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FOMC Voting Committee Chairman Balkin Undecided on Interest Rate Increase

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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 …

FOMC Voting Committee Chairman Balkin Undecided on Interest Rate Increase

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:


FOMC Voting Committee Chairman Balkin recently stated in an interview that he has not yet decided on the upcoming interest rate increase despite previously advocating for a 25 basis point increase if inflation persisted. Balkin emphasizes his openness to all outcomes, noting that every meeting may not necessarily result in a 25bp increase. This sentiment aligns with Powell’s recent testimony, where he mentioned being open to a 50bp interest rate increase if future data requires it.

Balkin also addresses the potential impact of the recent Silicon Valley banking incident on the Federal Reserve’s monetary policy. However, he believes that financial stability may or may not be affected, but his primary focus is on economic demand. He assures that he will continue to respond until they control inflation.

Furthermore, Balkin mentions that he would not be surprised if the economic forecast summary released in the March meeting was higher than the expected 5.1% from December 2021. This statement suggests that the Fed may revise upwards its economic forecast which could potentially impact their decision on interest rates.

Overall, Balkin’s statement seems to be cautious and indicates that the FOMC is adopting a wait-and-see approach before making any decisions on interest rates. With talks of inflationary pressures and uncertainty surrounding financial stability, it appears that the Fed is prepared to pivot when necessary to maintain control over the US economy. The keywords associated with this message are interest rate, inflation, FOMC, Powell, and economic forecast.

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