ChainCatcher news, several of Wall Street's largest banks expect the Federal Reserve to end its balance sheet reduction process in April next year, which is consistent with their expectations for the Fed in July.A survey conducted by the New York Fed before last month's Federal Reserve interest rate meeting among so-called primary market dealers showed that "most dealers indicated that they expect the end of balance sheet reduction to depend on the level of reserves, overnight reverse repo conditions, or the assessment of upward pressure on money market rates relative to the administered rates."Some dealers stated that macroeconomic factors pose risks to the outlook for ending the balance sheet reduction. "The current size of the Federal Reserve's balance sheet is approximately $7 trillion."

ChainCatcher news, Federal Reserve Chairman Powell did not discuss monetary policy or economic outlook in his brief opening remarks at the New York Fed. (Jin Shi)

ChainCatcher news, according to Jinshi reports, former New York Fed President Dudley wrote in a recent article that the Fed's aggressive rate cut of 50 basis points makes sense. The two goals of the Fed's dual mandate (price stability and maximum employment) have become more balanced, indicating that monetary policy should be neutral, neither restraining nor promoting economic activity.However, short-term interest rates are still well above neutral levels. This discrepancy needs to be corrected as soon as possible. A 50 basis point cut would also align with the Fed's dot plot expectations. The market anticipates a total rate cut of at least 100 basis points by the end of 2024. If the Fed only cuts rates by 25 basis points now and expects a 50 basis point cut later this year, it would send a hawkish signal, raising market concerns about why they didn't cut by 50 basis points from the start. A 50 basis point cut in September would help the Fed escape this dilemma.

ChainCatcher news, Dudley, who served as president of the New York Federal Reserve Bank from 2009 to 2018, stated that if the risks between rising inflation and a weak labor market truly reach a balance, as Federal Reserve officials have said, then the Fed should hope for interest rates to be closer to neutral levels. Given that all Federal Reserve officials believe that rates below 4% make it meaningless to start cutting rates by 25 basis points, logically, the Fed should move faster. Additionally, last week's employment report was not particularly reassuring, as the unemployment rate has risen by 0.5 percentage points since the beginning of the year. (Jin Shi)

ChainCatcher news, former New York Fed President Dudley stated that the Federal Reserve needs to cut interest rates by 50 basis points in September. (Jin Shi)

ChainCatcher news, according to Jinshi, the U.S. one-year inflation expectation for August from the New York Fed is 3%, up from the previous value of 2.97%.A report released by the New York Fed on Monday showed that the public's expectations for inflationary pressures in the U.S. remained largely unchanged from last month, as current price pressures continue to ease. The Fed's latest consumer expectations survey found that respondents in August expect inflation rates of 3% and 2.8% one year and five years from now, respectively, which is basically flat compared to July. Respondents expect the inflation rate three years from now to rise from 2.3% in July to 2.5%.The report also found that the expected change in housing prices in August increased from 3% last month to 3.1%. Although the overall inflation expectations for August remained stable, the report indicated that the public expects prices for gasoline, rent, and healthcare to rise, while the increases in food and college prices are expected to slow down. The report stated that respondents view the labor market outlook as mixed, expecting income to increase, and spending expectations have also risen.

ChainCatcher news, the New York Fed's 1-year inflation expectation for July is 2.97%, previous value 3.02%. (Jin Ten)

ChainCatcher news, former President of the Federal Reserve Bank of New York (who had permanent voting rights on the FOMC and was known as the "third in command" of the Federal Reserve) Dudley stated: "I have long been in the camp of 'keeping interest rates high for a longer time.' I believe that to control inflation, short-term interest rates must be maintained at current levels or higher. But times have changed, and so has my mind. The Federal Reserve should cut interest rates, preferably starting at next week's rate meeting." (Jin Shi)

ChainCatcher news, according to Bloomberg, a jury of 12 federal jurors in New York will decide whether Mango Markets attacker Avi Eisenberg manipulated the market.It is reported that on Wednesday, the jury heard the closing arguments from the U.S. government in the case against Eisenberg, who was arrested in December 2022 in Puerto Rico and charged with commodity fraud, commodity manipulation, and wire fraud related to Mango Markets. If all three charges are upheld, he faces up to 20 years in prison. Prosecutors concluded Eisenberg's trial on Wednesday, stating that he manipulated futures contracts through false trading of MNGO tokens on October 11, 2022, and that traditional criminal law applies to Eisenberg.However, Eisenberg's defense attorney argued that he "employed a successful and legal trading strategy in which he put his own funds at risk. He fully complied with the smart contracts of Mango Markets." The jury did not reach a final verdict on Wednesday. They will reconsider the three charges against Eisenberg on Thursday.

ChainCatcher news, according to CoinDesk, Binance.US has appointed former New York Fed compliance chief Martin Grant to its board.It is reported that Martin Grant served as an officer at the Federal Reserve Bank of New York and held the position of Chief Compliance and Ethics Officer for 17 years.

ChainCatcher news, according to TheBlock, the New York Fed and several major U.S. banks, including Wells Fargo and Citibank, announced the early success of a digital asset experiment that used tokenized dollars for faster and more reliable payments.The experiment utilized distributed ledger technology for domestic and international payments between different financial institutions. The results showed success in five testing areas: programmability, privacy, interoperability with other wholesale payment systems, availability, and settlement speed. (source link)

ChainCatcher news, the New York Federal Reserve Bank (NY Fed) on Wednesday restricted the counterparty standards for its reverse repurchase agreement (RRP) program, which may prevent USDC stablecoin issuer Circle from obtaining loans from the Federal Reserve.According to a press release from the New York Federal Reserve Bank, funds registered with the Securities and Exchange Commission (SEC) as "2a-7 funds" that are "organized for a single beneficiary" will generally be considered ineligible, and the Circle Reserve Fund appears to fall into this category.Under the new rules, the fund composed of USDC reserves managed by BlackRock for stablecoin issuer Circle "will generally be considered ineligible for the New York Federal Reserve Bank's reverse repurchase program."It is reported that Circle has placed approximately $25 billion in short-term U.S. Treasury reserves into a custom fund managed by BlackRock called the Circle Reserve Fund. According to an earlier press release from Circle and documents submitted to the SEC for the fund, the Circle Reserve Fund is exclusively for Circle's use and is registered as a "2a-7" government money market fund. (source link)

ChainCatcher news, according to Reuters, major U.S. banks including Citigroup, HSBC, Mastercard, and Wells Fargo are launching a digital dollar pilot program with the New York Federal Reserve Bank. The project is named "Regulated Liability Network." The program will run for 12 weeks, conducted in a testing environment using simulated data. The goal is to test how digital dollar tokens can enhance payment speed and efficiency. (Reuters)