Page 40 - Fomc News Today

Federal Reserve Bank of Cleveland President Loretta Mester also reiterated that she does not expect the Fed to cut rates next year, noting that policy makers need to keep inflation expectations from becoming unanchored.

Investors will be greeted Tuesday with a larger new-issue calendar, estimated at $6.087 billion, up from total sales of $5.551 billion in the week of Aug. 29.

The Investment Company Institute reported $755 million of outflows from muni bond mutual funds in the week ending August 24 compared to $320 million of inflows the previous week.

Many market players have revised their supply projections downward since rising interest rates have slowed down refunding and taxable volumes and general market volatility has stopped some issuers from participating.

The Federal Reserve needs to raise its benchmark rate above 4% by early next year and leave it there for some time to help cool inflation, Cleveland Fed President Loretta Mester reiterated on Wednesday.

Federal Reserve officials, picking up where they left off over the weekend in Jackson Hole, stressed their commitment to defeating inflation while remaining vague on how big their policy move will be next month.

Investors will be greeted Monday with decreased supply with the new-issue calendar estimated at $5.882 billion, down from total sales of $6.134 billion in the week of Aug. 22.

Federal Reserve Bank of Minneapolis President Neel Kashkari said U.S. inflation is very high and the central bank must act to bring it back under control.

Investors are probably in for disappointment if they continue to fight the Fed.

Former Treasury Secretary Lawrence Summers called on the Federal Reserve to deliver a clear message saying it will need to impose "restrictive" monetary policy that drives up the U.S. unemployment rate in order to quell inflation.