Category Archives: Federal Reserve

Silicon Valley Bank collapse ‘could force central banks to stop interest rate rises’

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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.

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World Bank walking tightrope as it mulls increased lending to poorest

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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.

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Federal Reserve to slow interest rate rises as it tackles 40-year inflation high

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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.

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We need serious public policy, not more printed money – the US economy is in tatters

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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.

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Fed announces sixth consecutive hike in US interest rates to fight inflation

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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%.

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US mortgage rates hit 21-year high as Fed action weighs on housing sector

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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.

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Fed raises interest rate by 0.75 percentage points as US seeks to rein in inflation

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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.

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Trump search affidavit reveals potential for ‘evidence of obstruction’ at Mar-a-Lago – live

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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.

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Dow plunges 1,000 points after Fed chief Powell warns of inflation ‘pain’

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US stock markets nosedive as Jerome Powell says at top bank summit the ‘overarching focus is to bring inflation back down’

US stock markets nosedived on Friday after Federal Reserve chair, Jerome Powell, warned of “pain” ahead as the central bank struggles to bring down inflation from a 40-year high.

Powell’s highly anticipated speech was more hawkish than had been expected, with the Fed chair pledging to do all he could to end rising prices. The Dow Jones Industrial Average lost just over 1,000 points, 3%, the S&P fell 3.3% and the Nasdaq dropped almost 4%.

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Federal Reserve announces biggest interest rate hike since 1994

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Fed confirms 0.75 percentage-point increase as Americans across country hit hard by rising prices and shortages of key items

With soaring inflation and the shadow of recession hanging over the United States, the Federal Reserve announced a 0.75 percentage-point increase in interest rates on Wednesday – the largest hike since 1994.

Until this week the Fed had been expected to announce a smaller increase. At a press conference, the Fed chair, Jerome Powell, said the central bank decided that a larger hike was needed after recent economic news, including last week’s announcement that inflation had risen to a 40-year high.

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Markets brace for sharpest rise in US interest rates in almost 30 years

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Federal Reserve expected to increase cost of borrowing by 0.75 percentage points to curb rising inflation

The world’s financial markets are bracing themselves for the sharpest rise in US interest rates in almost 30 years, as America’s central bank takes action to halt rising inflation.

After days of frenzied investor speculation and signs of growing central bank anxiety, the Federal Reserve is expected to increase the official cost of borrowing by 0.75 percentage points for the first time since 1994.

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ASX: Australian stocks close almost 3.6% down after global sell-off on inflation fears

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Benchmark ASX200 index closes 246 points lower, after falling 360 points in the first 15 minutes of trading on Tuesday

Australian shares have joined a global retreat, ending almost 3.6% lower, as investors fear central banks will lift interest rates more aggressively, slashing economic growth and companies’ profits.

The benchmark ASX200 share index of the top 200 companies lost just over 5.2% within the first quarter an hour of trading, or more than 360 points. The losses, though, were pared by the end, with the market ending 246 points lower at 6,686. The Australian dollar also remained below 70 US cents.

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Global markets plunge as Fed mulls biggest rate rise in decades

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US investors fret about possible recession as S&P 500 plummets into bear territory and global markets feel aftershocks

Fears about a possible recession have pounded stock markets around the world amid reports that US Federal Reserve could raise interest rates by as much as 0.75% this week – its biggest single hike in borrowing costs for nearly 30 years.

As Wall Street’s benchmark S&P 500 index fell almost 4% on Monday into bear territory, prompting selloffs from Sydney to Shanghai, US central bank policy makers will begin a two-day meeting on Tuesday with expectations mounting that they will lift rates by at least 0.50%.

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US stock markets fall sharply as investors worry about recession

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Dow Jones sinks more than 1,100 points as S&P closes down 4%, its largest fall since June 2020, and Nasdaq loses 4.7%

The wild ride on the US stock markets continued on Wednesday with the Dow Jones Industrial Average sinking more than 1,100 points as investors worried about a looming recession.

All of the major US markets fell sharply, with the S&P closing down 4%, its largest fall since June 2020, and the tech-heavy Nasdaq losing 4.7%.

