Fed Rate Hikes

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Fed’s George Says Higher US Savings May Also Mean Higher Rates Needed

(Bloomberg) — Kansas City Federal Reserve Bank President Esther George said ample US savings will help to buffer households but could also mean higher interest rates are needed to cool spending. George told a panel Tuesday in Santiago hosted by the Central Bank of Chile that if savings are concentrated in wealthier households who tend […]

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Wall Street Economists Split on Whether Fed Cuts Rates in 2023

(Bloomberg) — Wall Street’s biggest banks agree the Federal Reserve will hike US interest rates further into next year, but are at odds over how high it will take them and whether it will be cutting by the end of 2023. In a reflection of how tough Chair Jerome Powell’s job is becoming, leading economists […]

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Fed May Need to Raise Rates to 6%, Monetary Economist Taylor Says

(Bloomberg) — The Federal Reserve needs to raise interest rates significantly higher, to perhaps 6%, to reduce inflation, influential monetary economist John Taylor said on Friday. He told an economic conference in New York that rates were still “quite low” when measured in real, inflation-adjusted terms or when compared to monetary policy rules like the […]

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Powell’s Favored Curve Calls Time on the Fed’s Tightening Cycle

(Bloomberg) — Bond traders are declaring victory over the Federal Reserve’s war on inflation after it slowed last month to a weaker pace than economist forecasts. A part of the yield curve that Federal Reserve Chair Jerome Powell watches closely to monitor recession risks inverted for the first time since the pandemic hit in early […]

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Fed ‘Hasn’t Accomplished Anything’ on Labor Market, Dudley Says

(Bloomberg) — The Federal Reserve “hasn’t accomplished anything” in loosening the US labor market even after four consecutive 75-basis-point hikes, former New York Fed President Bill Dudley said. Friday’s jobs report showing a 261,000 gain in payrolls and a slight uptick in unemployment in October is “not consistent with a loosening labor market,” Dudley, chair […]

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Fed Sees Risk of Big Declines in Still-Lofty US House Prices

(Bloomberg) — The Federal Reserve suggested on Friday that lofty home prices could be susceptible to steep declines after big run-ups in recent years on the back of ultra-low interest rates. “With valuations at high levels, house prices could be particularly sensitive to shocks,” the Fed said in its semiannual Financial Stability Report released Friday. […]

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Wall Street Sees ‘Devil’s Bargain’ in Powell’s Rate Comments

(Bloomberg) — Wall Street had already come to terms with prospects that the Fed would again raise interest rates by 75 basis points. But Wednesday afternoon was full of drama as traders first took hope from the central bank’s statement but then slumped following stern comments by Chair Jerome Powell. Stocks initially jumped and Treasury […]

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Stocks Steady Ahead of Fed Meeting; Dollar Falls: Markets Wrap

(Bloomberg) — Equities erased early gains ahead of the Federal Reserve’s policy meeting Wednesday. A gauge of the dollar fell and gold rose. European stocks and US futures were little changed after euro-area manufacturing activity sank to the lowest level since the first Covid-19 lockdowns in 2020 as record inflation and a weakening global economy […]

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Fed to Hike Big Again and Open Door to Downshift: Decision Guide

(Bloomberg) — The Federal Reserve looks set to deliver a fourth straight super-sized rate increase with Chair Jerome Powell repeating his resolute message on inflation and opening the door to a downshift — without necessarily pivoting yet. The Federal Open Market Committee is expected to raise rates by 75 basis points on Wednesday to a […]

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Jittery Stock Traders Eye Four Days That Will Sow Market’s Fate

(Bloomberg) — Investors just got over a hectic week, contending with a blitz of earnings from some of America’s biggest companies as well as a pile of uncertain economic and geopolitical news. But what’s coming may be even worse. In the span of just seven trading sessions, there will be four major events that could […]

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Fed’s Bullard Sees 2023 Shift With End of Front-Loading Hikes

(Bloomberg) — Federal Reserve Bank of St. Louis President James Bullard said he expects the central bank to end its ‘’front-loading” of aggressive interest-rate hikes by early next year and shift to keeping policy sufficiently restrictive with small adjustments as inflation cools. “You do have to think about what the reasonable level is,” Bullard said […]

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Torched Stocks Are About the Only Thing Working in Fed’s Favor

(Bloomberg) — Inflation shows few signs of cooling in the economy. The same cannot be said of markets, which are starting to seem like the only thing the Federal Reserve has going for it these days. Even with Thursday’s big bounce, the S&P 500 has lost a quarter of its value this year. Shocking as […]

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Treasuries Liquidity Problem Exposes Fed to ‘Biggest Nightmare’

(Bloomberg) — The latest bout of global financial volatility has heightened concerns about regulators’ continuing failure to resolve liquidity problems with US Treasuries — the debt that serves as a benchmark for the world. It’s getting harder and harder to buy and sell Treasuries in large quantities without those trades moving the market. Market depth, […]

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Morgan Stanley Says Likely Fed Pivot Won’t End Earnings Pain

(Bloomberg) — Michael J. Wilson, one of Wall Street’s biggest equity bears, says a Federal Reserve pivot to dovishness is becoming likely amid falling money supply, but such a move won’t allay concerns about earnings. “We find M2 growth in what we call the ‘danger zone’ -– the area where financial/economic accidents tend to occur,” […]

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A Post-Fed Rally Should Sow ‘Deep Suspicion’: Wall Street Reacts

(Bloomberg) — US stocks swung wildly and the rout in Treasuries eased after investors speculated that the Federal Reserve may have become as hawkish as it will be during its battle against inflation. The S&P 500 closed down 1.7% after gaining as much as 1.5% earlier on the day the Fed raised rates by 75 […]

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