Page 7 - Marriners Eccles News Today

Federal Reserve policymakers scaled back their expectations for rate hikes this year after a series of bank collapses roiled markets last month, and stressed they would remain vigilant for the potential of a credit crunch to further slow the economy, a record of the meeting showed.

Federal Reserve staff are projecting that the banking crisis would trigger a recession later this year, minutes from the March FOMC meeting show.

The Office of Financial Research — a Treasury agency tasked with examining sources of systemic financial risk — published a report that found that full integration of a central bank digital currency could hurt banking-sector stability but offers significant benefits for consumers.

By Alberto Arellano More money was spent on federal building renovations by the Biden Administration ($2.5 billion) than the Taj Mahal’s $850 million construction cost. The Federal Reserve is struggling to hold expenses for government properties as it fights to control inflation. Federal Reserve Chair Jerome Powell testifies before the House Committee on Financial Services

The Federal Reserves goals of price and financial stability are in tension, Derek Tang writes.

Members of the Fed learned the wrong lesson from bizarrely focusing on the 1970s when they said "If history has taught us anything, it's to not let up too soon on inflation."

The key question in the short run is how much this effort to avert a banking crisis is going to undercut the effort to bring down inflation.

The Bank Term Funding Program, rolled out by the central bank on Sunday night, offers par value for underwater securities that banks pledge to obtain short-term loans. Industry insiders expressed optimism on Monday that it will buy time for institutions that have been hit by rising interest rates.

Over the last three days, the U.S. seized the two financial institutions after a bank run on Silicon Valley Bank, based in Santa Clara, California. It was the largest bank failure since Washington Mutual went under in 2008. How did we get here? And will the steps the government unveiled over the weekend be enough?

Disruptions and dislocations associated with more volatile business cycles have already created opportunities for active fixed income management, as the dramatic interest rate increase of 2022 illustrates.