With the February Fed meeting rapidly approaching, Jack Farley welcomes Colby Smith, U.S. economics editor for the Financial Times (FT), to share her expectations for the February meeting, and her insights about the transmission of the Fed’s policy to the market and the public. She argues that the disconnect between the rate cuts being priced into the interest rate futures market and the Federal Reserve’s own forecasts will be one of the most salient issues at tomorrow’s press conference with Fed Chair Jay Powell. Smith and Farley also discuss the latest economic data, the politics of the Fed, and the looming issue of the U.S. debt ceiling.
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Timestamps:
(00:41) Expectations For The Fed's February FOMC Meeting
(09:24) Are Financial Conditions Too Loose?
(18:26) "The Fed's Threshold For Pain Is A Lot Higher"
(25:48) Forward Guidance
(30:55) Curve Ad
(32:00) Employment Costs & Other Economic Data
(37:09) Will The Fed Hike Again In May (After It Likely Hikes Again in March)?
(40:12) New Voting Members on The FOMC
(43:26) Will Powell Be In "Attack Mode" Tomorrow?
(47:49) The Fed's Balance Sheet & Quantitative Tightening (QT)
(51:14) The Debt Ceiling
(53:34) The Fed's Reverse Repo (RRP) Facility