The New York Fed’s hottest club is the normally moribund reverse repo facility.

Over recent days, firms eligible to participate in this tool and its 0% return have gone from ignoring it to pumping in cash. The Federal Reserve Bank of New York took in $142.17 billion Tuesday and $101 billion Monday, in what were both overnight operations. Demand has been inching up for the tool over recent weeks, but for much of the facility’s life, there has been zero usage.

The...

WASHINGTON—Federal Reserve officials are wrapping up a two-day policy meeting Wednesday at which they are likely to maintain ultralow interest rates to support the economy’s accelerating recovery.

The central bankers have noted in public comments the recent pickups in hiring, spending and inflation, but have signaled no readiness to consider changing the Fed’s key policies.

The Fed has held overnight interest rates near zero since March 2020, when the Covid-19 pandemic and related restrictions delivered a severe blow to the economy. Since June, the central bank has also been purchasing at least $80 billion of Treasury bonds and at least $40 billion of mortgage-backed securities to hold down longer-term borrowing costs for consumers and businesses.

Fed officials have said they would hold rates steady until the labor market is back to full strength and inflation has reached the central bank’s goal of averaging 2%. Chairman Jerome Powell has said those...

The Federal Reserve has for years been pulling back on producing data detailing U.S. money supply, and that is a big mistake, according to the Center for Financial Stability. While money is increasingly driving economic and financial market activities, the Fed “seems less committed to actually measuring monetary quantities,” the research center said in a note on Monday. It also said that at a time when worries about inflation are on the rise, measuring money growth is critical to understanding what will happen to price pressures, adding that the Fed’s pullback on money data is at odds with its legal mission. The center...

TOKYO—The Bank of Japan on Tuesday slightly raised its growth forecast for Japan’s current fiscal year, predicting a lift from the global economic recovery, but it said inflation was unlikely to reach the bank’s 2% target for at least three more years.

Despite its weak inflation view, the bank stood pat on monetary policy after it made a number of tweaks to its easing program last month including removing a target for annual purchases of stock funds.

In...

Home-price growth accelerated to a new 15-year high in February, as homebuying demand remained strong and the number of homes for sale held near a record low.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 12% in the year that ended in February, up from an 11.2% annual rate the prior month. February marked the highest annual rate of price growth since February 2006.

Demand for homes has surged in the past year as mortgage interest rates held near record lows. Sales of previously owned homes, which make up the bulk of the housing market, rose in 2020 to their highest annual level since 2006, according to the National Association of Realtors.

The supply of homes for sale fell to a record low in January and stayed at that level in February, NAR said. Mortgage-finance company Freddie Mac recently estimated that the U.S. housing market is 3.8 million...

Sweden’s central bank said Tuesday that it still expects the key repo rate to remain unchanged at 0% in the years to come, with updated forecasts showing the repo rate remaining unchanged throughout its forecast horizon that runs to the second quarter of 2024.

The Riksbank said Sweden’s economic recovery is well underway, despite increasing coronavirus infections. However, it said a continued expansionary monetary policy will be needed over the next few years to support the economy and bring inflation close to the target more...

As the U.S. economy springs back to life, one of the biggest challenges that Federal Reserve officials will face on the monetary policy front is price inflation, which they expect will post a temporary jump.

One factor likely to drive price pressures that could affect whether the expected rise in inflation is short-lived comes down to prices for used cars. In a research note on Monday, Pantheon Macroeconomics Chief Economist Ian Shepherdson warned that used-car prices will play a notable role in inflation dynamics, and that...

Orders for long-lasting manufactured goods rose slightly in March, reversing course from the previous month when ongoing supply-chain challenges for U.S. factories helped fuel the first monthly decline in close to a year.

New orders for durable goods—products designed to last at least three years, such as computers and machinery—increased 0.5% to a seasonally adjusted $256.3 billion in March when compared with February, the Commerce Department said Monday.

Orders for durable goods have increased 10 out of the last 11 months. Economists surveyed by The Wall Street Journal expected a 2.2% gain, after an upwardly revised 0.9% decrease the previous month.

Low business and retail inventories and increased demand during the pandemic have translated to increased demand for manufacturers for much of the past year, but supply-chain issues continue to constrain production and delay some shipments.

Consumer spending, boosted by government stimulus...

