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Investors anticipate the U.S. central bank will follow through with a quarter-percentage-point rate hike at the end of its latest two-day policy meeting. The policy statement is due to be released at 2 p.m. EDT (1800 GMT), with Fed Chair Jerome Powell scheduled to speak to reporters half an hour later. But the new statement, and Powell's elaboration on it, will have to reconcile a set of risks that have grown more into conflict. Between that consensus and other problems that have intensified in the meantime, the Fed is likely to at least open the door to the prospect that this hike will be the last of the current tightening cycle, absent a future inflation surprise. Doing otherwise might hint that those projections had changed, a hawkish tilt towards more rate hikes that the Fed won't want to close off but also won't want to guarantee.

☆ The First Republic deal has come at a crucial point for the markets and economy
▼ + stars: | 2023-05-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Michael M. Santiago | Getty ImagesJPMorgan Chase's takeover of First Republic likely ends the panic phase of the banking crisis, with the fallout left to come in a pivotal week for markets and the economy. Following an unsuccessful effort to keep First Republic open, the largest U.S. bank by deposits reached a deal to take over the 14th-largest financial institution. With financial services covering such a wide swath of activities in the $26.5 trillion U.S. economy, the failures of Silicon Valley Bank, Signature Bank and now First Republic Bank will reverberate. Stocks nudged higher Monday morning on hopes that the worst of a banking crisis that began in early March has drifted into the rear view. "Resolving FRC should end the 7-week post SVB bank crisis phase."

☆ Fed needs to wrap upcoming rate hike in cotton wool amid banking crisis, says Krishna Guha
▼ + stars: | 2023-03-22 | 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 EmailFed needs to wrap upcoming rate hike in cotton wool amid banking crisis, says Krishna GuhaKrishna Guha, Evercore ISI vice chairman, joins CNBC's 'Squawk on the Street' to discuss the Fed's upcoming interest rate decision.

"This is all a bit of a mess," Krishna Guha, vice chair of ISI Evercore and a former New York Federal Reserve official, wrote ahead of a Federal Open Market Committee meeting that has veered from a dead-certain jump in interest rates two weeks ago to a speculative morass. The yield on the 2-year Treasury note - particularly sensitive to Fed policy expectations - rose steadily through the day, adding roughly a quarter of a point from the overnight low and approaching 4%. Analysts trying to parse what recent bank stress might mean said a coming credit contraction could be the equivalent of an additional quarter point Fed rate increase, or as much as a recession-inducing 1.5 percentage points, rendering further rate hikes obsolete. "The emergence of financial stress is likely to indicate to the committee that monetary policy is closer to being 'sufficiently restrictive' than some may have thought previously," BOA economists wrote. "At the very least, stress in financial markets suggests that the Fed should proceed with caution."

☆ Inflation gauge increased 0.4% in February, as expected and up 6% from a year ago
▼ + stars: | 2023-03-14 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Excluding volatile food and energy prices, core CPI increased 0.5% in February and 5.5% on a 12-month basis. The consumer price index increased 0.4% for the month, putting the annual inflation rate at 6%, the Labor Department reported Tuesday. Inflation rose in February but was in line with expectations, likely keeping the Federal Reserve on track for another interest rate hike next week despite recent banking industry turmoil. Food prices rose 0.4% and 9.5% respectively. That entails core services inflation minus housing, cohort that increased 0.2% in February and 3.7% from a year ago, according to CNBC calculations.

☆ Here's what the latest inflation data could mean for the markets
▼ + stars: | 2023-03-14 | 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 EmailHere's what the latest inflation data could mean for the marketsKrishna Guha, Evercore ISI vice chairman, and Emily Roland, co-chief investment strategist at John Hancock Investment Management, join 'Squawk on the Street' to discuss how much pressure the Fed has not to raise rates next week, Roland's thoughts on the Federal Reserve's next moves and more.

☆ Evercore ISI's Krishna Guha on the market: It's been a crazy week even by recent standards
▼ + stars: | 2023-03-09 | 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 EmailEvercore ISI's Krishna Guha on the market: It's been a crazy week even by recent standardsKrishna Guha, Evercore ISI vice chairman, joins 'Squawk on the Street' to break down his thoughts on Powell's testimony and the market.

☆ Fed's Powell heads to Capitol Hill this week, and he's going to have his hands full
▼ + stars: | 2023-03-06 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

It was made worse by the Fed not recognizing it in 2021," said Komal Sri-Kumar, president of Sri-Kumar Global Strategies. "If you're going to have a no-landing scenario, then you're going to accept 5% inflation, and that's politically unacceptable. He has to work on bringing inflation down, and because the economy is so strong it's going to get delayed. 'Ongoing increases' aheadFor his part, Powell will have to find a landing spot between the competing views on policy. However, Guha said that Powell is unlikely to tee up the half-point, or 50 basis point, rate hike later this month that some investors fear.

☆ CNBC Daily Open: Markets fall as the Fed shows no sign of pivoting away from interest rate hikes
▼ + stars: | 2023-02-23 | 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. Hence, interest rates need to continue rising. Despite Fed hawkishness, signs point to a no-landing scenario, which should give investors some comfort. Subscribe here to get this report sent directly to your inbox each morning before markets open.

