Fed-related news tracking
2026
Apr10
San Francisco Fed President Mary Daly emphasized that while lowering inflation to 2% is crucial, it should not be achieved at the expense of employment. She views the risks to the Fed's dual mandate of full employment and price stability as largely balanced. Following a strong March jobs report, which she called "really good news," Daly believes the Fed has more time to balance these risks. Despite recent high CPI data, which she said was not surprising, she stated the current policy is sufficiently restrictive. If inflation remains elevated, she advocates for holding rates steady, seeing no urgency to cut.
The March ADP report indicated a 62,000 increase in private sector jobs, surpassing expectations, with growth primarily in the service sector like education and healthcare. However, the overall trend shows weakness, with a divergence where small businesses are hiring while larger firms are cutting jobs. This data, along with ISM Services data, reinforces the view that the Federal Reserve will maintain its current policy. Consequently, markets are pushing back expectations for rate cuts, citing the resilient-enough labor market and ongoing inflation risks.
Apr09
The Federal Reserve's discount window lending balance fell to $5.87 billion in the week ending April 8, down from $6.01 billion the previous week.
The March FOMC minutes reveal Fed officials are divided on the economic impact of the US-Israel-Iran conflict. Many worry about the labor market, favoring potential rate cuts to support the economy. Conversely, a growing number of officials are concerned that rising oil prices could fuel inflation, possibly requiring rate hikes. Some even suggested reintroducing the possibility of a hike in the policy statement to reflect this two-way risk. Despite the uncertainty, some officials believe the economy is in a "good place," while Fed staff analysis projected "only a small effect" from the conflict.
The Federal Reserve's March meeting minutes reveal deep concerns over the Middle East conflict's negative impacts on the US economy, including growth, inflation, and employment. Officials are divided, creating "two-way risks": some fear persistent inflation from rising oil prices may necessitate rate hikes, while others worry a prolonged conflict could weaken the labor market, requiring rate cuts. Most officials agree that progress on the 2% inflation goal has slowed and upside risks have increased. For now, the Fed remains on hold, maintaining the federal funds rate at 3.5%-3.75% while acknowledging that policy flexibility is crucial amid high uncertainty.
Apr08
The FOMC minutes from the March meeting indicate that while a future rate cut is possible if inflation subsides, officials are increasingly concerned about elevated inflation. Discussions revealed two distinct scenarios: one justifying rate cuts due to economic growth concerns, and another potentially requiring rate hikes to combat inflation, which is being exacerbated by geopolitical tensions and rising oil prices. The Fed maintained its rate at 3.50%-3.75% in a near-unanimous vote, with Chair Powell adopting a hawkish stance, stating no cuts would be considered without clear progress on inflation, particularly regarding tariff impacts. Market expectations for cuts have been pushed back to September or later.
A US-Iran ceasefire has led to a plunge in oil prices, easing inflation fears and causing bond traders to increase their bets on a Federal Reserve rate cut. Previously, the conflict had nearly eliminated rate cut expectations and even spurred bets on a hike. In response to the ceasefire, US Treasury yields have fallen sharply across the curve, with the 10-year yield dropping below 4.24%. Market expectations for a rate cut have now rebounded from near-zero to about a one-third probability. However, some Fed officials remain cautious, and the ceasefire's durability is uncertain.
The U.S. Federal Reserve has released a proposal concerning its FedNow instant payment service.
Apr05
According to CME's 'FedWatch' on April 6, the market prices a 98.4% probability of the Federal Reserve holding interest rates steady in April, with a 1.6% chance of a 25 bps hike. For the June meeting, the probability of maintaining the current rate is 96.6%, with only a 1.8% chance of a 25 bps cut and a 1.5% chance of a 25 bps hike. This reflects a significant shift over the past month, where expectations for rate cuts have nearly vanished.
Apr03
In March, U.S. private sector employment increased by 62,000 jobs, surpassing the expected 40,000, while the February figure was revised up to 66,000. This growth was heavily concentrated in education and health services, while sectors like trade and transportation saw job losses. The data reveals a split, with small businesses hiring while larger firms are cutting staff. Following this and other data like the ISM services report, the Federal Reserve is expected to maintain its current policy, with markets pushing back expectations for rate cuts due to the better-than-expected data and inflation risks.
