The long-anticipated unwinding of quantitative easing (QE) in the US is set to begin, just as the Fed’s leadership faces a wave of turnover. We think a strong foundation should keep steady US economic growth on track.
Speculation is building about a looming shake-up in the leadership of the US Federal Reserve. Transitions are nothing new—but the stakes this time are unusually high for the economy and markets.
The Trump administration is starting to consider a replacement for US Federal Reserve Chair Janet Yellen after her term expires. This is only one potential leadership change in what could be a wave of turnover ahead for the institution.
May’s labor-market report disappointed, with every meaningful indicator lower than expected and down from last month. But we don’t believe it’s weak enough to stop a June rate hike or knock the Fed off track.
US inflation bounced back last month, but by less than expected. The data should support two more rate hikes in 2017, but if inflation doesn’t pick up, it may impact plans for more aggressive policy tightening down the road.
In an interview, AB’s new US Senior Economist, Eric Winograd, explains why he expects the US economy to continue growing and the Fed to raise rates two more times this year. He also highlights two risks: populism and protectionism.
Minutes from the Federal Reserve Open Market Committee (FOMC) March meeting highlight key aspects of the committee’s thinking, including the committee’s intent to reduce its balance sheet gradually over time.