NEW YORK (Project Syndicate) —The global financial and economic outlook for the year ahead has soured rapidly in recent months, with policy makers, investors, and households now asking how much they should revise their expectations, and for how long. That depends on the answers to six questions. Six questions First, will the rise in inflation…
2022 is shaping up as a historic year for markets. But while the S&P 500 is headed for its worst first half since 1970, the dollar appreciated during the first six months of 2022 by the largest margin in history, according to some measures. The Federal Reserve’s decision to raise interest rates by 75 basis…
If you want to know why Americans are so grumpy about the economy, let’s start with the fact that despite strong job growth and sizable increases in wages, their incomes are simply not keeping up with inflation. Americans just don’t feel poorer — they are poorer. In fact, they have never lost so much purchasing…
Investors and traders attempting to navigate one of the most treacherous periods in financial markets in years are all but sure to face more volatility during the second half of this year. One major reason is that few seem to be prepared for the risk that US inflation, already at an almost 41-year high of…
US stock indexes were higher in choppy trade Wednesday after Federal Reserve Chairman Jerome Powell reiterated his commitment to combat inflation, while also suggesting the economy was strong enough to withstand higher interest rates. How are stock indexes trading? The Dow Jones Industrial Average DJIA gained 125 points, or 0.4% to trade around 30,643, after…
Historically bad. That’s how the mammoth $ 53 trillion US fixed-income market has performed this year as the Federal Reserve works to curtail high inflation threatening to wreck the economy. To turbo charge the effort, the Fed on Wednesday fired off its biggest benchmark interest rate increase in nearly thirty years. But what does that…
Read More “What the Fed’s biggest rate hike in decades means for the bear market in bonds” »
Pity those first-time house buyers. On Wednesday, the US Federal Reserve raised the benchmark interest rate by 75 basis points to a 1.5% to 1.75% range, the biggest increase since 1994 as it tries to tame rising inflation, which has reached a 40-year high. Eric Finnigan, a director at John Burns Real Estate Consulting, wrote…
Just one day after Federal Reserve policy makers delivered their biggest rate hike in 28 years, the US inflation outlook continues to look dire in one obscure part of the financial market. Traders of so-called fixings, or derivatives-like instruments related to Treasury inflation-protected securities, expect four straight months of annual headline consumer-price index readings at…
The Federal Open Market Committee’s perceptions are moving closer to reality, but members still believe they can achieve a miracle: stamping out high inflation without pushing the economy into a recession. Before its latest policy announcement on June 15, the policy-setting FOMC projected the federal funds rate would rise to 2% by yearend; Now it…
Read More “Opinion: The Fed’s new outlook shows that it’s still in a fantasy land” »
An earnings recession is coming as the Federal Reserve raises interest rates, which in itself accelerates an economic recession. That should be no surprise given earnings are derived from economic activity. However, despite the economy already showing signs of weakness, inflation running at the highest level in 40 years and the Fed moving aggressively to…
