Federal Reserve

View:

July 02, 2025

U.S. Fed's Barkin - Puts focus on unemployment
Paying Article

July 2, 2025 8:10 PM UTC

Fed's Barkin remains in no rush to ease though policy will depend on incoming data.

...
DM Central Banks: Overlooking Lagged 2021-23 Tightening and QT?
Paying Article

July 2, 2025 8:30 AM UTC

We are concerned that DM central banks are underestimating the lagged impact of 2021-23 tightening and ongoing QT, which impacts the transmission mechanism of monetary policy.  Central banks need to consider cyclical and structural issues, but also need a more rounded view of the stance and implica

July 01, 2025

U.S. Fed's Powell - Prudent to wait but won't take July off the table
Paying Article

July 1, 2025 2:46 PM UTC

Fed's Powell states policy is data-dependent. He expects higher inflation while watching for labor market weakness he does not expect.

...
Trump Tariffs: Poker Face?
Paying Article

July 1, 2025 12:55 PM UTC

Our central scenario (but less than 50%) is towards a scenario of compromise, with some agreements in principle or trade framework deals, delays for most other negotiating in good faith but with one or two countries seeing a reciprocal tariff rise e.g. Spain and/or Vietnam.  This could still be fol

June 27, 2025

U.S. Fed's Kashkari - Expects two rate cuts this year, possible first cut in September
Paying Article

June 27, 2025 12:11 PM UTC

Kashkari's view puts him on the Fed's median dot. The skew on the dots is hawkish but the decision will depend on data.

June 26, 2025

U.S. Fed's Barr - Fears tariffs could lead to persistent inflation
Paying Article

June 26, 2025 5:35 PM UTC

Fed's Barr continues to warn that a tariff boost to inflation could have some persistence.

U.S. Fed's Daly - Fall promising for a rate cut
Paying Article

June 26, 2025 1:46 PM UTC

Fed's Daly is giving what appears to be a mainstream Fed view.

June 25, 2025

U.S. Fed's Collins - Calling for patience, as are most Fed speakers
Paying Article

June 25, 2025 1:59 PM UTC

Fed's Collins, as are most Fed speakers, is backing the wait-and-see approach to policy, particularly in regard to tariffs. 

...
EM FX Outlook: USD Less in Favor, but EM Mixed
Freemium Article

June 25, 2025 8:05 AM UTC

·       The Chinese Yuan (CNY) will likely remain stable while trade negotiations with the U.S. continue.  We see a trade deal in our baseline (probably Q4) and then a small rise in CNY v USD due to general USD weakness. 
·       In terms of total returns for the remainder of 2025, th

June 24, 2025

...
Tariffs and the Timing of FOMC Easing
Freemium Article

June 24, 2025 6:06 PM UTC

While two Fed Governors. Waller and Bowman, have suggested a July easing could be appropriate, testimony from Chairman Powell suggests a move that early is unlikely, though September is possible if inflation data continues to show a lack of feed through from tariffs. We, and Powell, expect some acce

U.S. Fed's Williams Backs steady policy, Powell expecting tariffs to lift inflation
Paying Article

June 24, 2025 4:45 PM UTC

Fed's Williams is backing Powell's caution over easing. Powell is suggesting inflation data for June, July and August will be crucial. 

U.S. Fed's Powell - Expected inflation keeping rates above neutral
Paying Article

June 24, 2025 2:56 PM UTC

Fed's Powell is reluctant to ease because inflation is expected to rise on tariffs.  Future policy will depend on incoming data.

U.S. Fed's Powell - Sticking to wait and see view
Paying Article

June 24, 2025 1:48 PM UTC

Fed's Powell, consistent with last week's post-FOMC press conference, seems in no rush to ease in his testimony to Congress.

U.S. Fed's Hammack - May stay on hold for some time
Paying Article

June 24, 2025 1:36 PM UTC

Cleveland Fed President Beth Hammack is sounding hawkish, in contrast to Bowman yesterday.

