Live

Russia's war in Ukraine

Live

Fed Chair Powell speech

7 Posts

Sort byLatestOldest

2 min ago

Wall Street is slightly higher as investors await key Fed speech 

US stocks were higher Friday as investors await a key speech from Federal Reserve Chair Jerome Powell. 

Investors will listen closely for clues about the future of interest rate hikes, but worry that the economically painful hikes will stay in place for longer than they originally anticipated. 

Boston Fed President Susan Collins told Yahoo Finance on Thursday it is "extremely likely" the central bank will need to hold interest rates high to bring down inflation. 

"I think it's extremely likely that we will need to hold [interest rates at current levels] for a substantial amount of time," Collins said. "But exactly where the peak is I would not signal right at this point. We may be near [a peak], but we may need to increase a little bit further.

2 min ago

Jackson Hole: Fed policy collides with reality in the most unequal county in America

Central bank officials from across the world have descended upon Jackson Hole, Wyoming this week to discuss policy decisions that will shape the economy for years to come.

But as they talk about inflation and the economy in the abstract, residents of the popular vacation destination are very much feeling the realities of their policies. That’s because Jackson Hole is the most economically unequal place in the United States, according to the Economic Policy Institute.

The snow-kissed peaks and verdant valleys of Jackson Hole, Wyoming — where Federal Reserve Chair Jerome Powell is due to give a highly anticipated speech on Friday — aren’t just awe-inspiring. They’re also symbolic.

Among the top 1% in Teton County (where Jackson Hole is located), the average annual income is a jaw-dropping $22.5 million. The median household income in Teton County in 2021, meanwhile, was about $94,000, according to the US Census Bureau.

The annual August symposium of global financial leaders and economic elites wouldn’t happen without the servers, cooks, drivers and hotel and event staff who make it function — the same people feeling the hard impact of elevated inflation, high interest rates and a softening economy the most.

“If you look at income, Jackson Hole is really a microcosm of the nation’s wealth inequalities laid out across these dramatic landscapes of the Mountain West,” said Kenan Fikri, director of research at The Economic Innovation Group, a bipartisan policy organization. “It’s a ground zero for understanding how inflation affects the budgets of lower-earning households when they’re already financially stressed.”

Read more here.

14 min ago

Don't expect fireworks from Powell this time

At last year's Jackson Hole summit, Federal Reserve Chair Jerome Powell delivered a fiery eight-minute speech that stunned markets into submission and led to an almost 15% correction in the S&P 500.

Powell won't be repeating those fireworks this time around, analysts say. Not only are markets more closely aligned with the Fed head, but inflation is in a much better place.

Still, "we don’t recall a Jackson Hole speech so hotly awaited," said Chris Rupkey, chief economist at FwdBonds.

"It is a miracle that the economy is still standing after $5 dollar gasoline prices and the Fed’s rapid rate hikes last year," he wrote in commentary issued Thursday.

"Fed officials may need to tinker with their economic models because monetary policy is having less effect on the economy than it did in prior years and decades. It is a good thing inflation is coming down because the economy is not slowing down," Rupkey wrote.

"The current group of Fed officials are one of the luckiest in history and the days for more and more interest rate hikes are likely nearing the end. The inflation battle is not over, but the central bankers have the upper hand," he wrote.

20 min ago

What happens in Jackson Hole doesn't stay in Jackson Hole

Most of the year, people visit Jackson Hole, Wyoming, to ski, fly fish or simply enjoy the region's vast natural beauty. But for three days in late August, the city situated in the heart of Grand Teton National Park transforms into Woodstock for economists.

There, top economists from across the globe rub shoulders with one another and mingle with reporters and investors hungry for clues about their economic outlooks. But instead of the Grateful Dead, the headliner of the festival taking place from August 24-26 is Federal Reserve Chair Jerome Powell (who admits he is a Deadhead).

He'll take the stage at the 46th such festival hosted by the Kansas City Fed, formally known as the Jackson Hole Economic Symposium, at 10:05 a.m. ET on Friday. But despite all the hype, his "set" could last under 10 minutes, like last year. And yet, those brief remarks in 2022 were powerful enough to roil markets.

No matter what comes out of the conference this year, it's clear that what happens in Jackson Hole doesn't stay in Jackson Hole. 

Read more here.

56 min ago

Could Fed Chair Powell’s Jackson Hole speech send stocks plunging again?

When Federal Reserve Chair Jerome Powell spoke this time last year at the Kansas City Fed symposium in Wyoming, he warned that interest rate hikes would mean “pain” for US households. The Dow Jones Industrial Average index sank 1,000 points in response.

Will history repeat itself?

Some investors say they expect Powell to reiterate the Fed’s commitment to tamping down inflation while acknowledging the progress that’s been made.

