(Bloomberg) — Federal Reserve Chair Jerome Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion. “We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched,” Powell said […]
Read More(Bloomberg) — The Federal Reserve has managed to do something that’s rarely seen in the U.S. these days: Get members of the Democratic and Republican parties to agree. At this year’s annual meeting of the American Economic Association, prominent economists from both sides of the political spectrum argued that the Fed is behind the curve […]
Read More(Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast. Federal Reserve policy makers could start to raise their target interest rate as soon as March and shrink the central bank’s balance sheet as a next step in response to surging inflation, Federal Reserve Bank of St. […]
Read MoreThe bond bears have been in ascendance this week, even before the release of the latest minutes from the last Federal Open Market Committee meeting. The yield on the 10-year Treasury has jumped 23.7 basis points this week, the largest four-day yield gain since June 5, 2020, as the Fed minutes showed discussion of a […]
Read MoreMarkets will see the latest minutes from the Fed’s monetary policy committee Wednesday. Karen Bleier/AFP/Getty Images Stocks fell Wednesday after the minutes from the last FOMC meeting confirmed that the Federal Reserve will begin raising interest rates soon to combat inflation. The release of the Fed minutes is usually a dull affair, as they usually […]
Read More(Bloomberg) — Federal Reserve officials said a strengthening economy and higher inflation could lead to earlier and faster interest-rate increases than previously expected, with some policy makers also favoring starting to shrink the balance sheet soon after. “Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may […]
Read More(Bloomberg) — The U.S. economy will spend 2022 learning to live with the coronavirus without much in the way of help from the Federal Reserve or the federal government — especially with the derailing of President Joe Biden’s $1.75 trillion spending plan. The Fed’s pivot last week toward tighter credit — ending its emergency bond-buying […]
Read MoreFederal Reserve Chairman Jerome Powell speaks during Wednesday’s live-streamed news conference. Michael Nagle/Bloomberg Inflation will ease markedly while interest rates remain historically low and negative in real terms, even as the labor market returns to full employment, according to the latest economic projections from the Federal Reserve. This would be the best of all economic […]
Read MoreAll eyes were on Federal Reserve Chairman Jerome Powell as the market digested the news Wednesday on what the central bank will do to keep the economy rebounding from the pandemic while countering the hot inflation that has consumers’ wallets sizzling. Market observers were betting the Fed will conclude its bond buying — a move […]
Read More(Bloomberg) — Federal Reserve officials intensified their battle against the hottest inflation in a generation by shifting to an earlier end of their asset-buying program and signaling they favor raising interest rates in 2022 at a faster pace than economists were expecting. Heralding one of the most hawkish policy pivots in years, the central bank […]
Read MoreAs an investor, Ray Dailo eyes the rearview mirror to see what’s ahead. If this paradox makes sense, then you likely agree with the view of history that “those who cannot remember the past are condemned to repeat it.” Put another way, it’s hard to know where you’re going if you don’t know where you’ve […]
Read MoreA pivot is defined as a turn or a twist. Its safe to say there will be twists and turns on Wednesday as Fed Chairman Jerome Powell is widely expected to adopt a more hawkish stance in his postmeeting news conference Wednesday. On display will be “the limits of Fed hawkishness,” said David Kelly, chief […]
Read More(Bloomberg) — Former U.S. Treasury Secretary Lawrence Summers warned of the risk of a “spontaneous deflating of financial markets” that have been pumped up by retail buying and exuberant investors. There is “a lot of euphoria,” Summers said at an American Council for Capital Formation webinar on Tuesday — pointing, among other things, to cryptocurrencies, […]
Read More(Bloomberg) — The U.S. went on a borrowing binge last year and the hangover could make it harder for the Federal Reserve to fight inflation without crashing the economy. Corporate debt has surged $1.3 trillion since the start of 2020 as borrowers took advantage of emergency Fed action as the pandemic spread, slashing interest rates […]
Read MoreFederal Reserve Board Chairman Jerome Powell. Brendan Smialowski / AFP via Getty Images The bond market is signaling that the Federal Reserve will soon have to abruptly lift interest rates, and that such a move could damage economic demand. Changes in bond yields suggest that this year’s surge in inflation has stuck around long enough […]
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