yusufizzetmurat/fed-pulse-embedding-caches huggingface dataset:
[2022-12-14] Staff Review of the Financial Situation Over the intermeeting period, Treasury yields and measures of inflation compensation declined, on net, and the implied path of the federal funds rate in 2023 en
[2022-12-14] Todd E. Clark, Senior Vice President, Federal Reserve Bank of Cleveland
[2022-12-14] Shaghil Ahmed, Carlos Garriga, Joseph W. Gruber, and William Wascher, Associate Economists
[2023-01-01] after a surge in early 2023, china’s economic growth is softening, with slowing exports and ongoing weakness in its property sector.
[2023-01-01] in the united states, recent stress in the banking sector has tightened credit conditions further.
[2023-01-01] similarly, members observed that some firms were indexing their prices, either implicitly or directly, to past inflation.
[2023-01-01] rates also moved up on a broad array of fixed-income securities, including investment- and speculative-grade corporate bonds, municipal bonds, both agency and non-agency commercial mortgage-backed sec
[2023-01-01] however, it was pointed out that momentum for several inflation components had rebounded somewhat recently and remained well above the medium-term inflation target.
[2023-01-01] equity prices had generally declined but remained higher than at the start of the year.
[2023-01-01] however, there is growing evidence that restrictive monetary policy is slowing activity, especially household spending.
[2023-01-01] it would also maintain the current degree of control over the monetary policy stance and ensure the full pass-through of the interest rate decisions to money markets.
[2023-01-01] it was noted that the outcome for real gdp in the first quarter of 2023 implied a technical recession and was weaker than the figure embedded in the june staff projections, while not implying that the
[2023-01-01] several participants commented that a government shutdown might result in the delayed release of some economic data and that this outcome would make it more difficult to assess economic conditions.
[2023-01-01] governing council is prepared to increase the policy rate further if needed to return inflation to the 2% target, and remains resolute in its commitment to restoring price stability for canadians.
[2023-01-01] strong population gains are adding to labour supply and supporting employment growth while also boosting aggregate consumption.
[2023-01-01] on the upside, existing pipeline pressures could still send retail prices higher in the near term.
[2023-01-01] governing council wants to see downward momentum in core inflation, and continues to be focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corpora
[2023-01-01] reference was made to evidence from some countries which indicated that the share of firms that had lowered prices was increasing now that input costs were falling and this share – for the first time
[2023-01-01] manufacturing was once again the principal drag on overall output, despite the continued easing in supply bottlenecks that had particularly benefited car production and sales.
[2023-01-01] however, the fall in energy prices, combined with the recent appreciation of the euro and continued tightening of credit conditions, was expected to gradually dampen core inflation compared with the d
[2023-01-01] wholesale borrowing by large banks increased over the intermeeting period.
[2023-01-01] hence, it was prudent to await eurostat’s gdp release in the coming week before drawing any firm conclusions.
[2023-01-01] this was supported by information from liaison contacts, with around one-third of private sector firms reporting wage increases above 5 per cent.
[2023-01-01] while the bank expects consumer spending to slow in response to the cumulative increase in interest rates, recent retail trade and other data suggest more persistent excess demand in the economy.
[2023-01-01] it then falls below the target in the medium term, as an increasing degree of economic slack reduces domestic inflationary pressures, alongside declining external cost pressures.
[2023-01-01] this was being led by household consumption, as high inflation weighed on household incomes and the effects of prior tightening in monetary policy worked their way through the economy.
[2023-01-01] as wage developments in the euro area were accelerating, second-round effects through higher wages appeared to be starting to materialise.
[2023-01-01] deposit rates had also increased further, rising more strongly for firms than for households since may 2022.
[2023-01-01] financial conditions remain restrictive but have eased since october, and the canadian dollar has been relatively stable against the us dollar.
[2023-01-01] the labour market remained tight, but less so than a few months earlier.
[2023-01-01] in light of these considerations and turning to the policy decision, members agreed that a further increase in interest rates was warranted.
[2023-01-01] in particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behaviour are consistent with achieving the 2% inflation target.
[2023-01-01] at the same time, the prevailing high level of uncertainty was underlined.
[2023-01-01] demand for bank loans to non-financial corporations had also declined in the final quarter of 2022.
[2023-01-01] it was emphasised that the continued increases in market-based inflation compensation measures, including the measure for five years forward five years ahead standing at above 2.5%, were mainly due to
[2023-01-01] reference was also made to empirical evidence that the public sector played a leading role in private sector wage-setting in a number of euro area countries.
[2023-01-01] in view of the high uncertainty and the risk that further supply shocks could materialise, the governing council’s data-dependent approach was also reaffirmed.
[2023-01-01] the economy will move into modest excess supply early next year before growth picks up to 2.4% in 2025.
