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Stocks: The S&P 500 index rose 0.6% to 2874.69. In fact, the Fed had begun cutting its policy rate just weeks before his 2019 Jackson Hole appearance to offset headwinds to growth from then-President Donald Trump's trade war with China. Powell's "Challenges for Monetary Policy" speech signaled more rate cuts were likely coming. Stocks: The S&P 500 index rose 0.2% to 3484.55. Stocks: The S&P 500 index rose 0.9% to 4509.37.
Persons: Jerome Powell, Jackson, Jim Urquhart, he's, Graphics Powell, Janet Yellen, hawkish Powell, Lean, Powell, Donald Trump's, Trump, Joe Biden, Biden, reappoint, Stocks, Ann Saphir, Dan Burns, Paul Simao Organizations: REUTERS, Kansas City Fed, Graphics, Trump, Reuters, Fed, Democratic, Thomson Locations: Teton, Jackson , Wyoming, U.S, , Wyoming, Jackson Hole , Wyoming, China, United States
Fed doves, Fed hawks: US central bankers in their words
  + stars: | 2023-08-22 | by ( ) www.reuters.com   time to read: +2 min
The following graphic offers a stab at how officials stack up on their outlook for Fed policy and how to balance their goals of stable prices and full employment. Note: Fed policymakers have been driving up borrowing costs since March 2022 to bring down high inflation, and in July they increased the target policy rate range to 5.25%-5.5%. Longtime banker Jeff Schmid starts as Kansas City Fed president Aug. 21, and will be a voter in 2025. St. Louis Fed President James Bullard, a vocal policy hawk, left the Fed in July for a job in academia; the new chief will be a 2025 voter. Reporting by Ann Saphir, Howard Schneider, Michael S. Derby and Dan Burns; Editing by Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.
Persons: Jeff Schmid, Louis, James Bullard, Ann Saphir, Howard Schneider, Michael S, Dan Burns, Marguerita Choy Organizations: Federal, Federal Open, New York Fed, Kansas City Fed, Louis Fed, Fed, Derby, Thomson Locations: Kansas, St
US bank credit contracts, loans drop in latest week: Fed data
  + stars: | 2023-08-18 | by ( ) www.reuters.com   time to read: +1 min
REUTERS/Andrew Kelly/File Photo Acquire Licensing RightsAug 18 (Reuters) - Bank credit at U.S. commercial banks shrank in the latest week as commercial banks pulled back on lending to businesses, data published by the Federal Reserve showed on Friday. Overall bank credit fell to $17.23 trillion in the week ending Aug. 9, down from $17.25 trillion a week earlier and $17.32 trillion a year earlier, its second straight year-over-year drop. Loans and leases fell to $12.13 trillion, from $12.15 trillion the week prior; commercial and industrial loans slipped to $2.74 trillion, from $2.75 trillion in the week ending Aug. 2. From a year earlier, commercial and industrial (C&I) loan growth slowed sharply to less than 1%. Reuters GraphicsThe trends reflect reduced demand from borrowers amid the Fed's rapid interest-rate hikes, as well as tightening credit standards and the fallout from the U.S. regional bank failures this year.
Persons: Andrew Kelly, Ann Saphir, Jonathan Oatis, Josie Kao Organizations: REUTERS, Bank, Federal, Reuters, U.S, Thomson Locations: Manhattan , New York City, U.S
Bank credit contracts, loans drop in latest week: Fed data
  + stars: | 2023-08-18 | by ( ) www.reuters.com   time to read: 1 min
A man is seen in silhouette near flowers at an office building in the financial district of New York City, U.S., June 14, 2023. REUTERS/Shannon Stapleton/File photo Acquire Licensing RightsAug 18 (Reuters) - Bank credit at U.S. commercial banks shrank in the latest week as commercial banks lent less to businesses, data published by the Federal Reserve showed on Friday. Overall bank credit, on a non-seasonally adjusted basis, was $17.23 trillion in the week ending Aug. 9, down from $17.25 trillion a week earlier and $17.32 trillion a year earlier. Loans and leases fell to $12.13 trillion, from $12.15 trillion the week prior; commercial and industrial loans slipped to $2.74 trillion, from $2.75 trillion in the week ending Aug. 2. Reporting by Ann Saphir; editing by Jonathan OatisOur Standards: The Thomson Reuters Trust Principles.
