US central bank raises interest rate to highest level in 15 years
"We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%", said Federal Reserve chariman Jerome Powell.
Interest Rates , Likely to Stay High , Despite Inflation Cooling.
In December, price growth in
the United States cooled, despite the economy
continuing to show signs of weakness.
NBC reports that inflation
ended up at 6.5% compared
to the same time in 2021.
In line with expectations,
month-to-month inflation
fell by 0.1% in December.
Despite the slowing rate of inflation,
the Federal Reserve appears unlikely to pull
back from its interest rate hike strategy.
According to Federal Reserve Chair
Jerome Powell, the central bank will not stop hiking
interest rates until inflation gets closer to 2%. .
NBC reports that the economy
has been buoyed by
a strong labor market. .
According to the Bureau of Labor
Statistics, unemployment has reached
a 53-year low, dropping to 3.5%. .
However, companies are still facing
difficulty in filling positions, as evidenced
by the 10.5 million job openings in the U.S.
The high number of openings has led to an increase
in wages, however the Fed warns that the trend is
likely to translate into higher prices for consumers.
To be clear, strong wage growth is
a good thing. But for wage growth
to be sustainable, it needs to be
consistent with 2% inflation, Jerome Powell, Federal Reserve Chair, via NBC
Credit: Wibbitz Top Stories Duration: 01:31Published
Fed Must Be Free of
'Political Control', to Curb Inflation, , Powell Says.
Federal Reserve Chairman Jerome Powell made the comments on Jan. 10.
Powell stated that preventing further price increases might mean the Fed makes decisions that are disliked by either side of the political aisle.
Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. , Jerome Powell, Federal Reserve Chairman,
via NBC News.
But restoring price stability
when inflation is high can require measures that are not popular
in the short term as we raise interest rates to slow
the economy, Jerome Powell, Federal Reserve Chairman,
via NBC News.
The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors, Jerome Powell, Federal Reserve Chairman,
via NBC News.
Powell made the comments as part of a speech focused on the autonomy of a nation's central bank.
Powell also responded to calls for the Fed to enact policy that would address climate change.
[The Federal Reserve should] stick to our knitting and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities, Jerome Powell, Federal Reserve Chairman,
via NBC News.
The Federal Reserve has directed major banks to take stock of how prepared the institutions would be in the event of a major climate crisis.
Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public’s will as expressed through elections, Jerome Powell, Federal Reserve Chairman,
via NBC News.
But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy ... , Jerome Powell, Federal Reserve Chairman,
via NBC News.
... or supervisory tools to promote a greener economy
or to achieve other climate-based goals. , Jerome Powell, Federal Reserve Chairman,
via NBC News.
We are not, and will not be, a ‘climate policymaker.’, Jerome Powell, Federal Reserve Chairman,
via NBC News
Credit: Wibbitz Top Stories Duration: 01:30Published
Payrolls Increased by 517,000 , in January.
CNN reports that
new data was released by the
Bureau of Labor Statistics on Feb. 3.
517,000 jobs were added in the U.S. last month despite economists only expecting 185,000.
The unemployment rate dropped to 3.4%.
CNN reports that the unemployment
rate hasn't been that low since
Neil Armstrong walked on the moon.
CNN reports that the unemployment
rate hasn't been that low since
Neil Armstrong walked on the moon.
With 517,000 new jobs added in January 2023 and the unemployment rate at 3.4%, this is a blockbuster report demonstrating that the labor market is more like a bullet train, Becky Frankiewicz, president and chief commercial
officer of ManpowerGroup, via CNN.
Seema Shah, chief global strategist of Principal Asset Management, says the jobs report may complicate the Federal Reserve's attempts to cool inflation.
This is a labor market on heat; nobody would have expected a number as monstrous as this, Seema Shah, chief global strategist of
Principal Asset Management, via CNN.
Is [Fed Chair Jerome] Powell now wondering why he didn’t push back on the loosening in financial conditions? , Seema Shah, chief global strategist of
Principal Asset Management, via CNN.
It’s difficult to see how wage pressures can possibly soften sufficiently when jobs growth is as strong as this, and it’s even more difficult to see the Fed stop raising rates and entertain ideas of rate cuts when there is such
explosive economic news coming in, Seema Shah, chief global strategist of
Principal Asset Management, via CNN
Credit: Wibbitz Top Stories Duration: 01:30Published
Federal Reserve Poised to Announce , Latest Interest Rate Hikes , Despite Slowing Inflation.