The Federal Reserve has dropped hints of a change in the settings of its tool kit used to control interest rates, but many observers don’t see that happening at this week’s monetary policy meeting.

The rate-setting Federal Open Market Committee is expected to maintain its near-zero short-term interest-rate target and $120 billion monthly bond buying when it meets Tuesday and Wednesday. In a research note Friday, J.P. Morgan economist Michael Feroli said his bottom line for the meeting is that it will be uneventful.

That...

U.S. durable-goods orders are expected to rebound in March after bad weather disrupted supply chains a month earlier. Until the February setback, orders for long-lasting manufactured goods had increased for nine straight months amid strong demand for consumer goods and rising business investment.

WASHINGTON—As the economic recovery evolves from forecast to reality, the Federal Reserve will face a question that has vexed it in the past: how to signal its eventual tightening of the money spigot.

The process of ending the Fed’s giant bond-buying program, and subsequently raising interest rates, will take years unless inflation unexpectedly surges. Its first step down that road will be to start talking about it in the coming months or weeks—Chairman Jerome Powell’s next big test with financial markets.

Officials will begin by debating how and when to scale back, or taper, the $120 billion-plus of Treasury and mortgage bonds the Fed has been buying each month since last June to hold down long-term borrowing costs.

That conversation hasn’t yet kicked off, according to public comments from central bankers and minutes from their March 16-17 policy meeting. The Fed said in a postmeeting statement that the U.S. labor market and inflation would have to...

After the near meltdown of the Treasury bond market a year ago, the Federal Reserve still has some anxiety about the underlying health of a part of the financial system that serves as a benchmark for borrowers and lenders across the planet.

Federal Reserve Bank of Boston leader Eric Rosengren said that many of the same issues that shook the market when the coronavirus pandemic took hold could flare up again if new trouble arrived. He said in an interview Monday that he wants the multitrillion-dollar Treasury market to be more...

Federal Reserve Bank of New York President John Williams said Wednesday he doesn’t know when the Federal Reserve will be able to dial back its support for the U.S. economy’s recovery.

“I’m 100% supportive of how we’ve been approaching this,” Mr. Williams said in a virtual appearance, referring to the Fed’s current near-zero interest rate stance and its $120 billion a month in bond buying.

As...

Federal Reserve Chairman Jerome Powell is a people person whose job as the world’s most powerful central banker won’t let him scratch that itch.

In a virtual appearance Wednesday, Mr. Powell said the trappings of his position make it hard for him to speak with everyday Americans, which is something he would like to do.

“People don’t come up...

Unemployment claims declined to the lowest level since the pandemic struck last spring, adding to signs the U.S. economic revival is picking up speed.

Jobless claims, a proxy for layoffs, fell to 576,000 last week from 769,000 a week earlier.

That is the lowest weekly figure since March 2020, but still way above the levels of around 220,000 that prevailed early last year, before the coronavirus pandemic hit the U.S. economy.

“The labor market is on a recovery path,” said AnnElizabeth Konkel, economist at the job site Indeed. “The recovery is 100% tied to the public health situation,” she added.

The economy is showing signs of improvement as vaccination rates power consumer spending, governments relax restrictions on businesses, and households and federal-stimulus funds flow through the economy.

ISTANBUL—Turkey’s central bank held interest rates steady on Thursday in the first major decision since President Recep Tayyip Erdoganreplaced the institution’s chief last month in a move that sparked a selloff in Turkish assets.

The bank kept its key one-week repo rate at 19%, a move that is unlikely to woo foreign investors back. The ousting of Gov. Naci Agbal was the latest in a series of abrupt economic decisions by Mr. Erdogan, and has heightened concern over the nation’s economic stability and intensified the political challenges for Turkey’s leader.

Mr. Agbal’s removal caused investors to pull nearly $2 billion from the country in the following weeks. During his four months in office, Mr. Agbal had inspired investors’ confidence by raising interest rates in an effort to control inflation, but he ran afoul of Mr. Erdogan, who favors low rates to encourage economic growth.

The new governor, Sahap Kavcioglu, is a former member of parliament from...

South Korea’s central bank on Thursday kept its policy rate unchanged at a record-low 0.50%, amid concerns about the resurgence of local Covid-19 cases weighing on the economy.

