Federal Reserve chair, Jerome Powell, warned that higher inflation may postpone any Fed interest rate cuts until later in the year. Recent data show inflation is still above the 2% target, with year-over-year inflation at 3.5% in March.
Federal Reserve Chair Jerome Powell stated that while the Fed plans to cut interest rates this year, it will wait for further evidence of improving inflation and confidence in approaching the 2% target before doing so. The Fed's response to high inflation in 2022 led to 11 rate hikes, bringing inflation down to 3.2% from a peak of 9.1%. Despite signals of three rate cuts, Powell notes the economy's strength allows waiting for inflation data. Market experts debate the possibility of no rate cuts this year.
Federal Reserve Chair Jerome Powell emphasized the importance of further evidence showing a decrease in inflation before contemplating a reduction in interest rates. Powell expressed caution about prematurely lowering the policy rate until there is confidence that inflation is consistently moving towards the 2 percent target. The Federal Open Market Committee decided to maintain rates at 5.25% to 5.5%, the highest level in 22 years, with plans for potential rate cuts depending on the trajectory of inflation.
Minneapolis Federal Reserve Bank President Neel Kashkari indicated that if inflation remains stable, there may be no need for the anticipated two interest rate cuts this year. He highlighted the importance of strong job growth, consumer spending, and GDP growth in questioning the necessity for rate cuts. Despite expectations of rate reductions, Federal Reserve Chair Jerome Powell mentioned the likelihood of lowering the benchmark rate this year. The potential for no rate cuts in 2024 caused a market reaction with stocks dropping, emphasizing the impact of inflation on economic decisions.
Federal Reserve Chair Jerome Powell stated that the Fed is not in a rush to cut interest rates despite investors' expectations, citing strong employment data and the need for inflation to reach closer to 2%. Powell expressed concerns about cutting rates too early, highlighting the risks of inflation popping back up. He also mentioned that waiting too long to cut rates could potentially trigger a recession. Powell noted that he does not foresee rates falling to pre-pandemic levels in the near future. Additionally, Powell emphasized the importance of the Fed's independence from politics in achieving its mandated mission of price stability and maximum employment.
Federal Reserve Vice Chair Philip Jefferson suggested that the central bank's key rate may have to remain at its peak for a while to bring down persistently elevated inflation. Jefferson expects inflation to continue to slow this year and stated that keeping rates steady at the current level could help cool inflation. He omitted any mention of future rate cuts and highlighted the importance of reaching the Fed's 2% target inflation level. U.S. consumer inflation was reported at 3.5% recently. The remarks indicate a potential shift from the previously forecasted rate cuts by the Fed.
UBS Group AG strategists predict that strong US growth and persistent inflation may lead the Federal Reserve to hike rather than cut interest rates, possibly reaching 6.5% by next year. While the banks base case is for two rate cuts this year, UBS sees a growing possibility of inflation staying high, prompting a shift to rate hikes. This outlook reflects concerns about inflation becoming entrenched and a potential deep selloff in bonds and stocks as markets scale back bets on policy easing.
The head of the US central bank, Jerome Powell, stated that while inflation has decreased, it remains above the 2% target in the US, UK, and Europe. Speculation surrounds potential rate cuts by the Federal Reserve, Bank of England, and European Central Bank this year. The gold price reached a new high of $2,295 per ounce due to fears that high inflation may delay action. Eurozone inflation dropped to 2.4% in March, indicating a possible rate cut by the ECB this summer.
The March consumer price index (CPI) report, set to be released, is anticipated to show a year-over-year jump of 3.7% in core CPI, slightly lower than the prior month. Analysts suggest that a cooling of inflation in March could lead to potential interest rate cuts by the Federal Reserve in June. The report's outcome will heavily influence stock and bond markets. This follows Fed Chair Jerome Powell's indication that interest rates could be cut in 2024 once inflation is under control. Inflation pressures persist with core prices expected to rise 3.7% annually.
Fed Chair Jerome Powell discussed the economy and monetary policy at Stanford's Business, Government, and Society Forum, stating that any rate cuts will not be influenced by the presidential election timing. Powell highlighted the Fed's commitment to make decisions based on data and economic conditions, without personal or political bias. Former President Donald Trump had accused Powell of allegedly planning interest rate cuts to benefit the Democrats.
