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Fed Announces Hawkish 25bps Rate Hike, Signals Hikes At Every 2022 Meeting As Bullard Dissents

Fed Announces Hawkish 25bps Rate Hike, Signals Hikes At Every 2022 Meeting As Bullard Dissents

A little background:

By now, enough has been…

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2 years ago

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Fed Announces Hawkish 25bps Rate Hike, Signals Hikes At Every 2022 Meeting As Bullard Dissents

A little background:

By now, enough has been said about what the Fed may do today: consensus expects that to fight soaring inflation, the Fed will enact a 25bps rate hike (but not 50bps unless Powell really wants to shock markets), the first since 2018, together with forward guidance for a string of hikes. Considering where inflation is, it is very clear by now that the Fed is far behind the curve - the list time CPI was here, the Fed Funds rate was 15%!

Needless to say, a rate hike has long been priced in by the market which sees more than 100% odds of a 25 bps hike (and small odds of a 50bps rate hike) and more than 7 rate hikes for all of 2022.

Consensus also expects a a mention of Ukraine risk, and while the Fed is not expected to provide details on B/S reduction, it may share a light calendar guide; Consensus also expects dots to be raised to four/five hikes in 2022 at 1.1%/1.4%) but the "terminal rate" dot will unchnaged; elsewhere, the 2022 GDP dot will stay at 3.3% while the Fed raises both the 2022 and 2023 PCE dots.

The FOMC may, of course, surprise either hawkish or dovish. Here is how to determine which way the Fed is leaning:

  • Dovish: Any hike dissenters: no forward guidance for hikes in statement; strong concerns over Ukraine in statement FFR 2022 dot £ 0.9%. long run dot
  • Hawkish: Shock 50bps hike, or any dissenters to just 25bps: no mention of Ukraine risk; concern over long-run inflation expectations; details on B/S reduction; 2022 FFR dot > 1.4; long run FFR dot > 2.5%; 2022 GDP dot > 3 4%: rise in 2024 PCE dot.

Ian Lyngen at BMO Capital Markets is among those in the dovish camp: he anticipates a more cautious liftoff by the Fed than is implied by the futures market: “This isn’t to suggest the chair won’t emphasize the need to address accelerating inflationary pressures with a series of measured and predictable rate increases -- after all, this is the beginning of a hiking campaign."

Before the press briefing, the biggest news should be in the 2022 dot plot, according to Bloomberg. The FOMC was at three hikes in December. That will move up, and economists surveyed by Bloomberg are looking for four hikes, but many Wall Stret economists see five, while markets as noted above, are pricing in around seven hikes, or one at every meeting this year. There’s a plausible case for four, five, six or seven hikes in the new dots. The 2022 dots of course have the likelihood of moving market pricing, which has already moved up over the course of the last few months.

With a hike in the bag, Shawn Cruz, senior market strategist at TD Ameritrade said that “what is going to be interesting is what they say about their intentions for the balance sheet. I think that was a little bit of a surprise for markets when they announced that they were also going to start running off the balance sheet this year, and I wonder if that is maybe at least going to get softened a little bit at the meeting."

Meanwhile, as Bloomberg's Ye Xie notes, 2Y yields have moved 160 bps over the past six months, marking the biggest jump at the start of a Fed tightening cycle in modern history. Even so, markets indicate tightening will likely slow from some seven hikes this year to less than two in 2023, before cuts in late 2023/early-to-mid 2024.

Meanwhile, inflation expectations embedded in breakeven rates remain well above the Fed’s target in the next few years (5y BE is at ~3.5%).  Taken together, the markets are saying the Fed will front load the tightening, push rates to a neutral, but not too restrictive level, while tolerating inflation above its 2% target for a persistently long period of time.   In other words, as Xie concludes, "Jerome Powell is not Paul Volcker." But we knew that already.

So with that in mind, here is what the Fed just announced:

  • Fed Raises Funds Rate Target Range 25 Bps to 0.25%-0.5%
  • Fed Signals 6 more hikes in 2022
  • Fed Says Inflation Elevated, Cites Broader Prices Pressures
  • Fed Says Ukraine War May Create Inflation Pressure, Slower Growth
  • Fed Forecasts Rates at 2.8% End ‘24, Long-Run Cut to 2.4%
  • Fed Median Forecast Sees Inflation at 4.3% End 2022, 2.7% 2023
  • Fed Median Shows Unemployment at 3.5% End 2022, 3.5% End 2023
  • Fed Raises Ior 25 Bps to 0.4%, Discount Rate Increased to 0.5%

Bullard dissented, opting for a 50bps rate hike!

