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·         Yellen supports banks’ share buybacks. Sen. Warren wants BlackRock designated too big to fail

Treasury Secretary Janet Yellen gave her blessing to the Federal Reserve’s decisions late last year to allow banks to buy back their own shares again.

The industry’s biggest names “look healthier now” after being held back from returning cash to shareholders during the Covid-19 pandemic, she said.

Yellen faced harsh questioning on a related issue when Sen. Elizabeth Warren said she wants money management giant BlackRock to be regulated the same as Wall Street’s too-big-to-fail institutions.

·         BlackRock, others' risks should be studied, 'systemic' tag may not be best: Yellen

 

·         Fed's Powell expects inflation to bump up, but not get out of hand

 

 

·         Powell sees ‘orderly’ market adjustment to brighter US outlook

Jay Powell, the Federal Reserve chair, has dismissed fears that the recent rise in long-term borrowing costs could be unhealthy for the US recovery, saying markets had adjusted in an “orderly” manner to a brighter economic outlook.

During testimony to the Senate banking committee on Wednesday, Powell sought to stamp out concerns, raised mainly by Republican lawmakers, that the economy could overheat as a result of Joe Biden’s $1.9tn fiscal stimulus package.

Long-term US government debt yields have lept since the start of the year, with the benchmark 10-year note trading at 1.63 per cent, far above the 0.9 per cent level seen in January. However, after hitting a 14-month high of 1.75 per cent last week, the market has stabilised in recent days.

While Fed officials have said they are monitoring the shifting market, they have hit back against warnings that the rise in yields has been so stark that it warranted alarm or intervention by the central bank.

 

·         Fed Chair Powell: Digital Dollar Would Need Stronger Privacy Than Digital Yuan

 

·         NY Fed's Williams says time frame for raising rates will be driven by economy

The timeline for when the Federal Reserve will start to raise rates will depend on what is happening with the economy, New York Federal Reserve Bank President John Williams said on Wednesday.

 

·         Fed's Daly says U.S. economy 'long way' from goals

 

San Francisco Federal Reserve President Mary Daly on Wednesday said the U.S. economy is a “long way” from its goals, as she noted little upward pressure on wages and remarked on the absence of froth in financial conditions, all suggestive of support for keeping the Fed’s foot on the monetary gas pedal.

 

Fed's Daly says expect a 'dose of patience' on interest rates

 

·         Bostic expects Fed to lift rates in 2023 - WSJ

Atlanta Federal Reserve president Raphael Bostic expects the U.S. central bank will be able to start lifting its interest rates in 2023, the Wall Street Journal reported on Wednesday.

 

·         Fed’s Kaplan said he expects an interest rate hike in 2022

Dallas Federal Reserve President Robert Kaplan told CNBC on Tuesday he likely will favor an interest rate increase before the end of 2022.

 

·         St. Louis Fed's Bullard remains optimistic but wants evidence of strong growth before raising rates

Though Covid-19 cases are declining and vaccinations are increasing, “We are still in a crisis," said James Bullard, president of the Federal Reserve Bank of St. Louis.

 

 

·         Fed to set monetary policy on actual economic outcomes, Evans says

Chicago Federal Reserve President Charles Evans on Wednesday said the central bank will set its monetary policy on economic outcomes and will not reduce monetary policy accommodation until it sees actual improvements.

 

“We’re looking for actual improvement in the economy and inflation to get back up to our dual mandate objectives of maximum inclusive employment and 2% inflation on average,” Evans said at an event hosted by the Japan America Society of Chicago.

 

 

Fed Evans expects the US unemployment rate to drop to 4.5% in 2021

- expects the US unemployment rate to drop to around 4.5% this year

- expects 6.5% GDP growth this year

- there are a lot of reasons to be optimistic, but there are also concerns

- Evans, too, restates the changed paradigm at the Fed:

- we are looking for actual improvement in the economy and won't backtrack (on easing) only on the basis of a forecast more to come 

 

·         Fed's Barkin says the dot plot is not FOMC policy

Barkin is the president and CEO of the Federal Reserve Bank of Richmond, he has some comments crossing on the wires.

Speaking in a Bloomberg TV interview.

- you want yields to respond to what happening in the economy

- yields reflecting good news on vaccines, fiscal aid

- really hopeful that we're at the back end of pandemic

- the Fed's interest-rate dot plot is not Federal Open Market Committee policy

-Fed has tools to handle unwanted inflation

- inflation is not a one-year phenomenon, it's multi-year

- expect to see price pressures in 2021

- expect strong demand, met by some supply-chain issues

- the US economy will have strong spring and summer

Reference: CNBC, Reuters, Business Standard, Financial Times, Yahoo Finance, Forexlive