has $42 billion in capital, this means that America’s central bank has a net financial position of MINUS $868 billion on a mark-to-market basis.

https://www.federalreserve.gov/aboutthe ... 69de1401fa

Source: Sovereign Man