  • James Bullard, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1/2 to 3/4 percent

Here is a redline of the FOMC statement:

Here is a summary of the Fed's economic projections:

Longer-run median unemployment rate 4% compares to previous forecast of 4% at Dec. 15, 2021 meeting

  • 2022 median jobless rate at 3.5% vs 3.5%
  • 2023 median jobless rate at 3.5% vs 3.5%
  • 2024 median jobless rate at 3.6% vs 3.5%

Longer-run real GDP median projection of 1.8% compares to previous forecast of 1.8%

  • 2022 median GDP growth 2.8% vs 4.0%
  • 2023 median GDP growth 2.2% vs 2.2%
  • 2024 median GDP growth 2.0% vs 2.0%

Longer run PCE inflation median at 2.0% compares to previous forecast of 2.0%

  • 2022 median PCE inflation 4.3% vs 2.6%
  • 2023 median PCE inflation 2.7% vs 2.3%
  • 2024 median PCE inflation 2.3% vs 2.1%
     
  • 2022 median core PCE inflation 4.1% vs 2.7%
  • 2023 median core PCE inflation 2.6% vs 2.3%
  • 2024 median core PCE inflation 2.3% vs 2.1%

Longer run Fed funds median at 2.4% compares to previous forecast of 2.5%

  • 2022 median Fed funds 1.9% vs 0.9%
  • 2023 median Fed funds 2.8% vs 1.6%
  • 2024 median Fed funds 2.8% vs 2.1%

And visually (link):

The take home here: year-end 2022 growth cut from 4.0% to 2.8%, while inflation has been hiked from 2.7% to 4.1%. Stagflation?

Diane Swonk tells Bloomberg that we will see “very weak growth" and notes that it is fanciful to think we won’t see an increase in the unemployment rate. "The Fed has been behind the curve on inflation," she adds.

A look at the Fed's dots indicated that the benchmark rate at end 2022 is about 1.9%, which is far more hawkish than economists surveyed by Bloomberg were looking for, but is in line with where the market pricing is.

It is even more notable that the median dot-plot forecast for the federal funds rate at the end of 2024 has been raised from 2.1% to 2.75%. So, that’s an overshoot of the neutral 2.5%. And what is even more bizarre, as the Fed hikes 2024 rate to 2.75% it cut its median loner-run dot to 2.375% now from 2.5%.

As Bloomberg notes, that’s a very interesting shift by the Fed on the long-run policy rate. That downshift suggests that, once the supply-chain issues are over and the pandemic has passed, policy makers very much see the same old secular stagnation phenomenon returning.

Also, as Neil Dutta at Renaissance Macro points out, Covid is officially over: “The Fed deleted the reference noting that the path of the economy depends on the course of the virus.”

Perhaps more importantly, and the reason why stocks are getting hammered, is that the Fed’s dot plot is penciling in rate hikes at every remaining meeting this year. Speaking on Bloomberg TV, Guggenheim's Scott Minerd says that the Fed is at a “level of panic” and the dot plot has an erratic nature. “I think they are in an inflation panic."

That said, it could have been worse - the Fed could have launched QT and it did not. In fact, there was not much clarity on the Fed’s quantitative tightening program as some had expected. "The Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.” There was an outside chance of getting a full plan today including a start date, but we have to wait for a “coming” meeting for that.

That is odd, because as Powell said in his Senate Banking Committee hearing this month, the Fed would set the caps for balance-sheet reduction at this meeting. So, as BBG's Chris Anstey notes, "perhaps we get more -- market-moving -- information about the plan when the FOMC minutes come out. Unless Powell gives us different guidance in his press briefing."

Putting it all together, and explaining the hawkish reaction across assets, the Fed's dots have finally caught up with the market in 2022 and are now above the market in 2023. however, the market now expects rate cuts in 2024 (even as the Fed remains at 2.75%) due to the Fed's hiking into a slowdown.