[2023-01-01] accounting for household offset accounts, the household credit-to-gdp ratio was at its lowest since the early 2000s, as was the ratio of business credit to gdp.
[2023-01-01] however, growth could be higher than projected if the strong labour market and receding uncertainty meant people and businesses became more confident and spent more.
[2023-01-01] members observed that measures of spare capacity in the labour market remained near multi-decade lows.
[2023-01-01] lower prospective growth in demand was expected to reduce both goods and services inflation over time.
[2023-01-01] given recent developments, members anticipated that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflatio
[2023-01-01] the year-end expected rate was about 70 basis points higher than the year-end expectation before the may fomc meeting.
[2023-01-01] firms in the bank’s liaison program reported that the demand for labour had remained strong, but had eased over preceding months in line with the job advertisements data.
[2023-01-01] although job vacancy rates had declined, they remained unusually high.
[2023-01-01] at the same time, it would stand ready to provide liquidity support if needed to ensure a smooth monetary policy transmission.
[2023-01-01] the median respondent to the desk surveys expected the three-month bill yield to increase slightly relative to the similar-maturity overnight index swap (ois) rate and to remain above it into the four
[2023-01-01] survey indicators, such as the purchasing managers’ index (pmi) for output and business expectations in the construction sector, had recovered slightly in recent months but still clearly pointed to co
[2023-01-01] gains in consumer spending picked up for the quarter as a whole, driven by a surge in january that was followed by a small net decline over february and march.
[2023-01-01] turning to financial and monetary developments, bank funding costs continued to reflect the transmission of monetary policy.
[2023-01-01] moreover, the additional monetary policy tightening that would be necessitated by higher or more persistent inflation, and the potential for a greater tightening of financial conditions, represented a
[2023-01-01] overall, a range of indicators suggest that supply and demand in the economy are now approaching balance.
[2023-01-01] new entrants tended to take jobs paying lower wages, while job movers typically took higher-quality jobs with significant wage increases.
[2023-01-01] members noted that the information received on inflation over the prior month had been reassuring.
[2023-01-01] the point was made that this risk was elevated and was likely to rise non-linearly if inflation remained too high over an extended period of time, as suggested in the projections.
[2023-01-01] public demand was expected to be sustained at a high level over the coming year; the decline in public consumption as the pandemic and flood-related support rolls off was expected to be largely offset
[2023-01-01] however, members observed that a range of indicators suggested that conditions in the housing market were stabilising.
[2023-01-01] by the time of the september meeting, a new round of staff projections would be available to the governing council.
[2023-01-01] this suggested that larger firms continued to see financing conditions as favourable, with very few considering them a reason for reducing investment.
[2023-01-01] overall, the governing council assessed that there were still significant upside risks to the inflation outlook.
[2023-01-01] in the labour market, there are signs of more availability of workers, but conditions remain tight, and wage growth has been around 4-5%.
[2023-01-01] members agreed to reconsider the case for a pause at the following meeting, recognising that pausing would allow additional time to reassess the outlook for the economy.
[2023-01-01] there was little spare capacity in the economy, with the unemployment rate very low.
[2023-01-01] for borrowers with lower scores, credit availability tightened slightly in april but remained close to pre-pandemic levels.
[2023-01-01] this was also visible when looking at the significant impact of the global reappraisal of the inflation and interest rate outlook on broader financial markets.
[2023-01-01] it had decelerated slightly for goods inflation, but was still very high.
[2023-01-01] this was the result of both the decline in energy prices and the economy’s greater resilience to the challenging international environment.
[2023-01-01] food price inflation had come down from its peak of 15.5% in march but had still been almost 10% in august.
[2023-01-01] with regard to the outlook, the year-on-year rate of increase in the cpi (all items less fresh food) was likely to be above 2 percent through fiscal 2024, due to factors such as the remaining effects
[2023-01-01] markets also expected smaller rate cuts from that point, given the ongoing resilience in economic activity and labour market conditions.
[2023-01-01] nonetheless, members acknowledged that inflation remained high and broadly based.
[2023-01-01] this situation was also reflected in the forward rate curve, which suggested that the probability of a rate increase versus a pause at the september meeting had been relatively evenly split for some t
[2023-01-01] a very broad consensus supported the 25 basis point rate increase proposed by mr lane, while a preference was also initially expressed for raising the key ecb interest rates by 50 basis points in view
[2023-01-01] while the bank’s business outlook survey suggests acute labour shortages are starting to ease, wage growth is still elevated relative to productivity growth.
[2023-01-01] these schemes made it convenient for firms to hold on to cheap and less productive labour.
[2023-01-01] with inflation still high, most major foreign central banks, while keeping their policy rates unchanged, indicated their intentions to hold these rates at sufficiently restrictive levels to bring infl
[2023-01-01] most of the increase in longer term yields reflected higher real yields.