☆ CNBC Daily Open: Markets fall as the Fed shows no sign of pausing interest rate hikes
▼ + stars: | 2023-02-23 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

☆ Brainard's move to the White House leaves a big gap for Biden to fill at the Fed
▼ + stars: | 2023-02-15 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

In her more than eight years as a Federal Reserve official, Lael Brainard was an influential voice, particularly for the side that favored keeping monetary policy loose and interest rates low. "Brainard's departure from the Fed leaves a dove-sized hole in its monetary policy," Beacon Policy Advisors wrote in its daily newsletter Wednesday. Indeed, Brainard's influence only accelerated the longer she served as a Fed governor. Her subsequent appointment in 2022 as vice chair solidified her influence, installing her as part of the "troika" of policy-directing power that includes current Chairman Jerome Powell and New York Fed President John Williams. Some candidates outside the Fed ranks, according to Guha, include Karen Dynan, Jason Furman, Janice Eberly and Christina Romer, all of whom served under former President Barack Obama (and his vice president, Biden).

☆ In 2022 inflation data trumped Fed comments for moving markets, report says
▼ + stars: | 2023-01-18 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

In terms of market moves, “the sheer volatility around each CPI release is remarkable” and reflects the magnitude of inflation surprises last year and how those unexpected readings changed the outlook for Fed policy, they wrote. Last year was the year the Fed got caught flatfooted by the highest levels of inflation seen in 40 years. Rates will almost certainly go up further this year even as inflation pressures are showing some initial signs of cooling. Among policymakers, the report found that remarks by Fed Chair Jerome Powell, Vice-Chair Lael Brainard and New York Fed leader John Williams had notable market impacts. The report did not rank the market impact of the 11 remaining regional Fed leaders, who speak with much greater frequency than Board members and even the New York Fed leader.

☆ Traders don't want to believe the Fed, so get used to a lot of choppiness
▼ + stars: | 2023-01-10 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Then Fed officials get on the tape say they're going to keep raising rates and keep them high until hell freezes over. Atlanta Fed President Raphael Bostic on Monday said the central bank should raise interest rates above 5% and stay there for "a long time." Inflation data continues to show signs of cooling, but it's still high, and the Fed doesn't want to declare victory so they keep jawboning the markets down. The source of tension is that the trading community doesn't want to believe the Fed, and many are arguing the Fed is using stale data. "Wall Street does not believe the story being spun by the Fed," Harry Katica from Saut Strategy told his clients.

☆ Fed Chair Powell is having a communication problem with the market
▼ + stars: | 2022-12-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

No matter what Federal Reserve Chairman Jerome Powell tells market participants these days, it seems they only hear the good stuff. Two recent examples: First in July, when Powell hinted that smaller interest rate hikes could be on the way. Chair Powell is really trying to message the fact that the fed funds rate has to be restrictive to tamp down inflation. A month and a half later, Powell delivered an uncharacteristically terse speech at the Fed's annual Jackson Hole, Wyoming summit. One more chance So Powell heads into next week's Federal Open Market Committee meeting with another opportunity to set the market straight.

☆ Fed Chair Powell sounded more optimistic about a soft landing, says Evercore's Krishna Guha
▼ + stars: | 2022-12-01 | 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 EmailFed Chair Powell sounded more optimistic about a soft landing, says Evercore's Krishna GuhaKrishna Guha, Evercore ISI vice chairman, joins CNBC's 'Squawk Box' to discuss markets following new comments from Federal Reserve Chair Jerome Powell.

☆ Reactions: UK's Truss fires Kwarteng, set to U-turn on tax cuts
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 14 (Reuters) - British Prime Minister Liz Truss fired her finance minister Kwasi Kwarteng and news reports said she will scrap later on Friday parts of the economic programme of big, unfunded tax cuts that they delivered last month. Consequently, the scope for a rally in gilts (move lower in yields) and sterling would seem to be limited." BENJAMIN NABARRO, ECONOMIST, CITI"The key issue in the near term is the contradiction between monetary and fiscal policy. RACHEL REEVES, OPPOSITION LABOUR PARTY'S FINANCE CHIEF"This humiliating u-turn is necessary - but the real damage has already been done. We may well be through the worst of the volatility but I fear that the UK is nowhere near out of the woods."

☆ The risk is rising of the Fed going overboard and causing a recession, says Evercore's Krishna Guha
▼ + stars: | 2022-09-26 | 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 EmailThe risk is rising of the Fed going overboard and causing a recession, says Evercore's Krishna GuhaKrishna Guha, vice chairman of Evercore ISI, and AJ Oden, AJ Oden, senior investment strategist at BNY Mellon Investor Solutions, join 'Squawk Box' to discuss whether the Fed is trying to put out its fire and more.

Outside the Fed, however, there is a growing sense that the path to a soft landing is unlikely. Some analysts estimate the unemployment rate, which hit 3.7% in August, may need to rise as high as 7.5%. The new projections, though, will include anonymous estimates from each official for where the policy rate should be at the end of 2022 and the following three years. Reuters GraphicsThe 1.2-percentage-point difference between the two, the so-called "real" or inflation-adjusted federal funds rate, showed the Fed bowing to the need for tighter policy. But inflation eventually will have to move for the Fed to change course.

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