Tyler Durden Wed, 03/16/2022 - 14:07

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International

EUR/AUD bearish breakdown supported by additional China fiscal stimulus and AU inflation

Weak PMI readings from the Eurozone, an increase in China’s budget deficit ratio, and renewed inflationary pressures in Australia may trigger a persistent…

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13 hours ago

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October 24, 2023

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  • Weak PMI readings from the Eurozone, an increase in China’s budget deficit ratio, and renewed inflationary pressures in Australia may trigger a persistent bearish sentiment loop in EUR/AUD.
  • Watch the key short-term resistance at 1.6700 for EUR/AUD.
  • A break below 1.6250 key medium-term support on the EUR/AUD may trigger a multi-week bearish impulsive down move.

The Euro (EUR) tumbled overnight throughout the US session as it erased its prior gains against the US dollar recorded on Monday, 23 October; the EUR/USD shed -104 pips from yesterday’s intraday high of 1.0695 to close the US session at 1.0591, its weakest performance in the past seven sessions.

Yesterday’s resurgence of the USD dollar strength has been attributed to a robust set of October flash manufacturing and services PMI data from the US in contrast with weak readings seen in the UK and Eurozone that represented stagflation risks.

Interestingly, the Aussie dollar (AUD) has outperformed the US dollar where the AUD/USD managed to squeeze out a minor daily gain of 21 pips by the close of yesterday’s US session. The resilient movement of the AUD/USD has been impacted by positive news flow out from China, Australia’s key trading partner.

China’s national legislature has just approved a budgetary plan to raise the fiscal deficit ratio for 2023 to around 3.8% of its GDP which was above the initial 3% set in March and set to issue additional sovereign debt worth 1 trillion yuan in Q4. This latest round of additional fiscal stimulus suggests that China’s top policymakers are expanding their initial targeted measures to address the ongoing severe liquidity crunch in the domestic property market as well as to reverse the persistent weak sentiment inherent in the stock market.

In addition, the latest set of Australia’s inflation data surpassed expectations has also reinforced another layer of positive feedback loop in the Aussie dollar which in turn may put Australia’s central bank, RBA on a “hawkish guard” against cutting its policy cash rate too soon.

The less lagging monthly CPI Indicator has risen to an annualized rate of 5.6% in September, above consensus estimates of 5.4%, and surpassed August’s reading of 5.2% which has translated into a second consecutive month of uptick in inflationary growth.

In the lens of technical analysis, a potential bearish configuration setup has emerged in the EUR/AUD cross pair from a short to medium-term perspective.

Major uptrend phase of EUR/AUD is weakening

.

Fig 1: EUR/AUD medium-term trend as of 25 Oct 2023 (Source: TradingView, click to enlarge chart)

Even though the price actions of the EUR/AUD have been oscillating within a major ascending channel since its 25 August 2023 low of 1.4285 and traded above the key 200-day moving average so far, the momentum of this up movement is showing signs of bullish exhaustion.

Yesterday (24 October) price action ended with a daily bearish reversal “Marubozu” candlestick coupled with the daily RSI momentum indicator that retreated right at a significant parallel resistance in place since March 2023 at the 65 level which suggests a revival of medium-term bearish momentum.

EUR/AUD bears are now attacking the minor ascending support

Fig 2: EUR/AUD minor short-term trend as of 25 Oct 2023 (Source: TradingView, click to enlarge chart)

The EUR/AUD has now staged a bearish price action follow-through via the breakdown of its minor ascending support from its 29 September 2023 low after a momentum bearish breakdown that was flashed earlier yesterday (24 October) during the European session as seen from the 4-hour RSI momentum indicator.

Watch the 1.6700 key short-term pivotal resistance (also the 50-day moving average) for a further potential slide toward the intermediate supports of 1.6460 and 1.6320 in the first step.

On the other hand, a clearance above 1.6700 invalidates the bearish tone to see the next intermediate resistance coming in at 1.6890.

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International

GigXR partners with NUS Medicine to deliver holographic clinical scenarios for gastroenterology training

GigXR, Inc., a global provider of holographic healthcare training, announced today its partnership with the Yong Loo Lin School of Medicine, National University…

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October 24, 2023

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GigXR, Inc., a global provider of holographic healthcare training, announced today its partnership with the Yong Loo Lin School of Medicine, National University of Singapore (NUS Medicine), one of the world’s leading medical schools, to introduce a new gastrointestinal module for the award-winning HoloScenarios application. Created to better prepare medical and nursing students in diagnosing and treating acute gastrointestinal diseases, HoloScenarios: Gastrointestinal delivers evidence-based, robust clinical simulations that present hyperrealistic holographic simulated patients and medical equipment to be used in any physical learning environment, accessed anywhere in the world.

