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An additional quarter-percentage-point rate increase, whether at the Fed's Sept. 19-20 meeting or later in the year, would be marginal in its macroeconomic impact, a small addition to the 5.25 percentage points the Fed has added to its policy rate over the 16 months ending in July. 'MIXED MESSAGING'The minutes include references to how officials assess the economy, the likely path of inflation, appropriate monetary policy, and the chief risks to policymakers' outlook. The core PCE index fell in June to 4.1% from 4.6% in May, a fact only released after the Fed meeting, though economists expected the decline. Since the July meeting, Philadelphia Fed President Patrick Harker has joined Atlanta Fed President Raphael Bostic in saying no more rate increases were needed. If market interest rates "break higher ... the Fed is going to have a problem.

Persons: Jerome Powell, Powell, Andrew Hollenhorst, Patrick Harker, Raphael Bostic, John Williams, Tim Duy, Howard Schneider, Paul Simao Organizations: Fed, Citi, Philadelphia Fed, Atlanta Fed, New York Fed, Market Committee, Macro, Thomson Locations: U.S

☆ Looming inflation report could hold an unpleasant surprise for markets
▼ + stars: | 2023-08-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

The central bank district's Inflation Nowcast model points to a 0.4% rise that would equate to a 3.4% annual rate. "Rent could be an important source of a positive (moderating) surprise in July's CPI," Yardeni wrote. 'Sticky' inflation persists But inflation has proven more persistent than most policymakers, particularly those at the Fed, would have thought. In fact, the Atlanta Fed's sticky CPI is still at 5.8% on a 12-month basis — though 2.9% at an annualized pace — after peaking at 6.7% earlier this year. Moreover, Thursday's core CPI reading is expected to show core inflation running at a 4.7% annual level, just a tad below the June reading.

Persons: Dow Jones, it's, Ed Yardeni, Goldman Sachs, Morgan Stanley, Lisa Shalett, Shalett, Morgan, Yardeni, Jerome Powell, Andrew Hollenhorst, Hollenhorst, Solita Marcelli Organizations: Cleveland Federal Reserve, Yardeni Research, JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley Wealth Management, CPI, Cleveland Fed, UBS Locations: U.S, Atlanta

☆ Here's what to expect from the Federal Reserve meeting Wednesday
▼ + stars: | 2023-07-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

WASHINGTON, DC - JUNE 21: Federal Reserve Chairman Jerome Powell testifies before the House Committee on Financial Services June 21, 2023 in Washington, D.C. Powell testified on the Federal Reserve’s Semi-Annual Monetary Policy Report during the hearing. Win Mcnamee | Getty Images News | Getty ImagesDespite an improving inflation picture, the Federal Reserve is expected on Wednesday to approve what would be the 11th interest rate increase since March 2022. That would push the upper boundary of the federal funds rate to its highest level since January 2001. But apparently the folks at the Fed think they need one more at least." Likewise, Steven Blitz, chief U.S. economist at Globaldata.TSLombard, said a "dovish hike and talk of soft landings" at Wednesday's meeting would be a mistake for the Fed.

Persons: Jerome Powell, Powell, Win Mcnamee, they've, Kathy Jones, Charles Schwab, Jones, —, haven't, Luke Tilley, that'll, " Tilley, I'm, Andrew Hollenhorst, Steven Blitz Organizations: Federal, Financial, Getty, Federal Reserve, Investors, Open Market, Dow Jones, Investment Advisors, Citigroup Locations: WASHINGTON, DC, Washington ,, Central, —, Wilmington, U.S

☆ The war against inflation is a long way away from being won
▼ + stars: | 2023-07-17 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

But those data points reflected relative rates of change, not capturing the overall surge that led to the highest inflation level in more than 40 years. The 12-month PPI reading had peaked at an annual rate of 11.6% in March 2022, its highest ever in data going back to November 2010. "Near-term price inflation may do little to contradict rising Fed official and market hope that a benign outcome is being achieved." For their part, Fed officials have indicated they see their benchmark rate rising by at least half a percentage point by the end of the year. So-called core inflation rose 0.2% in June and was tracking at a 4.8% annual rate, much higher than the Fed would like.

