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Periods of high inflation would offset those when inflation was low as occurred between the financial crisis and the pandemic. Those concerns may not matter anymore if the pandemic has driven inflation and interest rates chronically higher. Speaking at a Boston Fed labor market conference in November, Kohn said the new framework showed the risks of not keeping inflation at bay to begin with. "Probing" for maximum employment "can't ignore...inflation risks," Kohn said, calling for a return to a strategy disavowed in the last review. "I think preemptive tightening is best-practice central banking, and I hope they return to allowing that."

Persons: Joshua Roberts, Jerome Powell, There's, Miesha Williams, Powell, Charles Evans, Evans, Fed, Loretta Mester, Austan Goolsbee, Goolsbee, Donald Kohn, Kohn, Howard Schneider, Dan Burns, Andrea Ricci Organizations: Federal Reserve, REUTERS, Rights, U.S, Federal, Spelman College, Reuters, Chicago Fed, Chicago, Cleveland Fed, Boston Fed, Thomson Locations: Washington , U.S, Atlanta

☆ America is stuck in a greased-pig economy
▼ + stars: | 2023-09-19 | by ( Linette Lopez | ) www.businessinsider.com time to read: +10 min

At the same time that prices were cooling off, the rest of the economy seemed to be holding up. And consumers were so intent on spending money to have a good time that cities let Beyoncé dictate public transit. In this greased-pig economy, stability depends on how confident investors and policymakers are that they're close to catching the pig. Moving in a messIn the messy economy the pandemic left us, it's not easy to pinpoint exactly why inflation has been so stubborn. CPI inflation peaked at 9% in June 2022 and has been going down steadily since.

Persons: it's, Jerome Powell, Mike Konczal, Konczal, we've, Price, proclivity, that's, Taylor Swift, we'd, Charles Evans, Christine Lagarde, Morgan, Jamie Dimon, Roosevelt, —, you've, Justin Simon, Jasper Capital, Linette Lopez Organizations: Consumers, Federal, Roosevelt Institute, Fed, Chicago Fed, European Central Bank, Census Locations: American, America, Jasper

☆ The Greased-Pig Economy: Higher Inflation, Stock Market Crash Possible
▼ + stars: | 2023-09-19 | by ( Linette Lopez | ) www.businessinsider.com time to read: +10 min

At the same time that prices were cooling off, the rest of the economy seemed to be holding up. In this greased-pig economy, stability depends on how confident investors and policymakers are that they're close to catching the pig. Moving in a messIn the messy economy the pandemic left us, it's not easy to pinpoint exactly why inflation has been so stubborn. CPI inflation peaked at 9% in June 2022 and has been going down steadily since. But with inflation still above the Fed's goal, it's clear we need to recalibrate some on the demand side still.

☆ Biden is still trying to forgive student debt in 'a very direct confrontation' with Supreme Court, expert says
▼ + stars: | 2023-08-27 | by ( Annie Nova | ) www.cnbc.com time to read: +4 min

"This is a very direct confrontation with the Court," Rosenblum wrote at the end of June on X, the social media platform formerly known as Twitter. Annie Nova: What exactly did you find so bold about President Biden disagreeing with the Supreme Court and announcing another plan to forgive student debt? It was because of the court, Biden made clear, that Americans would not receive the relief his administration had sought to provide them. Before Roosevelt, conflict between the Supreme Court and the president was not taboo, and Supreme Court justices were often understood to be important ordinary political figures. Charles Evans Hughes, chief justice of the Supreme Court when Roosevelt was elected, had been a Republican candidate for president.

Persons: Joe Biden, Noah Rosenblum, Joe Biden's, Rosenblum, Biden, Annie Nova, mystifying legalese, Franklin Roosevelt, Roosevelt, Charles Evans Hughes Organizations: White House, Washington Post, The Washington Post, White, New York University, CNBC, Supreme, Democrats, New, Republican

Even as inflation has slowed from last summer's 40-year highs, Fed officials have been reluctant to declare their job finished until there are clearer signs the economy is slowing. If, as some argue, the interest rate that neither stimulates nor restrains the economy has shifted higher, it means Fed policy is putting less pressure on the economy than expected. Partly to let its policies play out, the Fed is widely expected to leave interest rates on hold at its Sept. 19-20 meeting. Will the bulk of policymakers feel higher rates will be needed to finish the job? "I do expect some rise in unemployment will be required to get underlying inflation into a zone where the Fed is comfortable."

