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☆ Slowing growth plus stubborn inflation add up to a headache for Fed officials
▼ + stars: | 2024-04-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The slowing growth and stubborn inflation picture emerging in the U.S. economy may not be quite a nightmare scenario for the Federal Reserve, but it at least could make for some restless sleep. Markets had been looking for the string of good readings dating back to mid-2022 to continue, with economists estimating real GDP growth of 2.4% and inflation readings around 3%. What it got was essentially what some on Wall Street called the worst of both worlds, with weakening growth and stubborn price pressures. The Fed will get a more granular look at PCE data on Friday when the Commerce Department releases the monthly figures for March. "We still think Fed cuts are coming this summer, before inflation has sustainably slowed."

Persons: Matthew Ryan, —, Ryan, Steven Blitz, Veronica Clark Organizations: Federal Reserve, Commerce, Treasury, Commerce Department, TS Lombard, Citigroup, Citi Locations: U.S

☆ Don't sweat the prospect of no Fed rate cuts, economist says — markets will still march higher
▼ + stars: | 2024-03-28 | by ( Sam Meredith | In Samuelmeredith | ) www.cnbc.com time to read: +4 min

Federal Reserve Bank Chair Jerome Powell speaks during a news conference at the bank's William McChesney Martin building on March 20, 2024 in Washington, DC. His comments come as investors await the release of further U.S. economic data and closely monitor clues from Fed officials about the expected number of interest rate cuts in 2024. Asked on Thursday about the likelihood of one or no Fed interest rate cuts this year, Blitz said that it's "getting pretty good. Blitz said markets will likely continue to march higher, even if the Fed decides not to impose any interest rate cuts this year — a prospect that U.S. asset manager Vanguard named as their base-case scenario. Christopher Waller, governor of the US Federal Reserve, during a Fed Listens event in Washington, DC, US, on Friday, March 22, 2024.

Persons: Jerome Powell, William McChesney Martin, Chip Somodevilla, Steven Blitz, Blitz, They're, CNBC's, it's, Christopher Waller, Waller, Raphael Bostic, Jerome, Powell Organizations: Bank, Getty, Federal Reserve, TS Lombard, Traders, Fed, Vanguard, Economic, of New, Atlanta Federal Reserve, US Federal Reserve, Bloomberg Locations: Washington ,, U.S, of New York, Atlanta, Washington , DC

☆ This week provided a reminder that inflation isn't going away anytime soon
▼ + stars: | 2024-03-14 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

From consumer and wholesale prices to longer-term public expectations, reports this week served up multiple reminders this week that inflation isn't going away anytime soon. Data across the board showed pressures increasing at a faster-than-expected pace, causing concern that inflation could be more durable than policymakers had anticipated. The bad news began Monday when a New York Federal Reserve survey showed the consumer expectations over the longer term had accelerated in February. It continued Tuesday with news that consumer prices rose 3.2% from a year ago, and then culminated Thursday with a release indicating that pipeline pressures at the wholesale level also are heating up. The latest jolt on inflation came Thursday when the Labor Department reported that the producer price index, a forward-looking measure of pipeline inflation at the wholesale level, showed a 0.6% increase in February.

Persons: Steven Blitz, Dow Jones Organizations: New York Federal Reserve, TS Lombard, Labor Department, department's Bureau of Labor Statistics

WASHINGTON (AP) — From Wall Street traders to car dealers to home buyers, Americans are eager for the Federal Reserve to start cutting interest rates and lightening the heavy burden on borrowers. Why, with inflation nearly conquered and interest rates at a 22-year high, isn't now the time to cut? High rates could also compound the struggles of banks that are saddled with bad commercial real estate loans, which would be harder to refinance at higher rates. “We need the government to address the interest rates ... and understand that they’ve accomplished their goal of lowering inflation," Kelleher said. If so, that might not just delay the Fed's rate cuts, but result in fewer of them.

Persons: isn't, ”, Steven Blitz, “ They’re, ” Loretta Mester, Mester, “, David Kelleher's Chrysler, Kelleher, ” Kelleher, Powell, ” Powell, we’re, Andrea Kugler, Eric Swanson Organizations: WASHINGTON, Federal Reserve, GlobalData, Lombard, Federal Reserve Bank of Cleveland, Jeep, Fed, University of California Locations: Wall, Philadelphia, Irvine

Describing that anticipated outcome while keeping open the possibility of future rate increases will be one challenge Powell faces. Another will be discounting speculation about the prospect of rate cuts or changes to other aspects of Fed policy, such as the ongoing reduction of the central bank's balance sheet. The yield on the 10-year Treasury note is just about six-tenths of a percentage point below the Fed's policy rate; when the gap between the two shifts from negative to positive is when monetary policy gets perhaps its truest test. Recent data on balance don't fully back the Fed's view of a gently slowing economy and steadily easing inflation. "Assuming the economy keeps growing ... the Fed will get back to hiking," Blitz said.

