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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
From the Release: "Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn." |
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| 6/25 | 8/5 | 9/16 | 10/8 | 10/29 | 12/16 | 1/28 | 3/18 | 4/29 | 6/24 | ||
| Actual | 2.00% | 2.00% | 2.00% | 1.50% | 1.00% | 0.25% | <0.25% | <0.25% | <0.25% | <0.25% | |
| Forecast | 2.00% | 2.00% | 2.00% | 1.00% | 0.50% | <0.25% | <0.25% | <0.25% | <0.25% | ||
| Previous | 2.00% | 2.00% | 2.00% | 2.00% | 1.50% | 1.00% | <0.25% | <0.25% | <0.25% | <0.25% | |
| Revised From | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
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Actual | Forecast | Previous | Revised Form | |
| 9-0 hld | 9-0 hld | N/A | |||
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Federal Open Market Committee (FOMC) Minutes
for September 16th
The minutes first noted severe global credit crunch. The FOMC temporarily engaged in reciprocal currency ("swap") arrangements to be used in supporting dollar liquidity. The assessment of the economy was a weakening of the labor market, industrial production, real personal comsumption expedictures (PCE), residential construction, business investment and nonfarm inventories - GDP is expected to deccelerate. One good news is declining inflation. The main concern still goes back to the financial system. The FOMC believes the rate cutting campaign has already the the federal funds rate at a low enough level to stimulate growth, or at least not strain it. There is however some call for policy to combat the slowdown. The release noted, "Some members emphasized that if intensifying financial strains led to a significant worsening of the growth outlook, a policy response could be required; however, such a response was not called for at this meeting." Release Statement: Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth. |
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| 8/28 | 10/9 | 11/20 | 1/2 | 2/20 | 4/8 | 5/21 | 7/16 | 8/26 | 10/7 | ||
| Actual | 9-0 hld | ||||||||||
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| Previous | 9-0 hld | ||||||||||
| Revised From | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
The Federal Open Market Committee concluded its 2-day meeting and gave a more or less unchanged outlook on the economy. While acknowledging minor improvements in the economy, more contraction is expected. There was a unanimous vote to keep the rates unchanged. The Fed expressed a wait-and-see approach to quantitative easing, something the market is expecting to hear more of since interest rates are already near zero. |
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
Today's FOMC announcement surprised markets as the Fed said that it would expand its purchases of mortgage-backed securities by $750 billion and has decided to purchase $300 billion of long-term US Treasuries over the next six months. The news boosted equities as it implies the Fed is trying to lower rates on the many corporate, mortgage and consumer loans linked to benchmark government debt. The greenback suffered as the expansion of these Fed programs will add extra debt to the Fed's balance sheet, which debases the value of the greenback.
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Actual | Forecast | Previous | Revised Form | |
| <0.25% | <0.25% | <0.25% | N/A | ||
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Provided by: Federal Reserve
Discount Rate: pr. 0.50% (Dec 16th), 1.25% (Oct 29), 1.75% (Oct 8) The FOMC statement held little in the way of surprises though it did say that the Fed was prepared to purchase longer-term Treasury securities. US equities which were already up on teh day moved even higher helping to boost the USD/JPY pair and gave the Dollar strength against the Euro.
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Actual | Forecast | Previous | Revised Form | |
| 0.25% | 0.50% | 1.00% | N/A | ||
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Provided by: Federal Reserve
Discount Rate: 0.50%, pr. 1.25% (Oct 29), 1.75% (Oct 8) The Fed cut rates by 75 basis points to bring the rate down to a target range of 0 to 1/4 percent. The move is the last cut the Fed can take and will it will keep rates low "for some time." They will also try an array of new economic measures to stimulate spending. The Fed will now focus on increasing the quantity of money in the financial system. The Dollar was pressured in the aftermath of the release.
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Actual | Forecast | Previous | Revised Form | |
| 1.00% | 1.00% | 1.50% | N/A | ||
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Provided by: Federal Reserve
Discount Rate: 1.25%, forecast 1.25%, pr. 1.75% The FOMC lowered rates by 50 basis points, as expected to 1%, a four-year low. With a gloomy outlook for growth as a result of weaker consumer spending, weaker demand for exports, and the financial crisis, the Fed seems to have left the door open for another rate cut in its next meeting. Inflation is seen to be moderating in the coming quarters and the recent actions by the Fed should help to improve credit and growth.
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Actual | Forecast | Previous | Revised Form | |
| 1.50% | 2.00% | N/A | |||
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Provided by: Federal Reserve
The Federal Reserve, along with the other main central banks around the world cut rates by 50 basis points today in an unscheduled move. The coordinated effort is an attempt to lower borrowing costs during a time when money and credit markets have freezed up and to help avoid a global recession. In the join statement, the central banks see inflation easing and are now concerned about the risks to growth.
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Actual | Forecast | Previous | Revised Form | |
| 2.00% | 2.00% | 2.00% | N/A | ||
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Provided by: Federal Reserve
From the Release: "Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth. Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain. The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability."
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Federal Open Market Committee (FOMC) Minutes
for August 5th
The minutes from the FOMC suggested that the Fed is concerned about growth and that the current rate is not too low. It may mean that the Committee is ready to hold rates steady in the near terms in order to make sure growth does not regress. Still rather hawkish language regarding inflation
Members were split about the inflation outlook, with some saying the recent reduction in oil prices caused risks to "diminish modestly", while other members though inflation risks had "increased."