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US stocks see worst day this year as Fed rate hike rattles investors

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Dow falls 3.1% a day after the Fed chair announces biggest hike in two decades to combat inflation

US stock markets suffered their worst day of the year on Thursday as investors worried about the Federal Reserve’s plans to raise interest rates to tackle soaring inflation.

The Dow Jones Industrial Average lost over 1,000 points (3.1%). The S&P 500 and Nasdaq Composite fell 3.5% and 4.9% respectively. Tech stocks were particularly hard-hit, with Amazon dropping 7.6% and Tesla falling 8.3%.

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US Federal Reserve raises interest rates for first time since 2018

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Fed raises rates by a quarter percentage point from near zero as central bank struggles with inflation, the war in Ukraine and Covid

The Federal Reserve has raised interest rates for the first time since 2018, as the central bank struggles with soaring US inflation, the impact of the war in Ukraine and the coronavirus crisis.

The Fed raised rates by a quarter percentage point from near zero, in what is expected to be the first in a series of raises in the coming months.

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Biden releases $7bn in frozen Afghan funds to split between 9/11 families and aid

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Money would go toward humanitarian efforts for Afghan people and to US victims of terrorism, keeping it out of hands of Taliban

Joe Biden signed an executive order on Friday releasing $7bn in frozen Afghan reserves to be split between humanitarian efforts for the Afghan people and American victims of terrorism, including relatives of 9/11.

In a highly unusual move, the convoluted plan is designed to tackle a myriad of legal bottlenecks stemming from the 2001 terrorist attacks and the chaotic end of the 20-year war in Afghanistan, which ignited a humanitarian and political crisis, the New York times reports.

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The rise in global inflation – the hit to living standards across the world

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Analysis: From Pakistan to the US, Australia to Germany, the cost of living is rising to new highs and causing new hardships

After decades lurking in the shadows, inflation is back. On Amazon, you can find fridge magnets printed with words spoken 40 years ago by Ronald Reagan, before the election that swept him into the White House.

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”

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Markets rattled as hawkish Fed signals US rate rises coming – business live

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Rolling coverage of the latest economic and financial news

The reopening of hospitality venues, and higher demand for premium spirits, has boosted drinks maker Diageo.

Diageo, whose brands include Johnnie Walker whisky, Smirnoff vodka, Tanqueray gin and Baileys Irish Cream, grew its sales by 15.8% in the second half of 2021.

The positive price/mix benefit was primarily driven by mix, reflecting the strong growth of premium plus brands, particularly in scotch, tequila and Chinese white spirits, as well as the continued recovery of the on-trade channel in Europe and North America and the partial recovery of Travel Retail.

There was also a price benefit, primarily from price increases in Latin America and Caribbean, Africa and North America.

“Diageo has produced a great set of results with a strong increase in sales, margin, and profits over the past six months.

The continuing shift by consumers to spirits consumption has benefited the company, as this is a sector of the drinks market that it dominates.

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FTSE 100 falls ahead of crucial Jerome Powell speech – business live

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Rolling live coverage of business, economics and financial markets as investors anticipate new approach to inflation

Something to sink your teeth into before lunch: more discounts on dining out.

Related: Eat out to help out scheme to be extended by some restaurants

Mark Haefele, chief investment officer, UBS Global Wealth Management, said:

While we expect the Fed to shy away from more radical easing measures, such as explicit controls on government bond yields, we believe Powell will likely outline other dovish measures. These could include a move toward average inflation targeting, giving the central bank more leeway to allow inflation to overshoot the 2% target while keeping rates pegged close to zero.

Maybe the age of the independent, activist central bank head is also coming to an end. Fiscal policy is more powerful and monetary policy needs to work in harmony with it. Monetary policy is being asked to do things (like tackle economic inequality) that it really isn’t suited to. But, here we are, waiting for Jay Powell to turn up at Grafton’s Saloon. He’s already done everything he can, he’s almost out of bullets and he may even have already won the fight, but we have placed our faith in him and desperately want fresh encouragement.

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