🇺🇸 #Fed (1) | Given that recent data surprised to the upside and didn’t point to an immediate recession, it would be difficult for the Fed to start an "easing cycle" (necessary to cut rates by 50bps). 
🇺🇸 #Fed (2) | However, global economic policy uncertainty (especially trade) and geopolitical tensions are still supporting the “risk-management” approach, synonym of a 25bps cut.
*Link: bit.ly/2lC4p0I
*Link: bit.ly/2lC4p0I
🇺🇸 #Fed (3) | Latest inflation figures and indicators linked to wage pressures also remained somehow robust, which likely implies another wave of hawkish dissents (Rosengren & George).
🇺🇸 #Fed (4) | The recent tensions about #dollar scarcity have legitimized more interventions (starting with repo operations) but, depending on Fed assessment, other options are on the table (IOER tweak) or...
bloomberg.com/news/articles/…
bloomberg.com/news/articles/…
🇺🇸 #Fed (5) | …or could be discussed during the press conference such as a small round of asset purchases (if banks’ reserves are seen as too low).
*March statement: bit.ly/2kSoO1j
*March statement: bit.ly/2kSoO1j
🇺🇸 #Fed | The surge in money-market rates Monday and Tuesday could be a symptom that banks lack sufficient reserves - Bloomberg
*Link: bloom.bg/2mlGbYT
*Link: bloom.bg/2mlGbYT
🇺🇸 #FED CUTS MAIN TARGET RATE 25 BPS TO 1.75%-2%; IOER CUT 30 BPS - BBG
*FED: GEORGE, ROSENGREN DISSENT FOR NO CUT, BULLARD SEEKS 50 BPS
*FED: GEORGE, ROSENGREN DISSENT FOR NO CUT, BULLARD SEEKS 50 BPS
🇺🇸 #Fed (1) | At this point, it looks tilted to the hawkish side (related to expectations):
*The dot plot of rate forecasts shows a split over the need for more easing.
*There are slight upgrades in GDP growth expectations (2019 and 2021).
*The dot plot of rate forecasts shows a split over the need for more easing.
*There are slight upgrades in GDP growth expectations (2019 and 2021).
🇺🇸 #Fed (2) | *Officials are not expecting below-trend GDP growth before 2022 (1.8% v 1.9%)
*Esther George and Eric Rosengren again dissent in favor of no cut.
*No announcement of small round of asset purchases in order to solve the problem of dollar scarcity.
*Esther George and Eric Rosengren again dissent in favor of no cut.
*No announcement of small round of asset purchases in order to solve the problem of dollar scarcity.
🇺🇸 #Fed (3) | All in all, it seems that the Fed thinks that the surge in money-market rates is mainly related to tax payments and treasury settlements (and therefore not a symptom that banks lack sufficient reserves).
*POWELL CITES CORPORATE TAX PAYMENTS, TREASURY SETTLEMENTS
*POWELL CITES CORPORATE TAX PAYMENTS, TREASURY SETTLEMENTS
🇺🇸 #Fed (4) | *POWELL: WE WILL REVISIT QUESTION OF WHEN TO GROW BALANCE SHEET - BBG
