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"This was an outstanding quarter ... this big blowout number," Waller told an economic data seminar at the St. Louis Fed. So this is something we are keeping a very close eye on when we think about policy going forward." It's clearly calming down," with recent employment gains more in line with the levels seen before the coronavirus pandemic, Waller said. The Fed is in the process of weighing that and other data to determine whether to hike the benchmark policy rate again. However neither Goolsbee nor Minneapolis Fed President Neel Kashkari, who spoke to Bloomberg Television on Tuesday, ruled out further Fed rate increases.

Persons: Christopher Waller, Waller, Louis Fed, Michelle Bowman, Bowman, Lisa Cook, Austan Goolsbee, Goolsbee, Neel Kashkari, Kashkari, Howard Schneider, Lindsay Dunsmuir, Michael Derby, Ann Saphir, Paul Simao, Andrea Ricci Organizations: Federal Reserve, St, Ohio Bankers League, Fed, New York Fed, Atlanta, CNBC, Chicago Fed, Minneapolis, Bloomberg Television, Thomson Locations: U.S

☆ ECB may copy Bank of England's way of steering rates: Schnabel
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, March 27 (Reuters) - The European Central Bank could take a leaf from the Bank of England's book as it looks for new ways of managing liquidity in the banking sector and steering short-term interest rates on the market, ECB board member Isabel Schnabel said on Monday. The ECB is now rapidly shrinking its balance sheet but this is unlikely to fall back to its level of before the 2008-2009 global financial crisis, so policymakers are now studying a new way to steer short-term interest rates in a new normal. Using the same rate for providing and remunerating reserves ensures that money market rates will trade closely to the policy rate, Schnabel argued. Another benefit of such a demand-driven framework is that it offers more flexibility on how the central bank provides reserves. "A third benefit is that the Bank of England’s approach may potentially lead to a leaner balance sheet depending on banks’ demand for reserves," Schnabel said.

"It was a quirky situation," St. Louis Fed President James Bullard said in comments to a St. Louis community group. 'FELT VERY STABLE'The Fed raised interest rates by a quarter of a percentage point on Wednesday, its ninth straight increase. This wasn't a straightforward decision," Atlanta Fed President Raphael Bostic said in an interview with National Public Radio, a U.S. media outlet. But "that's a different issue than the macro policy issue that we were dealing with in terms of interest rates," Bostic said. So the conditions were right to do monetary policy the way we want to do monetary policy."

By announcing an inflation goal, central bankers feel they build credibility for themselves and focus the planning of households and firms in ways that help keep inflation controlled. Those decades, up to the end of the first year of the coronavirus pandemic in 2020, saw inflation largely contained. Achieving that target is just core to our overall monetary policy," Brainard said, a sentiment echoed in central bank headquarters from Frankfurt to London to Tokyo. "Let me be quite clear, there are no ifs or buts in our commitment to the 2% inflation target," Bank of England Governor Andrew Bailey said last year. Should inflation prove stickier than expected, achieving the central bank's 2% inflation goal could mean even more losses.

☆ Fed policymakers signal rate-hike slowdown coming, but no easing
▼ + stars: | 2023-01-12 | by ( Ann Saphir | ) www.reuters.com time to read: +4 min

"It is encouraging that we got some information today that went in the right direction," St. Louis Fed President James Bullard said at an event organized by the Wisconsin Bankers Association. REUTERS/Dado Ruvic/Illustration 1 2'STEER MORE DELIBERATELY'Speaking earlier on Thursday to a business group in Pennsylvania, Philadelphia Fed President Patrick Harker said he believes quarter-percentage-point rate hikes are indeed now appropriate. Richmond Fed President Tom Barkin said on Thursday that inflation over the last three months has gone in the "right direction" and allows the Fed to "steer more deliberately" in its battle against price pressures. The Fed ultimately pushed borrowing costs, and the U.S. unemployment rate, into double-digit territory during that period before stopping the upward spiraling of prices. Fed policymakers say they do not expect the unemployment rate, currently 3.5%, to rise much more than a percentage point in the course of the current inflation fight.

☆ ECB's Villeroy lays out plan for shrinking balance sheet
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +2 min

Villeroy said it was too early to say whether the ECB should raise that rate by 50 or 75 basis points at its Oct. 27 meeting. At that point, Villeroy said the ECB should first have banks repay money borrowed under the central bank's Targeted Longer-Term Refinancing Operations (TLTRO). "The reimbursement of TLTROs comes first, and we should avoid any unintended incentives to delay repayments by banks," he said. "Here we could start earlier than 2024, maintaining partial reinvestments but at a gradually reduced pace," he said. He argued the ECB should start this unwind slowly and then accelerate, with a clearly communicated "end-point...in terms of both the terminal date and size".

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