FOMC Voting Committee’s Balkin Remains Open on Interest Rate Increase

03/11/2023 13:09 • AI & Tech Insights • 65 views

According to reports, on March 11, Balkin, chairman of the FOMC Voting Committee and Richmond Fed in 2024, said in an interview on Friday that he had not made a decision on the upcoming interest rate increase (he had been advocating a 25 basis point interest rate increase) under the condition of continued inflation. At the same time, he also said, “At any particular meeting, I always said that I am open to any outcome”, and pointed out that he “will never give up any possibility”. “The last interest rate increase of 25bp does not mean that every meeting is 25bp”. Balkin’s statement echoes Powell’s testimony this week. At that time, Powell said that he was open to a new interest rate increase of 50bp if future data showed that it was necessary. With regard to the potential impact of the Silicon Valley banking incident on the Federal Reserve’s monetary policy, Balkin believed that he mainly focused on economic demand, and financial stability “may or may not affect”, “I will continue to respond until we control inflation”. He added that he would not be surprised if the economic forecast summary released at the March meeting was revised to be higher than the expected level of 5.1% in December last year. (Financial Times)

Barkin, the Federal Reserve, is open to the resumption of a 50bp interest rate increase

Analysis based on this information:

The Federal Open Market Committee (FOMC) Voting Committee’s Chairman and Richmond Fed in 2024, Balkin, has stated that he has not yet decided on whether to increase interest rates. While he had previously advocated for a 25 basis point increase in interest rates, he notes that he is open to any outcome and will not give up any possibilities. This statement is similar to that of Powell’s, who also stated that he is open to a new interest rate increase of 50 basis points if future data suggests that it is necessary.

Balkin’s focus is on economic demand, and he does not believe that the Silicon Valley banking incident will significantly affect financial stability. He believes that he will continue to respond until they can control inflation. This statement indicates that the FOMC may be willing to make adjustments to monetary policy in response to changes in inflation rates.

Balkin also believes that the economic forecast summary report may be revised to exceed the 5.1% expected in December of last year. This indicates that the committee may be anticipating a stronger economic performance than previously thought.

Overall, Balkin’s statement suggests that the FOMC is remaining cautious in its approach to the interest rate increase. The committee is open to adjusting its strategy based on changes in economic data and inflation rates. The committee seems to be prioritizing economic demand over financial stability, which may indicate that risks are being taken to boost economic growth.

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FOMC Voting Committee’s Balkin Remains Open on Interest Rate Increase

Barkin, the Federal Reserve, is open to the resumption of a 50bp interest rate increase

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