Latest news with #FederalReserveBank
Reuters
8 hours ago
- Business
- Reuters
NY Fed flags $1.06 trillion unrealized loss on bond holdings in 2024
NEW YORK, June 3 - The Federal Reserve saw $1 trillion in unrealized losses on its holdings last year, according to a report released Tuesday by the Federal Reserve Bank of New York. The bank said in its annual report, opens new tab for the System Open Market Account, the Fed's massive holdings of cash and securities, that the $1.06 trillion unrealized loss in 2024 was 'modestly higher' than the $948.4 billion paper loss seen in 2023. The state of unrealized losses last year was due to 'higher market interest rates across the yield curve' while partially offset by reduced Fed holdings of bonds. The Fed noted unrealized losses capture the difference between the book value of securities it owns versus the current market price. These paper losses do not affect monetary policy operations and are not an issue of note given that the Fed holds its bonds to maturity. The report added the unrealized loss on Fed holdings will likely prevail for years to come. The Fed's balance sheet in recent years has undergone massive expansion, more than doubling to a peak of $9 trillion by 2022 as the Fed bought Treasury and mortgage bonds to stabilize markets and add stimulus during the pandemic. It has been shrinking its holdings for some time, with the overall size of its balance sheet now at $6.7 trillion. The Fed's large holdings are expected to stabilize in January 2026 at $6.2 trillion, the Fed report noted, based on the current view of market participants.
Bloomberg
10 hours ago
- Business
- Bloomberg
Fed's Bostic Wants More Progress on Inflation, in No Rush to Cut
Federal Reserve Bank of Atlanta President Raphael Bostic said he's in no rush to move interest rates, adding he wants to see 'a lot' more progress on inflation despite recent encouraging price data. 'There's still a ways to go in terms of the progress that we're going to need to see,' Bostic said in a phone call with reporters Tuesday. 'I'm not declaring victory on inflation yet.'
Bloomberg
5 days ago
- Business
- Bloomberg
Fed's Daly Says Policy in a ‘Good Place,' Can Be Patient
Federal Reserve Bank of San Francisco President Mary Daly said monetary policy is in a 'good place' to continue to bring inflation down. Daly said she doesn't necessarily expect inflation to reach the central bank's 2% goal this year, but she emphasized officials are making progress. She expects inflation will continue to decline over time as the labor market slows but remains solid.
Miami Herald
6 days ago
- Business
- Miami Herald
Fed minutes send strong message on interest-rate cuts
Interest rates aren't going anywhere-maybe. Minutes from a meeting of the Federal Reserve Bank leaders, which was held in early May and released on May 29, show the central bank voted to undertake open market operations "as necessary" to maintain the federal funds rate in a target range of 4.2% to 4.50%. In a related action, the Board of Governors of the Federal Reserve System voted unanimously in early May to approve the establishment of the primary credit rate at the existing level of 4.5% – which means interest rates for lenders, consumers and the rest of Americans won't be budging in the near term, much to the dismay of the Trump administration. Don't miss the move: Subscribe to TheStreet's free daily newsletter The minutes of its May 6-7 meeting, known as the Federal Open Market Committee, released May 29, also showed the central bank would allow "modest deviations from stated amounts for reinvestments, if needed for operational reasons." "We are comfortable with our policy stance," Federal Reserve Bank President Jerome Powell said at a May 7 press conference. This stance "will be updated as appropriate to reflect decisions of the Federal Open Market Committee or the Board of Governors regarding details of the Federal Reserve's operational tools and approach to implement monetary policy," the central bank Federal Reserve has a dual mandate to target low inflation and unemployment. It can raise interest rates to slow inflation, but that can cause unemployment. Or it can cut rates to boost job growth, but that can cause inflation. Related: Fed official sends strong message about interest-rate cuts The information available at the time of the May meeting indicated that consumer price inflation remained somewhat elevated. The unemployment rate had stabilized at a relatively low level since the middle of last year, but reported real GDP growth stepped down markedly in the first quarter of 2025. Total consumer price inflation-as measured by the 12-month change in the price index for personal consumption expenditures (PCE)-was 2.3% in March. Core PCE price inflation is the Fed's favorite inflation measure. It excludes changes in consumer energy prices and many consumer food prices. It was 2.6% in March, above the Fed's 2% target. Both total and core inflation were lower than their year-earlier levels. Recent data indicated that labor market conditions had remained solid but have worsened over the past year. The unemployment rate was 4.2% in March and April, equal to its average over the second half of 2024, but up from 3.4% in 2023. Average hourly earnings for all employees rose 3.8% over the 12 months ending in April, little changed from a year ago. According to the advance estimate, real GDP declined 0.3% in the first quarter. However, this first-quarter estimate was likely affected by measurement issues. Based on available data, the outsized increase in imports did not seem to be fully matched by corresponding increases in other spending categories, including inventory investment, resulting in a small decline in estimated real GDP. Indicators of foreign economic activity pointed to a moderate pace of expansion in the first quarter, likely supported in part by front-loaded demand from U.S. importers in anticipation of tariff hikes. Related: Did the Supreme Court just allow Trump to dump Powell? However, more recent indicators suggested weakening momentum, notably in Canada and Mexico, amid elevated uncertainty about global trade policies. Inflation abroad was near central bank targets in most foreign economies, in part reflecting lower energy prices. By contrast, Chinese inflation remained quite subdued. The European Central Bank, the Bank of Mexico, and several central banks in emerging Asia eased monetary policy, citing in part the prospective drag on domestic growth from U.S. tariffs. In their communications, foreign central banks also emphasized the need to maintain policy flexibility amid heightened uncertainty. Goldman Sachs' Roger Kaplan, former Federal Reserve Bank of Dallas president, said May 29 that he didn't think the Fed would move interest rates in June or July. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs However, as clarity evolves around the U.S. tariff instability and unemployment remains steady, Kaplan said he would look for a possible cut come September. "There's a chance of it," Kaplan said in an interview with CNBC on May 29. But he noted that the Fed's current status was "the right thing to do," and that it was "wise" to be patient. More information regarding open market operations and reinvestments may be found on the Federal Reserve Bank of New York's website. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
The Standard
7 days ago
- Business
- The Standard
Fed's Williams calls for strong response if inflation deviates from target
New York Federal Reserve President John Williams speaks at an event in New York, U.S., November 6, 2019. REUTERS