[2023-01-01] it was argued that some of the stronger tightening of credit standards reported in the survey, beyond the level that had been expected by banks in the previous survey round, was likely to be attributa
[2023-01-01] with respect to the medium term views differed, with risks, however, generally seen as remaining to the upside.
[2023-01-01] following an uptick in april, energy inflation had resumed the downward trend seen since last autumn.
[2023-01-01] the decline in the annual growth rate of narrow money (m1) had been accelerated by a pronounced reshuffling between instruments within broad money (m3), with shifts from overnight deposits into other
[2023-01-01] regarding the outlook, although such consumption was expected to be affected by price rises, it was projected to keep increasing moderately with nominal employee income continuing to improve, and part
[2023-01-01] in canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures.
[2023-01-01] however, it was also argued that as long as the prospects for higher and more persistent policy rates were not priced into the term structure of market interest rates, that policy path would not be re
[2023-01-01] the recent eurogroup statement on the euro area fiscal stance was consistent with this assessment.
[2023-01-01] with regard to economic activity in the euro area, members concurred with mr lane that growth was likely to remain subdued in the coming months.
[2023-01-01] it was argued that core inflation continued to be sticky and that the previous quick progress on headline inflation was increasingly fading as energy base effects vanished or even reversed.
[2023-01-01] in the united states and europe, economies are slowing but proving more resilient than was expected at the time of the bank’s october monetary policy report (mpr).
[2023-01-01] likewise, there was a risk that, in some countries and sectors, union bargaining might go beyond a one-off “catch-up” of real wages with respect to pre-pandemic levels and try to make up for the trend
[2023-01-01] underlying price pressures remained strong, inflation in non-energy components of the price index was rising and a tight labour market would continue to exert pressure on core inflation.
[2023-01-01] members discussed two other risks to global financial stability, outside of china, that were relevant to australia.
[2023-01-01] growth is expected to stall through the middle of 2023, picking up later in the year.
[2023-01-01] in their discussion, members argued that, on the one hand, the reopening of the chinese economy should lead to fewer bottlenecks in global supply chains and thus support global activity.
[2023-01-01] as more households renew their mortgages at higher rates and restrictive monetary policy works its way through the economy more broadly, consumption is expected to moderate this year.
[2023-01-01] it will continue expanding the monetary base until the year-on-year rate of increase in the observed cpi (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner.
[2023-01-01] persistence was seen as essential to bring inflation back to 2% in the medium term.
[2023-01-01] weaker demand and higher borrowing costs are weighing on business investment.
[2023-01-01] as regards wage and price-setting, members agreed that wage pressures had strengthened on the back of robust labour markets and employees aiming to recoup some of the purchasing power lost owing to hi
[2023-01-01] therefore, while there was wide agreement that there were no signs of a wage-price spiral, it was argued that current wage growth was clearly not consistent with a 2% inflation target, even when takin
[2023-01-01] moreover, although there was tentative evidence suggesting that wage growth was close to a peak, further evidence was required to be sure it was turning.
[2023-01-01] looking ahead, it was noted that eurosystem staff had revised down their economic growth projection for 2023.
[2023-01-01] in contrast to many other types of loans, the payment performance of home mortgages improved.
[2023-01-01] members noted that these observations meant there remained a risk that output growth slows more sharply than expected; if so, it would bring inflation back to target more quickly than expected.
[2023-01-01] however, getting inflation the rest of the way back to 2% could prove to be more difficult because inflation expectations are coming down slowly, service price inflation and wage growth remain elevate
[2023-01-01] market economists had also revised lower their expectations for further increases in the cash rate this year; the average expected peak in the cash rate had declined from 4.45 per cent prior to the au
[2023-01-01] this suggested that a large part of the pass-through of past interest rate increases was still in the pipeline.
[2023-01-01] this suggested that the medium-term equilibrium rate of unemployment was likely to be higher.
[2023-01-01] committee policy actions in their discussion of monetary policy for this meeting, members agreed that economic activity had been expanding at a moderate pace.
[2023-01-01] having been able to keep inflation expectations anchored, despite the long period in which inflation had been above target, was seen as a major achievement.
[2023-01-01] it was underlined that the governing council’s mandate was price stability and that institutional independence had been granted to allow central banks to focus squarely on price stability.
[2023-01-01] the bank’s july monetary policy report (mpr) projects the global economy will grow by around 2.8% this year and 2.4% in 2024, followed by 2.7% growth in 2025.
[2023-01-01] participants generally continued to judge that a tightening in credit conditions spurred by banking-sector stress earlier in the year would likely weigh further on economic activity, but the extent re
[2023-01-01] economic growth in the first quarter looks to be stronger than was projected in january, with a bounce in exports and solid consumption growth.
