Fed alert to developing risks to financial stability – Danske Bank

Fed Chair Jerome Powell’s swearing-in remarks yesterday reflected comments on the Fed being alert to developing risks to financial stability as well as to go ahead with a process of gradual normalisation on both interest rates and balance sheet reduction, explains the research team at Danske Bank.

Key Quotes

“This has to be seen in light of recent lower equities. The Fed fund futures point to a virtual 100% probability of the FOMC hiking rates in the March meeting. On a new Fed Vice-Chair, sources indicate that Loretta Mester (Cleveland Fed) is to be considered by the White House.”

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