Monetary policy

In a speech, Federal Reserve Gov. Adriana Kugler said sound monetary policy comes when electoral politics are kept out of central banking.

The Federal Reserve's top official was emphatic that he and other leaders on the Board of Governors cannot be dismissed or demoted at will by the president.

The Federal Reserve's Federal Open Market Committee will announce its interest rate decision at 2pm, followed by a press conference with Federal Reserve chair Jerome Powell. Markets are expecting a 25 basis point rate cut at today's meeting.

At a minimum, president-elect Donald Trump can make two appointments to the Federal Reserve Board of Governors and choose new leadership. But more substantial changes could be in the offing.

The impact of both presidential candidates' fiscal promises around taxation and spending could have dramatic effects on the Federal Reserve's outlook for monetary policy, which has become more aggressive toward rooting out inflation.

The Federal Reserve began cutting rates in September. The December meeting is its last of 2024. Will the cutting continue, or will there be a pause? Doug Peta, Chief Strategist, U.S. Investment Strategy, at BCA Research, discusses the meeting and future policy.

The Federal Open Market Committee is expected to cut interest rates at its September meeting, which will also provide a new Summary of Economic Projections. Marvin Loh, senior macro strategist at State Street Global Markets, examine the meeting, the SEP and Fed Chair Powell's press conference.

A survey of more than 400 bank executives found that while many support the former president, the vast majority disagree with his attitude toward independence at the Federal Reserve — a stance that would impact banks' business models most directly.

Federal Reserve chair Jerome Powell flagged a recent upward revision to income and savings data as a sign of economic strength. He said the information could factor into the central bank's monetary policy discourse during the Fed's next interest rate meeting in November.

After cutting rates 50 basis points in September, the Federal Open Market Committee meets after Election Day to determine monetary policy. Gary Pzegeo, head of fixed income at CIBC Private Wealth U.S., provides his take on the latest move.

This week, Federal Reserve Gov. Michelle Bowman cast the first dissenting vote at an FOMC meeting in years. On Friday, she explained why the economic data she's seen didn't convince her of the need to cut rates as much as her fellow governors thought.

President Joe Biden, in a speech emphasizing the progress made on the economy during his administration, said he has never called Federal Reserve Chairman Jerome Powell during his time as president.

The move signals the end of the Federal Reserve's battle against runaway inflation in the wake of the COVID-19 pandemic. Fed officials expressed divergent views on further action this year.

The Federal Reserve's independence in setting monetary policy is critical to global confidence in U.S. markets and the dollar's status as reserve currency of choice. Making those functions constitutionally separate from the executive branch is the best way to ensure that independence.

The Federal Reserve's preferred measure of inflation held steady at 2.6% for the third month in a row, a positive reading that increases the odds of a September rate cut.

The stock prices of banks that have large exposure to commercial real estate loans surged after comments from Federal Reserve Chair Jerome Powell. His remarks could be a sign that relief is coming on both sides of those banks' balance sheets.

In his speech at the Federal Reserve's Jackson Hole Economic Symposium, the Fed chair said employment losses are now a bigger risk than elevated inflation.

"Fed watchers will be parsing Powell's comments for signs that a 50bp rate cut is on the table for September," noted Lauren Saidel-Baker, an economist with ITR Economics. "However, the notoriously tight-lipped chair is unlikely to confirm this, making a 25bp cut the most likely outcome."

Over the weekend Republican vice presidential nominee Sen. JD Vance, R-Ohio, said setting interest rates should be a "political decision" with input from elected officials.

As the 2024 election season once again puts the Federal Reserve's independence under a microscope, some observers see a weakness in one of the landmark policy arrangements that undergird the financial system as we know it.