The Federal Reserve's November meeting went as the market expected: no change in rates. What wasn't expected was the October and early November rollercoaster of bond yields. And by rollercoaster, think Kingda Ka.
The outcome of the Fed's meeting in September was to hold rates at the current level. It has been described as a "hawkish pause," and the Fed was clear in post-meeting remarks and statements that one more increase is still possible in 2023.
Instead of a recession, the economy is healthy and appears poised for slow, but sustainable, growth. This is pretty close to the soft landing that Jerome Powell consistently insisted was achievable. Can consumer spending continue to prop up the economy, or will inflation continually outpacing income take a toll?
Data releases in July told a story of a stronger-than-expected economy. The doom-and-gloom scenario of an all-but-inevitable recession seemed to be replaced by something that looked like optimism around the prospect of a soft landing. Will the Fed actually be able to pull off avoiding a recession?
The Fed finally hit "pause" on interest rate increases in June after fifteen months and ten consecutive rate hikes. There are some signs that the rate increases already enacted are beginning to have an impact, however, wage growth remains strong. What does that mean for the timing of potential rate decreases?
With the debt ceiling debate behind us, attention has now returned to the Fed. The Fed is trying diligently to tamp down economic growth to control inflation, but recent progress has slowed, and changes are incremental. What does that mean for the future path of rate hikes?
Inflation is falling, wage growth has moderated somewhat, and a strong labor market doesn't seem to be inducing a wage-price inflation spiral. The Fed's confidence may not be misplaced, and the economy may avoid a recession this year as inflation continues to head back down towards 2%.
The impact of bank failures is going to take a while to be fully felt in the economy. The pullback in lending is likely already underway as banks trim balance sheets in anticipation of either new regulations or a further weakening economy. What does this mean for the Fed?
While the fallout from bank failures will take a while to unravel, and the impact on markets will likely be ongoing, the bigger picture wraps right back to the Federal Reserve. But first, a little recent history lesson.
Markets appear to have finally started taking Federal Reserve Chairman Jerome Powell's warnings seriously and caught up to the rhetoric that the Fed has been consistently pushing out. Rates will be higher for longer, yields went up, bond prices fell, and equity markets finally acknowledged that the pivot was nowhere in sight. What does this mean for the economy?
The market adage is “as January goes, so goes the year.” Is it true? According to an analysis by Fidelity, January returns are positive about 75% of the time the full year turns out positive. But the data continues to be open to interpretation.
While the equity markets, as measured by the S&P 500 index, was up in the third quarter, December was a disappointment from the gains seen in October and November. Inflation is dropping, if slowly. Employment is lower, but strong, which is supportive of the economy, and GDP returned to positive. What’s causing the volatility?
We’re on the home stretch of a year in which “unprecedented” doesn’t even begin to capture it. Nothing went according to plan, for anyone, from Russia’s invasion of Ukraine to the Fed’s domestic attempts to combat inflation.
Economic data showed some movements in the right directions, both up and down. The Federal Reserve responded by talking about letting the economy catch up to the rate increases already enacted. Does that mean that the path forward will be smoother and potentially skirt a recession?
The Fed raised the key short-term interest rate by another 75 basis points at the September FOMC meeting, but the big news wasn’t the well-anticipated rate increase.