Persons: Shannon Stapleton, Ann Saphir, Jonathan Oatis Organizations: REUTERS, Bank, Federal, Thomson Locations: New York City, U.S
"Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy." The group also "discussed several risk-management considerations that could bear on future policy decisions," the minutes said. U.S. Treasury yields hit session highs after the release of the minutes while U.S. stocks extended losses. Fed staff said they expected a "step-down" in underlying prices over the second half of this year. Investors in contracts tied to the federal funds rate are betting heavily that the Fed won't raise its policy rate again during the current tightening cycle.
Persons: Howard Schneider, Michael S, Ann Saphir, Paul Simao Organizations: Federal Reserve, U.S, Federal, Market, Treasury, Fed, Derby, Thomson
Fed doves, Fed hawks: a look at how U.S. central bankers fly
  + stars: | 2023-08-11 | by ( ) www.reuters.com   time to read: +2 min
The following graphic offers a stab at how officials stack up on their outlook for Fed policy and how to balance their goals of stable prices and full employment. Note: Fed policymakers have been driving up borrowing costs since March 2022 to bring down high inflation, and in July they increased the target policy rate range to 5.25%-5.5%. Longtime banker Jeff Schmid starts as Kansas City Fed president Aug. 21, and will be a voter in 2025. St. Louis Fed President James Bullard, a vocal policy hawk, left the Fed in July for a job in academia; the new chief will be a 2025 voter. Reporting Ann Saphir, Howard Schneider, Michael S. Derby and Dan Burns; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.
Persons: Jeff Schmid, Louis, James Bullard, Ann Saphir, Howard Schneider, Michael S, Dan Burns, Andrea Ricci Organizations: Federal Open, New York Fed, Kansas City Fed, Louis Fed, Fed, Derby, Thomson Locations: Kansas, St
Daly: Premature to say if Fed has done enough on rates
  + stars: | 2023-08-10 | by ( ) www.reuters.com   time to read: +2 min
"Whether we raise another time, or hold rates steady for a longer period -- those things are yet to be determined," Daly said in an interview with Yahoo Finance. "It would be premature to project what I think would happen because there's a lot of information coming in between now and our next meeting." While goods inflation is receding, and newly signed lease trends signal inflation from housing will also cool, core services inflation excluding housing has so far made little progress, Daly said. The Fed raised its policy a quarter of a percentage point last month, to a range of 5.25% to 5%, and policymakers will consider whether to raise rates further when they meet again in September, November and December. Daly before the most recent rate hike had thought a total of two more interest-rate increases would likely be needed before year's end, but she did not reiterate that view on Thursday.
Persons: Mary Daly, Daly, Ann Saphir, Jonathan Oatis Organizations: San Francisco Federal Reserve Bank, Yahoo Finance, U.S . Labor Department, Fed, Traders, Thomson
REUTERS/Sarah SilbigerAug 10 (Reuters) - Federal Reserve policymakers are unlikely to raise interest rates again in 2023 and will probably start cutting them early next year, traders bet on Thursday, after a U.S. government report showed consumer prices rose only moderately last month. Traders of futures tied to the Fed's policy rate now see less than a 10% chance that the U.S. central bank will increase its benchmark overnight interest rate from its current 5.25%-5.50% range at a Sept. 19-20 policy meeting. The Fed's first rate cut is priced into the futures contracts by March of 2024. The Fed has driven its policy rate up by 5.25 percentage points since March 2022 to bring inflation back down to its 2% goal. "There's always a chance we get reacceleration of inflation prints after October, but I don't think that's going to spur Fed action."
