Mark Vitner Fed Quotations

Recent trends show the price pressures are well contained, with the exception of oil, ... The core CPI rose at just a 1.8 percent annual rate over the past three months, which is slightly below the 1.9 percent year-to-year gain. That means the core CPI is unlikely to accelerate in the next few months and allows the Fed to continue its policy of just gradually pushing up interest rates.

It gives the Fed a little more breathing room on interest rates, that's the most I can say.

There is no operating manual that says what a neutral fed funds rate is, but the Fed knows that it's higher than 3 percent,

When the federal government increases the budget deficit it increases interest rates on everybody, so it is like a tax increase on borrowing. What that means is that mortgages will be more expensive.

Some folks will be quick to jump on this morning's data as a sure sign that the next move by the Fed will be to cut interest rates. Such talk is still way too premature.

I don't think there's much doubt the Fed will raise rates by a quarter point each of the next three meetings. Even a really strong report probably won't cause them to raise rates by a half-point.

Coming on the heels of the recent spate of weaker economic reports, the better than expected inflation news will probably cause the Fed to leave interest rates unchanged at their June FOMC meeting, ... It is still way too soon, however, to conclude that the Fed is done.

It's beginning to look like the Fed was right all along ... and that the case for a recession has gotten a lot weaker. It looks like we're going to have a successful bumpy landing.

If this kind of strength follows through to other reports, it will become very difficult for the Fed to leave rates unchanged when they meet on Aug. 22nd,

The prices paid is still way up there, inflation is still running a little hot, enough that the Fed will continue to raise interest rates.

The most recent acceleration in productivity growth looks like it was cyclically driven, ... Even with output soaring, many businesses were reluctant to boost hiring because the Fed was hiking interest rates and energy costs were surging. Even if businesses wanted to hire more workers, many could not because the labor markets were so tight.

You could even interpret the minutes to read that economic growth has already slowed to its long-run potential and that the federal funds rate is already at a neutral level. The Fed's commentary describes an economy that is nearing or already in the early stages of a soft landing.

While core finished goods are still relatively tame, there are signs that price increases are accelerating further back in the production pipeline, ... Typically the Fed continues tightening until this series tops out. But with prices up only modestly, they will likely continue to make only modest adjustments.

There is some concern that we could see a much more hawkish stance from the Fed and that Greenspan may spell out a little more tightening than the markets had priced after the January employment number.

Back in late 2000 the Chicago PMI weakened a month ahead of the ISM survey. The weakness then also came quite unexpectedly and soon afterwards the Fed abruptly reversed course,

The way the Fed is supposed to influence markets is through an open market policy, but they will also use the open mouth policy,

Yesterday there was a little bit of a fear that maybe the housing market is not slowing down much and that the Fed has to do a little bit more, and today it takes some of that fear back out. They are really close to being done.

The Fed has to conduct a bit of a high wire act. If rates were to rise quickly that would put part of the economic expansion at risk, particularly residential construction and commercial development.

The federal response has been much larger than we thought it would be, ... And the money is being spent much more quickly.

The Fed will probably cut rates in both August and October by 25 basis points (a quarter-percentage point) each. We really don't know what they will do beyond that.

The federal government is going to spend whatever they need to, to make some visible progress before next year's mid-term elections, ... And what that's going to do to an economy that's already at full employment is drive up the cost of cement, drive up the cost of steel, drive up the cost of labor.

The Fed can't wait for core inflation to pick up before they act,

We've had a pretty good run here in anticipation that the Fed is nearly done raising interest rates.