A weekend piece from Nick Timiraos in the Wall Street Journal. Says Federal Reserve officials are preparing to slow down from a 50bp rate hike in December to 25bp this time around (the meeting is January 31/February 1). And that further debate at the Federal Open Market Committee (FOMC) will centre on when to 'paude' rate hikes ahead.
- They could begin deliberating at the Jan. 31-Feb. 1 gathering how much more softening in labor demand, spending and inflation they would need to see before pausing rate rises this spring.
- In recent public statements and interviews, Fed officials have said slowing the pace of rate increases to a more traditional quarter percentage point would give them more time to assess the impact of their increases so far as they determine where to stop.
The Wall Street Journal is gated, here is the link for more if you can access it. but the above is the pertinent gist.
As background ICYMI, Timiraos have made a name for himself as a Fed insider.
Back in June 2022 Timiraos dropped the bombshell during the Federal Reserve blackout period:
"A string of troubling inflation reports in recent days is likely to lead Federal Reserve officials to consider surprising markets with a larger-than-expected 0.75-percentage-point interest rate increase at their meeting this week," he writes.
The report is speculation but it tapped into the old-style Fed leaks. And, the post, as was Timiraos, was spot-on.
Timiraos has thus been crowned the new Hilsenrath (you may remember his role during the Bernanke Fed as a provider of Fed-insider info).
Fed Chair Powell