Monetary policy

Dallas Fed President Robert Kaplan said he’s open to adjusting his view that the Federal Reserve should start tapering its asset-purchase program sooner rather than later if the Delta variant persists and hurts economic progress.

Treasury Secretary Janet Yellen said that by the end of this year, monthly price changes will be running at a level consistent with the Federal Reserve’s target, even if year-over-year numbers continue to show uncomfortably high inflation.

The Federal Reserve is on track to begin increasing interest rates in 2023 if the economy performs as policy makers are projecting, Vice Chairman Richard Clarida said Wednesday.

President Joe Biden has a tough decision in choosing the next Federal Reserve chair: Play it safe by giving Jerome Powell a second term or take a chance on a liberal like Lael Brainard, who would please progressives in Congress yet potentially agitate Wall Street.

Federal Reserve Governor Christopher Waller said that if the next two monthly U.S. employment reports show continued gains, he could back an announcement soon on scaling back the central bank’s bond purchases.

Federal Reserve Board Gov. Lael Brainard staked out some different ground from Chair Jerome Powell as the policy makers await a presidential decision on who should lead the central bank in the coming four years.

Federal Reserve Bank of Minneapolis President Neel Kashkari said the spread of the Delta variant of COVID-19 could keep some Americans from looking for work, potentially harming the U.S. recovery.

Financial markets “are very well prepared” for the Federal Reserve to start tapering its massive asset-purchase program in the fall, St. Louis Fed President James Bullard said.

Ed Moya, senior market analyst for the Americas at OANDA, talks with Bond Buyer Managing Editor Gary Siegel about the upcoming FOMC meeting, inflation, the possibility of tapering and the future make-up of the Fed in a wide-ranging discussion on the economy and monetary policy. (31 minutes)

President Joe Biden said he believes the surge in U.S. inflation is temporary and that he has told Federal Reserve Chairman Jerome Powell that he respects the central bank’s independence.

Federal Reserve Bank of St. Louis President James Bullard said the central bank has met its goal of achieving “substantial further progress” on both inflation and employment, urging policy makers to move forward in reducing stimulus.

The high level of incarceration in the U.S., especially among Americans of color and indigenous people, constrains the labor market and the economy’s ability to reach its full potential, Federal Reserve Bank of Atlanta President Raphael Bostic said.

Consumer price spikes, which in June surged the most since 2008, will likely be a temporary feature of an economy that’s quickly recovering from the pandemic, said Federal Reserve Bank of San Francisco President Mary Daly.

"You now have a proven toolbox based on the data from the MSRB municipal trades,” says Brad Wendt of Charles River Associates.

While municipals hit the pause button Friday, the movement in yields in the first week of July marked the largest one-week decline in 2021.

More of the same from the FOMC did little to move UST or munis. ICI reported the 17th consecutive week of inflows at $1.98 billion. July is looking good for municipal issuers.

The Federal Reserve’s tapering of its asset purchases, which he hopes will start “soon,” will run smoother this time around because investors already know that a move is being discussed, said Federal Reserve Bank of Dallas President Robert Kaplan.

Edward Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle, will discuss the economy, inflation and the Federal Reserve.

Federal Reserve Gov. Christopher Waller said the better-than-expected performance of the U.S. economy warrants scaling back asset purchases sooner than expected and he favors starting with mortgage-backed securities.

The Federal Reserve might consider an interest-rate hike from near zero as soon as late 2022 as the labor market reaches full employment and inflation is at the central bank’s goal, Federal Reserve Bank of Boston President Eric Rosengren said.