Persons: Sarah Silbiger, Guy Lebas, Janney Montgomery Scott, Ann Saphir, Karen Brettell, Lucia Mutikani, Bernadette Baum, Paul Simao Organizations: Eccles Federal Reserve, Washington , D.C, REUTERS, Federal Reserve, Labor Department, Traders, Thomson Locations: Washington ,, U.S
Household debt ticked up 0.1% to $17.06 trillion, as mortgage balances - the biggest portion, and typically the biggest driver, of overall household debt - were largely unchanged. But the quarter-to-quarter trend appeared less alarming, with New York Fed researchers noting a leveling out near pre-pandemic levels in the most recent two quarters. New York Fed researchers attributed the decline to the timing of the academic year, as well as to some small forgiveness programs kicking in. Overall mortgage balances ticked down to $12.01 trillion, from $12.04 trillion in the prior quarter, reflecting some changes in credit reporting that are expected to reverse next quarter, New York Fed researchers said. Originations rose about 11% to $179 billion, reflecting the sharp rise in car prices; the number of newly opened loans remains below pre-pandemic levels, the report said.
Persons: Lee Jae, Ann Saphir, Paul Simao, Jonathan Oatis Organizations: REUTERS, New York Federal Reserve Bank, Fed, New York, Reuters, New York Fed, Mortgage, Auto, Thomson Locations: Seoul, U.S
Nelson previously worked at the Fed, where he was involved in discount window policy, including changes made 20 years ago aimed at reducing barriers in part by no longer requiring banks to first exhaust other emergency liquidity resources. Reuters GraphicsA recent Reuters analysis shows that many small banks, and even some large banks, do not conduct frequent tests of the discount window, calling into question their readiness to use it when needed. In recent months the Fed has undertaken a push to get more banks to sign up to and test access to the discount window, and in late July the Fed and fellow bank regulators issued a reminder to banks to do so. Regulatory agencies should make it clear that bank examiners will not view discount window use negatively, he wrote. Bank executives say the potential for public disclosure and negative treatment by bank supervisors discourage use of the discount window, according to a Fed survey of senior bank financial officers taken in May and released last week.
Persons: Bill Nelson, Nelson, Ann Saphir, Andrea Ricci Organizations: Fed, Bank Policy Institute, Bank, Thomson
Fed's Bowman says more US rate hikes likely will be needed
  + stars: | 2023-08-05 | by ( ) www.reuters.com   time to read: +3 min
REUTES/Ann Saphir/File PhotoAug 5 (Reuters) - The U.S. Federal Reserve will likely need to raise interest rates further to bring down inflation, Governor Michelle Bowman said on Saturday. Bowman said she supported the Fed's quarter-point increase in interest rates last month, given still-high inflation, strong consumer spending, a rebound in the housing market and a labor market that is helping to feed higher prices. In forecasts published in June, most Fed policymakers expected to end the year with the Fed policy rate at 5.6%, one quarter-point hike above the setting established at the Fed's late-July meeting. Bowman's use of the plural "rate increases" in her remarks on Saturday indicates she thinks the Fed will need to go higher than that. "I will also be watching for signs of slowing in consumer spending and signs that labor market conditions are loosening."
Persons: Michelle Bowman, Ann Saphir, Bowman, Jerome Powell, Banks, Tom Hogue Organizations: Federal, Hoover Institution, REUTES, U.S . Federal Reserve, Kansas Bankers Association, Market Committee, Labor, Thomson Locations: Palo Alto , California, U.S
Federal Reserve Board Chairman Jerome Powell speaks during a press conference following a closed two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., July 26, 2023. Other parts of the Labor Department report were less encouraging for Fed policymakers counting on a labor market softening to put more downward pressure on inflation. Traders of contracts tied to the Fed's policy rate now see less than a 30% chance of another rate hike by the end of this year, down from about a 35% chance before Friday's jobs report. "I think overall this still does point to a labor market that is slowly but steadily heading toward a soft landing," said Daniel Zhao, lead economist at Glassdoor. There are several more key data releases that will shape Fed policymakers' views before the next policy meeting in September.
