Colby Smith

@nytimes correspondent writing about the Federal Reserve and the US economy. Previously @FT, @TheEconomist, @BloombergTV. [email protected]

[Colby Smith @colbyLsmith]

In his first remarks after stepping down as Fed chair, Powell says the central bank is undergoing a “stress test” and says the removal of officials over policy disagreements would undermine its credibility

https://t.co/utmumLBjXz

[Annmarie Hordern @annmarie]

Bessent tells reporters it’s a “new day at the Fed.”

“I had my first breakfast with Chair Warsh this morning. I think he will do the right thing to balance inflation and growth.”

[Ana Swanson @AnaSwanson]

Howard Lutnick came into office with one of the most complex disclosure forms we had ever seen, with more than 800 companies. An NYT review of those firms -- and their disputes -- sheds light on his freewheeling first year in government.

with @mrothfeld

https://t.co/cUxR1q318D

[Colby Smith @colbyLsmith]

Inflation moved sharply away from the Fed's 2% target in April. PCE inflation rose 3.8% YoY, the fastest annual pace since May '23. Core inflation ticked up to 3.3% (although prices increased slightly less than expected for the month)

This data reinforces an internal shift at the Fed toward embracing the possibility of rate hikes

https://t.co/C78mbKkOH2 @nytimes

[Colby Smith @colbyLsmith]

"I want Kevin to be totally independent," Trump says at Warsh's swearing in ceremony to become the next chair of the Fed. "Don't look at me. Don't look at anybody. Just do your own thing and do a great job"

[Colby Smith @colbyLsmith]

Waller on Friday: "Don't confuse dissents with fights"

"It's healthy to have debate and dissents. I don't think there is anything wrong with it."

[Colby Smith @colbyLsmith]

In the Q&A, Waller pushes back that the Fed has lost credibility re inflation: "The markets kind of understand if things get out of hand, we'll do something."

"That's why these longer term expectations are still anchored."

[Colby Smith @colbyLsmith]

Waller: "I can no longer rule out rate hikes further down the road if inflation does not abate soon"

He becomes the latest Fed official to endorse removing the easing bias from the statement and making clear that a rate hike is just as likely as a rate cut going forward

[Colby Smith @colbyLsmith]

Complicating the rates outlook is a potential shift in the Fed's communications style. Warsh says officials talk too much and box themselves in by providing guidance.

That also creates a self-reinforcing loop w/ markets, Warsh believes. Instead of giving an independent judgment on the state of the economy, for example, markets reflect what the Fed has signaled, making investors ill-prepared if officials need to adjust course

[Colby Smith @colbyLsmith]

NEW: As Warsh gets sworn in as Fed chair today, the case for cuts has evaporated. Fed officials have embraced the possibility of hikes, sending Treasury yields higher.

Pushing for cuts against this backdrop would not only isolate Warsh from his new colleagues but also risk higher, not lower, long rates.

https://t.co/swTB35nRoT @nytimes

[Colby Smith @colbyLsmith]

Waller: "I can no longer rule out rate hikes further down the road if inflation does not abate soon"

He becomes the latest Fed official to endorse removing the easing bias from the statement and making clear that a rate hike is just as likely as a rate cut going forward

[Colby Smith @colbyLsmith]

NEW: As Warsh gets sworn in as Fed chair today, the case for cuts has evaporated. Fed officials have embraced the possibility of hikes, sending Treasury yields higher.

Pushing for cuts against this backdrop would not only isolate Warsh from his new colleagues but also risk higher, not lower, long rates.

https://t.co/swTB35nRoT @nytimes

[Colby Smith @colbyLsmith]

On the eve of Warsh's swearing in as Fed chair on Friday, here's our piece from last week about what he means by regime change and how likely he is to achieve that

https://t.co/Oogluog4lM @nytimes

[Colby Smith @colbyLsmith]

Our full write-up: https://t.co/MHhGgduRON

[Colby Smith @colbyLsmith]

Key line in April's Fed minutes: A majority of officials embraced the possibility of higher rates to counteract the inflation surge

https://t.co/hZFjnsIv8m @nytimes

[Colby Smith @colbyLsmith]

Key line in April's Fed minutes: A majority of officials embraced the possibility of higher rates to counteract the inflation surge

https://t.co/hZFjnsIv8m @nytimes

[Colby Smith @colbyLsmith]

Really enjoyed speaking with @annap_2013 about her outlook. She maintains that the Fed’s policy stance is still “mildly restrictive,” even as she ratified market pricing for no cuts this year and the possibility of a hike later on

We also talked about AI, the value of the dot plot and her thoughts on Waller’s plan to centralize Fed operations

[Atlanta Fed @AtlantaFed]

Later: Join the Atlanta Fed at 7 p.m. (ET) for the closing keynote of its 30th annual Financial Markets Conference, featuring @PhiladelphiaFed president and CEO @annap_2013, with @nytimes reporter @colbyLsmith moderating. Watch: https://t.co/2jza2hKOqC
#FedFMC

[Anna Paulson @annap_2013]

Thank you to the @AtlantaFed and @nytimes' Colby Smith. https://t.co/8S2gn5iRJB

[Atlanta Fed @AtlantaFed]

Later: Join the Atlanta Fed at 7 p.m. (ET) for the closing keynote of its 30th annual Financial Markets Conference, featuring @PhiladelphiaFed president and CEO @annap_2013, with @nytimes reporter @colbyLsmith moderating. Watch: https://t.co/2jza2hKOqC
#FedFMC

[Colby Smith @colbyLsmith]

Should specify as @vtg2 mentioned that Bowman and Miran wanted the temporary designation “limited to a finite time period of at least a week (but we would support a period up to a month to allow for possible delay)”

[Colby Smith @colbyLsmith]

Powell's tenure is not over just yet. Because Warsh has not been sworn in, Powell will serve as chair pro tempore, the Fed said on Friday.

Bowman and Miran say they didn't support the temporary designation

[Colby Smith @colbyLsmith]

NEW: Warsh wants regime change at the Fed and missteps during Powell's tenure made the central bank vulnerable to that kind of criticism

But an assessment of Powell's 8 yrs as chair points to a far more constructive legacy than Warsh portrays

https://t.co/Oogluog4lM @nytimes