Average 30-year mortgage rates have increased around 14 basis points this week, but with expectations of lower inflation and possible rate cuts by the Federal Reserve, rates are anticipated to trend down in the coming months. Fed Chair Jerome Powell indicated a positive economic outlook and mentioned a potential rate cut later this year. Investors are already pricing in a possible Fed cut in June, which could further drive down mortgage rates. However, Fed officials are cautious and await more cooling inflation data before making any decisions. Mortgage rates are influenced by broader economic factors impacted by Fed moves.
Federal Reserve Chair Jerome Powell reaffirmed the likelihood of interest rate cuts this year due to inflation moving towards 2%, with the S&P 500 rising slightly while the Dow fell; Disney successfully defended against activist investor Nelson Peltz, leading to a 3% stock dip. Energy sector continues as a top performer in the S&P 500.
The US consumer price index (CPI) rose 3.5 percent in March from a year earlier, higher than predicted, leading economists to doubt the Federal Reserve will cut interest rates this year. Stock prices fell and bond yields rose after the CPI report, impacting President Biden's approval ratings. Core prices also increased more than expected. Despite the inflation surge, the US economy appears solid with low unemployment rates. Analysts, like those at Goldman Sachs, have revised rate-cut predictions multiple times due to unpredictable inflation patterns and market reactions.
Unexpectedly high inflation data has led to an increase in mortgage rates, with the average 30-year rate reaching 6.88%, the highest in over a month. Investors now believe the Federal Reserve won't cut rates until September at the earliest, keeping mortgage rates elevated. Inflation remains a concern, impacting the trend of mortgage rates. Home prices are expected to rise as rates drop, leading to increased affordability challenges in the housing market. President Biden has proposed solutions to address housing market issues, but supply shortages continue to hinder affordability for many Americans.
President Biden asserted that inflation was surging when he took office in January 2021, despite federal data indicating otherwise. The latest Consumer Price Index reading revealed that annual inflation accelerated faster than expected for a third consecutive month in March. Inflation remained below 3% until April 2021 when it surged to 4.2% and peaked at a 40-year high of 9.1%. Housing and gasoline costs were significant drivers of inflation, affecting everyday necessities like food and rent. High inflation levels may hinder the Federal Reserve from reducing interest rates as they aim to maintain around a 2% inflation rate.
Jerome Hayden "Jay" Powell (born February 4, 1953) is an American attorney and investment banker who has served since 2018 as the 16th chair of the Federal Reserve. After earning a degree in politics from Princeton University in 1975 and a Juris Doctor from Georgetown University Law Center in 1979, he moved to investment banking in 1984, and worked for several financial institutions, including as a partner of The Carlyle Group. In 1992, Powell briefly served as under secretary of the Treasury for domestic finance under President George H. W. Bush. Powell left Carlyle Group in 2005 and founded Severn Capital Partners, a private investment firm. He was a visiting scholar at the Bipartisan Policy Center from 2010 to 2012, before returning to public service.He became a member of the Federal Reserve Board of Governors after being nominated to the post by President Barack Obama in 2012, he was subsequently elevated to chairman by President Donald Trump (succeeding Janet Yellen), and renominated to the position by President Joe Biden.Powell built his reputation in Washington during the Obama administration as a consensus-builder and problem-solver.Powell received bipartisan praise for the actions taken by the Federal Reserve in early 2020 to combat the financial effects of the COVID-19 pandemic. As the Federal Reserve continued to apply high levels of monetary stimulus to further raise asset prices and support growth, some observers perceived a disconnect between asset prices and the economy. Powell has responded by arguing that supporting the Fed's dual mandate of stable prices and full employment outweighed concern over high asset prices. Time said the scale and manner of Powell's actions had "changed the Fed forever" and shared concerns that he had conditioned Wall Street to unsustainable levels of monetary stimulus to artificially support high asset prices. In November 2020, Bloomberg News called Powell "Wall Street's Head of State", as a reflection of how dominant Powell's actions were on asset prices and how profitable his actions were for Wall Street.Nearing the end of his first year in the White House, President Biden nominated Powell for a second term as Federal Reserve Chair, and the Senate Banking Committee approved of his renomination with only one dissenting vote; he was confirmed to a second term in an 80–19 vote on May 12, 2022. Following President Biden's renomination of Powell, the Fed Chairman retired his previous words "transitory inflation", and indicated a reduction in quantitative easing (QE) and mortgage-backed security (MBS) purchases due to high inflation, with the consumer price index (CPI) in November 2021 having reached 6.8% according to the Bureau of Labor Statistics, the highest level in 40 years.