Persons: Chris Albrecht, what's, Thomas Barkin, Barkin, Charles Evans, Richard Clarida, Howard Schneider, Dan Burns, Paul Simao Organizations: Caesars, Richmond Fed, Reuters, Fed, Chicago Fed, Workers, U.S, Thomson Locations: DANVILLE, Virginia, Danville , Virginia, Caesars Virginia, Danville, U.S, Jackson Hole , Wyoming

☆ Chicago Fed President Goolsbee says recent reports show inflation is moving in the right direction
▼ + stars: | 2023-04-14 | by ( Alex Harring | ) www.cnbc.com time to read: +3 min

The latest batch of economic data shows positive developments on the inflation front, but the Federal Reserve's job is not over yet, Chicago Federal Reserve President Austan Goolsbee said. Goolsbee, who succeeded Charles Evans in the president role earlier this year, is a member of the Federal Open Market Committee, which sets the federal funds rate. The data showed a 1% decline in March, which is a larger fall than the 0.5% expected by economists polled by Dow Jones. The data this week has bolstered hopes of those predicting the Fed could change course on its interest rate hike campaign. "The one thing that I think we're spending too much time looking at is wage growth as an indicator of prices," Goolsbee said.

☆ Fed should not rely too much on market reaction to guide policy, Goolsbee says
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +1 min

Feb 28 (Reuters) - The Federal Reserve must supplement traditional government data and readings from financial markets with real-time, on-the-ground observations of economic conditions if it is to make good policy, Chicago Fed President Austan Goolsbee said on Tuesday. "It is a danger and a mistake for policymakers to rely too heavily on market reactions" like stock and bond market gyrations that "tell us which way the markets want the Fed to move," he said. That's slightly higher than where Fed policymakers in December signaled they would need to take the policy rate. Fed policymakers will provide updated projections on the rate path and economy at the end of their March 21-22 meeting. Fed Chair Jerome Powell earlier this month said one of the U.S. central bank's most important resources is the "haul" of information on local economies and communities gleaned from regional Fed banks like the one that Goolsbee now heads.

Powell faces a similar task this year but with the inflation problem turned on its head. As such, the Fed, which has been under Powell's leadership since early 2018, has flagged a downshift this year to a gradual pace of interest rate increases to reduce the risk of a policy mistake. Part of that withdrawal of stimulus included starting its balance sheet drawdown. For some that made kicking off the balance sheet drawdown at the July meeting less attractive than the September meeting, when then-Chair Yellen would speak with the press at its conclusion. "I see no advantage at all to moving it to July," then Fed governor Lael Brainard said.

☆ Stocks regain some lost ground as investors interpret U.S. payrolls data
▼ + stars: | 2022-12-02 | by ( Sinéad Carew | ) www.reuters.com time to read: +4 min

The U.S. Labor Department reported that nonfarm payrolls increased by 263,000 jobs last month compared with economist expectations for 200,000 jobs. "That sentiment shift has been more powerful than any 'negativity' to be taken from today's jobs report," he said. MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.15% on the day but added 1.5% for the week. Earlier it had jumped sharply in response to the jobs data, gaining as much as 0.82%. Gold prices also regained some lost ground from their earlier reaction to the jobs data.

☆ Morning Bid: Why payrolls might not matter to markets
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +4 min

It's payrolls Friday, yet the most keenly awaited U.S. economic data point may not hold much sway over markets that are already behaving as if the U.S. tightening cycle is over. If it holds at current levels, this would mark one of the biggest weekly drops in the last two years . One line of argument goes that to justify the move seen in government bond markets, the Fed needs to be more or less done in December. So, where does this all leave the November non-farm payrolls report out at 1330 GMT? In the light of that data, markets may be anticipating a lower number later on.

☆ Dollar gives back gains, strong wage growth complicates Fed policy
▼ + stars: | 2022-12-02 | by ( ) www.cnbc.com time to read: +3 min

"Stronger-than-expected hiring can buy the Fed more time to stay aggressive," Joe Manimbo, senior market analyst at Convera in Washington, said. But the dollar gave back gains as investors took profits before the weekend and as Fed officials spoke on the outlook. The dollar index was last down 0.13% on the day against a basket of currencies at 104.49, and the euro gained 0.10% to $1.0533. In the 12 months through October, the PCE price index increased 6.0% after advancing 6.3% in September. The next major U.S. economic indicator will be consumer price inflation data due on Dec. 13, one day before the Fed concludes its two-day meeting.

☆ Economist Austan Goolsbee named next Chicago Fed president
▼ + stars: | 2022-12-01 | by ( ) www.cnbc.com time to read: +3 min

Economist Austan Goolsbee will take over as president of the Chicago Federal Reserve early next year as the central bank weighs critical policy moves ahead, according to an announcement Thursday. "Austan is an exceptional choice to be the next president of the Federal Reserve Bank of Chicago. Goolsbee comes to the Chicago Fed at a sensitive time for the central bank. A Chicago Fed release announcing the appointment said the new district president is "a leading empirical economist" whose research spans a wide variety of topics. Goolsbee called the Chicago Fed "one of the crown jewels" of the central bank system.