Persons: Jerome Powell, Elizabeth Frantz, Raphael Bostic, Austan Goolsbee, Daniel Zhao, Kathy Bostjancic, Ann Saphir, Tim Ahmann, Lucia Mutikani, Jason Neely, Kevin Liffey, Paul Simao Organizations: Federal, Committee, REUTERS, Federal Reserve, Atlanta Fed, Bloomberg Television, Labor Department, Chicago Fed, Nationwide, Thomson Locations: Washington , U.S, U.S
"So why not be in a situation where you're just much more ready in case you...need to access this discount window?" An analysis of Fed data by Reuters, though, shows a lot still needs to be done to meet that goal. All told, about 3,800 banks borrowed from the discount window during the 11-year period detailed in the central bank data. The biggest banks also stepped up to borrow so as to reduce discount window stigma. Minneapolis Fed President Neel Kashkari said small banks should think of the discount window as a backup.
Persons: Brittany Hosea, Jerome Powell, I’ve, Lorie Logan, Banks, Goldman Sachs, Huberto Ennis, Michelle Bowman, Brad Tidwell, SVB, Austan Goolsbee, Richmond Fed's Ennis, Neel Kashkari, Ann Saphir, Michael S, Andrea Ricci Organizations: Bank, REUTERS, Federal Reserve, Reuters, Dallas, U.S, Fed, Reuters Graphics Reuters, Richmond Fed, National Credit Union Association, Chicago Fed, Federal Home Loan Bank, Minneapolis, Home Loan Bank, Thomson Locations: Santa Clara , California, U.S, Silicon, Washington, While California, Texas, Logan's, New Mexico, Louisiana, Henderson , Texas
On Tuesday, Goolsbee said his own decision at the Fed's next meeting in September will be driven by what happens on prices. And those metrics suggest, Goolsbee said, that the Fed is on the "golden path" of disinflation without a recession. But, he added, he does not see a tight connection between labor market tightness and inflation - meaning, he believes that inflation can fade even as the job market stays healthy. The Fed's September rate call will depend on what happens with inflation, as will how long the Fed will keep rates high and when it will start cutting, he said. "The answer is, it totally depends on whether we're able to navigate the path and get inflation down without a recession," he said.
Persons: Austan Goolsbee, Obama, Brendan McDermid, Goolsbee, that's, Banks, Ann Saphir, Andrea Ricci Organizations: University of Chicago, Democracy, REUTERS, Chicago Federal Reserve Bank, Reuters, U.S, Fed, Labor Department, Thomson Locations: New York City, U.S
The Fed's quarterly Senior Loan Officer Opinion Survey, or SLOOS, also showed that banks expect to further tighten standards over the rest of 2023. Monday's SLOOS report - which Fed policymakers had in hand last week when they decided to deliver an 11th interest-rate hike after skipping one at their June meeting - suggests credit tightening is ongoing. For small firms, a net 49.2% of banks said credit terms were stiffer, versus 46.7% in the last survey. Smaller net shares of banks reported tightening standards for auto loans, though terms for credit cards did tighten somewhat. While still weak, demand for auto loans was the least soft in four quarters, while demand for credit card loans was essentially flat after two straight negative quarters.
Persons: Monday's, You've, you've, Jerome Powell, Daniel Silver, Ann Saphir, Nick Zieminski, Dan Burns, Cynthia Osterman Organizations: Federal, Survey, Reuters, Thomson
He said in the statement released by the St. Louis Fed that the regional bank "is well-positioned for ongoing success and impact." The St. Louis Fed said Kathleen O'Neill Paese, the regional bank's first vice president and chief operating officer, will act as interim president. The regional bank said its search committee will look nationally for a new leader, noting that its search will be "robust, transparent, fair and inclusive." While they operate under the oversight of the Board of Governors in Washington, regional Fed banks are quasi-private institutions technically owned by member banks. With Bullard's exit, there will be two unfilled regional Fed bank slots.
Persons: James Bullard, Bullard, Louis Fed, Mitchell, Daniels, Jr, doesn't, Tim Duy, Duy, Derek Tang, LH Meyers, Wrightson ICAP, Kathleen Bostjancic, Kathleen O'Neill Paese, Louis Fed's, Esther George, Michael S, Ann Saphir, Chizu Nomiyama, Paul Simao Organizations: Louis Federal Reserve, U.S, Purdue, St, School of Business, Federal, Macro, Fed, Purdue University, Minneapolis Fed, Nationwide, Brookings Institution, Governors, Kansas City Fed, Derby, Thomson Locations: Indiana, St, Washington
[1/2] U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. The greenback also hit its lowest against the Swiss franc since early 2015 after the inflation report. Data showed core U.S. consumer prices rose just 0.2% in June, compared with forecasts for a gain of 0.3%. The monthly rise in core prices was the smallest since August 2021. Against the yen, the dollar dropped to a six-week low of 138.17 yen .