Average 30-year mortgage rates are in the high 6% range, spiking close to 7% post the latest inflation report, with expectations of rates possibly exceeding 7%. The Federal Reserve may not lower rates until inflation eases, influenced by upcoming data like the personal consumption expenditures price index. Investors anticipate a rate cut in September rather than June, keeping mortgage rates elevated for now but potentially decreasing later in 2024.
The latest Consumer Price Index (CPI) in the U.S. climbed 3.5% in March from a year ago, exceeding the Federal Reserve's 2% target for the third consecutive month. WalletHub compared 23 Metropolitan Statistical Areas (MSAs) to assess the impact of inflation, highlighting Honolulu with a 4.8% increase, Miami-Fort Lauderdale-West Palm Beach region with a 4.9% rise, and San Bernardino-Riverside-Ontario area with a 4.7% hike.
Grocery prices have surged by 21% in the last three years, exceeding the overall pace of inflation, with staples like eggs, detergent, milk, butter, cereal, and toilet paper experiencing significant price increases. In February 2023, grocery prices shot up by 10.2% compared to the previous year. Inflation remains a concern, with February's Consumer Price Index at 3.2%, slightly higher than expected. Fed Chair Jerome Powell aims to address inflation by cutting interest rates. Local grocery stores are working to mitigate the impact, with some offering sales and donations to help families in need.
The chairman of the Board of Governors of the Federal Reserve System is the head of the Federal Reserve, and is the active executive officer of the Board of Governors of the Federal Reserve System. The chairman presides at meetings of the Board.The chairman serves a four-year term after being nominated by the president of the United States and confirmed by the United States Senate; the officeholder serves concurrently as member of the Board of Governors. The chairman may serve multiple terms, pending a new nomination and confirmation at the end of each term, with William McChesney Martin as the longest serving chair from 1951 to 1970 and Alan Greenspan as a close second. The president may not have the legal authority to dismiss a chairman before the end of a term, although this assumption has never been tested in court.The current chairman is Jerome Powell, who was sworn in on February 5, 2018. He was nominated to the position by President Donald Trump on November 2, 2017, and later confirmed by the Senate. He was subsequently nominated to a second term by President Joe Biden, later confirmed by the Senate and sworn in on May 23, 2022.
A review led by former US Federal Reserve head, Dr Ben Bernanke, highlighted that the Bank of England's economic forecasting quality deteriorated due to outdated software and incrementalism, causing large errors in predicting the cost of living crisis. The Bank faced criticism for underestimating the impact of global shocks like COVID lockdowns and the Ukraine invasion on inflation, leading to delayed interest rate hikes. Dr Bernanke recommended major IT upgrades and suggested modeling various economic scenarios for more accurate forecasts.
The Greenspan put was a monetary policy response to financial crises that Alan Greenspan, former chair of the Federal Reserve, exercised beginning with the crash of 1987. Successful in addressing various crises, it became controversial as it led to periods of extreme speculation led by Wall Street investment banks overusing the put's repurchase agreements (or indirect quantitative easing) and creating successive asset price bubbles. The banks so overused Greenspan's tools that their compromised solvency in the global financial crisis of 2007–2008 required Fed chair Ben Bernanke to use direct quantitative easing (the Bernanke put). The term Yellen put was used to refer to Fed chair Janet Yellen's policy of perpetual monetary looseness (i.e. low interest rates and continual quantitative easing).In Q4 2019, Fed chair Jerome Powell recreated the Greenspan put by providing repurchase agreements to Wall Street investment banks as a way to boost falling asset prices; in 2020, to combat the financial effects of the COVID-19 pandemic, Powell re-introduced the Bernanke put with direct quantitative easing to boost asset prices. In November 2020, Bloomberg noted the Powell put was stronger than both the Greenspan put or the Bernanke put, while Time noted the scale of Powell's monetary intervention in 2020 and the tolerance of multiple asset bubbles as a side-effect of such intervention, "is changing the Fed forever."While the specific individual tools have varied between each genre of "put", collectively they are often referred to as the Fed put (cf. Central bank put). In late 2014, concern grew about the emergence of a so-called everything bubble due to overuse of the Fed put and perceived simultaneous pricing bubbles in most major US asset classes. By late 2020, under Powell's chair the perceived everything bubble had reached an extreme level due to unprecedented monetary looseness by the Fed, which simultaneously sent most major US asset classes (i.e. equities, bonds, housing, and commodities) to prior peaks of historical extreme valuation (and beyond in several cases), and created a highly speculative market. By early 2022, in the face of rising inflation, Powell was forced to "prick the everything bubble", and his reversal of the Fed put was termed the Fed call (i.e. a call option being the opposite of a put option).
