The Fed considering skipping a hike in June

Hike, hold or skip?

Federal Reserve officials are sounding increasingly split over whether to raise interest rates at their meeting next month or pause their credit tightening campaign. A compromise some have suggested: A skip, where they put off a rate increase next month only to return to it at their following meeting in July.

In contrasting remarks Thursday, Gov. Philip Jefferson outlined the dovish case for patience while Dallas Fed chief Lorie Logan suggested that she's not ready to call a halt to the Fed's tightening campaign.

An option she floated: Skipping action next month.

“The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren't there yet,” Logan told bankers in San Antonio, pointing to elevated core inflation.

Investors lifted bets on an increase at the Fed's June 13-14 meeting as they weighed Logan's remarks, with July also in view. Chair Jerome Powell has an opportunity to provide more guidance when he speaks at a Fed conference in Washington.

Atlanta Fed President Raphael Bostic, who unlike Logan has publicly backed a wait-and-see approach, also has said that not moving in June wouldn't necessarily mean the Fed was done raising rates.

“A pause could be a skip or it could be a hold,” he said during a moderated discussion at a conference hosted by his bank Tuesday on Amelia Island, Florida. “We don't know. There is a lot of uncertainty in the world and so we'll have to see how things play out and get a sense of what's true signal and what's noise and that's going to be a week-to-week thing.”

Policymakers have raised rates 5 percentage points in little more than a year, but inflation remains well above their 2% target and unemployment of 3.4% is the lowest in a generation.

Federal Trade Commission sues to block Amgen deal for Horizon

The U.S. is attempting to block a proposed $26 billion acquisition of Horizon Therapeutics by biotech drug developer Amgen on antitrust grounds.

The Federal Trade Commission said Tuesday that the deal, announced in December, would give Amgen unfair leverage to block competition for Horizon medications. The FTC said the deal would entrench Horizon's monopoly position on treatments for thyroid eye disease and chronic refractory gout.

Amgen did not immediately respond to a request for comment.

The Thousand Oaks company said in December that the acquisition would allow it to expand into rare disease treatments.

Horizon Therapeutics PLC, based in Dublin, Ireland, develops potential treatments for autoimmune and severe inflammatory diseases. Its best-seller, Tepezza, is only approved in the United States and treats eye bulging and double vision from thyroid eye disease.

The FTC said Tuesday that the deal would allow Amgen to use rebates on its existing drugs to pressure bill payers like pharmacy benefit managers into favoring Tepezz and Krystexxa, a treatment for chronic refractory gout.

Household debt ecclipses pre-pandemic levels

U.S. households showed signs of increasing financial stress in the first quarter with credit card balances not declining in the way they typically do at the start of the year and delinquencies rising for most types of consumer loans.

Households added $148 billion in overall debt, bringing the total to $17.05 trillion, according to a report released by the Federal Reserve Bank of New York on Monday. Balances are now $2.9 trillion higher than just before the pandemic.

Consumers typically build up more credit-card debt at the end of the year, during the holiday season and then reduce those balances at the start of the following year, sometimes with the help of tax refunds. But for the first time in 20 years, that wasn't the case this year, suggesting some households are under strain from higher prices and may be relying on credit cards to maintain their spending.

“Credit card balances were flat in the first quarter, at $986 billion, bucking the typical trend of balance declines in first quarters,” researchers wrote in the report.

The overall delinquency rate remained low by historical levels, at 2.6%. But the share of debt that became delinquent — meaning it was at least 30 days late — is rising for most loan types, including credit cards and auto debt.