The war on inflation is far from won, with the Fed's preferred measure of price increases still running at roughly three times the central bank's 2% target. That's the biggest ramp-up in U.S. rates over a nine-month period since Volcker battled even higher inflation in the early 1980s. Powell, who this year marked a decade since his appointment as a Fed governor and whose second term as Fed chief extends to 2026, has overseen some divided decisions. In a best-case scenario, inflation continues to fall and Fed officials, whether hawk or dove, align around a stopping point for the policy rate that doesn't lead to a sharp rise in unemployment. Reporting by Howard Schneider; Additional reporting by Ann Saphir; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

☆ The November jobs report and the Fed matter most to markets in the week ahead
▼ + stars: | 2022-11-25 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

November's jobs report is the big event for markets in the week ahead, and it could provide important insight into the path of Federal Reserve interest rate hikes. The labor market has cooled only slightly, as other parts of the economy have slowed. But the labor market has been more resilient than expected, challenging the Fed's efforts to tame inflation by slowing economic activity. Besides the jobs report, there is the Job Openings and Labor Turnover Survey (JOLTS) report Wednesday, as well as the Fed's beige book on economic activity. "Holding above 4,000, as we await the jobs report and those other economic reports would be constructive for one more move before Christmas," he said.

☆ Citadel boss Ken Griffin likens Fed rate hike policy to taking a course of antibiotics, says taking the foot off the brake now would be a 'mistake'
▼ + stars: | 2022-11-15 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

The Fed needs to stay on the course with its monetary policy, Citadel founder and CEO Ken Griffin said. Griffin said the Fed should not veer from its path of rate hikes until inflation is conquered. Lower-than-expected inflation in October prompted some experts to nudge the Fed into slowing its rate hikes. Doing so would be "the absolute worst mistake the Fed could possibly make" and could cost the Fed its credibility, Griffin added. His comments followed a lower-than-expected inflation rate of 7.7% in October, according to the Bureau of Labor Statistics.

☆ Stock market rally will be put to test in week ahead, after yields fall and tech surges
▼ + stars: | 2022-11-11 | by ( Patti Domm | In | ) www.cnbc.com time to read: +10 min

This week, bond yields also came off their highs and were sharply lower, paving the way for gains in tech and growth shares. They include Fed Vice Chair Lael Brainard, New York Fed President John Williams and Minneapolis Fed President Neel Kashkari to name a few. Hogan said that group includes Bullard, Brainard and San Francisco Fed President Mary Daly. Many strategists are calling the move higher a bear market rally, and some expect it will fizzle in December while others say it could continue into the new year. Friday Earnings: JD.com, Foot Locker, Buckle 8:40 a.m. Boston Fed President Susan Collins 10:00 a.m.

☆ Wall St rallies to close out soft week after jobs report
▼ + stars: | 2022-11-04 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +4 min

But the data also showed average hourly earnings rose slightly more than expected, as did job growth, pointing to a labor market that largely remains on firm footing. Nonfarm payrollsLabor market data has been a primary focus for markets as the Fed has repeatedly stated it is looking for some cooling before considering a pause in hikes. "This was not a report that shows the rate hikes are starting to take hold," said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago. The Dow Jones Industrial Average (.DJI) rose 410.27 points, or 1.28%, to 32,411.52. Starbucks Corp jumped after it topped Wall Street estimates for quarterly comparable sales and profit, while DoorDash Inc's (DASH.N) revenue beat boosted the food delivery firm's shares.

Data for September was revised higher to show 315,000 jobs created instead of the previously reported 263,000, but the unemployment rate ticked up to 3.7% from 3.5%. "And I think the implication of that is probably a slower rate of pace of rate increases, a longer pace of rate increases and potentially a higher end point." The Fed's key policy rate currently sits in a 3.75%-4.00% range. "I had interest rates in September peaking at around 4.9% in the March-April (2023) kind of time frame," Kashkari said. Reporting by Lindsay Dunsmuir, Michael S. Derby, Dan Burns and Ann Saphir; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

☆ Fed's Evans says smaller rate hikes make sense, front-loading done
▼ + stars: | 2022-11-04 | by ( Ann Saphir | ) www.reuters.com time to read: +3 min

"From here on out, I don't think it's front-loading anymore, I think it's looking for the right level of restrictiveness," Evans told Reuters in an interview, referring to the U.S. central bank's string of supersized rate hikes. The Fed's preferred measure of inflation is running at more than three times the central bank's 2% target. But the Fed would also be in position to downshift from 50-basis-point to 25-basis-point hikes if it needed to, he said. You are looking for the point where you've got two-sided risks," Evans said. "I think most people would say at the moment it's not two-sided: inflation reports are likely to still be disappointing even if they begin to improve."

