America’s astonishing economic growth goes up another gear
1 year, 3 months ago

America’s astonishing economic growth goes up another gear

Hindustan Times  

The energizer bunny, a pink mechanical hare that keeps banging its drum owing to long-lasting batteries, will celebrate its 35th anniversary this October. Recent data suggest it may even be on track for annualised growth of nearly 6% in the third quarter, a pace it has hit only a few times since 2000. The Federal Reserve’s branch in Atlanta uses a range of data points to estimate GDP growth in real time: a technique known as nowcasting, rather than forecasting, because it assigns weights to already observed variables without factoring in expectations for future figures. This has prompted a debate about whether America’s neutral short-term interest rate—where the Fed would set rates to neither stifle nor stimulate growth—has drifted up. Bill Dudley, a former Fed official, has argued that in the long run America may need higher rates to balance the need for more borrowing and a smaller funding pool.

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History of this topic

The Fed expects to cut rates more slowly in 2025. What that could mean for mortgages, debt and more
5 days, 17 hours ago

The Fed expects to cut rates more slowly in 2025. What that could mean for mortgages, debt and more

Associated Press  

NEW YORK — The Federal Reserve’s third interest rate cut of the year will likely have consequences for debt, savings, auto loans, mortgages and other forms of borrowing by consumers and businesses. “Because the upcoming Trump administration’s policies might cause a resurgence in inflation or otherwise throw the economy off balance, the Fed might choose to take a wait-and-see approach …

US Fed to play ‘cut-and-pause’ for meeting dual mandate of growth & inflation; Fewer rate cuts eyed in 2025: Experts
1 week, 2 days ago

US Fed to play ‘cut-and-pause’ for meeting dual mandate of growth & inflation; Fewer rate cuts eyed in 2025: Experts

Live Mint  

The US Federal Reserve will begin its deliberations for the latest monetary policy decisions on Tuesday, December 17, and will announce its new benchmark interest rate decision on December 18. The US central bank will conduct its two-day Federal Open Market Committee meeting amid Wall Street bets that will likely stay on course towards delivering another rate cut even after …

As the Fed cuts, some long-term interest rates are rising
1 week, 5 days ago

As the Fed cuts, some long-term interest rates are rising

Salon  

In physics, what goes up must come down. "It seems like the Fed's done a pretty good job of maintaining a path to slowly and steadily lower interest rates without having too much of a impact on the economy overall," said Jonathan Ernest, assistant professor of economics at Case Western Reserve University. If short-term rates are falling because inflation is …

Why everyone wants to lend to weak companies
3 weeks, 4 days ago

Why everyone wants to lend to weak companies

Live Mint  

Credit investors often talk in euphemisms. The safest bonds, with the highest credit ratings and hence the lowest yields, are almost always referred to as “high-grade" rather than “low-yield". Indeed, on November 24th the spread enjoyed by investors in American high-yield bonds over that enjoyed by investors in Treasury bonds fell below the spread on fixed-rate residential mortgages for the …

Mortgage rates: Bad news if you’re looking to buy a house in the next two years
1 month ago

Mortgage rates: Bad news if you’re looking to buy a house in the next two years

CNN  

Washington CNN — Americans looking to purchase a home in the next few years will have a tough pill to swallow. Mortgage rates are now expected to stay stuck above 6% for at least the next two years, according to economists and recent forecasts. Wells Fargo economists project mortgage rates to average 6.3% by the end of next year, according …

'Crisis is real': Analyst warns Trump of looming plight that could doom presidency
1 month ago

'Crisis is real': Analyst warns Trump of looming plight that could doom presidency

Raw Story  

Donald Trump managed to win a second term in large part due to the frustration of the electorate over prices — but there's a big economic crisis looming over the president-elect's head that could end up defeating him, Heather Long wrote for The Washington Post. Trump has boasted that under his presidency, people will be able to get 2 percent …

Trump enters just as the Fed is shifting its focus
1 month, 2 weeks ago

Trump enters just as the Fed is shifting its focus

Live Mint  

With its second consecutive interest-rate cut this year, the Federal Reserve is attempting to boost the odds of a soft landing. Alternatively, any resurgence in inflation could force the Fed to stop cutting rates, raising the odds that the economy faces a hard landing later in Trump’s term. Due in part to the Fed cutting rates with a solid economy, …

