Monetary policy

During this week's Federal Open Market Committee meeting, officials voted to lower the cap on the amount of Treasury securities that can roll off the central bank's books each month from $60 billion to $25 billion.

Banks and other financial market participants have been keyed into the central bank's communications around monetary policy expectations. But in an unpredictable economy, the guidance doesn't always hit the mark.

Recent economic data have shown inflation stubbornly above the Fed's 2% target, putting rate cuts in jeopardy. Lauren Saidel-Baker, an economist with ITR Economics, parses the FOMC meeting, Chair Powell's press conference and takes a look at future policy.

According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.

D.A. Davidson Director of Wealth Management Research James Ragan will review and analyze the March Federal Open Market Committee meeting.

Federal Reserve Chair Jerome Powell said at the Federal Open Market Committee press conference Wednesday that a slower pace of reduction could help the central bank avoid shrinking its holdings further without disrupting the banking system.

Federal Reserve Bank of New York President John Williams said the economy is headed in the right direction, and it will likely be appropriate to cut interest rates later this year

The Federal Reserve expects to cut interest rates three times this year, some say as early as March, if data alllow those moves. Following the Jan. 30-31 FOMC meeting, Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions, will provide his take on the meeting and Chair Jerome Powell's press conference.

John Williams, who also serves as vice chair of the Federal Open Market Committee, does not expect the Federal Reserve to slow its balance sheet runoff anytime soon.

The president of the Federal Reserve Bank of Dallas and former manager of the central bank's open market account said a slower approach to balance sheet reduction may be warranted sooner rather than later.

Federal Reserve officials point to overnight reverse repurchase agreement activity as an indication of excess liquidity, which the central bank is working to reduce. But some analysts say that excess liquidity may be drying up faster than expected, with important implications for banks.

The Federal Open Market Committee meets Dec. 12 and 13 and in addition to their statement, they will issue a Summary of Economic Projections.

The Federal Open Market Committee's Summary of Economic Projections probably won't offer the 130 basis points of cuts next year that the market expects.

Benchmark two-year yields, those most closely tied to the outlook for US central-bank policy, rose as much as 14 basis points, the most in a day since June.

All eyes are on the Federal Reserve and monetary policy. Join us as Scott Anderson, chief U.S. economist and managing director at BMO Economics, breaks down the latest FOMC meeting.

Often a harbinger of recessions, the fact that short-term yields are higher than long-term is not inherently bad, Federal Reserve Gov. Chris Waller said Tuesday, noting that in this case it could prove that market expectations are anchored.

Federal Reserve Chair Jerome Powell said he expects the final version of the Basel III endgame reforms to garner "broad support" after comments are received and addressed.

The Federal Reserve is expected to pause at its September meeting. Jeff Timlin, a managing partner at Sage Advisory, will join us on Sept. 21 to provide analysis of the meeting.

Treasury Secretary Janet Yellen acknowledged that a surprisingly robust economy has led investors to assume that the Federal Reserve would maintain high interest rates over a longer period, but said longer-term drags on the economy could upend that calculus.

Federal Reserve Chair Jerome Powell said inflation relief from the housing sector is "in the pipeline" but some say strong underlying demand and an inadequate housing supply could disrupt future rate pauses or cuts.