Fed

2022 - 11 - 2

Live updates: Watch Fed Chair Powell's press conference after ... (CNBC)

The Federal Reserve delivered its latest monetary policy announcement, with the central bank hiking rates by 75 basis points, or 0.75 percentage point.

The strategist said Powell will have to be careful in how he crafts the statement because he could raise market expectations for a less aggressive Fed. "Rate hikes from here will be more cognizant of the new economic environment we're in with respect to the much higher cost of capital and economic clouds that are circling," he said. As in, Wall Street will be looking for the central bank to "step down" from its current tightening path. "Will there be discussion about the potential for 50 basis points in December? We're somewhat surprised to see the 'soft pivot' in the statement itself and we expect that Powell will double down on this narrative at the press conference. "From a cost benefit perspective, it doesn't do as much damage to the asset markets and to the broader economy… "We've always said it was going to be difficult, but to the extent rates have to go higher and stay higher for longer it becomes harder to see the path. ... And that's why I've said at the last two press conferences that at some point it will be important to slow the pace of increases. The Fed raised its target rate by three-quartes of a point Wednesday afternoon. The Fed's outlook may be less one-sided, but reaffirming its bias to fight hard against inflation – and the 2% inflation target – is likely to remain a market headwind until inflation conditions improve." The level of interest rates will also be higher than previously expected, he said. "Chairman Powell made it clear that his bias is to err on the side of over-tightening rather than under-tightening in order to avoid the risk of inflation becoming entrenched," said Yung-Yu Ma, chief investment strategist, BMO Wealth Management.

U.S. Federal Reserve raises interest rates 75 basis points, but hints ... (Globalnews.ca)

The U.S. Federal Reserve delivered a 75-basis-point interest rate hike on Wednesday but hinted that more standardized increases could be on the docket going ...

Likewise, the Bank of England is expected to raise rates Thursday to try to ease consumer prices, which have risen at their fastest pace in 40 years, to 10.1 per cent in September. Ultimately, economists at Goldman Sachs expect the Fed’s policymakers to raise their key rate to nearly five per cent by March. Those higher labor costs are often passed on to customers in the form of higher prices, thereby fueling more inflation. Republican candidates have hammered Democrats on the punishing impact of inflation in the run-up to the midterm elections that will end Tuesday. Rowe Price, suggested that falling home sales are “the canary in the coal mine” that demonstrate that the Fed’s rate hikes are weakening a highly interest-rate sensitive sector like housing. This week, the government reported that companies posted more job openings in September than in August. Uruci noted, though, that the Fed’s hikes haven’t yet meaningfully slowed much of the rest of the economy, particularly the job market or consumer demand. The Fed’s move raised its key short-term rate to a range of 3.75 per cent to 4.0 per cent, its highest level in 15 years. But in a statement, the Fed suggested that it could soon shift to a more deliberate pace of rate increases. Those words indicated that the Fed’s policymakers may think borrowing costs are getting high enough to possibly slow the economy and reduce inflation. Typically, the Fed raises rates in quarter-point increments. It noted that its rate hikes take time to fully affect growth and inflation.

Fed Hikes Again by 75 Basis Points, Hints at Entering End Phase ... (BNN)

(Bloomberg) -- Federal Reserve officials delivered their fourth straight 75 basis-point interest rate increase while also signaling their aggressive ...

“It’s not clear that members are of one mind on the pace of future increases. Fed forecasts in September implied a 50 basis points move in December, according to the median projection. Having been criticized for missing the stubbornness of the inflation surge, officials know that monetary policy works with a lag and that the tighter it becomes the more it not only slows inflation, but economic growth and hiring too. Then, as Powell talked about a higher peak rate and said the Fed had a “ways to go” on tightening, yields and the dollar surged and stocks slid. 8 vote could cost President Joe Biden’s Democrats control of Congress, and some prominent lawmakers in his party have started to publicly urge the Fed to show restraint. Initially stocks rallied and Treasury yields tumbled with the dollar on the statement, which hinted rate hikes were entering their final phase.