Sharply rising bond rates could stem Wall Street's 'relief rally' and push interest rate cuts further into the future
1 month, 2 weeks ago

Sharply rising bond rates could stem Wall Street's 'relief rally' and push interest rate cuts further into the future

ABC  

The apparent roar of approval was almost deafening. It's a world that, down the track, promises a return of inflation and permanently higher interest rates as America shifts to a more protectionist global stance that punishes China and, by extension, hurts Australia. Since mid-September, US money markets almost inexplicably have begun forecasting a rise in interest rates. The bond is …

Tomorrow Easy for Fed, December Difficult: Torsten Slok
1 month, 2 weeks ago

Tomorrow Easy for Fed, December Difficult: Torsten Slok

Bloomberg  

00:00 I want to understand whether this has changed anything for you or just cemented what you were already thinking. So from that, of course we can derive that will if this continues, it does on the one hand mean easier financial conditions because of the stock market going up, but it also means tighter financial conditions because loan rates …

Mortgage rates are rising. Experts cite economic strength, inflation and possible Trump win
1 month, 3 weeks ago

Mortgage rates are rising. Experts cite economic strength, inflation and possible Trump win

LA Times  

Mortgage rates have been on the rise despite recent action from the Federal Reserve. In September, the Federal Reserve lowered its benchmark interest rate for the first time since 2020, giving hope to prospective home buyers that mortgage rates would follow suit. “They are saying ‘What’s going on?’” The fact that mortgage rates have gone up despite the cut underscores …

Americans' Economic Optimism Soars as Interest Rates Fall
1 month, 4 weeks ago

Americans' Economic Optimism Soars as Interest Rates Fall

CNN  

Americans' economic sentiment has improved, with a rise in consumer sentiment and lower inflation expectations. The Federal Reserve's recent interest rate cut has played a significant role in this improvement, easing borrowing costs and making it cheaper for consumers to purchase durable goods. However, the government's retail spending report indicates that sales of durable goods declined in September, suggesting that …

Mortgage Rates Continue to Rise as Economic Data Remains Strong
2 months ago

Mortgage Rates Continue to Rise as Economic Data Remains Strong

CNN  

Mortgage rates rose again this week, marking the fourth consecutive weekly increase. The average rate on a standard, 30-year fixed mortgage was 6.54% in the week ending October 24, 2023, the highest level since early August but still below this year's high of 7.22% seen in early May. Expectations of a Fed rate cut caused mortgage rates to drop to …

Stocks Fall, US Yields Rise Amid Election Jitters
2 months ago

Stocks Fall, US Yields Rise Amid Election Jitters

Live Mint  

Global stock markets are experiencing volatility due to the upcoming U.S. election and the outlook on interest rate cuts. U.S. yields rose, while stocks fell, reflecting market uncertainty. The S&P 500 and Dow Jones Industrial Average finished lower, while the Nasdaq Composite ended higher. The pan-European STOXX 600 index closed down, while MSCI's gauge of stocks across the globe fell.

US Federal Reserve is finally lowering rates: Here's what consumers need to know
3 months ago

US Federal Reserve is finally lowering rates: Here's what consumers need to know

Hindustan Times  

The Federal Reserve has cut its benchmark interest rate from its 23-year high, with consequences for debt, savings, auto loans, mortgages and other forms of borrowing by consumers and businesses. “Act cautiously and responsibly," Channel said, "and don’t make any rash decisions based on a single Fed meeting or economic report.” Eventually, yields for savers will decline as the Fed …

Ahead of elections, US Federal Reserve shifts interest rates dramatically to deal with worst inflation
3 months ago

Ahead of elections, US Federal Reserve shifts interest rates dramatically to deal with worst inflation

India TV News  

The Federal Reserve cut interest rates by half of a percentage point on Wednesday, kicking off what is expected to be a steady easing of monetary policy with a larger-than-usual reduction in borrowing costs that followed growing unease about the health of the job market. "The committee has gained greater confidence that inflation is moving sustainably toward 2%, and judges …

