What we’re reading (12/14)
“We Need To Do Hard But Necessary Things To Tackle Inflation” (Glenn Hubbard, New York Times). “The Fed must begin tapering asset purchases more aggressively now…[t]he Fed should also raise its benchmark federal funds rate in early 2022. This is a short-term interest rate at which banks borrow and lend reserve balances with one another. He should also be prepared to make further adjustments should macroeconomic conditions, including broader and longer-lasting inflation, demand it.”
“Surging US Producer Prices Add To Pressure On Fed To Accelerate Taper” (Financial Times). “The producer price index published by the Bureau of Labor Statistics on Tuesday jumped 0.8 per cent in November, for an annual increase of 9.6 per cent. That is the fastest year-over-year rate since the data were first collected in 2010.”
“The Federal Reserve Is Expected To Take A Very Big Step Toward Its First Rate Hike” (CNBC). “The Federal Reserve is expected to announce a dramatic policy shift Wednesday that will clear the way for a first interest rate hike next year. Markets are anticipating the Fed will speed up the wind-down of its bond buying program, changing the end date to March from June. That would free the central bank to start raising interest rates from zero, and Fed officials are expected to release a new forecast showing two to three interest rate hikes in 2022 and another three to four in 2023.”
“FOMC Preview: Is The Fed Behind The Curve On Inflation?” (Yahoo!Finance). “How fast does the Federal Reserve want to move on drawing down its pandemic-era stimulus? That’s the question that Fed officials will have to answer in its two-day meeting kicking off Tuesday, where the major discussion will focus on the pace of the central bank’s wind down of its asset purchase program.”
“Millennials Are Supercharging The Housing Market” (Wall Street Journal). “For years, conventional wisdom held that millennials, born from 1981 to 1996, would become the generation that largely spurned homeownership. Instead, since 2019, when they surpassed the baby boomers to become the largest living adult generation in the U.S., they have reached a housing milestone, accounting for more than half of all home-purchase loan applications last year.”
