Two of the Federal Reserve's closely watched gauges for prices and labor costs released on Friday reaffirmed expectations that the central bank will begin raising interest rates in March as the Fed moves to tame inflation. The personal consumption expenditures deflator, the Fed's official indicator for ... READ MORE >
Coronavirus
Chart of the day: Initial jobless claims drop as omicron crests
New filings for jobless claims fell to 260,000 last week, following the 14-week high of 290,000 in the previous week, as COVID-19 cases continued to retreat from their recent record high, according to government data released Thursday. Still, it marked the third week in a row that new jobless claims ... READ MORE >
U.S. GDP increases 6.9% in fourth quarter
The American economy closed out last year on an upbeat note, finishing with a 6.9% growth rate in the fourth quarter on a seasonally adjusted annualized pace, according to Commerce Department data released on Thursday. For the full year, growth advanced by 5.7%, the strongest rate since 1984. The ... READ MORE >
Fed to use conventional and unconventional tools to obtain price stability
The Federal Reserve on Wednesday signaled that it intends to use both conventional and unconventional tools to address risks to the economic outlook caused by inflation even as the economy remains short of full employment. The major changes to the Federal Open Market Committee statement released after ... READ MORE >
Bank of Canada keeps rates steady but prepares for rate hikes ahead
The Bank of Canada kept its policy rate at 0.25% at its January meeting on Wednesday as it prepares to hike rates in March and subsequently draw down its balance sheet. In its announcement, the central bank has removed its exceptional forward guidance on its policy rate, saying that “the economic ... READ MORE >
Chart of the day: New home sales rise above 11% for second straight month
Sales of new single-family homes in December beat the market's median estimate by a wide margin, rising by 11.9% to 811,000 on an annual basis, according to data released by the Commerce Department on Wednesday. Although November's reading for the month-over-month change was revised down to 1.7%, that ... READ MORE >
Chart of the day: Consumer confidence falls as omicron sets in
Consumers showed less confidence in January as the impact of the omicron variant weighed on expectations, according to a report from the Conference Board on Tuesday. The headline index slid to 113.8 from 115.2 in December, snapping a string of gains since September, when the economy came out of the ... READ MORE >
Chart of the day: Omicron variant will extract a powerful economic toll
The health crisis caused by COVID-19 is entering its third year and is taking an ever-increasing human toll. This latest wave—attributed to the omicron variant—has infected around 814,000 people per day, which is 4.85 times greater than the peak of the wave attributed to the delta variant. The variant ... READ MORE >
FOMC preview: Shaping expectations for a major policy shift
The policy objective at Wednesday’s meeting of the Federal Open Market Committee will be to prepare market participants for the major shift in policy that lies ahead: a rate hike in March, another in June, and a balance sheet runoff likely to start in June or July. Policymakers and investors should ... READ MORE >
How the Fed plans to use its balance sheet to craft a soft landing
Key takeaways The Fed will begin reducing its balance sheet by midyear. Expect a roll-off of $2.85 trillion by the end of 2024. The roll-off can be put on hold if economic conditions merit. The Fed is unlikely to sell assets back into the market under current conditions. Risks to the ... READ MORE >