How the economy will respond to the Fed's rate cuts
3 months ago

How the economy will respond to the Fed's rate cuts

Politico  

“Rate cuts going into the end of this year and the beginning of next year will help provide some momentum to the economy,” said Bharat Ramamurti, a former Biden White House official who’s now advising Harris’s campaign. “Very sharp and significant Fed rate hikes didn’t have the same effect on the economy that you would have expected,” said David Wessel, …

Fed leader, concerned about jobs downturn, tees up interest rate cuts
4 months ago

Fed leader, concerned about jobs downturn, tees up interest rate cuts

LA Times  

Federal Reserve Chair Jerome H. Powell now sees inflation as less of a threat and maximizing jobs as even more important. But Powell’s emphasis on doing “everything we can to support a strong labor market” gave some economists reason to think that the Fed could make a half-point move next month. Powell said that the pace of policy actions would …

Wall Street 'Oracle' reveals the mortgage rate magic number which will get the housing market moving
4 months, 1 week ago

Wall Street 'Oracle' reveals the mortgage rate magic number which will get the housing market moving

Daily Mail  

Mortgage rates have fallen to their lowest level in 15 months - but one expert is warning a bigger drop is needed to kickstart the frozen housing market. Meredith Whitney said that mortgage rates need to hit 6 percent or below in order to kickstart the frozen market The average 30-year fixed-rate mortgage eased to 6.47 percent this week, according …

Treasuries Surge as Traders Bet Big on a Fed Rescue Mode
4 months, 2 weeks ago

Treasuries Surge as Traders Bet Big on a Fed Rescue Mode

Live Mint  

Bond traders are piling into bets that the US economy is on the verge of deteriorating so quickly that the Federal Reserve will need to start easing monetary policy aggressively to head off a recession. “Treasuries are a good buy here because I do think the economy will continue to slow.” Bond traders have repeatedly misjudged where interest rates have …

Fears US economy headed towards recession spark jitters across global markets
4 months, 2 weeks ago

Fears US economy headed towards recession spark jitters across global markets

ABC  

There are genuine concerns the world's largest economy is heading toward a recession, and the fear is gripping global financial markets. "Shares went sky high into July on the back of better news on inflation, increasing optimism about lower interest rates ahead and optimism about IT and AI-related earnings," Mr Oliver, who manages $3 billion in investments, said. The US …

Buckle up: Wall Street’s shaky July could be a preview for more sharp swings
4 months, 3 weeks ago

Buckle up: Wall Street’s shaky July could be a preview for more sharp swings

Associated Press  

NEW YORK — For more than a year, the U.S. stock market went in mostly one direction, up, and in mostly one manner, quietly. A bonanza around artificial-intelligence technology helped drive Big Tech stocks higher, while other areas of the market held up amid rising hopes for coming cuts to interest rates by the Federal Reserve. A measure of fear …

US Fed paves the way for pre-election rate cut
4 months, 3 weeks ago

US Fed paves the way for pre-election rate cut

The Telegraph  

The chairman of the US Federal Reserve has paved the way for a pre-election rate cut in a sign that the era of high borrowing costs around the world is coming to an end. Speaking after the Fed held borrowing costs in a range of between 5.25pc and 5.5pc for the eighth time, Mr Powell said: “The broad sense of …

US economic growth increased last quarter to a healthy 2.8% annual rate
4 months, 4 weeks ago

US economic growth increased last quarter to a healthy 2.8% annual rate

Associated Press  

WASHINGTON — The nation’s economy accelerated last quarter at a strong 2.8% annual pace, with consumers and businesses helping drive growth despite the pressure of continually high interest rates. The central bank’s favored inflation gauge rose at a 2.6% annual rate last quarter, down from 3.4% in the first quarter of the year. the Fed thinks that it’s getting close …

US home sales fell in June to slowest pace since December amid rising mortgage rates, home prices
5 months ago

US home sales fell in June to slowest pace since December amid rising mortgage rates, home prices

Associated Press  

LOS ANGELES — The nation’s housing slump deepened in June as sales of previously occupied homes slowed to their slowest pace since December, hampered by elevated mortgage rates and record-high prices. Existing home sales sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%, according to mortgage …

