CFE Analysis | Fed

Some Simple Term Structure Arithmetic

Robert J. Barbera and Jonathan H. Wright We’ve written two pieces recently on Treasury yields amid the COVID recovery.  Wednesday’s  release of the Federal Reserve Open Market Committee’s Survey of Economic Projections is an opportunity to review where ten yields are, and where they may be headed. The median FOMC participant projects a funds rate […]


What did We Learn from Recent Monetary Policy Performance?

A growing chorus of commentators are now issuing warnings about additional Fed tightening in light of the flattening Treasury yield curve. Despite clear evidence that job growth in the U.S. is running well ahead of a sustainable pace, low wage and price inflation, for many suggest no need to firm overnight interest rates. Exhibits A […]

CFE Analysis | Fed

What will the FOMC be discussing next December?

The FOMC has communicated that it is likely to raise the federal funds rate 25 basis points in its meeting today; it would be a major shift in behavior if it didn’t. Thus, the main thing many folks are talking about is what the Fed will signal in the Survey of Economic Projections (SEP) and […]

CFE Analysis | Fed

What will the Fed do? Nov. 2017 edition

Ideally, if there has been no big news about the economy since the previous FOMC meeting, the FOMC should be back-page news. And maybe as part of “normalization” we are getting back to that: tomorrow’s FOMC announcement is likely to be a very sleepy event. Note: Let’s be clear that I’m talking about Wednesday’s FOMC […]

CFE Analysis | Fed

What the next Fed chair will do

Back in normal times, the following question would have seemed peculiar: Which Fed chair candidate would choose highly accommodative policy if a large fiscal stimulus hits an economy in which the unemployment rate is already at historic lows? The question becomes stranger when we add that the Republicans in power might prefer that Chair. What […]

CFE Analysis | Fed

Yellen for Fed Chair?

I received several comments regarding the post on Jay Powell, asking whether I was implicitly stating a preference for Powell over Janet Yellen. Nope. I clearly should have been less obtuse, but I meant only to be commenting on Powell, who had become a strong favorite according to the betting pundits. The Powell piece started […]

CFE Analysis | Fed

Powell for Fed chair?

According to the folks who bet on such things, Jerome (Jay) Powell is a heavy favorite to become the next Fed chair. I have no special insights into the likely pick, but I do have a pretty good sense of Powell. I was working as a special advisor to the Fed governors when Powell arrived […]

CFE Analysis | Fed

What will the Fed Do? June 2017 edition.

We’ve been reviewing those ‘5 things to watch for’ pieces that often precede FOMC meetings. Our conclusion is that even a Fed groupy is unlikely to find 5 notable things happening at any given FOMC. This is as it should be in an age of transparency. We’re trying a different approach. We’ll try to distill […]

CFE Analysis | Fed

Q&A about Fed portfolio normalization

The best way to predict how the FOMC will react to evolving economic conditions, we at the CFE have been arguing, is to listen almost exclusively to communication on behalf of the consensus, and then to, as best as possible, take that communication at face value. As we’ve documented, this approach has had an excellent […]