☆ Fed's Evans: need to get policy rate to a bit above 4.5%, then hold
▼ + stars: | 2022-10-21 | by ( ) www.reuters.com time to read: +1 min

Oct 21 (Reuters) - Chicago Federal Reserve Bank President Charles Evans on Friday repeated his view that the U.S. central bank ought to get policy to "a bit above" 4.5% by early next year and then hold it there so as to restrain growth and bring down too-high inflation. "Front-loading was a good thing, given how far below neutral rates were" as recently as March, when they were near zero, Evans told the regional Fed bank's Community Bankers Symposium earlier Friday. "But overshooting is costly, too, and there is great uncertainty about how restrictive policy must actually become, so this is going to put a premium on the strategy of getting to a place and a level where policy can plan to rest and evaluate data and developments." The remarks were shortened version of similar comments given two weeks ago; the bank posted a video of Evans' presentation on its website. Register now for FREE unlimited access to Reuters.com RegisterReporting by Ann Saphir; editing by Diane CraftOur Standards: The Thomson Reuters Trust Principles.

☆ Wall Street ends higher as hopes for less aggressive Fed grow
▼ + stars: | 2022-10-21 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +4 min

Analysts widely expect the Fed to hike rates by 75 basis points for a fourth straight meeting in November. For the week, the S&P 500 climbed 4.74%, the Dow gained 4.89% and the Nasdaq rose 5.22%. Schlumberger (SLB.N) shot up 10.33% to help to lift the S&P 500 energy sector (.SPNY) 2.76% after reporting a quarterly profit above expectations. Advancing issues outnumbered declining ones on the NYSE by a 2.59-to-1 ratio; on Nasdaq, a 2.03-to-1 ratio favored advancers. The S&P 500 posted 9 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 60 new highs and 322 new lows.

The exterior of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, D.C., U.S., June 14, 2022. Yet even as markets point to another large increase at the final policy meeting of the year in December, sentiment is building within the Fed to take a breather. Even with the existing rate outlook, it was a "closer call than normal" whether recession can be avoided. Inflation, officials acknowledge, has become broader and more persistent than anticipated, and may be slow to decline. Recent staff estimates, recounted in the minutes of the last Fed meeting, indicated the economy may be much "tighter" than anticipated as high demand strains against potential output that may be more limited than thought.

CHARLOTTESVILLE, Va., Oct 19 (Reuters) - Interest rates that move too high could have a "nonlinear" impact on the economy as businesses become more pessimistic, Chicago Fed President Charles Evans said on Wednesday, mapping out a case for caution in the central bank's battle against high inflation. While the risks of high inflation remain "to the upside," Evans said raising rates much higher than currently planned could pose risks of its own. But he said it already was a "closer call than normal" whether the United States can avoid a recession. "Unfortunately, at the moment, inflation is just much too high," Evans said. Register now for FREE unlimited access to Reuters.com RegisterReporting by Howard Schneider; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.

☆ 2-year Treasury yield tops 4.6% as recession fears grow louder
▼ + stars: | 2022-10-20 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +1 min

The benchmark 10-year Treasury yield climbed as high as 4.18% on Thursday, reaching level last seen over 14 years ago in mid-2008. It was last up by 3.8 basis points to 4.167%. The yield on the policy-sensitive 2-year Treasury was last at 4.612% after rising by six basis points to levels last noted in 2007. The yield on the German 10-year bund was last up by around 8 basis points to 2.448%, levels last seen in 2013. Meanwhile, the British 10-year gilt yield was up 9 basis points to 3.964% amidst economic turmoil in the U.K.

☆ Fed's Evans: Keeping unemployment below 5% would be 'good' outcome in inflation fight
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: 1 min

WASHINGTON, Oct 19 (Reuters) - If the Federal Reserve can bring inflation under control with unemployment remaining under 5% that would be "pretty unusual and good," Chicago Fed President Charles Evans said on Wednesday. In remarks at the University of Virginia Evans said the policy projections outlined after the September Fed meeting, with the target interest rate rising to 4.6% next year and unemployment rising to around 4.4%, "could be consistent with an economy that runs below trend but doesn't actually go into a recession...If you bring this in under 5% (unemployment) that would be pretty unusual and good." Register now for FREE unlimited access to Reuters.com RegisterReporting by Howard Schneider Editing by Chris ReeseOur Standards: The Thomson Reuters Trust Principles.

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