JUST IN: 🇺🇸 White House economic adviser Hassett says the Federal Reserve will likely cut interest rates next week. ...

Its balance of power on Bloomberg TV and radio alongside Omara Omeokwe I'm Joe Mathieu with breaking news in Washington that just crossed the terminal after we took air this evening on Bloomberg. That could be a new help wanted sign going up at the White House. Of course, if Donald Trump chooses Kevin Hassett to be the next chair of the Federal Reserve.That's the expectation. And if he does. Donald Trump's aides and allies are now discussing the possibility of making Treasury Secretary Scott Bessant, the to ...

Core Viewpoint - The U.S. Treasury Secretary Scott Bessent is advocating for a new requirement that Federal Reserve regional bank presidents must reside in their districts for at least three years prior to taking office, which could increase the White House's influence over the traditionally independent Federal Reserve [1][3]. Group 1: Proposed Changes - Bessent stated that there is a disconnect in how the Federal Reserve is framed and emphasized that candidates for regional bank president who have not lived in their district for three years would be vetoed [2]. - This proposal is part of a broader effort by the administration to exert more control over the Federal Reserve, which has historically maintained independence from political pressures [3]. Group 2: Federal Reserve Structure and Function - The Federal Reserve aims to manage inflation and support employment by setting a short-term interest rate that affects borrowing costs throughout the economy [4]. - The Federal Reserve's structure includes a seven-member board of governors in Washington and 12 regional banks that represent specific districts across the U.S. [4]. - Interest rate decisions involve votes from the seven governors and the president of the New York Fed, with four of the other regional presidents voting on a rotating basis, although all presidents participate in the interest-rate setting committee meetings [5]. Group 3: Criticism of Current Practices - Bessent has criticized the current practice where "three, maybe four" regional Fed presidents were appointed from outside their districts, with some residing in New York, questioning whether this aligns with the original design of the Federal Reserve [6].

Core Insights - The Federal Reserve has begun to recover from a three-year period of unprecedented losses related to its monetary policy implementation post-COVID-19 pandemic [1] - Since November 5, the Fed's deferred asset has decreased from $243.8 billion to $243.2 billion, indicating a positive shift in a long-term trend [2] - The combined profits of the 12 Reserve Banks are projected to exceed $2 billion in the current quarter, suggesting a return to profitability [3] Monetary Policy Impact - The Fed's bond-buying spree during the pandemic increased its holdings to a peak of $9 trillion by summer 2022, aimed at stabilizing the financial system and lowering long-term borrowing costs [5] - Rising inflation led the Fed to sharply raise interest rates starting in early 2022, creating a mismatch between income generated and payouts to banks [6] - Recent rate cuts have reduced the Fed's losses by lowering payouts to banks, with the federal funds target rate currently between 3.75% and 4% [7]

Core Viewpoint - The Federal Reserve has halted its balance-sheet runoff and shifted its policy to stabilize liquidity in response to market pressures, particularly in the cryptocurrency sector [1][2][3][4]. Group 1: Federal Reserve Policy Changes - The Federal Reserve ended quantitative tightening on December 1, 2023, and will now reinvest maturing Treasuries and mortgage-bond payouts into Treasury bills to maintain ample reserves [1][3]. - A 25-basis-point rate cut was implemented, adjusting the target range to 3.75%-4.00%, marking the first cessation of balance sheet reduction since 2022 [4]. - Chair Jerome Powell indicated that the decision was made once reserves exceeded the level necessary for smooth market functioning, as indicated by money-market signals [3]. Group 2: Impact on Cryptocurrency Market - The shift in Fed policy aims to stabilize liquidity and control short-term rates, but the cryptocurrency market remains cautious amid ongoing downward momentum [2][5]. - Bitcoin's recent trading activity showed volatility, with prices fluctuating between approximately $83,951 and $90,108, indicating market uncertainty [4][5]. - Historical patterns suggest that Bitcoin dominance tends to peak shortly after the cessation of quantitative tightening, followed by a decline in dominance as altcoins begin to recover [6].

The decision comes as Trump signaled publicly that longtime adviser Kevin Hassett is a leading contender to lead the central bank. ...

I have a question about the independence of regulatory agencies. Start with the Fed. Do do you see your regulatory agency as independent of the president or as a creature of the president. >> The Federal Reserve is an independent a-olitical agency. >> The FDIC is defined by statute as an independent regulatory agency.We have also always tried to coordinate our activities with other agencies throughout the government. >> NCUA is an independent agency within the executive branch. One way you could describe ou ...

The banking system is “sound and resilient,” Federal Reserve Board Vice Chair for Supervision Michelle W. Bowman said Tuesday (Dec. 2).By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.Bowman said this while testifyi ...

Group 1 - The Federal Reserve is experiencing significant disagreement among officials regarding the appropriate endpoint for interest rate cuts, with estimates diverging more than ever since 2012 [1][4] - Fed Chair Jerome Powell has acknowledged the differing views within the rate-setting committee, highlighting the tension between prioritizing stable prices versus maximum employment [2][3] - The concept of the "neutral" interest rate, which neither stimulates nor constrains the economy, is currently a focal point of debate among Fed officials [3][5] Group 2 - In September, 19 Fed officials provided 11 different estimates for the neutral rate, ranging from 2.6% to 3.9%, indicating a wide range of opinions [4] - The estimates are becoming increasingly significant as the Fed's benchmark approaches the upper edge of the range, complicating future rate cuts [5] - Philadelphia Fed President Anna Paulson expressed caution heading into the December meeting due to the risks of higher inflation and unemployment, suggesting that monetary policy must balance carefully [5][6]

Core Viewpoint - The next Federal Reserve chair should be a thoughtful leader focused on economic policy and the dual mandate goals, prioritizing analysis and clear communication to the public [2][3]. Group 1: Attributes of the Next Fed Chair - The ideal candidate should be able to lead the committee in considering the best path for policy to achieve economic goals, setting aside external pressures [2]. - Attributes of potential candidates include strong analytical skills, effective modeling, and forecasting capabilities [3]. Group 2: Criticism and Reform of the Fed - There is a growing mainstream criticism of the Federal Reserve, with calls for reform from some leading candidates [4]. - While acknowledging past mistakes, such as the delay in addressing inflation, there is a belief that improvements can be made without undermining the institution [5][8]. Group 3: Monetary Policy Considerations - The Fed should consider various scenarios and not rely solely on one approach, particularly in light of recent high inflation [6]. - There is a need for a balanced approach to monetary policy that considers the implications of lowering interest rates on inflation and small businesses [10]. Group 4: Transparency and Communication - A framework for how the Fed reacts to economic data should be established to improve transparency and predictability in policy decisions [11][12]. - Better communication regarding the Fed's reaction function is necessary to enhance understanding of its policy setting [13].