Persons: Lee Jae, Simon Harvey, Jordan Rochester, Sterling, Gertrude Chavez, Dreyfuss, Ann Saphir, Chris Reese, Andrea Ricci Organizations: REUTERS, Swiss, Swiss National Bank, Nomura, Bank of England, Thomson Locations: Seoul, Swiss, U.S, London, Norwegian, Swedish, United States
That could help lower overall inflation when the next CPI report is released on Aug. 10, with the details in Wednesday's report suggesting "downside risks" to any forecast of July's inflation rate. Indeed, at least one Fed official on Wednesday stuck to policymakers' prevailing hawkish mantra that inflation is still too high. While not specifically addressing the CPI report, Richmond Fed President Thomas Barkin told a Maryland business group that he still felt inflation had "been stubbornly persistent." 'FINAL INNINGS'But the latest CPI data could undercut arguments for yet another rate increase beyond the July meeting. Fed officials, blindsided by the persistence of inflation they initially thought would dissipate on its own, have been reluctant to bank on good news continuing.
Persons: Omair Sharif, Rick Rieder, Lael Brainard, Brainard, Thomas Barkin, Goldman Sachs, they've, Raphael Bostic, Bostic, Howard Schneider, Michael S, Ann Saphir, Dan Burns, Paul Simao Organizations: Federal Reserve, U.S . Labor Department, Reuters Graphics Reuters, BlackRock, Fed, White, Economic Council, Economic, of New, Richmond Fed, U.S, Cleveland Fed's Center, Inflation Research, Atlanta Fed, Derby, Thomson Locations: U.S, of New York, Maryland
[1/2] U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. The greenback also hit its lowest against the Swiss franc since early 2015 after the inflation report. "The Fed may have talked itself into a corner with a July 26th rate hike. Against the yen, the dollar dropped to a six-week low of 138.17 yen . The pound is being driven by expectations for the Bank of England to deliver more rate rises to tame UK inflation, which is the highest of any major economy.
Persons: Lee Jae, Simon Harvey, Brian Jacobsen, Sterling, Gertrude Chavez, Dreyfuss, Chuck Mikolajczak, Ann Saphir, Chris Reese Organizations: REUTERS, Swiss, Swiss National Bank, Core, CPI, Annex Wealth Management, Bank of England, Thomson Locations: Seoul, Swiss, Core U.S, U.S, London, Norwegian, Swedish, Menomonee Falls , Wisconsin, New York, San Francisco
The Fed has raised interest rates by 5 percentage points since March 2022 to bring down the highest U.S. inflation in four decades. "We may end up doing less because we need to do less; we may end up doing just that; we could end up doing more. Fed policymakers are widely expected to deliver a rate hike at their meeting later this month, a move that would bring the policy rate to the 5.25%-5.50% range. That could buttress the case that price pressures are weakening, which in turn could take some pressure off the central bank to hike rates again. Atlanta Fed President Raphael Bostic, speaking at yet another event on Monday, repeated his view that the Fed can be "patient" on rates and allow restrictive policy to bring down inflation without further action by the central bank.
Persons: Mary Daly, Daly, Jerome Powell, Ann Saphir, Michael Barr, Raphael Bostic, Loretta Mester, Mester, Dan Burns, Howard Schneider, Paul Simao Organizations: Federal Reserve, San Francisco Fed, Brookings Institution, San Francisco Federal, REUTERS, New York Fed, Atlanta Fed, Cleveland Fed, Thomson Locations: U.S, San Francisco , California
July 7 (Reuters) - Bank credit for U.S. commercial banks expanded slightly in the last week of June, even as commercial and industrial lending ticked down, Federal Reserve data released on Friday showed. Bank credit rose to $17.31 trillion in the week ending June 28, from $17.29 trillion a week earlier, on a non-seasonally adjusted basis. On a seasonally adjusted basis credit contracted slightly, but in both data series bank credit ended the month up compared with the first week of June. Commercial and industrial lending, an indication of activity among small and medium-sized businesses, cooled to $2.77 trillion, from $2.78 trillion. Trends in bank loans are a gauge of economic momentum, and year-over-year growth has slowed sharply since last year as the Fed raised interest rates and credit has tightened.