Persons: Jerome Powell, Powell, Larry Meyer, Meyer, Krishna Guha, Powell's, Christopher Waller, Waller, Steven Blitz, Howard Schneider, Dan Burns, Paul Simao Organizations: Federal Reserve, Fed, U.S ., Economic, of New, Reuters Graphics Reuters, Evercore ISI, Hamas, U.S . House, Graphics, TS Lombard, Thomson Locations: U.S . Congress, of New York, Israel, Palestinian, Washington, U.S

☆ CNBC Daily Open: Inflation reports take center stage
▼ + stars: | 2023-10-13 | by ( Shreyashi Sanyal | ) www.cnbc.com time to read: +2 min

In this article JPMCWFCGOOGL Follow your favorite stocks CREATE FREE ACCOUNTA pedestrian passes a Wall Street subway station near the New York Stock Exchange (NYSE) in New York, U.S., on Monday, June 27, 2022. Photographer: Michael Nagle/Bloomberg via Getty Images Bloomberg | Bloomberg | Getty ImagesThis report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. This pushed U.S. markets lower, renewing fears of what lies next for the Federal Reserve, which has stuck to its goal of 2% inflation. Investors may now want to take a deep breath to brace themselves before the barrage of earnings reports take markets by storm.

Persons: Michael Nagle, Steven Blitz, Zhiwei Zhang Organizations: New York Stock Exchange, Bloomberg, Getty Images Bloomberg, Getty, CNBC, Labor Department, Federal Reserve, GlobalData, JPMorgan Chase, Citigroup, Wells, Bank Locations: New York, U.S

☆ Getting to 2% inflation won't be easy. This is what will need to happen, and it might not be pretty
▼ + stars: | 2023-10-12 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Mike Blake | ReutersIn theory, getting inflation closer to the Federal Reserve's 2% target doesn't sound terribly difficult. The main culprits are related to services and shelter costs, with many of the other components showing noticeable signs of easing. watch nowInstead, getting better control of rents, medical care services and the like could take ... well, you might not want to know. Policymakers have been banking on the notion that when existing rental leases expire, they will be renegotiated at lower prices, bringing down shelter inflation. He added that the CPI report "is a reminder that we do not have good historic examples to lean on" for long-term patterns in rent inflation.

Persons: Mike Blake, Steven Blitz, Goldman Sachs, Lisa Sturtevant, Christopher Bruen, Marta Norton, Stephen Juneau, Juneau Organizations: Reuters, GlobalData, Street, Cleveland Fed, Bright MLS, Housing, Americas, Morningstar Wealth, Bank of America Locations: Rancho, San Diego , California, Maryland, Stephen Juneau , U.S

☆ Bond yields could hit 6% as the Fed is going to keep hiking rates until something breaks, research firm says
▼ + stars: | 2023-10-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Key bond yields are likely headed to 6% as the Fed will keep hiking interest rates, TS Lombard said. That's due to recent robust economic data, which could influence the Fed to take interest rates higher. Higher rates risk sparking a recession, especially considering interest rates are already higher than Fed officials think, Blitz said. Markets have panicked in recent weeks as investors try to adjust to a higher-for-longer interest rate environment. Yields on the 10-year US Treasury just rose to their highest level since 2007, briefly touching 4.8% on Friday.

Persons: Lombard, —, Steven Blitz Organizations: stoke, Treasury, Service, Federal Reserve, Lombard, Investors, —

☆ A U.S. government shutdown will be marginally negative on the economy, says economist
▼ + stars: | 2023-09-29 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailA U.S. government shutdown will be marginally negative on the economy, says economistSteven Blitz, chief economist at TS Lombard, discusses the impact of a potential government shutdown on the U.S. economy that is "teetering towards recession."