US stock futures climbed with Dow Jones Industrial Average futures up by 0.3%, S&P 500 futures by 0.3%, and Nasdaq 100 futures by 0.4%. Chair Jerome Powell's reassurance on rate cuts boosted market confidence, shifting focus to the upcoming US jobs report. Expectations for further rate hikes due to economic acceleration have eased. Levi Strauss and BlackBerry saw stock increases due to positive corporate news. General Motors' stock has surged by 25% this year, outperforming Ford and S&P 500, attributed to improved EV execution and shareholder returns.
The Federal Reserve System, commonly known as "the Fed," has faced various criticisms since its establishment in 1913. Critics have questioned its effectiveness in managing inflation, regulating the banking system, and stabilizing the economy. Notable critics include Nobel laureate economist Milton Friedman and his fellow monetarist Anna Schwartz, who argued that the Fed's policies exacerbated the Great Depression. More recently, former Congressman Ron Paul has advocated for the abolition of the Fed and a return to a gold standard.Critics have also raised concerns about the Fed's role in fractional reserve banking, its contribution to economic cycles, and its transparency. The Fed has been accused of causing economic downturns, including the 2007-2008 financial crisis, and of being influenced by private interests. Despite these criticisms, the Federal Reserve remains a central institution in the United States' financial system, with ongoing debates about its role, policies, and the need for reform.
Most U.S. stocks slipped as Treasury yields rose, with the S&P 500 falling 0.2%, Dow Jones rising 0.2%, and Nasdaq falling 0.1%. Federal Reserve officials signaled no immediate interest rate cuts, causing market weakness despite positive corporate earnings. Fed Chair Powell's comments on inflation led to record-high Treasury yields and a shift in rate cut expectations to September. Strong earnings from companies like UnitedHealth supported the market. Treasury yields rose further, reflecting investor concerns. Corporate earnings exceeding estimates boosted investor confidence amid geopolitical tensions. Federal Reserve officials will continue to speak this week.
The Dow snapped a six-day losing streak on Tuesday as investors digested a "higher-for-longer" interest rate mantra from the Federal Reserve. The Dow Jones Industrial Average ( ^DJI ) finished the day up 0.2%, or more than 50 points, following comments from Federal Reserve chair Jerome Powell, who said it will likely take "longer than expected" for the central bank to be confident in its inflation fight. The S&P 500 ( ^GSPC ) and tech-heavy Nasdaq Composite ( ^IXIC ) closed down 0.2% and 0.
US single-family homebuilding in March experienced a 12.4% drop in starts to an annual rate of 1.022 million units, with permits for future construction falling to a five-month low. The resurgence in mortgage rates is deterring buyers, while the housing market recovery faces challenges as interest rate expectations shift. Economists doubt a rate cut in 2024 as the Federal Reserve maintains rates. Homebuilding declined in the Northeast, Midwest, and South but rose in the West. The housing market slowdown reflects caution among builders and buyers amidst market uncertainty.
Citigroup analysts predict gold prices could surpass $3,000 per ounce in the next 6 to 18 months due to geopolitical tensions and inflation concerns. Gold has surged over 15% this year, influenced by Middle East conflicts and the US-Russia-Ukraine war. The Federal Reserve's expected interest rate cuts and Iran's recent actions are driving gold's appeal over fixed-income assets like bonds. Costco is capitalizing on the rally, estimated to earn $200 million monthly from gold bars. Other banks like Goldman Sachs and UBS also raise their forecasts, with Goldman expecting gold to hit $2,700 by year-end.
Yahoo! News
NY Post
Washington Post
ABC News
ABC News
Yahoo! News
NBC
Fox News
Associated Press
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
PANORA
Wikipedia
PANORA
PANORA
PANORA
Wikipedia
PANORA
Wikipedia
PANORA
Wikipedia
PANORA
PANORA
PANORA
PANORA