'Risk of major financial fallout' as IMF sounds the alarm on persistent global inflation
5 months, 1 week ago

'Risk of major financial fallout' as IMF sounds the alarm on persistent global inflation

ABC  

The message seems to have been lost in all the noise. The biggest risk is that higher American interest rates "disrupt capital flows and impede planned monetary policy easing, which could adversely impact growth". Even worse, "persistently high interest rates could raise borrowing costs further and affect financial stability if fiscal improvements do not offset higher real rates amid lower …

Stock market today: Wall Street rolls to the edge of records as hopes remain for cuts to rates
5 months, 1 week ago

Stock market today: Wall Street rolls to the edge of records as hopes remain for cuts to rates

Associated Press  

NEW YORK — U.S. stocks rose Friday after some mixed signals on big banks’ profits and inflation did little to dent Wall Street’s belief that easier interest rates are on the way. In the bond market, which has been home to some of Wall Street’s strongest action this week, Treasury yields yo-yoed after the release of the latest update on …

Are US interest rates high enough to beat inflation? The Fed will take its time to find out
7 months, 1 week ago

Are US interest rates high enough to beat inflation? The Fed will take its time to find out

Associated Press  

WASHINGTON — The sharp interest rate hikes of the past two years will likely take longer than previously expected to bring down inflation, several Federal Reserve officials have said in recent comments, suggesting there may be few, if any, rate cuts this year. “That would suggest that they either need to stay high for longer or maybe even higher for …

Are US interest rates high enough to beat inflation? The Fed will take its time to find out
7 months, 1 week ago

Are US interest rates high enough to beat inflation? The Fed will take its time to find out

Associated Press  

WASHINGTON — The sharp interest rate hikes of the past two years will likely take longer than previously expected to bring down inflation, several Federal Reserve officials have said in recent comments, suggesting there may be few, if any, rate cuts this year. “That would suggest that they either need to stay high for longer or maybe even higher for …

The Fed indicated rates will remain higher for longer. What does that mean for you?
7 months, 2 weeks ago

The Fed indicated rates will remain higher for longer. What does that mean for you?

LA Times  

A sign highlighting the financing interest rate is displayed near the price sticker on an unsold vehicle at a Mercedes-Benz dealership. Mortgage rates, credit card rates, auto loan rates and business loans with variable rates will all likely maintain their highs, with consequences for consumer spending, after the Federal Reserve indicated Wednesday that it doesn’t plan to cut interest rates …

The Fed indicated rates will remain higher for longer. What does that mean for you?
7 months, 3 weeks ago

The Fed indicated rates will remain higher for longer. What does that mean for you?

Associated Press  

NEW YORK — Mortgage rates, credit card rates, auto loan rates, and business loans with variable rates will all likely maintain their highs, with consequences for consumer spending, after the Federal Reserve indicated Wednesday that it doesn’t plan to cut interest rates until it has “greater confidence” that price increases at the consumer level are slowing to its 2% target. …

The Fed indicated rates will remain higher for longer. What does that mean for you?
7 months, 3 weeks ago

The Fed indicated rates will remain higher for longer. What does that mean for you?

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Please enter a valid email address Please enter a valid email address SIGN UP I would like to be emailed about offers, events and updates from The Independent. Please try again later {{ …

Fed officials vote to hold interest rates steady at 23-year-high - here's what it means for YOUR wallet
7 months, 3 weeks ago

Fed officials vote to hold interest rates steady at 23-year-high - here's what it means for YOUR wallet

Daily Mail  

It is the sixth consecutive time the Fed has kept rates at the same level Rates are currently between 5.25 and 5.5 percent - their highest in 23 years Federal Reserve votes to hold interest rates steady at their current range The Federal Reserve has voted to hold interest rates steady at their current 23-year-high, officials announced today. The Federal …

Federal Reserve says interest rates will stay at two-decade high until inflation further cools
7 months, 3 weeks ago

Federal Reserve says interest rates will stay at two-decade high until inflation further cools

Associated Press  

WASHINGTON — The Federal Reserve on Wednesday emphasized that inflation has remained stubbornly high in recent months and said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target. Despite the recent setbacks, he said, “My expectation is that over the course of this year, we will see …

The Fed Thinks Time is on Its Side. That Could Get Awkward.
7 months, 3 weeks ago

The Fed Thinks Time is on Its Side. That Could Get Awkward.

