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21 11, 2022

DAILY112122

2022-11-21T17:37:05-05:00November 21st, 2022|2- Daily Briefing|

FRB-NY Considers Why Deposit Rates are Now So Sticky

As Karen Petrou’s talk last week noted, Democrats and the CFPB have charged that exploitation explains why bank deposit rates now lag Fed rate hikes.  Today’s post from the Federal Reserve Bank of New York finds a steady decline in bank deposit-rate matches to Fed rate hikes since 1994, but also identifies market factors that largely explain rate sluggishness.  The study estimates the “deposit beta” – i.e., the difference between FOMC hikes and all deposit rates (including non-interest paying funds) found in BHC data.

Senate Dems Demand Digital-Asset Crackdown

Following last week’s hearings with the banking agencies (see Client Report REFORM214), Chairman Brown (D-OH) and Senate Banking Democrats today sent letters urging Vice Chair Barr, Acting Chairman Gruenberg, and Acting Comptroller Hsu to review SoFi’s digital asset activities, accusing the firm of improperly expanding its crypto trading following commitments not to do so when it was granted licenses as a national bank and BHC.  Following the playbook of pressing for rules and enforcement rather than new law, Senators point to a new SoFi service they believe is not only an “expanded” digital-asset activity despite a commitment to wind down these impermissible activities, but also is dangerous to investors and unsafe and unsound.

Daily112122.pdf

1 11, 2022

DAILY110122

2022-11-01T16:53:18-04:00November 1st, 2022|2- Daily Briefing|

Progressives Target Fed Attack Directly on Powell

With a new letter from progressive Democrats ahead of the FOMC release, it is clear that the campaign  not just against Fed rate hikes, but now also Chairman Powell, is gaining strength on the left.  Long-time Fed critic Elizabeth Warren (D-MA) is joined here by Sens. Sanders (D-VT) – who has spoken out before and Sens. Whitehouse (D-RI) and Merkley (D-OR).  The letter is also signed by seven progressive House Democrats – a small minority of Democrats to be sure, but still significant in terms of the Democratic base.  All of them urge the Fed to forbear on grounds that higher rates are already having adverse employment and global-growth consequences.

Daily110122.pdf

28 10, 2022

Al103122

2022-11-08T15:43:59-05:00October 28th, 2022|3- This Week|

BLAMING THE PARTY-POOPER

Last week, we noted a significant uptick in Democrats turning on a central bank they have treated with the utmost courtesy ever since the Biden Administration tied its political fate to whatever economic outcomes the Fed was aiming to accomplish.  We shall see what the midterms say about what Americans think about the combination of acute inflation and interest rates higher than many are able ever to remember, but the President’s stout defense of economic prosperity, Secretary Yellen’s disavowal of any recession, and the Administration’s increasing focus on corporate culprits make it clear that the Treasury Secretary stands by her Fed and the White House – at least for now – backs her up.

Al103122.pdf

25 10, 2022

DAILY102522

2022-10-25T17:08:46-04:00October 25th, 2022|2- Daily Briefing|

Setting Stage for US Action, UK Regulators Target Bigtech Consumer-Finance Market Power

Focusing principally on competition, the UK’s Financial Conduct Authority (FCA) today released a discussion paper investigating bigtech’s entry into payments, deposit, consumer-credit, and insurance.

With Yellen Backing, SEC Central-Clearing NPR Advances

The Federal Register today includes the SEC’s proposal requiring that market clearinghouses submit certain secondary-market transactions for clearing along with the small percentage now already centrally-cleared.

FDIC Reports Significant Financial Inclusion Progress

Showing significant improvements in financial inclusion, the FDIC today released its biennial under- and unbanked household survey.

CFPB to Require Almost-Open Banking

At long last and as recently promised, the CFPB later this week will start a rulemaking process that would ultimately require financial institutions to share personal data with a consumer upon his or her request.

Democrats Get Ready To Blame The Fed

Continuing progressive critiques of the FOMC’s anti-inflation fight, Senate Banking Chairman Brown (D-OH) has written to FRB Chairman Powell sharply protesting current Fed policy.

Daily102522.pdf

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