Ian Shepherdson Fed Quotations

My guess is it won't be very exciting because he already told us three weeks ago what he thinks. He's certainly not going to say anything that suggests the Fed might be thinking about not cutting rates as soon as the market thinks but I don't think he'll want to give the impression that they're going to slash rates even more aggressively.

If this continues, it can do real damage to core inflation, making it all the more important that the Fed succeeds in slowing the economy to ease inflation pressure.

Given the complete absence of meaningful inflationary pressure evident in the economy now, and -- as the Fed put it, 'tentative evidence of a slowing in certain interest-rate sensitive sectors of the economy' -- we think there is very little chance that rates will rise again in the current cycle.

We think confidence will rebound next month, but in the meantime the odds surely now favor a Fed ease next week,

There is no clear steer on policy in this speech; analysts with different views will read it in different ways.  But we think the Fed chairman knows recovery is here; he just wants to be a bit cautious -- and in both directions, which means no more easing,

This report indicates manufacturing is continuing to rebound from the Asian crisis, which is exactly what the Fed expects.

This report will leave the markets still pushing for a Fed ease...but perhaps with a bit less conviction, ... It is still not a done deal.

The question the Fed now faces is what will happen to growth looking forward in the wake of a 75-basis-point tightening?

A serious downturn in housing activity will have to wait until there is a meaningful increase in mortgage rates, ... For that, we have to wait until payrolls take off and the Fed signals tighter policy.

Preparing the markets for a rate hike is a process in which the Fed gradually has to back away from its unduly pessimistic stance of recent months. This will take some time, but the process is now underway.

The upcoming data will soon enough force the Fed to change its stance, otherwise it will begin to look ridiculous,

This does not read like a Fed where everyone is looking for a reason to stop.

This is great news. These are very helpful numbers to those -- including us -- who think the Fed will not raise rates next month.

Skeptics will argue this is just a post-war bounce that won't last, but we disagree, ... The ISM was in the mid-50s before the war, thanks to very loose policy, and there's no reason why it can't return to those levels very soon. The Fed does not need to ease again.

The new Fed Chairman clearly expects to have to raise rates a bit further, but the extent of the tightening is dependent on the relative performance of the labor and housing markets.

The Fed is nearly done. The U.S. economy is coming back.

The Fed is now explicitly conducting monetary policy with the aim of supporting stock prices,

The Fed can and will be much more of an active player in the stock market until it turns the corner,

The Fed chairman is not habitually in the business of delivering shocks to the markets unless the circumstances are especially dire. That is certainly a fair description of the situation in the states hit by Katrina, but it does not apply to the rest of the economy.

The Fed's chief worry is still the labor market, ... So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

The Fed's chief worry is still the labor market. So long as the unemployment rate does not fall further, and clear signs of consumer slowed own emerge, the Fed will be able to leave rates on hold.

The Fed's minutes do not change the near-term outlook for policy despite the strong market reaction. Clearly there is some debate as to how much further tightening will be necessary, as the minutes say the number of hikes will likely 'not be large,' but 'large' is undefined. This does not read like a Fed where everyone is looking for a reason to stop.

The Fed will deal with (the housing-jobs mix) by hiking in January and March and hoping that the housing softening will be sufficient to get them off the hook by May, though I think that's a close call.

The Fed will likely ease on Nov. 6, but the Beige Book has not changed the odds, ... And it tells us nothing about the future of the economy or Fed policy.

The Fed has begun to prepare the markets for higher interest rates, ... almost balanced.

It now seems appropriate to start thinking about a fed funds rate as low as 4 percent by the summer.

Clearly good numbers, reinforcing the Fed view that much of the spring rise in inflation was 'transitory' - but good CPI numbers alone will not stop rates rising slowly.

Clearly, this report looks awful, but it does not presage any change in the underlying inflation environment, ... PPI is not driving Fed policy.

Clearly, these headlines will assuage some of the fears of a consumer collapse, and they mean the Fed will wait till the meeting before easing again. We still look for at least a 25-basis-point easing on Jan. 31.

The wage story is gathering momentum. No wonder the Fed is concerned.

The wage story is gathering real momentum. The Fed is going to 5%, and more if housing does not collapse by mid-year.

As far as we can tell, just about everyone now expects another 25-basis-point hike on May 16, which rather begs the question why the Fed did not act more boldly today and raise rates by 50 basis points. By the time of the May meeting, a bigger move might be forced upon the FOMC.

The drop in stock prices is no excuse to beginning cutting rates, as some in the market desperately want to believe, ... Given where oil prices are and given what the fundamentals still suggest, I don't see the Fed doing anything for the time being.

The headline was pulled down by slightly bigger declines in gasoline, natural gas and fuel oil prices than we expected. Core PPI is now up just 1.7% year over year, down from May's 2.8% peak. It will slow further in the wake of the slowing in raw-materials prices, but the Fed cares much more about the labor market than PPI.

There was no comment on future Fed policy, but ... with no inflation risk, Mr. Greenspan can wait until recovery is secure. In the meantime, rates are on hold.