2017 Economic Calendar
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Monetary Policy Report to Congress  

Highlights
July 7, 2017
The FOMC's semi-annual monetary report to Congress offers no surprises, repeating that strength in the economy will likely warrant further increases in the federal funds rate and that the unwinding of the Fed's balance sheet is likely to begin sometime this year. The report gives no indication when the next move in the funds rate might be.

The report does note concerns over valuation pressures in the financial markets including Treasuries, equities, real estate and corporate bonds, noting that liquidity in the latter, due likely to regulatory changes, is unusually low. The report also notes that term premiums in the Treasury market are unusually low, indicating that investors are not getting much of a premium for the risk of future inflation and that Treasuries are negatively exposed if inflation expectations rise. Still, the report describes the impact of these issues on the financial markets as limited.

The report also touches on the topic of policy rules which are supported by House Republicans, warning that they fail to capture the true complexity of the economy. Janet Yellen will make an opening statement and take questions at next Wednesday's hearing before a House committee. She will also testify on Thursday before a Senate committee.


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