Category Archives: Jerome Powell

Federal Reserve ‘poised to begin cutting rates as early as September’

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Bank officials signal readiness to start interest rate-cutting cycle to ease pressure on households and businesses

Kamala Harris’s hopes of victory in the looming US presidential election have been given a boost by mounting expectations that the US Federal Reserve will cut interest rates from as early as September.

As Democrats gather for the party’s national convention in Chicago starting on Monday, economists on Wall Street said the world’s most powerful central bank was poised to begin a cycle of interest rate cuts before the end of the year.

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Climate activists force Fed chair Jerome Powell off stage in New York

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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.

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Trading in PacWest shares suspended amid fears of new US banking crisis

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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.

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Credit Suisse shares continue to fall despite efforts to calm nerves

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Lifelines handed to Swiss bank and US regional bank First Republic fail to ease investor concerns

Credit Suisse shares came under renewed pressure on Friday, despite fresh attempts by central banks and politicians to calm fears about a crisis in the global banking industry sparked by the collapse of two US banks this week.

Shares in Credit Suisse, Switzerland’s second largest bank, fell 8% on Friday despite securing a £45bn emergency loan from the Swiss National Bank just days earlier to shore up its liquidity after a week of panic.

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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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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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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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Global report: US unemployment could hit 25%, warns Fed chairman, as Japan enters recession

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India extends Covid-19 lockdown but eases many restrictions; South Africa reports highest daily new cases; World Health Assembly to begin

Unemployment in the United States could peak at 25% as a result of the coronavirus pandemic, according to the chair of the Federal Reserve, amid warnings the June quarter economic figures will be “very, very bad”. The bleak prediction came as Japan slid into its first recession in five years, with forecasts that worse was to come.

In a sober assessment of the economic impact of coronavirus in the US, the Fed chair, Jerome Powell, estimated GDP contraction in the June quarter could be “easily be in the twenties or thirties”, as fallout from the global outbreak worsened.

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German recession fears rise as industrial output tumbles – business live

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Rolling coverage of business, economics and markets as factories in Europe’s largest economy stutter

Eurozone growth came in unchanged on its third estimate: 0.2% growth in the second quarter of the year.

A minor beat on the headline year-on-year growth rate, remaining at 1.2% against 1.1% expectations, but otherwise no shocks.

Labour has confirmed that it will not vote for an election on Monday even if a bill intended to stop a no-deal Brexit passes before then.

If we vote to have a general election, then no matter what it is that Boris Johnson promises, it is up to him to advise the Queen when the general election should be. And given that he has shown himself to be a manifest liar, and someone who has said that he will die in a ditch rather than stop no deal, and indeed his adviser, [Dominic] Cummings, has been swearing and shouting at MPs saying they are leaving on 31 [October] no matter what, our first priority has to be that we must stop no deal and we must make sure that that is going to happen.

Related: Brexit: Labour confirms it will not vote on Monday for early election - live news

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Global stock markets gain as investors predict cautious Federal Reserve – business live

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Central banks in spotlight amid Brexit uncertainty and growth concerns

The Bank’s reticence to raise rates has been hinted at by Gertjan Vlieghe and Silvana Tenreyro, two of the nine-member monetary policy committee.

Weaker growth prospects have come on top of concerns about Brexit, according to Martin Beck, lead UK economist at Oxford Economics, a consultancy. He expects a 9-0 vote to keep policy unchanged, saying:

The economy’s recent performance has been broadly in line with the MPC’s expectations. But public pronouncements by some committee members on downside risks have indicated a dovish shift around the pace of future rate hikes.

In light of the continued failure to get a Brexit deal through Parliament, Brexit uncertainty remains a key block on action by the MPC.

The Bank of England will also be in action later this week, with a monetary policy announcement on Thursday at midday.

Anything other than a unanimous vote to keep interest rates on hold would be a shock, for fairly obvious reasons.

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