Federal Reserve issues FOMC statement

For release at 2:00 p.m. EDT

Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low.  Inflation  remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the  Federal Reserve ‘s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller.

Implementation Note issued July 27, 2022

Last Update: July 27, 2022

• Flows were seen at 27.8 million kWh/h at 0500 – 0600 GMT
• Flows were reduced to 24.8 million kWh/h at 0600 – 0700 GMT
• Flows are now reduced to 17.4 million kWh/h for 0700 – 0800 GMT

This is consistent with Russia taking down capacity to roughly 20% with nominations suggesting that flows will plunge to 14.4 million kWh/h. For some context, physical flows have been roughly around 29 million kWh/h since resumption last week. In any case, this just reaffirms Russia is tightening the screws on Europe and the latter has major problems to deal with going into the winter months.

Anyway:

• Sen. Rob Portman (R-OH) released a minority staff report for the Homeland Security and Governmental Affairs Committee that details how the Federal Reserve System has been targeted by Beijing. T
• “A Federal Reserve counterintelligence analysis identified 13 persons of interest as having connections with known Chinese talent recruitment plan members or ‘having similar patterns of activity the [Federal Reserve] analysts deemed’ of potential concern,” the new report says. “Federal Reserve investigators dubbed these individuals, representing no fewer than 8 of the 12 Federal Reserve Banks, as the P-Network.”

Info comes via this link.

Reuters also have a piece up on the allegations:

• promptly rejected by the Fed as “unfair, unsubstantiated, and unverified.”

The long-expected call looks set for Thursday, 28 July 2022.

A spokesperson for Biden says doubts tariffs will be a big topic.

Awaiting any more on this. If not tariffs, will there be much discussion on economy-relevant topics or will it all be about Taiwan, Ukraine etc?

Amazon Prime price hikes will take effect starting September 15 when members join or next renew. The firm citing higher costs. Info via Reuters.