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Actual | Forecast | Previous | Revised Form | |
| 2.00% | 2.00% | 2.00% | N/A | ||
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Provided by: Federal Reserve
The Federal Open Market Committee held rates at 2%, and said the inflation outlook remains highly uncertain and growth risks remain. The Dollar weakened in the 5 minutes after the release, as it looks like the Fed may be concerned more about growth and does not seem ready to raise rates in order to battle inflation. Traders were looking for a move in October, but the chance according to futures markets, declined to 54% for an Oct hike in the 15 minutes after the release, compared to 60% pre-FOMC. Still the move against the Dollar was not very strong, implying Dollar strength wasn't dynamically altered.
EUR/USD - Euro Hits 6-Week Low vs Dollar Before Fed, Initial Euro Gains After Release Cut Down: Overnight the Euro-Dollar pair was down 100 pips following weak European data expectations of perhaps a statement more focused on the risks of inflation. The pair retracted 30 pips in the minutes following the release, but recovered to pre-decision levels rather quickly as the pair's bulls and bears both exerted their influence.
USD/JPY - Dollar Gains vs Yen as US Stock Rally on Oil Prices, Unable to Break 108.30 Resistance: The Yen gained initially against the Dollar overnight, but the Dollar found support and recovered to the 108.25 area prior to Fed decision. US stocks, bolstered by yet another day of oil declines, rallied during NY morning trading. The DOW industrials index was up 200 points by 12:30 PM and oil was off by $2.50 at that time. Still, the Dollar was not able to break resistance at 108.30 and was lower following the FOMC decision.
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Federal Open Market Committee Minutes for June 24-25 Meeting
Provided by: Federal Reserve |
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Actual | Forecast | Previous | Revised Form | |
| 2.00% | 2.00% | 2.00% | N/A | ||
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The Federal Reserve
The FOMC held rates at 2% and offered little in the way of any surprises. The key details in the announcement had been tested in speeches and came in about as expected. The Fed seems less concerned now about the recent downturn the economy experienced, and shifting their focus to inflation. It will be some time before the Fed can increase interest rates as the economy is still sputtering with housing yet to find a bottom and other indicators pointing to weaker growth ahead. However to combat inflation, which will be a major theme the rest of the year, the next move the Fed will do will be a rate increase.
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Federal Open Market Committee Minutes for April 29-30 Meeting
The Federal Reserve seems ready to stay on the sidelines and the decision to cut rates by 25 basis points was a "close call." The risks to growth and inflation are now balanced and only "significant weakening of the economic outlook" would force another interest rate cut. Inflation expectations were put higher, with the personal consumption index expected to jump to a range of 3.1 to 3.4% compared to the previous forecast of a 2.1% to 2.4% rise. Also, the worst part of the credit crisis seems to have passed. The Fed did also reduce their projections for economic growth this year by almost a full percentage point. Expectations are now for growth to increase by 0.3% to 1.2% this year. The minutes did not do much to strengthen the Dollar on a day of Dollar weakness, so the markets may have priced in the pause and have not gleamed new information. Only a change of language regarding inflation's risks, and the talk of raising interest rates would have supported the Dollar. US stocks were reeling today, and the Dollar's losses intensified against the Yen. From the Release: " The Committee agreed that that the statement to be released after the meeting should take note of the substantial policy easing to date and the ongoing measures to foster market liquidity. In light of these significant policy actions, the risks to growth were now thought to be more closely balanced by the risks to inflation. Accordingly, the Committee felt that it was no longer appropriate for the statement to emphasize the downside risks to growth. Given these circumstances, future policy adjustments would depend on the extent to which economic and financial developments affected the medium-term outlook for growth and inflation. In that regard, several members noted that it was unlikely to be appropriate to ease policy in response to information suggesting that the economy was slowing further or even contracting slightly in the near term, unless economic and financial developments indicated a significant weakening of the economic outlook." |
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Federal Open Market Committee Minutes for March 17-18 Meeting
FOMC meeting minutes re-iterated some of the things Bernanke has been saying recently, most importantly that Fed official see that a contraction in the economy during the first half of 2008, with several members believing that a "prolonged" and "severe" downturn could not be ruled out. From the Release:
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Federal Open Market Committee Minutes for Jan 29-30 Meeting
Provided by: Federal Reserve |
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For the December 11 25bps Rate Cut
Release from FOMC Meeting Minutes The Minutes revealed that the housing weakness continues to deepen, and projected growth for 2008 will be lower than the Fed's own previous estimates. Consumer spending seem to be shrinking as well, and employment growth has been restricted because of the housing weakness. The Committee noted "Members would be prepared to adjust the stance of monetary policy if prospects for economic growth or inflation were to worsen." This leaves the door for further rate cuts. The market reacted to the dovish outlook by putting shorting pressure on the dollar today. |
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For Oct 31 Meeting/Announcement. The Federal Open Market Committee lowered its benchmark rate by a quarter point on Oct. 31, to 4.5 percent, after reducing borrowing costs a half point in September. The Committee warned that a fall in the stock markets, as a result of banks warning of billions of dollars of losses on debt tied to sub-prime mortgage, would add to lower consumer confidence to limit consumer and business spending. In an accompanying quarterly economic forecast, the degree of uncertainty about the growth outlook is greater than that for inflation, officials said. |
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| During the Aug. 7th FOMC meeting, minutes reveal that the board members were more concerned about rising inflation that the rising cost of credit. They realized that "strains in financial markets" jeopardized expansion, but that "for the present, given that the likely outcome for the economy was continued moderate growth, the upside risks to inflation remained the most significant concern." Of course this changed, as 10 days later the Fed was forced to cut the discount rate, the rate at which the Fed lends to banks, in an emergency session to stave off the crisis brought about by a credit crunch. | |||||