Politico  

That combination of factors could stick around well into 2024, steadily pushing back the timeline for the first rate cut and prolonging the threat that the high price of debt will break something. Former President Donald Trump, who appointed Powell as chair, has already said the central bank chief will lower rates this year to “help Democrats” and will surely …

Wages, employment, inflation are up, causing headaches for the Fed
7 months, 3 weeks ago

Wages, employment, inflation are up, causing headaches for the Fed

NPR  

Wages, employment, inflation are up, causing headaches for the Fed Enlarge this image toggle caption Michael Mathes/AFP via Getty Images Michael Mathes/AFP via Getty Images The Federal Reserve has promised to be "data driven" in deciding when to cut interest rates. "I think it's clear at this point that the progress that we've made lowering inflation towards target has stalled," …

Federal Reserve expected to cut rates, lift Joe Biden’s re-election prospects
8 months, 4 weeks ago

Federal Reserve expected to cut rates, lift Joe Biden’s re-election prospects

The Hindu  

The U.S. Federal Reserve looks on track to cut interest rates as the Presidential- campaign season heats up, potentially delivering President Joe Biden a boost as polls show Americans dislike his handling of the economy. The Fed could play an outsized — and potentially uncomfortable — election-year role by helping shape attitudes about stubbornly high inflation and mounting housing costs …

Fed rate outlook looks just right for banks
8 months, 4 weeks ago

Fed rate outlook looks just right for banks

Live Mint  

When it comes to interest rates, banks need a Goldilocks scenario: Not too hot, not too cold. Surging interest rates gave banks plenty of headaches, to put it mildly, ranging from a rapid repricing of deposits to a plunge in the value of their longer-term fixed-rate securities. Fed policymakers last week left unchanged their median forecast implying three quarter-point rate …

The New Normal for Mortgage Rates Will Be Higher Than Many Hope
9 months ago

The New Normal for Mortgage Rates Will Be Higher Than Many Hope

Live Mint  

Interest rates are likely to come down later this year, with the Federal Reserve on track to start cutting rates. “There is further room for tightening spreads," says David Finkelstein, chief executive and chief investment officer of Annaly Capital Management, a real-estate investment trust that invests in mortgage bonds and other strategies across residential mortgage finance. Even if the Fed …

Federal Reserve foresees 3 rate cuts in 2024 despite bump in inflation
9 months ago

Federal Reserve foresees 3 rate cuts in 2024 despite bump in inflation

Associated Press  

WASHINGTON — Federal Reserve officials signaled Wednesday that they still expect to cut their key interest rate three times in 2024, fueling a rally on Wall Street, despite signs that inflation remained elevated at the start of the year. Speaking at a news conference, Chair Jerome Powell said the surprising pickup in inflation in January and February hadn’t fundamentally changed …

Federal Reserve holds interest rates steady, projects three rate cuts later this year
9 months ago

Federal Reserve holds interest rates steady, projects three rate cuts later this year

NPR  

Federal Reserve holds interest rates steady, projects three rate cuts later this year Enlarge this image toggle caption Chip Somodevilla/Getty Images Chip Somodevilla/Getty Images The Federal Reserve held interest rates steady on Wednesday, but policymakers signaled they still expect to start cutting rates later this year. Updated forecasts from members of the Fed's rate-setting committee show an average of three …

Federal Reserve is likely to preach patience as consumers and markets look ahead to rate cuts
9 months ago

Federal Reserve is likely to preach patience as consumers and markets look ahead to rate cuts

Associated Press  

WASHINGTON — Across the United States, many people are eagerly anticipating the Federal Reserve’s first cut to its benchmark interest rate this year: Prospective home buyers hope for lower mortgage rates. Excluding volatile food and energy costs, so-called “core” prices rose at a monthly pace of 0.4% in both January and February, a pace far higher than is consistent with …