But the market is unlikely to react quite as dramatically this time around, they say, partly because Powell’s speech will likely be similar to the kind of commentary he has delivered following recent policy meetings.

“Expect a balanced assessment with no abrupt hawkishness, but no mission accomplished: The Fed has not come this far to let inflation slip out of its grasp,” wrote Evercore ISI strategists in a note on Tuesday.

While it’s unclear if the Fed will raise interest rates again this year — Powell has signaled at least one more increase — Wall Street has the end of the central bank’s aggressive rate-hiking campaign in its sights. That’s a key difference from last year.

“In August of 2022, Powell knew the Fed had several more rate hikes to go. Today, the Fed may be near the end of this hiking cycle. That is going to require him to be a lot more nuanced in his speech,” said Tom Graff, head of investments at Facet.

Traders see a roughly 85% chance that the Fed will hold rates steady at its next meeting, in September, according to the CME FedWatch Tool. Expectations for whether the central bank will pause or raise rates for the rest of the year are more divided, with narrow majorities for no change in November or December.

57 min ago

The Fed is likely not done with rate hikes, says Bullard

The US economy has not cooled down enough yet for the Federal Reserve to pause its rate-hiking campaign, warned former Federal Reserve Bank of St. Louis President James Bullard in an interview Thursday.

Citing the summer slew of strong economic reports, Bullard told Bloomberg: “This reacceleration could put upward pressure on inflation" and "delay plans for the Fed to change policy."

Any further pressure on inflation "would suggest a higher rate profile for the Fed than otherwise," he said.

According to minutes from its last meeting in July, Fed officials are forecasting more rate hikes this year. However, some investors are betting on rate cuts as soon as early next year.

57 min ago

How should central banks coordinate when their economies are headed in opposite directions?

The global inflation crisis put the world's central banks in lockstep for the past year, raising rates nearly in unison. But the economic landscape has changed, and diverging policies could spell trouble down the road.

So how should banks coordinate when their economies are headed in opposite directions?

It's a topic that will likely be on the table this week as central bankers from around the globe descend on Jackson Hole, Wyoming, to discuss "Structural Shifts in the Global Economy" at the annual economic policy symposium hosted by the Kansas City Federal Reserve. 

Communication and coordination between central banks have been vital for the past three years. And since the start of the pandemic, international monetary policy has looked striking similar. From the United States to Saudi Arabia to Malaysia, many major world economies slashed interest rates to historically low levels in March 2020 to stimulate their economies amid Covid lockdowns. Many have since begun to hike interest rates aggressively in the last two years. 

But while the early years of the pandemic affected much of the world's economy in similar ways, the rebound has not been identical, and some countries, including the United States, are recovering faster than others. 

International monetary policy — once in lockstep — is beginning to diverge. 

Read more here.

US stocks were higher Friday as investors await a key speech from Federal Reserve Chair Jerome Powell. 

Investors will listen closely for clues about the future of interest rate hikes, but worry that the economically painful hikes will stay in place for longer than they originally anticipated. 

Boston Fed President Susan Collins told Yahoo Finance on Thursday it is "extremely likely" the central bank will need to hold interest rates high to bring down inflation. 

"I think it's extremely likely that we will need to hold [interest rates at current levels] for a substantial amount of time," Collins said. "But exactly where the peak is I would not signal right at this point. We may be near [a peak], but we may need to increase a little bit further.

Central bank officials from across the world have descended upon Jackson Hole, Wyoming this week to discuss policy decisions that will shape the economy for years to come.

But as they talk about inflation and the economy in the abstract, residents of the popular vacation destination are very much feeling the realities of their policies. That’s because Jackson Hole is the most economically unequal place in the United States, according to the Economic Policy Institute.

The snow-kissed peaks and verdant valleys of Jackson Hole, Wyoming — where Federal Reserve Chair Jerome Powell is due to give a highly anticipated speech on Friday — aren’t just awe-inspiring. They’re also symbolic.

Among the top 1% in Teton County (where Jackson Hole is located), the average annual income is a jaw-dropping $22.5 million. The median household income in Teton County in 2021, meanwhile, was about $94,000, according to the US Census Bureau.

The annual August symposium of global financial leaders and economic elites wouldn’t happen without the servers, cooks, drivers and hotel and event staff who make it function — the same people feeling the hard impact of elevated inflation, high interest rates and a softening economy the most.

“If you look at income, Jackson Hole is really a microcosm of the nation’s wealth inequalities laid out across these dramatic landscapes of the Mountain West,” said Kenan Fikri, director of research at The Economic Innovation Group, a bipartisan policy organization. “It’s a ground zero for understanding how inflation affects the budgets of lower-earning households when they’re already financially stressed.”

Read more here.

At last year's Jackson Hole summit, Federal Reserve Chair Jerome Powell delivered a fiery eight-minute speech that stunned markets into submission and led to an almost 15% correction in the S&P 500.