U.S. Fed's Bostic - Sees one rate cut late this year
Paying Article

June 24, 2025 10:54 AM UTC

Fed's Bostic continues to see only one rate cut this year, not backing Bowman's dovish view given yesterday.

June 23, 2025

U.S. Fed's Goolsbee - Impact of tariffs not as bad as feared
Paying Article

June 23, 2025 5:50 PM UTC

Fed's Goolsbee has added his voice to those of Waller and Bowman, noting that tariffs have lifted inflation less than feared.

...
Iran: Measured Next Steps?
Paying Article

June 23, 2025 3:17 PM UTC

  A measured or modest Iran retaliation could be used by the U.S. to seek a path back towards negotiation.  Israel would likely want to continue to degrade Iran nuclear and military facilities, but the U.S. could eventually pressure Israel to stop.  This is our baseline, though the military attac

U.S. Fed's Bowman - Openness to July easing a dovish shift
Paying Article

June 23, 2025 2:40 PM UTC

Fed Governor Bowman's openness to a July easing is a surprise, coming from someone who has recently been a hawk.

...
DM Rates Outlook: Yield Curve Steepening?
Paying Article

June 23, 2025 8:30 AM UTC

•    We see the U.S. yield curve steepening in the next 6-18 months. 2yr U.S. Treasury yields can step down with cautious Fed easing on a modest/moderate growth slowdown and also if the Fed keeps an easing bias in H2 2026. 10yr U.S. Treasury yields face a tug of war between lower short-dated y

June 20, 2025

U.S. Fed's Barkin - Contrasts dovish earlier remarks from Waller
Paying Article

June 20, 2025 4:53 PM UTC

Fed's Barkin sees no rush to ease. Earlier Fed's Waller said the Fed could move as early as July.

...
U.S. Outlook: Slowdown but not Recession, Cautious Fed Easing
Paying Article

June 20, 2025 2:14 PM UTC

•    Policy uncertainty remains high and final details of the tariffs will depend on the decisions of the courts as well as those of President Trump. However the magnitude of the tariffs is becoming easier to predict than the detail. Trump looks set to insist on a minimum average tariff of at

June 18, 2025

...
Fed: Hold Then Cautious Easing
Paying Article

June 18, 2025 7:27 PM UTC

Though the SEP reduced growth forecasts and boosted inflation, the guidance from the Fed remains that policy is on hold in the coming meetings.  Though the FOMC median still has two 2025 cuts, the breakdown shows that this was a close call and a lot of members see no cut or only 25bps. We look for

U.S. Fed's Powell - Expecting tariffs to feed into inflation despite recent softer data
Paying Article

June 18, 2025 6:48 PM UTC

Fed's Powell, while welcoming recent softer inflation data, is still wary of the risk from tariffs.

...
FOMC more pessimistic than March forecasts but not compared to May statement
Paying Article

June 18, 2025 6:23 PM UTC

The FOMC has left rates unchanged at 4.25-4.50% as expected. The median rate forecast is unchanged at 3.9% for end 2025 but the FOMC now sees only 25bps of easing in 2026 rather than 50bps, with 2027 still seeing 25bps, but the end 2027 rate is now seen at 3.4% from 3.1%, leaving a slightly hawkish

June 12, 2025

...
Trump Tariffs: China and July 9 Reciprocal Deadline
Paying Article

June 12, 2025 7:17 AM UTC

 We attach a 65% probability to a U.S./China reaching a new trade deal that reduces the minimum overall tariff to 15-20% imposed by the U.S., most likely agreed in Q4 2025 and to be implemented in 2026.  However, a 35% probability exist of no deal and this could eventually mean higher tariffs (Fig

June 11, 2025

...
FOMC Preview for June 18: No change in rates or dots, only marginal changes to statement and forecasts
Paying Article

June 11, 2025 4:01 PM UTC

The June 18 FOMC meeting looks highly likely to leave rates unchanged at 4.25-4.5%. We expect only marginal changes to May’s statement and the Fed’s median forecasts from March, with no change at all in the median dots on rates.  Chairman Powell at the press conference may welcome recent signal

