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Federal Reserves Logan: Short-term political factors are not taken into account when setting interest rates.The Federal Reserve accepted a total of $1.447 billion from five counterparties in its fixed-rate reverse repurchase operations.According to CNBC, Alphabet raised $11 billion in a European bond offering, bringing its total global debt offerings to over $30 billion.On February 11th, Federal Reserve official Logan stated on Tuesday that she is "cautiously optimistic" that the Feds current policy rate level can push inflation back to the 2% target while maintaining a stable job market. Economic data in the coming months will test this assessment. Logan stated, "If this happens, it would indicate that our current policy stance is appropriate and that we dont need to cut rates further to achieve our dual mandate." However, she added that if inflation falls while the labor market cools significantly, "further rate cuts might become appropriate. Right now, however, Im more concerned that inflation remains stubbornly high." She noted that after three rate cuts last year, downside risks to the labor market "appear to have eased significantly," but this has also introduced additional risks to inflation. She pointed out that with short-term borrowing costs already in what is widely considered a "neutral" policy range, current interest rates have limited restraining effect on the already strongly rebounding economy and inflation that has consistently exceeded the Feds target for nearly five years. Logan expects inflation to make progress this year, with some initial signs of improvement already observed.Federal Reserves Logan: A central clearing mechanism should be provided for the Feds standing repurchase facility.

WTI bulls move in on supply side concerns, but the Fed looms

Alina Haynes

Dec 13, 2022 14:28

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On Monday, the price of West Texas Intermediate, or WTI, crude oil increased as supply-side concerns outweighed fears of weakening demand. At the time of writing, WTI is trading at $73.40, a 0.1% increase from its low of $73.27. It has risen from a low of $73.27 to a high of $73.51.

 

Despite the upcoming US consumer Price index and Federal Reserve meeting, supply concerns have trumped recession concerns in the most recent sessions. The Fed is likely to raise interest rates by 50 basis points on Wednesday, following the release of today's inflation data from other U.S. states, which might bolster the Fed's reputation.

 

"Core prices likely increased by 0.3% month-over-month in November, for the second consecutive month. We anticipate that goods deflation will once again serve as a counterbalance to shelter inflation. Importantly, the November decline in gas prices is anticipated to bring respite to the CPI. Overall, our m/m predictions imply a 7.3%/6.1% YoY increase in total/core pricing," TD Securities analysts stated.

 

The money markets presently assign a probability of about 75% that the US central bank would raise rates by 50 basis points following four consecutive rate hikes of 75 basis points. However, other observers believe that the event will have a hawkish consequence.

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