Fed hikes again by 75 basis points, hints at slowing rate increases (Financial Post)

United States Federal Reserve officials delivered their fourth straight 75 basis-point interest rate increase while also signalling their aggressive ...

But policymakers have yet to see meaningful progress on inflation. Those projections showed rates reaching 4.4 per cent this year and 4.6 per cent next year, before cuts in 2024. Having been criticized for missing the stubbornness of the inflation surge, officials know that monetary policy works with a lag and that the tighter it becomes the more it not only slows inflation, but economic growth and hiring too. The dollar deepened declines. stocks erased an earlier drop after the news, while yields on 10-year Treasuries stayed lower. Article content

Les taux vont continuer de grimper aux États-Unis, la Fed attendue ... (Le Droit)

Une nouvelle forte hausse des taux d'intérêt est en vue aux États-Unis, où la banque centrale cherche à tout prix à faire ralentir l'activité économique ...

Cela a été interprété comme le signal d’une possibilité de hausses moins rapides dans les mois à venir. «Cela fait partie de notre transition vers une croissance stable et régulière avec une inflation basse», a-t-elle ajouté. Il s’agit de son plus haut niveau depuis janvier 2008. Réagissant à cette quatrième solide hausse des taux d’affilée, la porte-parole de la Maison-Blanche, Karine Jean-Pierre a assuré que «les actions de la Fed aidaient à maîtriser l’inflation». Il a reconnu que le Comité monétaire (FOMC) était ouvert «à modérer ses hausses de taux dès la prochaine réunion» en décembre, mais il a aussi rapidement ajouté qu’il était «très prématuré» de considérer «une pause» dans les relèvements de taux. Lors de sa conférence de presse, le président de la réserve fédérale, Jerome Powell, a prévenu qu’il faudrait «du temps» avant que les hausses de taux d’intérêt ne ralentissent l’inflation et que cela passerait sans doute par un ralentissement de l’économie.

États-Unis | La Fed relève son taux de 0,75 point de pourcentage (La Presse)

La banque centrale américaine a relevé mercredi ses taux à leur plus haut niveau depuis près de 15 ans, et pense continuer à les augmenter, cherchant à tout ...

Cela a été interprété comme le signal d’une possibilité de hausses moins rapides dans les mois à venir. « Cela fait partie de notre transition vers une croissance stable et régulière avec une inflation basse », a-t-elle ajouté. Il s’agit de son plus haut niveau depuis janvier 2008. Réagissant à cette quatrième solide hausse des taux d’affilée, la porte-parole de la Maison-Blanche, Karine Jean-Pierre a assuré que « les actions de la Fed aidaient à maîtriser l’inflation ». Il a reconnu que le Comité monétaire (FOMC) était ouvert « à modérer ses hausses de taux dès la prochaine réunion » en décembre, mais il a aussi rapidement ajouté qu’il était « très prématuré » de considérer « une pause » dans les relèvements de taux. Lors de sa conférence de presse, le président de la réserve fédérale, Jerome Powell, a prévenu qu’il faudrait « du temps » avant que les hausses de taux d’intérêt ne ralentissent l’inflation et que cela passerait sans doute par un ralentissement de l’économie.

U.S. stocks climb, yields slump after Fed decision - BNN Bloomberg (BNN)

Stocks erased losses as the Federal Reserve signaled its most-aggressive campaign since the 1980s to curb inflation could be entering its end phase, ...