Persons: Robert Nickelsberg, Jared Bernstein, Sharp, Andrew Hollenhorst, Hollenhorst, Jerome Powell, That's Organizations: Hannaford, Financial, White House's Council, Economic Advisers, CNBC, Labor Department, Citigroup, Energy, of Labor Statistics Locations: South Burlington , Vermont

☆ One week of better inflation data does not 'a new trend make', says Citi's Andrew Hollenhorst
▼ + stars: | 2023-07-17 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailOne week of better inflation data does not 'a new trend make', says Citi's Andrew HollenhorstAndrew Hollenhorst, Citi chief U.S. economist, joins 'Squawk on the Street' to discuss Hollenhorst's mood towards the economy, moderations in inflation, and what to expect from the Federal Reserve going forward.

Persons: Citi's Andrew Hollenhorst Andrew Hollenhorst Organizations: Citi, Federal Reserve

☆ Starting to see signs Federal Reserve may have to push further, says Citi's Hollenhorst
▼ + stars: | 2023-07-05 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailStarting to see signs Federal Reserve may have to push further, says Citi's HollenhorstAndrew Hollenhorst, Citi chief U.S. economist, joins 'Squawk on the Street' to discuss the labor market's recent strength relative to the Federal Reserve outlook, what the Federal Reserve has to do, and more.

Persons: Citi's Hollenhorst Andrew Hollenhorst Organizations: Citi, Federal

That hawkish change in market expectations has helped boost the U.S. dollar to its highest level since March. Just over 25% of economists in the poll, 23 of 86, forecast at least one Fed rate cut by the end of 2023, but that is down from 28% in the last poll. The U.S. Labor Department is due to release consumer price inflation data on June 13, the first day of the Fed meeting. "If most Fed officials feel at least another 25-basis-point hike will be necessary, it seems simplest to deliver that hike in June rather than 'skip'." Inflation as measured by core PCE was forecast to remain above 2% at least until 2025.

Persons: Jerome Powell, Powell, Philip Marey, Janet Yellen, Andrew Hollenhorst, Oscar Munoz, Prerana Bhat, Indradip Ghosh, Vijayalakshmi Srinivasan, Maneesh Kumar, Ross Finley, Mark Potter, Paul Simao Organizations: U.S . Federal, Reuters, U.S, Rabobank, Treasury, Bank of Canada, U.S . Labor Department, Citi, National Bureau of Economic Research, TD Securities, Thomson Locations: BENGALURU, U.S, Canadian

☆ Markets are making a bet that inflation is finally starting to ease
▼ + stars: | 2023-06-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

There is "good news for both inflation and growth," Evercore ISI Chair Ed Hyman said in a client note Tuesday. Fed officials already had been largely discounting shelter prices that they expect to recede through the year. Core services inflation "is likely to slow significantly for the rest of this year and next," Hyman wrote. To be sure, inflation is likely to remain a problem ahead, and Fed officials have stated multiple times that the current level is too high . Both increases "should also be an important reminder to markets and Fed officials," Citigroup economist Andrew Hollenhorst wrote Wednesday.

Persons: bank's, Ed Hyman, Hyman, —, Christopher Waller, Andrew Hollenhorst, Janet Yellen, Yellen, we're Organizations: Federal Reserve, Fed, PMI, Reserve Bank of Australia, Bank of Canada, Citigroup

☆ Stock market is coming around to idea of a rate hike in June, says Citi economist Andrew Hollenhorst
▼ + stars: | 2023-05-30 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailStock market is coming around to idea of a rate hike in June, says Citi economist Andrew HollenhorstAndrew Hollenhorst, Citi chief U.S. economist, joins 'Squawk on the Street' to discuss the factors which leads Citi to believe there will be another rate hike in June and July, if the Fed could pause at the next meeting and monitor rate hike effects and much more.

Persons: Andrew Hollenhorst Andrew Hollenhorst Organizations: Email, Citi

☆ US consumer spending appears solid early in second quarter
▼ + stars: | 2023-05-16 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

Retail sales excluding automobiles, gasoline, building materials and food services rebounded 0.7% last month, the Commerce Department said. Data for March was revised slightly down to show these so-called core retail sales slipping 0.4% instead of 0.3% as previously reported. Core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists estimated that core retail sales adjusted for inflation rose by about 0.6% in April. Sales at food services and drinking places, the only services category in the retail sales report, rose 0.6%.