June 10, 2025

...
U.S. Deficit and Government Debt Concerns
Paying Article

June 10, 2025 9:00 AM UTC

 The large U.S. budget deficit has helped push up 10yr real yields to 2% in 2024/2025, but both the budget deficit (heavy issuance) and government debt trajectories (sustainability and rating concerns) are key going forward if the 10yr budget bill passed is similar to the House Bill.  Foreign acco

June 05, 2025

U.S. Fed's Schmid - Expects tariffs to lift inflation
Paying Article

June 5, 2025 5:44 PM UTC

Fed's Schmid, like Kugler earlier, sounds hawkish. Harker is less so but is still in no hurry to ease. 

U.S. Fed's Kugler - See inflation risks now, employment risks down the road
Paying Article

June 5, 2025 4:27 PM UTC

Fed Governor Adriana Kugler still sounds hawkish, focused more on price risks than those to employment.

June 04, 2025

U.S. Fed Beige Book Summary - Activity declined slightly
Paying Article

June 4, 2025 6:15 PM UTC

The latest Fed Beige Book shows activity declining slightly, after being little changed in April and increasing slightly in March. Prices are now rising at a moderate pace after being modest to moderate in April, but it is unclear how much tariff based cost increases will be passed on. Whatever pass

June 03, 2025

...
Nato Summit 5% Target and Trump
Paying Article

June 3, 2025 10:48 AM UTC

Trump’s natural instincts will likely see extra pressure applied on Europe in the coming weeks to commit to 5%, but we do not see existential threats from Trump.  In the end, our baseline is that NATO will agree a “soft” aim of 5% (3.5% hard military spending and 1.5% infrastructure/cybersecu

June 02, 2025

...
Trump’s 50% Steel And Aluminum: Negotiating Leverage?
Paying Article

June 2, 2025 7:42 AM UTC

•    President Donald Trump increase in steel and aluminum tariffs from 25% to 50% is not just about boosting the steel and aluminum industry.  It also a demonstration that Trump remains in control of tariffs and can aggressively change tariffs to increase negotiating leverage.  It is a mess

May 30, 2025

...
Tax Foreigners Assets: How To Lose Friends
Paying Article

May 30, 2025 9:12 AM UTC

   Increasing taxes on dividends on U.S. equities and corporate bond coupons would alarm foreign investors and hurt the USD and U.S. equities, as it would amplifies foreign investors concerns that they are overweight U.S. assets and the USD.  Starting a capital war with investors into the U.S. is

May 29, 2025

U.S. Fed's Powell - Resists pressure from Trump to cut rates
Paying Article

May 29, 2025 6:18 PM UTC

The Fed has given a brief and blunt statement after a meeting between Powell and Trump called by the latter.

U.S. Fed's Goolsbee - Rates could come down if tariffs avoided
Paying Article

May 29, 2025 3:40 PM UTC

Fed's Goolsbee has shown that if the courts stop tariffs, easing would be more likely, though uncertainty will not be resolved quickly with Trump having many options to respond.

...
Court Stops Trump Reciprocal and Fentanyl Tariff
Freemium Article

May 29, 2025 7:18 AM UTC

•    The Trump administration will likely follow a multi-track response by appealing the judgement but also fast-tracking section 232 product tariffs for pharmaceuticals and semiconductors.  The administration could also consider section 301 or 122 tariffs (the latter 15% for 150 days against c

May 28, 2025

...
FOMC Minutes from May 7 - Still concerned that inflation could prove persistent
Paying Article

May 28, 2025 7:04 PM UTC

FOMC minutes from May 7 may be a little dated as tariffs on China have subsequently been reduced significantly, but there is no suggestion in any subsequent Fed commentary that the Fed is no longer concerned over the risks that the minutes outline. All participants judged that it was appropriate to