Credit: Yong Loo Lin School of Medicine, National University of Singapore (NUS Medicine), and GigXR

GigXR, Inc., a global provider of holographic healthcare training, announced today its partnership with the Yong Loo Lin School of Medicine, National University of Singapore (NUS Medicine), one of the world’s leading medical schools, to introduce a new gastrointestinal module for the award-winning HoloScenarios application. Created to better prepare medical and nursing students in diagnosing and treating acute gastrointestinal diseases, HoloScenarios: Gastrointestinal delivers evidence-based, robust clinical simulations that present hyperrealistic holographic simulated patients and medical equipment to be used in any physical learning environment, accessed anywhere in the world.

Going beyond linear step-based training traditionally seen with virtual reality (VR), HoloScenarios: Gastrointestinal uses mixed reality (MR) to simulate the entire patient journey, while including branching logic to catalyze variance in learning experiences. From taking basic medical history to performing invasive testing and emergency procedures, the new module empowers learners to master vital medical decision-making and manual skills as they would see them in real-life clinical scenarios and patient care.

HoloScenarios: Gastrointestinal is created in collaboration with renowned medical professionals and educators from NUS Medicine who specialize in the fields of Gastrointestinal (GI) Surgery and holographic medical training. The module is delivered by the Gig Immersive Learning Platform, the enterprise-scale platform enabling the creation, curation, and sharing of immersive training applications and modules made by the world’s preeminent healthcare institutions and MR developers.

“Gastrointestinal pathologies can be complex and challenging to diagnose. This module will allow learners to form a deeper understanding and appreciation of the gastrointestinal tract, especially the three-dimensional understanding of anatomy and body functions,” said Associate Professor Alfred Kow Wei Chieh from the school’s Department of Surgery and Assistant Dean (Education) at NUS Medicine. “We believe mixed reality is the next evolution in healthcare training, and collaborating with immersive platform innovators like GigXR helps us to bring this vital content to more learners globally and, ultimately, improve patient care.”

With international medical and surgical credentials that include MBBS (S’pore), M Med (Surg), FRCSEd (Gen Surg), FAMS, and FACS, Associate Professor Kow has trained thousands of healthcare professionals and advanced surgical fellows. He received the 2023 REAL Advancing in Liver Transplantation Award for his contributions to global liver transplantation education and is a founding member of The Holomedicine® Association.

“GigXR has one of the most advanced and comprehensive platforms in mixed reality, especially in medical training, and enables the exchange of developments, innovation, and expertise with a wider community across Asia and beyond,” added Associate Professor Kow. He is also the Head and Senior Consultant of the Division of Hepatobiliary & Pancreatic Surgery, Department of Surgery, at Singapore’s National University Hospital (NUH), the teaching hospital of NUS Medicine.

The new module also delivers enhanced realism in training learners to more accurately diagnose and treat acute gastrointestinal diseases. Whereas VR has been widely used in gastroenterology training for linear step-based skills, such as in endoscopic procedures, it is limited in its ability to simulate fully realized clinical scenarios. Holographic patient simulation in MR merges hyper-realistic holograms in physical learning spaces that accurately reflect the clinical environment and tools with which learners will care for real patients.

With HoloScenarios: Gastrointestinal, learners can interact with the holographic simulated patients, holographic medical equipment, instructors, and each other. This allows them to master both technical and soft skills, such as patient empathy and team communication, in hyper-realistic, safe-to-fail environments that reduce cognitive load. If the holographic patient displays the need for further care, such as a definitive surgery, learners can discuss a definitive treatment plan.

To gain a deeper evaluation of outward symptoms, co-located learners can safely walk around the patient hologram that is displayed on top of their real-world surroundings. Whereas VR locks learners into a virtual “box,” MR enables clear visibility and awareness of physical surroundings. This allows learners to move freely without fear of physical collisions and safety so they can fully focus on learning key gastrointestinal treatment, diagnostic, and communication skills with peers and instructors.