The Bank of Korea is widely forecast to stand pat through 2021 to support growth despite signs of an economic recovery.

All 14 economists polled by The Wall Street...

WASHINGTON—Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will begin to slow the pace of its bond purchases “well before” raising interest rates.

The Fed has been buying at least $120 billion a month of Treasury debt and mortgage-backed securities since last June to hold down long-term borrowing costs. Since December, the central bank has said the economy must make “substantial further progress” toward its goals of maximum employment and 2% inflation before it scales back those purchases.

“We will taper asset purchases when we’ve made substantial further progress toward our goals, from last December when we announced that guidance,” Mr. Powell said in a virtual event held by the Economic Club of Washington, D.C. “That would in all likelihood be before—well before—the time we consider raising interest rates.”

The Fed has said it will hold rates near zero until it sees the labor market return to full employment and inflation...

Underlying consumer level inflation isn’t as hot as government data released Tuesday suggests, according to a report from the Federal Reserve Bank of Cleveland. The bank says its median consumer-price index, which removes factors moving upward or downward the most in a given month, had inflation up at a 2% annual pace in March. That compares with the 2.6% year-over-year gain in the conventional CPI. Cleveland Fed data also shows the underlying trend of inflation may have even cooled. The bank’s median CPI rose 2.1% in February and was even higher in year-over-year readings in the closing months of 2020. Still, it is important...

Federal Reserve Bank of Boston President Eric Rosengren in an interview with The Wall Street Journal on Monday said he sees no urgency for the Federal Reserve to raise interest rates even with a positive economic outlook, and laid out some guidance on how much of an inflation increase he is willing to tolerate. Mr. Rosengren also flagged where he sees risks in the financial system and said research by the Fed related to climate change is entirely appropriate. Here is a transcript of the interview, lightly edited for clarity.

MICHAEL S. DERBY: One place I wanted to start out is a place that some of your colleagues have talked about recently. What was the liftoff dot you submitted to the [Summary of Economic Expectations] forecast back at the March FOMC meeting?

MR. ROSENGREN: Yeah, so I don’t publicly talk about my liftoff dot. What I would say is that I’m expecting a very strong economy over the course of this year, I’m expecting the unemployment rate to get...

Federal Reserve Bank of Philadelphia President Patrick Harker said Tuesday there is no urgency for the U.S. central bank to pull back on its support for the economy.

“I still think that a combination of increased vaccinations, falling Covid-19 case rates, and a huge dose of fiscal stimulus should buoy the national economy,” Mr. Harker said in the text of a speech.

“Fed...

U.S. consumer prices picked up sharply in March as the economic recovery gained momentum, partly reflecting higher gasoline prices.

The Labor Department said Tuesday that the consumer-price index—which measures what consumers pay for everyday items including groceries, clothing, recreational activities and vehicles—jumped 2.6% in the year ended March, and rose a seasonally adjusted 0.6% in March from February.

The so-called core CPI, which excludes the often-volatile categories of food and energy, climbed 1.6% over the prior year, and was up 0.3% in March from February.

“Inflation in March 2021 is still under control,” said Gus Faucher, chief economist at the PNC Financial Services Group, before the report was released. “It takes time for inflationary pressures to build in the economy.”

March’s reading marks the start of what many economists expect to be a monthslong upswing in prices, after nearly a year of muted overall inflation as the...

Cases of Covid-19 infections should fall over the coming months, a new report from the Federal Reserve Bank of San Francisco says. “Accumulated natural immunity stemming from prior infections appears to explain much of the recent decline in new infections and should continue to exert a strong downward pressure on infections over the weeks ahead,” Daniel Wilson, an economist at the bank, writes. That means cases of infection should decline into early June, he notes. But as has been the case ever since the pandemic emerged just over a year ago, uncertainty abounds. Mr. Wilson writes that “important risks could slow or even...

U.S. consumer prices likely picked up sharply in March as the economic recovery gained momentum, partly reflecting higher gasoline prices, according to economists surveyed by The Wall Street Journal.

They expect the Labor Department to report Tuesday that the consumer-price index—which measures what consumers pay for everyday items including groceries, clothing, recreational activities and vehicles—jumped 2.5% in the year ended March, and rose a seasonally adjusted 0.5% in March from February.