Powell won't be repeating those fireworks this time around, analysts say. Not only are markets more closely aligned with the Fed head, but inflation is in a much better place.

Still, "we don’t recall a Jackson Hole speech so hotly awaited," said Chris Rupkey, chief economist at FwdBonds.

"It is a miracle that the economy is still standing after $5 dollar gasoline prices and the Fed’s rapid rate hikes last year," he wrote in commentary issued Thursday.

"Fed officials may need to tinker with their economic models because monetary policy is having less effect on the economy than it did in prior years and decades. It is a good thing inflation is coming down because the economy is not slowing down," Rupkey wrote.

"The current group of Fed officials are one of the luckiest in history and the days for more and more interest rate hikes are likely nearing the end. The inflation battle is not over, but the central bankers have the upper hand," he wrote.

Most of the year, people visit Jackson Hole, Wyoming, to ski, fly fish or simply enjoy the region's vast natural beauty. But for three days in late August, the city situated in the heart of Grand Teton National Park transforms into Woodstock for economists.

There, top economists from across the globe rub shoulders with one another and mingle with reporters and investors hungry for clues about their economic outlooks. But instead of the Grateful Dead, the headliner of the festival taking place from August 24-26 is Federal Reserve Chair Jerome Powell (who admits he is a Deadhead).

He'll take the stage at the 46th such festival hosted by the Kansas City Fed, formally known as the Jackson Hole Economic Symposium, at 10:05 a.m. ET on Friday. But despite all the hype, his "set" could last under 10 minutes, like last year. And yet, those brief remarks in 2022 were powerful enough to roil markets.

No matter what comes out of the conference this year, it's clear that what happens in Jackson Hole doesn't stay in Jackson Hole. 

Read more here.

When Federal Reserve Chair Jerome Powell spoke this time last year at the Kansas City Fed symposium in Wyoming, he warned that interest rate hikes would mean “pain” for US households. The Dow Jones Industrial Average index sank 1,000 points in response.

Will history repeat itself?

Some investors say they expect Powell to reiterate the Fed’s commitment to tamping down inflation while acknowledging the progress that’s been made.

But the market is unlikely to react quite as dramatically this time around, they say, partly because Powell’s speech will likely be similar to the kind of commentary he has delivered following recent policy meetings.

“Expect a balanced assessment with no abrupt hawkishness, but no mission accomplished: The Fed has not come this far to let inflation slip out of its grasp,” wrote Evercore ISI strategists in a note on Tuesday.

While it’s unclear if the Fed will raise interest rates again this year — Powell has signaled at least one more increase — Wall Street has the end of the central bank’s aggressive rate-hiking campaign in its sights. That’s a key difference from last year.

“In August of 2022, Powell knew the Fed had several more rate hikes to go. Today, the Fed may be near the end of this hiking cycle. That is going to require him to be a lot more nuanced in his speech,” said Tom Graff, head of investments at Facet.

Traders see a roughly 85% chance that the Fed will hold rates steady at its next meeting, in September, according to the CME FedWatch Tool. Expectations for whether the central bank will pause or raise rates for the rest of the year are more divided, with narrow majorities for no change in November or December.

The US economy has not cooled down enough yet for the Federal Reserve to pause its rate-hiking campaign, warned former Federal Reserve Bank of St. Louis President James Bullard in an interview Thursday.

Citing the summer slew of strong economic reports, Bullard told Bloomberg: “This reacceleration could put upward pressure on inflation" and "delay plans for the Fed to change policy."

Any further pressure on inflation "would suggest a higher rate profile for the Fed than otherwise," he said.

According to minutes from its last meeting in July, Fed officials are forecasting more rate hikes this year. However, some investors are betting on rate cuts as soon as early next year.

The global inflation crisis put the world's central banks in lockstep for the past year, raising rates nearly in unison. But the economic landscape has changed, and diverging policies could spell trouble down the road.

So how should banks coordinate when their economies are headed in opposite directions?

It's a topic that will likely be on the table this week as central bankers from around the globe descend on Jackson Hole, Wyoming, to discuss "Structural Shifts in the Global Economy" at the annual economic policy symposium hosted by the Kansas City Federal Reserve. 

Communication and coordination between central banks have been vital for the past three years. And since the start of the pandemic, international monetary policy has looked striking similar. From the United States to Saudi Arabia to Malaysia, many major world economies slashed interest rates to historically low levels in March 2020 to stimulate their economies amid Covid lockdowns. Many have since begun to hike interest rates aggressively in the last two years. 

But while the early years of the pandemic affected much of the world's economy in similar ways, the rebound has not been identical, and some countries, including the United States, are recovering faster than others. 

International monetary policy — once in lockstep — is beginning to diverge. 

Read more here.