- “Of course data will largely determine the policy path going forward. Officials unanimously decided to lift the target for the benchmark rate by another 75 basis points to a range of 3.75 per cent to 4 per cent, its highest level since 2008. Data Wednesday showed hiring at US companies rose in October by more than forecast, underscoring resilient labor demand despite the Fed’s efforts to cool the economy. In corporate news, Boeing Co.’s chief said the planemaker could generate US$10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks and miscues. - The Japanese yen rose 0.3 per cent to 147.77 per dollar - The euro fell 0.5 per cent to US$0.9830 - The British pound fell 0.8 per cent to US$1.1395 Then, perhaps, the FOMC can signal a deceleration in tightening, but not before.” - The Nasdaq 100 fell 3.4 per cent Megacap tech bore the brunt of the selling, with giants like Apple Inc. - “This is not an environment in which the Fed will pivot or signal a pivot. Equities briefly rose when he said that a slower pace of rate hikes could come as soon as December.

Fed announces sixth consecutive hike in US interest rates to fight ... (The Guardian)

The Fed's latest increase brings the federal funds rate – which acts as a benchmark for everything including business loans, credit card and mortgage rates – to ...

Last month, the European Central Bank also [increased its cost of borrowing](https://www.theguardian.com/business/2022/oct/27/european-central-bank-hikes-interest-rate-recession-fears-ecb-eurozone-inflation) to tackle inflation, now at a record high of 10.7%. It is expected to weaken as companies count the cost of higher borrowing. While we’re seeing early signs of Fed-driven demand destruction, it’s affecting only certain sectors of the labor market.” In September, the costs of goods and services were Powell has indicated that the Fed expects rates will reach 4.4% by the end of the year and start coming down until 2024. “We’ve always said it was going to be difficult. And incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said. Fed officials had expected inflation to decline this year. [over 10%](https://www.theguardian.com/business/2022/oct/19/uk-inflation-rises-energy-bills-food-prices-september-cost-of-living-crisis) in the UK and on Thursday the Bank of England is expected to raise its base rate [by as much as one percentage point to 3.25%](https://www.theguardian.com/business/2022/oct/20/interest-rates-unlikely-to-rise-5-bank-of-england-ben-broadbent). He said the Fed would, at some point, slow the pace of rate rises but warned it was “very premature to think about pausing”. I don’t think we’ve overtightened,” said Powell. The Fed chair, Jerome Powell, said there were “no grounds for complacency” but acknowledged that officials were considering the pace of rate rises as they assess their impact on the wider economy.

Wall Street whipsaws as investors bet Fed may slow rate increases (Financial Times)

Central bank says it will be mindful of lag between rises in borrowing costs and economic effects.

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The Fed and White House combine for a day that cuts to the heart of ... (CNN)

US President Joe Biden speaks about protecting Social Security and Medicare and lowering prescription drug costs, at OB Johnson Park Community Center in ...

The Biden White House’s legislative accomplishments are concrete and significant – and the future they portend, officials say, lines up in many ways with the proposals on which Biden campaigned. Union workers made presentations on how they are training employees in these areas, and the President spoke to both new and existing efforts to train additional workers. Biden said “more than 350 organizations across the country” committed to the challenge, which was initially launched by the administration in June. All three – the bipartisan infrastructure law, as well as a law boosting American semiconductor chip manufacturing and a sweeping $750 billion health care, tax and climate bill – were highlighted during Wednesday’s event and remarks. But implicit in Biden’s pitch is the difficulty the overarching problem presents as the clock ticks down to the day votes are counted. “And they want to know what are we doing? One policy decision is expected to ripple through markets, media and politics alike, turning a spotlight directly onto an issue that Democratic officials say has wrought significant [ damage to their political prospects.](https://www.cnn.com/election/2022) The other will detail an intensive administration effort designed to reshape the pipeline to enter into professions over time. And so far the White House is standing by the Fed’s move despite growing criticism from Democrats. The Fed, meanwhile, continues its months-long effort to hit the brakes on an economy that is running red hot. “This ain’t your father’s Republican Party, that’s a different deal right now,” Biden said at an event in Florida on Tuesday. Yet American consumers have shown few signs of pulling back their spending - and America’s job market remains robust. “I just think that one of the things that I think frustrates the American people is they know the world is in a bit of disarray,” Biden said as he pointed directly to the uncertainty this year driven by Russia’s invasion.

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