Persons: Ann Saphir, Dan Burns, Chris Reese Organizations: Bank, Federal Reserve, Thomson
"That would be a Fed triumph and that can involve a couple of rate increases over this year." Remarks from Goolsbee previously sounded more skeptical of the need for further rate hikes on top of what the Fed has already done. The report is suggestive of labor market cooling, Goolsbee said, and the full effect of the Fed's 500 basis points of rate hikes since last March is still to come. Financial markets are pricing a Fed rate hike when policymakers next meet, in two and a half weeks. Services inflation even pre-pandemic was typically higher than the Fed's 2% goal, he said.
Persons: Austan Goolsbee, Goolsbee, we're, Ann Saphir, Chizu Organizations: Chicago Federal Reserve Bank, CNBC, Fed, Thomson
Fed interest-rate hike seen a lock for July
  + stars: | 2023-07-07 | by ( ) www.reuters.com   time to read: +1 min
Before the Labor Department report, they had seen a nearly even chance that rates would get to a 5.5%-5.75% range by November. The report, which showed employers hired 209,000 workers last month, is "consistent with steady and gradual slowing of the labor market," wrote III Capital Management's Karim Basta. While that's not enough to dissuade the Fed a July rate hike, he said, an increase in September is "very much an open question." The Fed held its policy rate steady last month, targeting a 5%-5.25% range, but policymakers signaled further rate hikes ahead given still unacceptably high inflation and its slow progress toward's the Fed's 2% goal amid a strong labor market. Reporting by Ann Saphir; Editing by Toby ChopraOur Standards: The Thomson Reuters Trust Principles.
Persons: Management's Karim Basta, that's, Ann Saphir, Toby Chopra Organizations: Federal Reserve, Traders, U.S, Labor Department, Fed, Thomson
Fed trying to figure out if rates are high enough: Goolsbee
  + stars: | 2023-06-30 | by ( ) www.reuters.com   time to read: 1 min
June 30 (Reuters) - Chicago Federal Reserve Bank President Austan Goolsbee on Friday said that he and colleagues will be parsing what will be "a lot of data" between now and the Fed's meeting in late July to assess if the US central bank needs to push borrowing costs up higher to bring down inflation. "That's what we are trying to figure out: have we done enough already? Do we still have substantially more to do, a modest amount more to do, and can we get inflation down without a recession?" Goolsbee said in an interview on Fox Business. Reporting by Ann SaphirOur Standards: The Thomson Reuters Trust Principles.
Persons: Austan Goolsbee, Goolsbee, Ann Saphir Organizations: Chicago Federal Reserve Bank, Fox Business, Thomson
Explainer: The Fed's rate policy path, and what the data says
  + stars: | 2023-06-30 | by ( ) www.reuters.com   time to read: +3 min
Here's a guide to some of the key data that will shape the policy debate and expectations around the Federal Reserve's next move:INFLATION (released June 30): Headline price pressures by the Fed's preferred inflation gauge eased to 3.8%, their lowest year-on-year reading since 2021, but underlying inflation pressures remained stuck on overdrive, with the core personal consumption expenditures index at 4.6%. The lack of progress toward the Fed's 2% target makes it less likely that Fed policymakers will feel comfortable holding off again on a rate hike come July. That ratio has dropped as the Fed's rate hikes have slowed labor market demand. A still-robust job market driving wage gains and consumer spending would be seen as contributing to the persistence of high inflation, and would build the case for further Fed rate hikes. Reporting by Ann Saphir; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.
Persons: Jerome Powell, Powell, Ann Saphir, Andrea Ricci Organizations: Federal, Reuters Graphics Reuters Graphics, Institute for Supply Management, Labor, Survey, Thomson
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