Catching Up on the Fed

Crédit Agricole CIB reports that the Federal Reserve remains on an extended hold through 2026 despite the confirmation of Kevin Warsh as the new Fed Chair. The report notes a hawkish tilt in recent FOMC dissents and a sharp reduction in reserve management purchases.

Key Takeaways

• 1.The Fed is in a 'wait-and-see' mode following the April FOMC meeting, with a hawkish tilt evidenced by three dissents against an easing bias.
• 2.Kevin Warsh has been confirmed as the next Fed Chair; while he may hold dovish views, he is unlikely to unilaterally shift policy against a hawkish Committee.
• 3.Reserve Management Purchases (RMP) have slowed drastically from $40bn/month to $10bn/month in the latest schedule.

Table of Contents

• April FOMC pushes back against any thoughts of easing
• We continue to expect an extended hold
• RMP have slowed notably
• Warsh to take over from Powell, but a new chair does not change our outlook
• Interest rates
• Balance sheet
• Communications
• Macro Research advanced tools
• Red Mount Analytics
• Global Markets Research contact details

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