On February 1, the Federal Reserve will announce
its latest interest rate increase which comes amid
the central bank's aggressive campaign to slow inflation.
NBC reports that while there are signs that inflation
is slowing, some indications suggest the economy
is reflating, which could also send prices up. .
We expect Fed Chair Powell
will insist on the need hold
policy at a restrictive level
for some time to bring inflation
down toward the 2% target, Gregory Daco, chief economist at Ernst & Young’s EY-Parthenon consultancy, via NBC.
Powell will also stress that
history cautions strongly against
prematurely loosening policy, Gregory Daco, chief economist at Ernst & Young’s EY-Parthenon consultancy, via NBC.
Powell will also stress that
history cautions strongly against
prematurely loosening policy, Gregory Daco, chief economist at Ernst & Young’s EY-Parthenon consultancy, via NBC.
According to the 'Bloomberg' index,
financial conditions have eased to reach
the lowest level since last February.
These changes can be seen in declining average
mortgage rates, which have retreated back to
6.13% after hitting a high of 7.08% in November.
NBC reports that the rising price of commodities like oil
and the improvement of the stock market have contributed
to a sense of cautious optimism regarding the economy.
NBC reports that the rising price of commodities like oil
and the improvement of the stock market have contributed
to a sense of cautious optimism regarding the economy.
The positive changes have eased fears of a global
recession, yet economists believe that the Fed will
continue to clamp down to prevent rapid economic growth.
According to Neil Dutta, the head of U.S. economics
at Renaissance Macro financial group, the Fed's
0.25% interest rate hike may end up being too small. .
The Fed’s story only
works if the economy
is slowing down.
Sorry, but I don’t see it, Neil Dutta, head of U.S. economics at
Renaissance Macro financial group, via NBC
Credit: Wibbitz Top Stories Duration: 01:30Published
Latest Fed Rate Outlook , Has Mixed Impact , on US Stock Markets.
Business Insider reports that U.S. stocks saw
mixed results as investors reacted to the
latest Federal Reserve interest rate outlook.
Business Insider reports that U.S. stocks saw
mixed results as investors reacted to the
latest Federal Reserve interest rate outlook.
On January 9, San Francisco Fed President Mary Daly,
along with Atlanta Fed President Raphael Bostic, said
the central bank is likely to raise rates past 5%.
On January 9, San Francisco Fed President Mary Daly,
along with Atlanta Fed President Raphael Bostic, said
the central bank is likely to raise rates past 5%.
According to Business Insider, they also said
the Fed is expected to keep rates raised as
a means of combating record-high inflation.
CME FedWatch suggests 80% odds
that another 25-basis-point hike
is on the way in February.
Investors are also eagerly anticipating
the December Consumer Price Index
report due out on January 12.
That report is a key inflation measure
that will have an influence on the
central bank's upcoming policy decisions. .
At the closing bell on January 9, the S&P 500 ended the day
down 0.08%, the Dow Jones Industrial Average ended
down 0.34% and the Nasdaq Composite went up 0.63%. .
Meanwhile, Bank of America has warned
that stock valuations remain too high and
the market risks dropping by as much as 30%.
Meanwhile, Bank of America has warned
that stock valuations remain too high and
the market risks dropping by as much as 30%.
Morgan Stanley has warned
that the S&P 500 could
slip an additional 22%. .
Morgan Stanley has warned
that the S&P 500 could
slip an additional 22%. .
However, according to Moody's economist, the chances
of the U.S. avoiding a recession are growing as
the number of layoffs has been below expectations.
Credit: Wibbitz Top Stories Duration: 01:31Published
Inflation woes continue to hit one of South America's largest economy Argentina. The Central Bank in the country has raised its benchmark interest rate by whopping 9.5 percent, the price rise..
Credit Card , Interest Rates , Reach All-Time High .
NBC reports that the cost of credit card debt
is now the highest it's been in over 30 years,
with average interest rates up to 19.04%.
Bankrate..
Credit: Wibbitz Top Stories Duration: 01:31Published
Bank of England Sets , Biggest Rate Hike in 33 Years.
CNN reports that the central bank increased interest rates by three quarters of a percentage point on Nov. 3.
The historical hike puts the Bank..
Credit: Wibbitz Top Stories Duration: 01:31Published
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