Apr02
For the week ending April 1, loans from the Federal Reserve's discount window increased to $6.01 billion, up from $5.22 billion the previous week.
A calendar of upcoming economic events highlights meetings by the Federal Reserve, European Central Bank (ECB), and the IMF Spring Meetings. Recent central bank meetings in March were dominated by the impact of rising oil prices due to conflict in the Middle East. At its March 17-18 meeting, the Fed held rates at 3.5-3.75% after six previous cuts, while upwardly revising growth and inflation forecasts. In contrast, the ECB also held rates steady but adopted a more hawkish tone, raising its 2026 inflation forecast to 2.6% due to energy price risks. This has led to expectations of policy divergence, with analysts predicting ECB hikes while the Fed remains on hold.
Mar31
According to the CME 'FedWatch' tool on April 1, the probability of the Federal Reserve raising interest rates by 25 basis points in April is just 1.6%, with a 98.4% chance of rates remaining unchanged. This is a significant drop from March 23, when the probability of a hike was 12.4%. Looking ahead to June, the market prices a 3.9% chance of a 25 basis point rate cut, while the probability of holding rates steady is 94.6%.
Mar30
The Federal Reserve's 2025 audited financial report shows a third consecutive year of operating losses, accumulating to over $200 billion. The 2025 loss was $18.7 billion, a significant reduction from $114.3 billion in 2023 and $77.6 billion in 2024. The losses stem from interest expenses on bank reserves exceeding income from its low-yield bond portfolio, a consequence of the 2022 rate hikes. The Fed is using a "deferred asset" to account for the shortfall, and officials state the loss does not impact its ability to conduct monetary policy.
Federal Reserve Governor Stephen Miran has proposed shrinking the Fed's oversized balance sheet, suggesting a reduction of $1-2 trillion over several years. He stated that the contractionary economic effects of this balance sheet reduction (quantitative tightening) could be offset by cutting the federal funds rate. Miran, who has consistently advocated for easing, believes the current policy is too restrictive and has suggested rate cuts of up to one percentage point within a year to return to a neutral level. He emphasized the process must be slow and gradual to avoid market disruption and restore future policy flexibility.
Mar25
A recent analysis posits that in 2021, the Federal Reserve failed to address a surge in demand during a supply shortage, allegedly focusing on other frameworks like DEI instead . This occurred as officials acknowledged that fiscal stimulus and supply chain issues were potential inflation catalysts , but maintained accommodative policy due to employment gaps . The critique suggests the Fed's demand-side tools were mismatched for the supply-side problem , leading to a subsequent, severe overcorrection that harmed the economy .
Mar24
Recent weak ADP jobs and ISM services data showed minimal payroll growth in the service sector over the last two months, including an unexpected drop in private payrolls. This has reinforced expectations that the Federal Reserve will maintain its current policy stance, with the S&P 500 index remaining steady in response. This follows a period of mixed data and diverging opinions among Fed officials earlier in March regarding the labor market's strength and the appropriate policy path, with some advocating for cuts and others for holding steady due to inflation and geopolitical risks.
Mar23
On Monday, March 23, the Federal Reserve's overnight reverse repo (RRP) facility usage was $857 million with 5 counterparties. This is a slight increase from the previous trading day's $822 million on Friday, March 20. For comparison, usage was $582 million on Monday, March 16.
Mar19
The U.S. Federal Reserve has proposed revisions to the Global Systemically Important Bank (G-SIB) surcharge, potentially reducing capital requirements for the largest banks by 3.8%. According to Fed Vice Chair Michelle Bowman, the changes, part of the Basel III Endgame finalization, aim to streamline capital rules and encourage lending by creating a unified method for calculating risk-based capital. The revised proposal, expected by the end of March, is a response to industry opposition against earlier, stricter versions and is intended to help banks compete with non-bank lenders, particularly in the mortgage market.
The Federal Reserve's revised "Basel III Endgame" proposal will increase capital adequacy ratios for large banks by 1.4%, a significant reduction from earlier, more stringent drafts that faced intense industry backlash. The new rules, expected by the end of March, aim to encourage lending, streamline risk-based capital calculations, and adjust the G-SIB surcharge. For many large banks, capital requirements are now expected to remain flat or decrease slightly, potentially freeing up billions in capital. The proposal also includes considerations for revising the high-risk weighting currently applied to assets like Bitcoin.
