January 4, 2005 04:16 PM
Faster Rate Increases Coming?
Excerpt: Hawkish minutes from the December Federal Reserve meeting raise the chances of faster rate increases in 2005 and throw the spotlight on inflation, dealers said Tuesday.
Hawkish minutes from the December Federal Reserve meeting raise the chances of faster rate increases in 2005 and throw the spotlight on inflation, dealers said Tuesday.
In the minutes, the central bank said the current level of the funds rate target, currently set at 2.25 percent, is still below the level it will need to reach to keep inflation stable and output at its potential.
Fed officials have said that policy is still accommodative, and that the five rate increases since June have been bringing rates back to a neutral level, thought to lie somewhere in the 3 to 5 percent range.
But the central bank has hesitated to be more specific on what a neutral level might be.
Some Fed policy-makers also warned that the policy accommodation was spurring "potentially excessive risk-taking in financial markets," the Fed said.
"Some members said the economy is close to potential, which suggests we might soon see inflation pressures take hold," said Christopher Low, chief economist at FTN Financial.
That blunt language -- reminding some of Fed Chairman Alan Greenspan's infamous "irrational exuberance" speech in 1996 -- surprised dealers and sent Treasury bond prices reeling -- and yields soaring. Bond prices and yields move in opposite directions.
"Indeed the tone of these minutes is notably more hawkish than in November," said Ian Shepherdson, chief U.S. Economist at High Frequency Economics in Valhalla, New York.
READ FULL STORY ...
Behind the Bouncing Ball of Oil Prices (January 09, 2005)
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Jobs Picture Shows Some Signs of Life (January 08, 2005)
Employment climbed at a steady if not spectacular pace in December, suggesting the economy is on a solid footing but that employers in many industries are still cautious about hiring. The Labor Department reported on Friday that the nation added 157,000 jobs in December and ...
Fed Minutes: Inflation Subdued, But... (January 04, 2005)
The Federal Reserve concluded at its policy-setting session last month that risks of inflation remained balanced for now, but they were clearly concerned about the potential for higher prices, minutes of the meeting issued on Tuesday showed. "A number of participants cited the recent depreciation ...
China Pledges To Work On Yuan Reform (January 04, 2005)
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Read all 55 posts in the same category of Economy:
Greenspan Again Backs Plan for Private Accounts -
Aug 22, 2006
Oil Prices Rise Amid Concern Over Weather and Supplies - Aug 17, 2006
Prices Rise Only Slightly, Easing Fears About Inflation - Aug 14, 2006
Oil Climbs Above $51 a Barrel on Concerns About Supplies - Aug 08, 2006
Greenspan Says Entitlement Programs Need Reform - Feb 18, 2005
U.S. Trade Deficit Exceeds a Record $600 Billion - Feb 13, 2005
Long-Term Rates Down Since June - Feb 07, 2005
Trim Deficit? Only if Bush Uses Magic - Feb 07, 2005
China: No Yuan Timetable - Feb 06, 2005
Greenspan Says Trade Gap May Narrow - Feb 06, 2005
Greenspan Sees U.S. Trade Gap Stabilizing and Possibly Falling - Feb 06, 2005
If Yuan Moves, Will U.S. Rates Go Up? - Feb 04, 2005
Greenspan Sees Weak Dollar Easing Current-Account Gap - Feb 04, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Federal Reserve Is Expected to Continue Raising Rates - Jan 31, 2005
Deficits May Be Wearing Thin at the Fed - Jan 25, 2005
U.S. Faces More Tensions Abroad as Dollar Slides - Jan 25, 2005
Oil Price Impact: Worse Than Feared? - Jan 23, 2005
The Effect of Rising Rates - Jan 17, 2005
A Chinese Revaluation May Not Help U.S. - Jan 15, 2005
For Unemployed, Wait for New Work Grows Longer - Jan 09, 2005
Behind the Bouncing Ball of Oil Prices - Jan 09, 2005
Jobs Picture Shows Some Signs of Life - Jan 08, 2005
Fed Minutes: Inflation Subdued, But... - Jan 04, 2005
China Pledges To Work On Yuan Reform - Jan 04, 2005
Fed Intends to Persist With Rate Increases - Jan 04, 2005
