Record highs come amid hopes a cooldown in inflation will allow Federal Reserve to cut interest rates several times this year
Wall Street scaled fresh records on Monday, as the S&P 500 and the Dow Jones industrial average each closed at an all-time high.
The S&P gained 0.2% to 4,850.43. The Dow cleared 38,000 for the first time, rising 0.4% to 38,001.81.
Associated Press contributed reporting
Continue reading...Consumer price index exceeds economists’ expectations as Fed weighs when to start cutting borrowing costs
Inflation ticked higher in the United States last month as the Federal Reserve weighs the latest stage of its battle against price growth.
The headline consumer price index increased at an annual pace of 3.4% in December, according to the Bureau of Labor Statistics, up from 3.1% in the previous month, and exceeding economists’ expectations of about 3.2%.
Continue reading...Stubbornly high inflation forces central banks to avoid cuts, but markets expect falls next year
The western world’s largest central banks are poised to keep interest rates on hold this week amid concerns over stubbornly high inflation, despite growing expectations for sharp cuts in borrowing costs next year.
In a crunch week for the global economy, the US Federal Reserve, Bank of England (BoE) and European Central Bank are expected to keep interest rates at their current restrictively high levels to ensure inflation continues to fall back from the highest levels in decades.
Continue reading...On Thursday protesters chanted: ‘Off fossil finance!’ and held a banner reading: ‘Fed Is Burning: Money, Futures, Planet’
The Federal Reserve chair, Jerome Powell, was escorted out of an event Thursday afternoon after a group of climate protesters briefly took the stage before he was due to give a speech. He took the stage after a 15-minute delay.
At the Economic Club of New York, protesters stormed the stage holding a banner that read “Fed Is Burning: Money, Futures, Planet” and chanting “Off fossil finance!” Powell, who was on stage, briefly left the event before returning to deliver his speech as planned. Security officials cleared protesters from the room.
Continue reading...Action came as world leaders begin arriving in New York for the UN general assembly and after Sunday’s march to end fossil fuels
One day after the largest climate march since the start of the Covid-19 pandemic, hundreds of climate activists blockaded the Federal Reserve Bank in New York to call for an end to funding for coal, oil and gas, with police making scores of arrests.
“Fossil fuel companies … wouldn’t be able to operate without money, and that money is coming primarily from Wall Street,” Alicé Nascimento, environmental campaigns director at New York Communities for Change, said hours before she was arrested.
Continue reading...Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when rate peaked at 9.1% in June
US inflation in August rose for the first time since June 2022, rising to 3.7% as a sharp increase in energy prices pushed prices up toward the end of the summer.
Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when the rate peaked at 9.1% in June. Still, an increase in inflation means the US economy is further from the Federal Reserve’s target rate of 2% and will likely make officials consider pushing interest rates up later this year.
Continue reading...Jay Powell tells symposium in Wyoming that inflation is still too high but that US central bank will ‘keep at it until the job is done’
Federal Reserve chair Jerome Powell used a closely watched speech on Friday to warn that the fight against inflation in the US is not over.
Speaking at the Federal Reserve Bank of Kansas City’s annual gathering of central bankers in Jackson Hole, Wyoming, Powell said inflation was still too high and that interest rates may have to rise further to tamp it down.
Continue reading...US Fed will also have to raise rates more aggressively than forecast, says Washington-based body
Interest rates in the UK will need to stay higher for longer than previously forecast in order to tackle stubbornly high inflation, the International Monetary Fund has warned.
The IMF’s regular update on the state of the global economy singled out the US Federal Reserve and the Bank of England as two central banks that will need to raise official borrowing costs more aggressively than it assumed only three months ago.
Continue reading...Banks seek to calm markets as investors fear repeat of First Republic and SVB failures
[NEW]Trading in shares of the California-lender PacWest have been suspended after plummeting 42% amid wider fears about the health of the US’s regional bank sector.
PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares plummeted by as much as 60%. But the sell-off continued on Thursday and affected other regional banks.
Continue reading...Report identifies Fed failures before bank collapse but also blames bad management, weakened regulations and lax supervision
The Federal Reserve failed to “take forceful enough action” ahead of the collapse of Silicon Valley Bank last month, the Fed said on Friday in a hard-hitting report that blamed extremely poor bank management, weakened regulations and lax government supervision for the failure.
Silicon Valley Bank’s collapse triggered an ongoing banking crisis for mid-sized US banks. On Friday, trading in another mid-sized bank – First Republic – was briefly halted after its share price fell 48%. The bank revealed on Monday that it had lost $100bn in deposits during last month’s banking crisis.