“In healthcare, educators are not only trying to help learners master and retain vital knowledge, but recall and apply it when a patient’s life may be at risk,” said Dr. Gao Yujia, MBBS (S’Pore), MRCS, FRCSEd, Consultant and Assistant Group Chief Technology Officer at Singapore’s National University Health System, and Vice Chairman of The Holomedicine® Association. “With HoloScenarios: Gastrointestinal, learners will have the ability to not only visualize the presentation of a given disease in 3D but better understand how to apply key learnings in the clinical context and within team environments.” Dr Gao is also the Director of Undergraduate Medical Education for Surgery at NUS Medicine.

With scenarios across gastrointestinal pathologies that include gastrointestinal bleeding, intestinal obstruction, and chronic liver failure, learners can master complex and potentially critical situations. They can learn, for example, how to stabilize patients who are dehydrated, bleeding, or septic, as well as the types of diagnostic procedures that may then be required to get a definitive diagnosis. Using mixed reality headsets or any Android, iOS smartphone or tablet, learners can access HoloScenearios: Gastrointestinal from anywhere for remotely distributed, yet highly immersive simulation.

“Immersive technology has accelerated the sharing of expertise for teaching, training, and simulation. Mixed reality, with its natural propensity to facilitate hyperrealistic, safe, and collaborative learning, continues to accelerate both the quality and scale of training outcomes,” said Jared Mermey, CEO of GigXR. “We are immensely proud to partner with NUS Medicine which has been at the forefront of adopting mixed reality in both clinical and educational use cases. By bringing their esteemed expertise onto our platform with the co-creation of HoloScenarios’ newest module, we believe clinical breakthroughs in diagnosing and treating gastrointestinal diseases will take a giant leap forward.”

Designed specifically for pedagogy, the Gig Immersive Learning Platform is trusted by over 70 enterprise-scale healthcare institutions across four continents to build full immersive curricula utilizing a robust content catalog – all of which is managed from a single dashboard. Third-party content developed by leading 3D medical partners, including DICOM Director, 3D4Medical by Elsevier, and ANIMA RES, seamlessly integrates with the platform to provide complementary, in-depth anatomy applications that empower learners with a broader physical context for the pathologies that they study.

“The Gig Immersive Learning Platform has quickly become the premier educational, social network for sharing healthcare training expertise in the immersive format, spanning global healthcare institutions and the Department of Defense to content developers and enterprises large and small,” said David King Lassman, Founder of GigXR. “HoloScenarios: Gastrointestinal marks the latest milestone in our rapidly expanding catalog, which now boasts a dozen different licensable training modules that span holographic simulated patients, clinical scenarios, anatomy, pathophysiology, and 3D medical imaging.”

NUS joins the University of Cambridge and Cambridge University Hospitals (CUH) NHS Foundation Trust, University of Michigan, and Morlen Health, a subsidiary of Northwest Permanente, P.C., as the world-class institutions partnering with GigXR to co-create holographic healthcare training. These simulations include modules centered around Respiratory diseases, Basic Life Support, Advanced Cardiac Life Support, Neurology scenarios, and now, with NUS, Gastrointestinal diseases.

GigXR and NUS Medicine plan to launch HoloScenarios: Gastro in Spring 2024. For more information on GigXR, visit GigXR.com or email sales@gigxr.com. For more information on NUS, visit nus.edu.sg.

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Public support for extending the 14-day rule on human embryo research indicated by foundational dialogue project

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded…

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October 24, 2023

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The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Credit: Dr Matteo Molè (Babraham Institute)

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Headline findings include:

  • Appetite for review of the 14-day rule: Participants recognised that extending the 14-day rule could open up ways to achieve benefits in fertility and health, with participant support for reviewing this, including national discussion.
  • Confidence in regulation: There was a high level of confidence in how human embryo research is regulated, despite a low level of awareness of the regulators and statutes themselves. This included strong desire to see robust regulation governing any changes to the 14-day rule and further regulation for the use of stem cell-based embryo models.
  • Support for improved fertility and health outcomes: The strongest hopes for future human embryo research were where new knowledge would deliver improvements in understanding miscarriage, preventing health conditions such as spina bifida and raising the success rates of IVF procedures.
  • Concerns about genetically engineering humans: The public expressed concerns on the application of developments in this field to genetically alter or engineer humans.

The dialogue engaged a group of 70 people broadly reflective of the UK population in over 15 hours of activities including a series of online and face-to-face workshops with scientists, ethicists, philosophers, policy makers and people with relevant lived experience (such as embryo donors from IVF procedures).