☆ Here's what to expect from today's Federal Reserve announcement
▼ + stars: | 2023-05-03 | by ( Jeff Cox | ) www.cnbc.com time to read: +7 min

Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, DC, on March 22, 2023. None of those figures are satisfactory for Fed officials. "Most Fed officials don't seem comfortable that the rate hike cycle is over," Citigroup economist Andrew Hollenhorst said in a note. The next Fed policy meeting comes in six weeks, on June 13-14, and April's consumer price report is due in one week, on May 10. This Fed meeting is crucial."

☆ With the banking crisis on hold, the Fed is back to fighting inflation
▼ + stars: | 2023-04-20 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

The Federal Reserve's policy pendulum has swung back to inflation fighting. "The view is based on banking sector stress remaining contained, the economic expansion continuing and core inflation remaining stubbornly high." A cooling crisis Indeed, Fed Chairman Jerome Powell and other central bankers in late February and early March were indicating chances of half-point rate hikes . Watching the banks, and the market To be sure, the banking situation remains in flux and could yet shape Fed policy. At the same time, the two-year Treasury note yield, which is most sensitive to Fed policy moves, has jumped about half a percentage point over the past two weeks.

Nearly 90% - 94 of 105 - of the economists who participated in the latest Reuters poll, predicted the U.S. central bank would hike its key policy rate by 25 basis points to the 5.00%-5.25% range at a May 2-3 meeting, in line with market pricing. Beyond that, 59 of 100 economists expected the Fed to keep its policy rate unchanged through at least this year. Only 26 respondents with an end-2023 view forecast a cut, similar to market expectations. "We maintain the first rate cut in March 2024. In an exclusive interview with Reuters this week, St. Louis Fed President James Bullard called for a much higher peak policy rate than currently expected, as inflation remains stubbornly high.

Another quarter-point increase is expected, but policymakers have also said they are watching banking data closely for signs of stress or a larger-than-anticipated drop in lending. The minutes "will likely express confidence in the separability of price stability and financial stability." Still, the events on that March 10 weekend added new complexity to a Fed policy debate that had been singlemindedly focused on lowering inflation from levels that last year were more than triple the Fed's 2% target. New consumer price index data released Wednesday is expected to show headline inflation falling, but with a still-high level of underlying or "core" inflation likely to concern Fed policymakers. Reporting by Howard Schneider; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ US expected to report strong consumer price increases in February
▼ + stars: | 2023-03-14 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

Economists said Tuesday's report remained important for policymakers despite the angst in financial markets. The Consumer Price Index (CPI) likely increased by 0.4% last month after accelerating 0.5% in January, according to a Reuters survey of economists. Food prices are expected to have risen moderately after climbing 0.5% in January. Gasoline prices likely increased, but overall energy prices probably eased slightly because of a decrease in the cost of energy services. With rents remaining hot, services less energy, probably recorded another month of strong price gains after rising 0.5% in January.

☆ CNBC Daily Open: The bank rout continues. The Fed might still raise rates anyway
▼ + stars: | 2023-03-14 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Bank of America tumbled 5.81% and Charles Schwab sank 11.57% even as the Schwab sought to reassure fears, saying it has "access to significant liquidity." Despite the turmoil in the banks, markets and analysts expect the Fed to go through with rate hikes. Subscribe here to get this report sent directly to your inbox each morning before markets open.

☆ CNBC Daily Open: Banks got hammered by SVB's collapse. But the Fed might still raise rates
▼ + stars: | 2023-03-14 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

The exterior of a First Republic Bank branch is seen on Barclay Street on March 13, 2023 in New York City. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. The biggest losers: First Republic Bank plunged 61.83%, Western Alliance Bancorp plummeted 57.06% and KeyCorp sank 27.33%. Despite the turmoil in the banks, markets and analysts expect the Fed to go through with rate hikes. Subscribe here to get this report sent directly to your inbox each morning before markets open.

☆ A year later, the Fed still has a long way to go in the fight against inflation
▼ + stars: | 2023-03-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +9 min

The rate hikes appeared to have quelled some of the inflation surge that inspired the policy tightening. Indeed, Fed officials for months stuck to the narrative that inflation was "transitory" and would abate on its own. Fed Chairman Jerome Powell recently insisted that he and his colleagues are taking "forceful steps" now to bring down inflation. The index most recently showed an annual inflation rate of 6.4%, down from a peak around 9% in the summer of 2022. Citigroup economist Andrew Hollenhorst thinks the Fed could tame key inflation metrics to around 4% by the end of this year.

