The Federal Reserve on Wednesday laid the groundwork for an eventual pause in interest rate increases early next year, even as it indicated it intends to continue lifting rates into a slowdown. The projection of a slowdown, which is in the Summary of Economic Projections released after the Federal ... READ MORE >
inflation
November CPI: Easing inflation amid surging housing costs poses dilemma for Fed
On first sight, the U.S. November consumer price index would suggest relief among policymakers following the second straight inflation report that came in lower than expected. With the top-line figure easing to a 7.1% annual increase and core inflation falling to 6% on a year-ago basis, the data ... READ MORE >
Did fiscal spending go too far? Assessing the global economy.
Fiscal responses by governments around the world during the pandemic were unprecedented. Many governments put forward anywhere between 20% and 30% of gross domestic product in spending to mitigate the impact of economic shutdowns. Now, after months of elevated inflation and surging interest rates, ... READ MORE >
FOMC preview: Policy rate to increase by 50 basis points
Two weeks after Federal Reserve Chairman Jerome Powell pointed to slower interest rate increases, the central bank is poised to do just that when the Federal Open Market Committee meets this week and raises its policy rate by 50 basis points. Such an increase would follow a series of 75 basis-point ... READ MORE >
Producer price inflation hotter than expected ahead of Fed’s meeting
Wholesale prices grew faster than expected in November, driven mostly by services which have become the new focus of the Federal Reserve in its fight against inflation. The producer price index for final demand rose by 0.3% in November and by 7.4% year-over-year, the Bureau of Labor Statistics reported ... READ MORE >
U.S. service sector grows, adding pressure on Fed
The Institute for Supply Management's service index rose in November as business activities increased on the month. The unexpectedly strong purchasing managers survey data, released on Monday, added more pressure on the Federal Reserve as focuses on taming inflation, especially in services. The ... READ MORE >
U.S. jobs report: Rising wages pose a problem as hiring remains strong
Expectations that wage growth would slow were dashed inside the U.S. jobs report for November as average hourly earnings increased by 5.1% on a year-ago basis and by 0.6% on the month in addition to being revised higher in October. The primary policy takeaway from the report is that the Federal ... READ MORE >
Manufacturing sector nears contraction
The manufacturing sector grew for the 30th month in a row but barely hovered above contraction in November, according to data released by the Institute for Supply Management on Thursday. The ISM’s overall index slowed to 49%, barely above the contraction threshold at 48.7%. It was the third straight ... READ MORE >
Consumer confidence drops as outlook darkens
Consumer confidence fell for the second month in a row as inflation and recession fears dampened the economic outlook. The Conference Board's confidence index dipped to 100.2 in November from 102.2 in October, significantly below the pre-pandemic level of 130. Rising prices remained consumers' top ... READ MORE >
Financial conditions update: Rising risks and tightening markets
Despite a strong bounce in U.S. financial markets following better-than-anticipated inflation data for October, financial conditions remain tight. The risk to the economic outlook has not abated after one month of encouraging consumer price index data. Central banks continue to increase the cost of ... READ MORE >