[2023-01-01] members noted the uncertainty around the outlook and that the monthly meetings provided the board with frequent opportunities to assess how these uncertainties were being resolved and to adjust policy
[2023-01-01] the argument was made, however, that if inflation expectations started to shift upwards in response to the prolonged period of high inflation, monetary policy would be transmitted less forcefully.
[2023-01-01] nevertheless, it was stressed that, in order to produce an upward shift in market expectations as regards the future path of interest rates, strong communication was required that highlighted three el
[2023-01-01] against this background, it was recalled that the ecb also had secondary objectives.
[2023-01-01] as higher interest rates continue to work their way through the economy, the bank expects economic growth to slow, averaging around 1% through the second half of this year and the first half of next y
[2023-01-01] overall, gdp growth is projected to be weak through the remainder of this year before strengthening gradually next year.
[2023-01-01] the bank’s april monetary policy report (mpr) projects global growth of 2.6% this year, 2.1% in 2024, and 2.8% in 2025.
[2023-01-01] with regard to the supply side, japan's potential growth rate remained at a low level of around 0.5 percent.
[2023-01-01] lfs employment had grown by 0.2% in the three months to january, slightly stronger than had been expected at the time of the february report.
[2023-01-01] labor market conditions remained tight in march, as job gains were robust and the unemployment rate was low.
[2023-01-01] ahead of its final meeting, the committee was made aware of the flash s&p global/cips uk composite pmi for september that would be released publically on friday 22 september.
[2023-01-01] it was recalled that the dichotomy between manufacturing and services was in line with historical patterns whereby monetary policy affected services with a longer lag.
[2023-01-01] members granted leave of absence to alison watkins am in accordance with section 18a of the reserve bank act 1959.
[2023-01-01] in particular, broad agreement prevailed that, ahead of its september meeting, the governing council should neither hint at further rate increases nor signal that it would pause in hiking rates or tha
[2023-01-01] cpi inflation eased to 5.2% in february, and the bank’s preferred measures of core inflation were just under 5%.
[2023-01-01] participants agreed that cumulative policy firming to date had reduced demand in the most interest-rate-sensitive sectors of the economy, particularly housing.
[2023-01-01] as it sets monetary policy, governing council will be particularly focused on these indicators, and the evolution of core inflation, to gauge the progress of cpi inflation back to target.
[2023-01-01] members considered the implications of the reopening of china’s economy for inflation developments in the euro area.
[2023-01-01] this implies the economy will move into excess supply in the second half of this year.
[2023-01-01] in china, real gdp growth had rebounded strongly in the first quarter from its pandemic-induced slump.
[2023-01-01] year-ended growth in wages was a little stronger than had been expected but the most recent forecasts had wages growth peaking at around 4 per cent by the end of the year.
[2023-01-01] private sector financing conditions had tightened a little in most advanced economies since the previous meeting.
[2023-01-01] in weighing up the two options, members agreed that the case to keep the cash rate target unchanged at this meeting was the stronger one.
[2023-01-01] ongoing cost pressures and the recent softening in demand had put pressure on some businesses’ profits and liquid reserves, most notably in the construction sector and the arts and hospitality sector.
[2023-01-01] however, companies could adapt more quickly to the challenging international environment and, together with the fading-out of the energy shock, this could support higher growth than currently expected
[2023-01-01] however, updated staff analysis and reports from the agents’ contacts suggested that food price inflation was likely to fall back more slowly than previously expected.
[2023-01-01] raising policy rates to sufficiently restrictive levels and keeping them there would, over time, reduce inflation by dampening demand and would also guard against the risk of a persistent upward shift
[2023-01-01] growth in the united states and europe has surprised on the upside, but is expected to weaken as tighter monetary policy continues to feed through those economies.
[2023-01-01] overall, it was nevertheless felt that it remained reasonable to expect a gradual economic recovery to take hold, thanks to a recovery in people’s real incomes from rising wages and a strong labour ma
[2023-01-01] it was stressed that the terms-of-trade shock had been operating like a tax and that its absorption in the domestic economy should proceed with some burden-sharing between labour and capital.
[2023-01-01] although headline inflation had continued to decline as energy prices fell and food price inflation eased, members noted that core inflation had remained sticky and shown little sign of easing.
[2023-01-01] at the same time, domestic inflation was stubbornly high and longer-run inflation projections still seemed to be above the governing council’s target.
[2023-01-01] for food inflation the momentum had fallen to 6%, which was still very high, while among the core inflation items it had declined significantly for goods but not for services.
[2023-01-01] members noted that housing prices had increased noticeably across all major capital cities in june, based on preliminary data.
[2023-01-01] the current inflation dynamics most likely did not yet reflect recent monetary policy tightening.
[2023-01-01] both the start of quantitative tightening and expectations of a full roll-off had been absorbed smoothly by the market.