...
The U.S. Slowdown Question Key for Markets
Paying Article

May 28, 2025 7:35 AM UTC

•    Though financial markets are debating the effects of the U.S. budget deficit trajectory on yields and how much global investors will reduce overweight U.S. exposure long-term, the critical question remains the scale of the economic slowdown and what it means for tactical asset allocation

May 23, 2025

...
Big Beautiful Bill will bring larger US budget deficits
Paying Article

May 23, 2025 4:32 PM UTC

The “Big Beautiful Bill” on fiscal policy passed by the House was costed by the Congressional Budget Office on May 20 and shows a significant boost to the budget deficit in the remainder of the current Trump presidential term. This is because tax cuts have been front loaded and spending cuts bac

U.S. Fed's Goolsbee - High bar for rate moves
Paying Article

May 23, 2025 1:10 PM UTC

Fed's Goolsbee has expressed concern over Trump's latest tariff threat, and seems uninterested in near term rate moves. 

May 22, 2025

U.S. Fed's Waller - Hoping for easing in second half of 2025
Paying Article

May 22, 2025 1:11 PM UTC

Fed's Waller continues his recent relatively dovish tone, seeing scope for easing in H2 2025.

May 19, 2025

U.S. Fed's Williams - Waiting for clearer outlook
Paying Article

May 19, 2025 1:19 PM UTC

Fed's Williams is in no hurry to ease, and will take his time as he watches incoming data.

U.S. Fed's Bostic - Sees one rate cut this year, worried about inflation
Paying Article

May 19, 2025 12:48 PM UTC

Fed's Bostic is sounding quite hawkish, but is no longer a voter this year.

May 16, 2025

...
Moody's downgrades US debt as long-standing fiscal concerns mount
Paying Article

May 16, 2025 11:42 PM UTC

Moody’s downgraded US debt to AA1 from AAA after Friday’s close. The decision appears due to continued lack of action on the budget deficit rather that being triggered by any specific event, and brings Moody’s into line with S and P and Fitch. However the timing is awkward for markets, with th

May 15, 2025

U.S. Fed's Powell - Signals change in Fed policy framework
Paying Article

May 15, 2025 3:18 PM UTC

The Fed after 5 years is due for a review of its policy framework. Powell is signalling that the existing framework is no longer appropriate in the post-pandemic environment. 

...
U.S./China Trade Truce Reduce Downside and Extra Stimulus Prospects
Paying Article

May 15, 2025 7:15 AM UTC

The alternative hard landing scenario in China has been reduced significantly with the trade truce with the U.S.  However, China will still have to cope with a minimum 30% overall tariff, with only around a 10% reduction in the fentanyl tariff likely to be agreed in the coming months.  Our baselin

May 14, 2025

U.S. Fed's Jefferson - Still seeing risks on both sides
Paying Article

May 14, 2025 1:28 PM UTC

The trade truce with China does not appear to have changed the views of Fed's Jefferson much.

...
Extreme U.S. Economic Uncertainty Starting to Fade
Paying Article

May 14, 2025 1:14 PM UTC

Now that we have seen April’s non-farm payroll and CPI data, the underlying economic picture still looks quite healthy. Activity still seems to have respectable momentum despite a marginal decline in Q1 GDP, while inflation appears to be losing momentum with little pass through of tariffs yet. Unc

...
Europe Portfolio Leverage Over Trump
Freemium Article

May 14, 2025 9:05 AM UTC

The U.S. will likely introduce a 25% tariff on pharmaceuticals, which will increase pressure on the EU and other European countries (e.g. Switzerland) and also delay serious negotiations close to the 90 day reciprocal tariff deadline on July 9, adding to pressure on Europe by deliberately prolonging

May 13, 2025

...
Markets: Less U.S. Recession Risk, But Trade Headwinds
Paying Article

May 13, 2025 9:38 AM UTC

Though we had expected a U.S./China trade truce, the terms are more favorable to U.S. growth than we anticipated.  Combined with the UK framework deal, we have revised down the probability of a U.S. recession from 35% to 20%.  In turn we have revised up the end 2025 and end 2026 S&P500 forecasts t