U.S. Economy Expected To Perform Well in 2005 - Jan 03, 2005
Women Are Gaining Ground on the Wage Front - Jan 01, 2005
Bush Vows To Maintain 'Strong' Dollar - Dec 26, 2004
Dollar Hits New Low Versus Euro - Dec 23, 2004
Leave No Truffle Behind? - Dec 23, 2004
Social Security Tax Limit May Go Up - Dec 20, 2004
U.S. Quiet on China Trade Tax - Dec 17, 2004
Fed Raises Interest Rates for 5th Time This Year - Dec 17, 2004
OPEC Considers Output Cut to Keep Prices From Falling - Dec 09, 2004
A Plan For U.S. Energy Security? - Dec 08, 2004
Fed Heading For A Pause - Dec 07, 2004
Social Security Reform = New Debt - Dec 06, 2004
Fed Sees Growth, Measured Rate Hikes - Dec 05, 2004
Weak Employment Rport Casts Doubts Over US Economic Strength - Dec 05, 2004
Fed: Inflation Not Setting Off Alarms - Dec 05, 2004
Balancing Act On The Buck - Dec 04, 2004
Job Growth Is Well Below Wall Street Forecasts - Dec 03, 2004
Fed Reports Growth In 11 Of 12 Regions - Dec 02, 2004
Inflation Under Control, Fed Gov. Says - Dec 02, 2004
Global Forecasts for 2005 Growth Are Reduced - Nov 30, 2004
Borrowing For Social Security Plan? - Nov 28, 2004
No Longer Top Dollar? - Nov 26, 2004
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
The Dollar Is Down, But Should Anyone Care? - Nov 21, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004
Oil Prices Rise Amid Concern Over Weather and Supplies - Aug 17, 2006
Prices Rise Only Slightly, Easing Fears About Inflation - Aug 14, 2006
Oil Climbs Above $51 a Barrel on Concerns About Supplies - Aug 08, 2006
Greenspan Says Entitlement Programs Need Reform - Feb 18, 2005
U.S. Trade Deficit Exceeds a Record $600 Billion - Feb 13, 2005
Long-Term Rates Down Since June - Feb 07, 2005
Trim Deficit? Only if Bush Uses Magic - Feb 07, 2005
China: No Yuan Timetable - Feb 06, 2005
Greenspan Says Trade Gap May Narrow - Feb 06, 2005
Greenspan Sees U.S. Trade Gap Stabilizing and Possibly Falling - Feb 06, 2005
If Yuan Moves, Will U.S. Rates Go Up? - Feb 04, 2005
Greenspan Sees Weak Dollar Easing Current-Account Gap - Feb 04, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Federal Reserve Is Expected to Continue Raising Rates - Jan 31, 2005
Deficits May Be Wearing Thin at the Fed - Jan 25, 2005
U.S. Faces More Tensions Abroad as Dollar Slides - Jan 25, 2005
Oil Price Impact: Worse Than Feared? - Jan 23, 2005
The Effect of Rising Rates - Jan 17, 2005
A Chinese Revaluation May Not Help U.S. - Jan 15, 2005
For Unemployed, Wait for New Work Grows Longer - Jan 09, 2005
Behind the Bouncing Ball of Oil Prices - Jan 09, 2005
Jobs Picture Shows Some Signs of Life - Jan 08, 2005
Fed Minutes: Inflation Subdued, But... - Jan 04, 2005
China Pledges To Work On Yuan Reform - Jan 04, 2005
Fed Intends to Persist With Rate Increases - Jan 04, 2005
U.S. Economy Expected To Perform Well in 2005 - Jan 03, 2005
Women Are Gaining Ground on the Wage Front - Jan 01, 2005
Bush Vows To Maintain 'Strong' Dollar - Dec 26, 2004
Dollar Hits New Low Versus Euro - Dec 23, 2004
Leave No Truffle Behind? - Dec 23, 2004
Social Security Tax Limit May Go Up - Dec 20, 2004
U.S. Quiet on China Trade Tax - Dec 17, 2004
Fed Raises Interest Rates for 5th Time This Year - Dec 17, 2004
OPEC Considers Output Cut to Keep Prices From Falling - Dec 09, 2004
A Plan For U.S. Energy Security? - Dec 08, 2004
Fed Heading For A Pause - Dec 07, 2004
Social Security Reform = New Debt - Dec 06, 2004
Fed Sees Growth, Measured Rate Hikes - Dec 05, 2004
Weak Employment Rport Casts Doubts Over US Economic Strength - Dec 05, 2004
Fed: Inflation Not Setting Off Alarms - Dec 05, 2004
Balancing Act On The Buck - Dec 04, 2004
Job Growth Is Well Below Wall Street Forecasts - Dec 03, 2004
Fed Reports Growth In 11 Of 12 Regions - Dec 02, 2004
Inflation Under Control, Fed Gov. Says - Dec 02, 2004
Global Forecasts for 2005 Growth Are Reduced - Nov 30, 2004
Borrowing For Social Security Plan? - Nov 28, 2004
No Longer Top Dollar? - Nov 26, 2004
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
The Dollar Is Down, But Should Anyone Care? - Nov 21, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004
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