MNI FedSpeak Podcast

Federal Reserve officials will probably wait until midyear before lowering interest rates despite market hopes for cuts as early as March, as inflation data stay choppy in coming months before resuming a downward trend, former Fed board economist Seth Carpenter told MNI

The eurozone economy is likely to avoid recession, but inflation should slow sufficiently for the European Central Bank to reduce its benchmark deposit rate by around 150 basis points this year, former ECB economist Riccardo Trezzi told MNI.

Markets are moving rapidly to price in cuts, noted Trezzi, who said that while January’s Governing Council meeting should produce little change the possibility of downward surprises to inflation meant that cuts could begin to be considered by as early as March.

“When markets understand that something has changed, in this case for the good, they always go ahead of the curve and try to anticipate because it’s the way you make money,” said Trezzi, who worked on the Federal Reserve Board’s inflation desk before taking on a similar role at the ECB.

The Fed's next move is likely a cut but won't come until later in 2024 because policymakers must be totally sure inflation is not going to plateau around 3% or even reverse recent declines, former St. Louis Fed President James Bullard tells MNI.

Stanford Graduate School of Business professor Darrell Duffie cheers the SEC's expansion of mandated central clearing in U.S. Treasury trades, saying the landmark new rule will ultimately lead to a significant improvement in market liquidity.

Export Development Canada Chief Economist Stuart Bergman discusses how sentiment about the global economy has weakened and why companies still face difficulties with inflation.

The Federal Reserve will remain reluctant to cut interest rates too soon or too quickly lest it allow recent progress on inflation to reverse, Priya Misra of JP Morgan Asset Management tells MNI. 

The Federal Reserve is likely done raising interest rates as inflation continues a steady decline and policymakers worry about the lagged effects of past hikes, former Kansas City Fed President Esther George tells MNI.

The European Central Bank hopes to publish a new series of questions about firms’ expectations for consumer price inflation as part of its Survey on the Access to Finance of Enterprises next year, and to increase the frequency of SAFE to quarterly from twice a year, ECB senior lead economist Annalisa Ferrando told MNI. A quarterly SAFE will better coordinate it with the ECB’s Bank Lending Survey, Ferrando said in an MNI podcast together with fellow senior lead economist Petra Kohler-Ulbrich.

The Federal Reserve could be done raising interest rates but only if the economy slows and inflation keeps cooperating, former New York Fed economist Matthew Raskin tells MNI. There's a good chance this will not happen in coming months, forcing the Fed to raise rates further, potentially to 6% or higher.

Ahead of Canada's fall fiscal update, Institute of Fiscal Studies and Democracy President Page sees limited fiscal room even as Canada's finances outshine G7 peers. The government has shown little inclination to set genuine fiscal targets but appears on track for limited moves to tackle voter anger over a housing squeeze, the former parliamentary budget officer says.