FED: Richmond's Barkin: Unemployment Downtick A Welcome Development
Jan-09 19:02
Richmond Fed President Barkin (2027 FOMC Voter) told reporters including MNI Friday that the December payrolls report was "encouraging", with the unemployment rate downtick to 4.4% in the month coming as a welcome development in a labor market environment characterized by modest and balanced supply and demand.
- "This fine balance between a modest job growth environment with a modest labor supply environment seems to be continuing and that was encouraging, Some of it is uncertainty, a lot of it is productivity. But it’s hard to find businesses outside of the AI ecosystem or health care that are talking about hiring, and that’s very consistent with what I saw today."
- Speaking on the intersection of today's jobs numbers and the strong recent productivity data shown in this week's report: "businesses are going to have to make a call as to whether they can sustain the productivity, and they're going to need to hire to meet demand. That’s the upside case. The downside is they're convinced that demand will falter, in which case you reduce jobs equivalently."
- We pencil in Barkin as being in line with the FOMC 2026 median implying 1 rate cut this year though clearly given his comments in the last week, he's not in any rush to ease.
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FED: Fed Announces Reserve Management Purchases; $40B For First Month
Dec-10 19:00
- Fed announces Reserve Management Purchases (RMPs) "to maintain an ample level of reserves through purchases in the secondary market of Treasury bills (or, if needed, of Treasury securities with remaining maturities of 3 years or less)."
- RMPs will be sized to accommodate projected trend growth in the demand for Federal Reserve liabilities as well as seasonal fluctuations, such as those driven by tax payment dates.
- Monthly amounts of RMPs will be announced on or around the ninth business day of each month alongside a tentative schedule of purchase operations for the subsequent approximately thirty days.
- The Desk plans to release the first schedule on December 11, 2025, with a total amount of RMPs of approximately $40 billion in Treasury bills; purchases will start on December 12, 2025.
- The Desk anticipates that the pace of RMPs will remain elevated for a few months to offset expected large increases in non-reserve liabilities in April. After that, the pace of total purchases will likely be significantly reduced in line with expected seasonal patterns in Federal Reserve liabilities. Purchase amounts will be adjusted as appropriate based on the outlook for reserve supply and market conditions.
- The Desk was also directed in October to reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills via secondary market purchases. The monthly schedule of planned purchases will include RMPs as well as these purchases.
MNI: FED: CUTS RATE TARGET 25 BPS TO 3.5%-3.75%; VOTE 9-3
Dec-10 19:00
- FED: CUTS RATE TARGET 25 BPS TO 3.5%-3.75%; VOTE 9-3
- FED DOT PLOT SHOWS MEDIAN 1 CUT IN 2026, 1 MORE IN 2027
- FED TO BEGIN RESERVE MANAGEMENT BILL PURCHASES DEC 12
- FED: RESERVES HAVE DECLINED TO 'AMPLE' LEVELS
- FED TO BUY $40B IN BILLS IN FIRST MONTH
- FOMC: TO CONSIDER 'EXTENT AND TIMING' OF ADDITIONAL CUTS
- FED FORECASTS SHOW STRONGER GROWTH, BIGGER INFLATION FALL
- LOWEST FED DOT IN 2026 DROPS TO 2%-2.25%
FED: MNI Instant Answers: Fed Cuts 25BP, Announces $40B In Bill Purchases
Dec-10 19:00
- Fed funds rate range maximum: 3.75%
- Number of dissenters: THREE. Miran preferred 50bp cut. Goolsbee and Schmid preferred holding steady.
- Does the FOMC change its forward guidance to indicate a higher bar for additional cuts? YES. "In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks."
- Median dot for 2026: 3.4% vs 3.4% PREV
- Median dot for 2027: 3.1% vs 3.1% PREV
- Median dot for 2028: 3.1% vs 3.1% PREV
- Median longer run dot: 3.0% vs 3.0% PREV
- Interest rate paid on reserve balances: 3.65% vs 3.90% PREV
- Standing repo minimum bid rate: 3.75% vs 4.0% PREV. "Going forward, standing overnight repo operations will no longer have an aggregate operational limit and will be conducted in a full allotment format using the FedTrade Plus trading platform."