☆ Watch CNBC's full interview with Citi's Andrew Hollenhorst
▼ + stars: | 2023-02-17 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Citi's Andrew HollenhorstAndrew Hollenhorst, Citi U.S chief economist, joins 'Closing Bell' to discuss S&P forecasts, inflationary pressure on the U.S. economy and the argument for further Fed hikes.

☆ Citi Chief U.S. Economist Andrew Hollenhorst thinks the Fed could hike beyond 5%
▼ + stars: | 2023-02-17 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCiti Chief U.S. Economist Andrew Hollenhorst thinks the Fed could hike beyond 5%Andrew Hollenhorst, Citi U.S chief economist, joins 'Closing Bell' to discuss S&P forecasts, inflationary pressure on the U.S. economy and the argument for further Fed hikes.

☆ Markets fully price in quarter-point interest rate hike in February as inflation slows
▼ + stars: | 2023-01-18 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

Markets are nearly certain the Federal Reserve next month will take another step down in the pace of its interest rate increases. Pricing Wednesday morning pointed to a 94.3% probability of a 0.25 percentage point hike at the central bank's two-day meeting that concludes Feb. 1, according to CME Group data. If that holds, it would take the Fed's benchmark borrowing rate to a targeted range of 4.5%-4.75%. Both indicate that Fed hikes are pulling down inflation and slowing consumer demand. "Softer PPI will join with slower consumer price and wage inflation to most likely push the Fed toward a 25bp increment," he added.

☆ Fed to lift rates by 50 basis points, but peak policy rate may be higher
▼ + stars: | 2022-11-18 | by ( Prerana Bhat | ) www.reuters.com time to read: +4 min

U.S. consumer price inflation unexpectedly fell below 8% last month, bolstering already well-established market expectations the Fed would go for smaller rate hikes going forward after four consecutive 75-basis-point increases. Peak rate forecasts ranged between 4.25%-4.50% and 5.75%-6.00%. But 16 of 28 respondents to an additional question said the bigger risk was that rates would peak higher and later than they expect now, with another four saying higher and earlier. "While markets are focused on peak inflation, underlying inflation trends are persistent. This could force the Fed to keep raising the federal funds rate well into next year and beyond levels currently anticipated," said Philip Marey, senior U.S. strategist at Rabobank.

☆ September job gains affirm that the Fed has a long way to go in inflation fight
▼ + stars: | 2022-10-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +7 min

But a surprising drop in the unemployment rate and another boost in worker wages sent a clear message to markets that more giant interest rate hikes are on the way. Everybody who seems to want a job is getting a job," said Ron Hetrick, senior economist at labor force data provider Lightcast. "But we've been getting into a situation where our low unemployment rate has absolutely been a significant driver of our inflation." A series of central bank rate increases has been aimed at reducing demand and thus loosening up a labor market where there are still 1.7 open jobs for every available worker. It all makes the inflation fight look ongoing, even with a slowdown in payroll growth.

☆ 'Bring the pain': Major banks raise forecasts for rate hikes after Fed's stern actions
▼ + stars: | 2022-09-22 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Goldman Sachs The call : A 75 basis point move in November, 50 basis points in December and 25 basis points in February, for a peak of 4.5%-4.75%, up half a percentage point from the previous expectation. Citigroup The call : November to see 75 basis points, followed by 50 in December and 25 in February, adding a cumulative 25 basis points for a terminal rate of 4.5%-4.75%. Both calls were 25 basis points higher than previous. One more 25 basis point hike in February, followed by a 50 basis point cut "in the latter portion of the year." UBS The call : 75 basis points in November, another 50 in December, with three 25 basis point cuts later in 2023.

☆ With inflation still high, the Fed may be a long way from where it can stop hiking
▼ + stars: | 2022-09-19 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Current market pricing in fed funds futures indicates that the Fed's "terminal rate," or the point where it stops hiking, will hit 4.39% in April 2023. In fact, those expectations for higher rates are causing Wall Street economists to rethink their projections for growth. Goldman Sachs also has raised its expectations for rate hikes this year, though it still sees a terminal rate in the 4%-4.25% range. "Thus far, higher rates have inflicted little widespread pain on the real economy, so the Fed has room to continue hiking into restrictive territory," the Morgan Stanley economist said. "Bottom line is that the Fed needs more evidence that its actions are taking a bite out of the real economy."

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