Monetary policy

“Our guidance suggests we would be raising rates were inflation to spike past our targets,” Barkin said.

The Fed remains dovish, although it raised inflation projections and lowered expected unemployment rates, but most participants still see rates at the zero lower bound in 2023.

She has repeatedly rejected concerns that Biden’s stimulus is excessive given the economy’s signs of recovery, and that run-away inflation could damage the economy.

Refinitiv Lipper reported $600 million of outflows from municipal bond mutual funds as the market correction caught up. High-yield funds lost a massive $722 million after $330 million a week prior.

The Beige Book suggests the economy is recovering, with optimism for 6-12 months ahead, while economists don't envision inflation rising enough for the Fed to take action any time soon.

Federal Reserve Governor Lael Brainard said it will take “some time” to meet the conditions laid out by the U.S. central bank for reducing the pace of its massive bond purchases, while noting recent bond market volatility.

Federal Reserve Bank of Richmond President Thomas Barkin played down recent Treasury market volatility, in remarks that reinforce the message that the U.S. central bank is not yet troubled by the increase in yields.

While U.S. growth is recovering quicker than expected amid the COVID-19 pandemic, the Federal Reserve is focused on supporting the labor market that is still in crisis after losing 10 million jobs, Atlanta Fed President Raphael Bostic said.

U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell appear wary of signs of froth in financial markets, even as they press ahead with economic stimulus measures that are elevating the euphoria.

Rising Treasury yields are a sign of optimism in the economic recovery, said a senior Federal Reserve official Friday, signaling no inclination from the central bank to take steps to halt the shift.

Federal Reserve actions will continue to bolster the U.S. economy as it battles the COVID-19 pandemic, the central bank said Friday in its twice-yearly update to Congress.

Former U.S. Treasury Secretary Lawrence Summers warned that the Federal Reserve will likely be pressured into raising interest rates sooner than markets expect, and perhaps as early as next year.

Federal Reserve Bank of Boston President Eric Rosengren said he doesn’t expect to see sustained 2% inflation for the next two years so long as U.S. unemployment remains high.

The municipal secondary gave way to higher-yields and triple-A benchmarks rose two to five basis points. U.S. Treasuries pared back Tuesday's losses, even on the heels of better economic data.

Federal Reserve officials did not see the conditions for reducing their massive asset-purchase program being met for “some time” at their January policy meeting, a record of the gathering showed.

Federal Reserve officials said the economy continues to be disrupted by the pandemic with one regional central bank chief dismissing the threat that inflation could get out of hand.

Treasury Secretary Janet Yellen is giving Federal Reserve Chairman Jerome Powell a bit of a headache when it comes to managing the money markets.

Economist Lisa Cook has the backing of several key White House officials and allies outside the administration as a possible choice for President Joe Biden in filling a vacancy on the Federal Reserve Board of Governors, according to people familiar with the matter.

While most observers expect inflation to grow as the economy heals, the latest CPI numbers suggest that it hasn't yet arrived.

Bouts of higher inflation won’t be surprising and while they’ll likely be transitory, it’ll be something to watch closely, said Federal Reserve Bank of Dallas President Robert Kaplan.