Persons: Steven Blitz Organizations: TS Lombard Locations: U.S

Reuters Graphics Reuters GraphicsMonth-to-month inflation numbers "will inevitably hop around," wrote Pantheon Macroeconomics Chief Economist Ian Shepherdson, who sees underlying consumer inflation nevertheless slowing to a "benign" level of below 3% by early next year. Since their meeting in July, only two Fed policymakers have said they felt rates do not need to rise further, while others noted their outlook for slowing inflation was built around a slightly higher federal funds rate. Overall bank credit has been falling on a year-over-year basis since mid-July, evidence of financial firms tightening access either through higher rates or stricter standards. By and large Fed officials feel the economy can grow about 1.8% a year with inflation at the 2% target and assuming "appropriate monetary policy." The outlook has diminished prospects for a U.S. recession, but may well keep Fed concerns about high - or higher - inflation alive.

Persons: Jessica Rinaldi, Ian Shepherdson, Jerome Powell, Powell, Torsten Slok, Goldman Sachs, Steven Blitz, Howard Schneider, Dan Burns, Andrea Ricci Organizations: REUTERS, Rights, Federal Reserve, Reuters Graphics Reuters, Investors, Apollo Global Management, Lombard Chief U.S, Fed, Thomson Locations: Flushing , New York, U.S

☆ Surging bond yields add to pressure for Powell's big speech Friday
▼ + stars: | 2023-08-22 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

All eyes will be trained on the central bank leader when he makes his annual address Friday in Jackson Hole, Wyoming. "Powell will need to choose whether to accept or push back against the 'higher-for-longer' narrative at Jackson Hole on Friday." Bond yields are a helpful guide to inflation as they represent a measure of where markets think growth, policy and prices are heading. That has come with one quarter-point Fed rate increase along with rising expectations that the economy may be able to avoid a much-predicted recession. This year's Jackson Hole symposium topic is "Structural Shifts in the Global Economy."

Persons: Jerome Powell, Powell, Andrew Hollenhorst, Jackson, Hollenhorst, Steven Blitz Organizations: Federal, Kansas City, Citigroup, Fed, TS Lombard Locations: Jackson Hole , Wyoming, Kansas

☆ Here's what to expect from the Federal Reserve meeting Wednesday
▼ + stars: | 2023-07-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

WASHINGTON, DC - JUNE 21: Federal Reserve Chairman Jerome Powell testifies before the House Committee on Financial Services June 21, 2023 in Washington, D.C. Powell testified on the Federal Reserve’s Semi-Annual Monetary Policy Report during the hearing. Win Mcnamee | Getty Images News | Getty ImagesDespite an improving inflation picture, the Federal Reserve is expected on Wednesday to approve what would be the 11th interest rate increase since March 2022. That would push the upper boundary of the federal funds rate to its highest level since January 2001. But apparently the folks at the Fed think they need one more at least." Likewise, Steven Blitz, chief U.S. economist at Globaldata.TSLombard, said a "dovish hike and talk of soft landings" at Wednesday's meeting would be a mistake for the Fed.

Persons: Jerome Powell, Powell, Win Mcnamee, they've, Kathy Jones, Charles Schwab, Jones, —, haven't, Luke Tilley, that'll, " Tilley, I'm, Andrew Hollenhorst, Steven Blitz Organizations: Federal, Financial, Getty, Federal Reserve, Investors, Open Market, Dow Jones, Investment Advisors, Citigroup Locations: WASHINGTON, DC, Washington ,, Central, —, Wilmington, U.S

☆ U.S. recession might still happen in mid-2023, says TS Lombard economist
▼ + stars: | 2023-06-01 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailU.S. recession might still happen in mid-2023, says TS Lombard economistSteven Blitz, U.S. economist at TS Lombard, discusses the latest developments surrounding the debt ceiling deal.

Persons: Steven Blitz Organizations: U.S, TS Lombard

☆ The banking crisis is having a slow-burn impact on the economy
▼ + stars: | 2023-04-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

That's a credit hit on Middle America, on Main Street," said Steven Blitz, chief U.S. economist at TS Lombard. Watching growth aheadIn the immediate future, the reading on first-quarter economic growth is expected to be largely positive despite the banking problems. In fact, the most recent recession was just two years ago in the early days of the Covid crisis. Consumer spending has seemed to hold up fairly well in the face of the banking crisis, with Citigroup estimating excess savings of about $1 trillion still available. [The banking situation] is a headwind, but it's not a gale-force headwind, it's just kind of a nuisance."