Mortgage rates tumble for the second week in a row
9 months, 1 week ago

Mortgage rates tumble for the second week in a row

CNN  

Washington, DC CNN — Mortgage rates dropped for the second week in a row, falling nearly a quarter of a percentage point over the past two weeks in the face of stronger-than-expected employment and inflation data. “Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation,” said Sam Khater, Freddie Mac’s chief …

Federal Reserve officials caution against cutting US interest rates too soon or too much
10 months ago

Federal Reserve officials caution against cutting US interest rates too soon or too much

Associated Press  

WASHINGTON — Several Federal Reserve policymakers warned Thursday against cutting U.S. interest rates too soon or by too much in the wake of recent data showing inflation stayed unexpectedly high in January. Christopher Waller, a member of the Fed’s influential board of governors, titled a written copy of remarks he delivered Thursday, “What’s the rush?” “We need to verify that …

Recession has struck some of world’s top economies; US keeps defying expectations
10 months, 1 week ago

Recession has struck some of world’s top economies; US keeps defying expectations

New Indian Express  

Several unique characteristics of the US economy have sheltered it from recessionary storms, analysts say. The US government provided about $5 trillion in pandemic aid in 2020-2021, far more than overseas counterparts, which left most households in much better financial shape and supported consumer spending well into 2023. “But also the structure of our economy is so much different.” Americans …

Stock market today: Wall Street skids after inflation remains stubbornly high
10 months, 1 week ago

Stock market today: Wall Street skids after inflation remains stubbornly high

Hindustan Times  

NEW YORK — Stocks fell sharply after disappointing data on inflation made investors confront the bitter possibility that interest rates will stay high for months longer than they were hoping. The worse-than-expected inflation report may have put the final nail into hopes that the Federal Reserve could deliver its first interest rate cut in March. Stocks of smaller companies fell …

Inflation is nearly back to 2%. So why isn’t the Federal Reserve ready to cut rates?
10 months, 2 weeks ago

Inflation is nearly back to 2%. So why isn’t the Federal Reserve ready to cut rates?

Associated Press  

WASHINGTON — From Wall Street traders to car dealers to home buyers, Americans are eager for the Federal Reserve to start cutting interest rates and lightening the heavy burden on borrowers. “If interest rates can come down, I think we’re going to start selling more cars.” Kelleher is likely to get his wish by May or June, when most economists …

US Fed Reserve keeps interest rates unchanged for fourth time in a row
10 months, 3 weeks ago

US Fed Reserve keeps interest rates unchanged for fourth time in a row

Hindustan Times  

The US Federal Reserve voted Wednesday to leave interest rates unchanged for the fourth straight meeting, while indicating it was moving toward future cuts -- but probably not before May at the earliest. But it added that the rate-setting Federal Open Market Committee is unlikely to start cutting interest rates "until it has gained greater confidence that inflation is moving …

Federal Reserve signals that interest rate cuts aren’t imminent, leaving them unchanged for now
10 months, 3 weeks ago

Federal Reserve signals that interest rate cuts aren’t imminent, leaving them unchanged for now

LA Times  

Interest rate cuts are coming. “I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting” to start cutting rates, Powell said at his news conference. The change in the Fed’s stance Wednesday comes as the economy is showing surprising durability after a series of 11 rate hikes helped drastically …

Wall Street’s hopes for rate cuts may be too optimistic, like they’ve been so many times before
11 months, 2 weeks ago

Wall Street’s hopes for rate cuts may be too optimistic, like they’ve been so many times before

Associated Press  

NEW YORK — Even when everyone agrees the interest-rate cuts that Wall Street craves so much are coming, there’s still room for potential disappointment. Since the Federal Reserve hinted last month its drastic rate hikes to get inflation under control may be done, bets have built on how much the Fed will lower its main interest rate in 2024. “All …

From AI and inflation to Elon Musk and Taylor Swift, the business stories that dominated 2023
1 year ago

From AI and inflation to Elon Musk and Taylor Swift, the business stories that dominated 2023

The Independent  

Sign up for the View from Westminster email for expert analysis straight to your inbox Get our free View from Westminster email Get our free View from Westminster email SIGN UP I would like to be emailed about offers, events and updates from The Independent. Their aggressive rate hikes had brought inflation way down from the peaks of 2022, when …

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