Continue reading...Progressive Democrat launches offensive on politicians on the left and the right who supported Trump-era deregulation of US banks
Political fall-out in the US from the collapse of Silicon Valley Bank continued on Sunday when leftwing Senator Elizabeth Warren hit the morning talk shows and repeatedly called for an independent investigation into US bank failures and strongly criticised Federal Reserve finance officials.
The progressive Democrat from Massachusetts, who has positioned herself as a consumer protection advocate and trenchant critic of the US banking system, told CBS’s Face the Nation that she did not have faith in San Francisco Federal Reserve president Mary Daly or Fed chairman Jerome Powell.
Continue reading...The central bank has lent about half as much as it provided during the 2008 crisis as banks rush to shore up their financials
Cash-short banks have borrowed about $300bn from the Federal Reserve in the past week, the central bank announced on Thursday.
Nearly half the money – $143bn – went to holding companies for two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets. The Fed did not identify the banks that received the other half of the funding or say how many of them did so.
Continue reading...Analysts say US Federal Reserve will probably reject further increase in borrowing costs next week
The world’s most powerful central banks could be forced to stop raising interest rates after the Silicon Valley Bank crisis, economists have said, amid growing signs of financial stress linked to rapid increases in borrowing costs over the past year.
Analysts said the US Federal Reserve would probably leave interest rates on hold at its decision next week, as the meltdown at the California-based technology lender ripples through global financial markets.
Continue reading...Campaigners say bank should rush to rescue countries facing recession – but can it do so without resulting in mass debt write-offs?
Not since the early 1990s has the world faced such a period of low growth.
Discounting the havoc caused by the financial crash of 2008 and the initial impact of the Covid-19 pandemic, the World Bank says that by the end of 2024 it will have been 30 years since the global economy grew at an average of less than 2% a year.
Continue reading...Jerome Powell warned there ‘was more ground to cover’ and rates would stay higher for an extended period
The Federal Reserve chair, Jerome Powell, indicated the central bank is preparing to slow the pace of interest rate rises as it tackles a 40-year high in inflation. But Powell warned there “was more ground to cover” and rates would stay higher for an extended period.
In a speech to the Brookings Institution, Powell said that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point, after four straight three-quarter point hikes.
Continue reading...Decades of bailouts have convinced some that the Fed will always come to the rescue – but this only papers over the fundamental flaws of the US economy
With the Federal Reserve leading the world’s central banks in a tightening cycle of interest rate rises, the likes of which we haven’t seen since 2006, commentators across the political spectrum are noting the fondness of the Fed chair, Jerome “Jay” Powell, for his legendary predecessor, Paul Volcker. On the left, the comparison is fearful; on the center and on the right, it’s one of admiration. But circumstances don’t really support the comparison.
On taking office in October 1979, Volcker declared “the standard of living of the average American has to decline” as a consequence of the war against the chronic inflation of the 1970s. He quickly set to work making that happen by driving interest rates up towards 20% and creating the deepest US recession since the 1930s.
Continue reading...Fed officials have now imposed the sharpest increases in interest rates since the 1980s, as the cost of living crisis batters consumers
The Federal Reserve stepped up its fight against a 40-year high in US inflation on Wednesday, announcing its fourth consecutive three-quarters of a percentage point hike in interest rates but signaling the pace of increases may soon slow.
With the cost of living crisis battering consumers and Joe Biden’s political fortunes, Fed officials have now imposed six rate rises in a row, the sharpest increases in interest rates since the 1980s, when inflation touched 14% and rates rose to nearly 20%.
Continue reading...Average interest rate on 30-year fixed-rate mortgage rose by 22 basis points to 7.16% last week
The average interest rate on the most popular US home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
The average contract rate on a 30-year fixed-rate mortgage rose by 22 basis points to 7.16% for the week ended October 21 while the MBA’s Market Composite Index, a measure of mortgage loan application volume, fell 1.7% from a week earlier. Mortgage application activity is at its slowest pace since 1997.
Continue reading...Third outsized rate increase in a row as central bank struggles to fight runaway inflation, increasing the cost of everything
The Federal Reserve announced another sharp hike in interest rates on Wednesday as the central bank struggles to rein in runaway inflation.
The Fed raised its benchmark interest rate by 0.75 percentage points, the third such outsized rate increase in a row, bringing the Fed rate to 3%-3.25% and increasing the cost of everything from credit card debt and mortgages to company financing.
Continue reading...Heavily redacted document also says several documents contained what appears to be Trump’s handwritten notes
Three new sealed filings have appeared online in the federal court system related to the Mar-a-Lago case, Politico reports:
Since they are not public, it’s unclear what they are, but a federal magistrate judge gave the justice department until noon eastern time today to make the redacted affidavit justifying the search public.
Continue reading...