Dr Peter Rugg-Gunn, scientific lead for the HDBI and senior group leader at the Babraham Institute, said: “Recent scientific advances bring incredible new opportunities to study and understand the earliest stages of human development. To ensure this research remains aligned with society’s values and expectations, we must listen and respond to public desires and concerns. This public dialogue is an important first step and as a scientist I am reassured by the findings but there is still a long way to go to fully understand this complex issue.” 

The report is exceedingly timely, following notable scientific advances in human developmental biology presented at conferences and in leading scientific journals in recent months. As well as generating excitement in scientific fields and with the public, announcement of these breakthroughs also prompted some concerns and criticisms, with the view that these findings raised significant ethical issues. The dialogue provides insight into public considerations following deliberation on early human embryo research. The hope is that it will act as a foundational reference point that others in the sectors can build upon, such as in any future review of the law on embryo research.

Professor Robin Lovell-Badge, co-chair of the HDBI Oversight group, senior group leader and head of the Laboratory of Stem Cell Biology and Developmental Genetics at the Francis Crick Institute, said: “We have learnt a lot about human development before 14 days, but there are areas of investigation that could change how we understand development, and associated diseases, that lie beyond our current window of knowledge. Despite low awareness of current laws, members of the public quickly recognised many of the critical issues researchers are keenly aware of when it comes to growing embryos beyond the current limit. This dialogue also reinforced the fact that the public are in support of research that will yield better health outcomes, and in this case, increase the success of IVF procedures.

Other countries will be looking to the UK to see how we deal with the 14-day rule; we are not there yet with any mandate to make a change, but this does give a strong pointer. The next step will be to delve deeper into some of the topics raised through this dialogue as they apply to specific areas of research, as well as feeding into policy changes.”

The 14-day rule and the regulation of stem cell-based models

When considering the regulation of research involving human embryos, the dialogue explored participant’s views on the 14-day rule. Introduced in 1990, the 14-day rule is a limit enforced by statute in the UK. It applies to early human embryos that are donated by consent to research and embryos that are created for research from donated sperm and eggs. It limits the amount of time early human embryos can be developed in a laboratory for scientific study to 14 days after fertilisation. Due to technical advances, it is now possible to grow embryos in the lab past 14 days, but researchers are not allowed to by the law. If the law changed, it would open up this ‘black box’ of development with researchers able to investigate this crucial time in development from 14-28 days after fertilisation.

Professor Bobbie Farsides, co-chair of the HDBI Oversight group and Professor of Clinical and Biomedical Ethics at the Brighton and Sussex Medical School, said: “It has been a fascinating experience to support HDBI in the undertaking of this exercise.  I commend the participants for the care and mutual respect they have shown throughout. Their engagement and commitment to a subject few of them had previously considered allowed for a wide range of views to be expressed and considered. I hope the scientists involved will be encouraged by the high level of interest in their work, and will want to keep the public conversation going around these important subjects.”

The dialogue included participant discussion on what a change to the 14-day rule might look like, and identified points that should be considered, such as defining what the benefits of extending the rule would be and potential mis-alignment with human embryo research regulations in other countries.

Participants acknowledged the astonishing possibilities of stem cell-based embryo models. The majority of participants would like to see these models further regulated. Work in establishing potential governance mechanisms is already underway. In recognition of the need for additional guidance and regulation in this area, the Cambridge Reproduction initiative launched a project in March 2023 to develop a governance framework for research using stem cell-based embryo models and to promote responsible, transparent and accountable research.

Future steps

A key outcome from the public dialogue is the identification of areas for further exploration, with participants proposing how future national conversations might be shaped. It is hoped that the project acts as a reference base for both widening engagement with the subject and also prompting deeper exploration of areas of concern.

Dr Michael Norman, HDBI Public Dialogue coordinator and Public Engagement Manager at the Babraham Institute, said: “This dialogue shows that people want the public to work closely with scientists and the government to shape both future embryo research legislation and scientific research direction. It is crucial that others in the sector build on these high quality, two-way engagement methodologies that allow for a genuine exchange of views and information to ensure that the public’s desires and concerns are listened to and respected. Transparency and openness around science is vital for public trust and through this we, as a society, can shape UK research in way that enriches the outcomes for all.”

Public Participant (Broad public group, south) said: “I do think that an extension of this public dialogue, and educating a wider society has a benefit in itself. This is really complex and sensitive and the wider you talk about it before decisions are made, the better.”

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