interest rate increase

Interest Rates Up Another 0.25%

The Federal Reserve Open Market Committee raised the fed funds target rate by 0.25% to a new level of 2.25-2.50%.  This was widely anticipated, with a high futures market probability of this outcome beforehand.  There were no committee dissents. The formal statement was little altered from November, noting that economic activity remains strong, unemployment remained…

mid-term election

How will the mid-term election results affect financial markets?

Unlike the surprise result in the presidential election two years ago, that fooled pollsters and statisticians both, last week’s mid-term election results were in line with predictions—although a few surprises still unfolded.  The Republicans held their majority position in the Senate, while the Democrats won a majority in the House of Representatives.  However, both were…

the fed

November Fed Meeting | No Change

As expected, the FOMC unanimously made no change in the fed funds target rate during the November meeting—leaving the level at 2.00-2.25%. Their formal statement offered few surprises, noting strength in underlying economic growth and labor markets. In keeping with the quarterly pace of rate movements, fed funds futures peg the chances of a hike…

interest rates

Where should interest rates be?

Where should interest rates be?  This has been pondered countless times over the last decade as the Fed imposed a monetary policy of extreme easing during the depths of the Great Recession, keeping interest rates near zero in subsequent years, before their the normalization process of raising them more recently.  It’s important to keep in…

interest rate increase

Interest Rates Increased Today

The FOMC decided to raise short-term interest rates by another quarter-percent—the third hike this year—bringing the fed funds target range to 2.00-2.25%.  This was largely as expected, with formal probabilities of such a move being pegged at around 95% based on futures markets.  There were no dissents.  The official statement noted a continued strengthening in…

interest rates

Today’s Fed Meeting: No Changes to Interest Rates

The FOMC concluded their monetary policy meeting today, which, as expected, resulted in no change to the fed funds rate—currently targeted to a range of 1.75-2.00%.  There were no dissenting votes. The formal narrative again was positive in its assessment of overall conditions, with both economic activity and labor market descriptions being upgraded from ‘solid’…

Productivity

What has happened to productivity?

Productivity continues to be a debated topic, and the subject of both academic and more practical white papers, with no clear-cut conclusion reached, although hopes and expectations for improvement from current low levels are widespread.  A recent report by consultant McKinsey delved into this topic extensively.  This isn’t entirely surprising since productivity is a more…