Persons: Spencer Platt, Steven Blitz, Stocks, Robert Sockin, it's, Dow Jones, isn't, It's, Moody's, Mark Zandi, headwind, Covid, Jim Baird, Plante, Baird Organizations: New York Stock Exchange, Getty, JPMorgan Chase, Bank of America, TS Lombard, First, Bank, P Bank ETF, Citigroup, Commerce Department, Silicon Valley Bank, Signature Bank, Moody's, Financial Advisors Locations: New York City, U.S, America, First Republic, Atlanta

☆ No exit ramp for Fed's Powell until he creates a recession, economist says
▼ + stars: | 2023-03-08 | by ( Elliot Smith | ) www.cnbc.com time to read: +2 min

Federal Reserve Chair Jerome H. Powell testifies before a U.S. Senate Banking, Housing, and Urban Affairs Committee hearing on "The Semiannual Monetary Policy Report to the Congress" on Capitol Hill in Washington, March 7, 2023. The U.S. Federal Reserve cannot disrupt its cycle of interest rate increases until the nation enters a recession, according to TS Lombard Chief U.S. He stressed that the Fed lacks clarity on the ceiling of interest rate increases in the absence of such an economic slowdown. Market expectations for the terminal Fed funds rate were around 5.1% in December, but have risen steadily. Goldman Sachs lifted its terminal rate target range forecast to 5.5-5.75% on Tuesday in light of Powell's testimony, in line with current market pricing according to CME Group data.

☆ Fed funds rate to hit 6.5% without mid-year recession, economist says
▼ + stars: | 2023-03-08 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFed funds rate to hit 6.5% without mid-year recession, economist saysSteven Blitz, chief U.S. economist at TS Lombard, shares his projections for the Federal Reserve's monetary policy trajectory after Chairman Jerome Powell's testimony on Capitol Hill rocked markets.

☆ A year later, the Fed still has a long way to go in the fight against inflation
▼ + stars: | 2023-03-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +9 min

The rate hikes appeared to have quelled some of the inflation surge that inspired the policy tightening. Indeed, Fed officials for months stuck to the narrative that inflation was "transitory" and would abate on its own. Fed Chairman Jerome Powell recently insisted that he and his colleagues are taking "forceful steps" now to bring down inflation. The index most recently showed an annual inflation rate of 6.4%, down from a peak around 9% in the summer of 2022. Citigroup economist Andrew Hollenhorst thinks the Fed could tame key inflation metrics to around 4% by the end of this year.

November's labor force participation rate of 62.1% was almost exactly where it was in January, with little variation in between. Each month millions of adults change their work status: Some join the labor market by either accepting a job or starting a job search; others move between a job and unemployment; some leave the labor market altogether. Increasingly "workers leaving employment are dropping out of the labor force, not becoming unemployed," TS Lombard economist Steven Blitz wrote recently. Recent changes in labor flow data "underscores the Fed's concern about the supply-demand labor imbalance underpinning inflation." Reuters GraphicsFEWER 'UNRETIREMENTS'The payroll jobs and labor force data come from different surveys, one of firms and one of households, and might be revised over time.

☆ U.S. job growth likely slowed again in November; labor market still tight
▼ + stars: | 2022-12-02 | by ( Lucia Mutikani | ) www.reuters.com time to read: +5 min

But the labor market remains tight, with 1.7 job openings for every unemployed person in October, keeping the Fed on its monetary tightening path at least through the first half of 2023. Labor market strength is also one of the reasons economists believe an anticipated recession next year would be short and shallow. The labor market is still very strong and still very tight," said Agron Nicaj, U.S. economist at MUFG in New York. The unemployment rate is seen unchanged at 3.7%, consistent with a still-tight labor market. "I still believe the economy tips into a short and shallow recession mid-2023, based on eroding labor market growth, but the probability of no recession is now higher," said Steven Blitz, chief U.S. economist at TS Lombard in New York.

☆ Is the Fed 'going rogue'? Calls heat up to back off quest for 2% inflation
▼ + stars: | 2022-11-19 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

For at least a decade, the Federal Reserve's position that a 2% inflation rate is where the economy best functions has been taken as gospel. 'Going rogue' "As far as 2% is concerned, I think it's stupid," said Jim Paulsen, chief investment officer at Leuthold Group. Paulsen and Sternlicht aren't the only critics of Fed policy. Achieving a steady 2% inflation rate, however, has proven elusive for the Fed. 'The gold standard' for policy But Fed Chairman Jerome Powell and most of his colleagues have rebuffed calls to raise the goal.

☆ Economist warns investors with listed stocks will see the biggest hole in their balance sheets
▼ + stars: | 2022-09-21 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailEconomist warns investors with listed stocks will see the biggest hole in their balance sheetsSteven Blitz, chief U.S. economist at TS Lombard, says that those with listed stocks are going to see the biggest hole in their balance sheets.

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