Government Shutdown Clouds Fed Outlook

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Several participants at the Federal Reserve’s September policy meeting said it was important to continue monitoring money-market conditions and evaluate how close bank reserves are to their “ample” level, as the central bank continues to unwind its massive portfolio of securities. 

The remarks come as prolonged funding pressures in US money markets, just as bank reserves held at the Fed are dwindling, are suggesting the central bank may be getting closer to ending its balance sheet runoff. 

A few participants noted that the Standing Repo Facility — the Fed’s liquidity backstop — would help keep the federal funds rate within its target range and ensure that temporary pressures in money markets wouldn’t disrupt the ongoing balance-sheet reduction, according to the minutes of the Sept. 16-17 gathering released Wednesday.  

Today's show features:

• Kay Herr, JPMorgan Asset Management US CIO of Global Fixed Income, Currency, and Commodities
• Stephen Carroll, Host of Bloomberg Daybreak Europe, on Macron's next two days during which he needs to select a new prime minister
• Mandeep Singh, Bloomberg Intelligence Global Head of Technology Research, on how AI became a trillion dollar market
• Herman Chan, Bloomberg Intelligence Senior Analyst for US Regional Banks on the bank merger outlook

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