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☆ Will the Fed 'raise and hold' rates? Traders bet they will not
▼ + stars: | 2022-12-05 | by ( Ann Saphir | ) www.reuters.com time to read: +4 min

Reuters GraphicsIt syncs with financial market measures like the inverted Treasury yield curve flashing warning lights about a coming recession. "I don't think the Fed will be comfortable cutting rates until unemployment gets close to 5%, or inflation declines south of 3%. Fed policymakers will update their forecasts for unemployment and inflation at the end of their Dec. 13-14 meeting, with some already previewing snippets of their updated outlooks. Powell said he believes rates will ultimately need to go "somewhat higher" than the 4.6% policymakers projected in September. But, he said, "we wouldn't just raise rates and try to crash the economy and then clean up afterwards."

Average 30-year fixed mortgage rates have dropped below 6% for the first time since late September. See more mortgage rates on Zillow Real Estate on ZillowMortgage calculatorUse our free mortgage calculator to see how today's mortgage rates would impact your monthly payments. 30-year fixed mortgage ratesThe current average 30-year fixed mortgage rate is 6.49%, according to Freddie Mac. 15-year fixed mortgage ratesThe average 15-year fixed mortgage rate is 5.76%, a decrease from the prior week, according to Freddie Mac data. Mortgage rates started ticking up from historic lows in the second half of 2021 and have increased significantly so far in 2022.

☆ The Fed's path to a 'Goldilocks' economy just got a little more complicated
▼ + stars: | 2022-12-02 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Spencer Platt | Getty ImagesLittle effect from policy movesThe numbers would indicate that 3.75 percentage points worth of rate increases have so far had little impact on labor market conditions. Much of the Street analysis after the report was viewed through the prism of comments Fed Chairman Jerome Powell made Wednesday. Among them were supply chain issues, housing growth, and labor cost, particularly wages. "Wages are rising more than productivity, as labor supply continues to shrink. To restore labor demand and supply, monetary policy must become more restrictive and remain there for an extended period."

☆ Premarket stocks: Why the stock market is channeling Goldilocks
▼ + stars: | 2022-12-02 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

It’s rough out there, but there is a silver lining: Persistently high Inflation is showing signs of slowing. “This morning’s data was a Goldilocks report,” wrote Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in a note Thursday. Gas prices also dropped between October and November, which means that inflation could keep slowing. A range of factors have led to the drop in gas prices – and not all of them are positive. The bottom line: Gas prices are still relatively high for this time of the year, but looking ahead, some forecasters see gas prices continuing to dip.

Fed officials from San Francisco Fed President Mary Daly to St. Louis Fed President James Bullard, often at opposite ends of recent policy debates, have both discussed rates possibly rising above 5% next year. If there is concern about crossing that line, Fed officials have not voiced it. With the expected half-point increase at the next meeting, the policy rate will end the year in a range between 4.25% and 4.5%. The fed funds rate was seen ending 2023 at 4.6%. The upcoming projections will show that final destination perhaps coming into view, and give a better assessment of the possible cost as well.

Mortgage rates have trended down this week following a speech Federal Reserve Chair Jerome Powell gave at the Brookings Institution on Wednesday. As the Fed has aggressively hiked rates this year, mortgage rates have also been pushed up. Because of this, borrowers shouldn't expect mortgage rates to drop dramatically any time soon. See more mortgage rates on Zillow Real Estate on ZillowMortgage refinance rates todayMortgage type Average rate today This information has been provided by Zillow. See more mortgage rates on Zillow Real Estate on ZillowMortgage calculatorUse our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments.

☆ The US jobs market keeps beating the odds, adding another 263,000 jobs in November
▼ + stars: | 2022-12-02 | by ( Madison Hoff | ) www.businessinsider.com time to read: +3 min

InsiderThe US gained 263,000 nonfarm payrolls in November, better than the 200,000 economists expected. November's gain shows ongoing strength in the jobs market. There were 263,000 nonfarm payrolls added in November, according to the latest release from the Bureau of Labor Statistics (BLS). But as we head to the end of 2022, the US labor market remains resilient." The "temperature is still high" in the labor market as Bunker told Insider after the last jobs report.

☆ Mohamed El-Erian paints markets as fixated on a 'dynamite' rate-hike slowdown by the Fed as he imagines a heart-to-heart between the two
▼ + stars: | 2022-12-02 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian believes the Fed and financial markets aren't listening to what the other is signaling. He believes markets are fixing on the news they want to hear and not on the Fed's warnings. You are definitely going to slow the pace of interest rate hikes starting as early as this month!" Powell signaled at Brookings that the Fed could slow the pace of interest rate hikes as soon as this month. But the Fed's messages just aren't getting through to markets on just hearing the good news — and that's not good for the health of the US and global economies, Mohamed El-Erian believes.

☆ Expect more choppiness ahead after a week of mixed market signals
▼ + stars: | 2022-12-02 | by ( Zev Fima | ) www.cnbc.com time to read: +5 min

Driving the action were several key economic reports, including the November ADP employment and nonfarm payrolls reports and the October personal spending report. The comments came after a softer-than-expected ADP employment report, but before a stronger-than-expected nonfarm payrolls report. With these kinds of mixed signals, expect more market choppiness as investors remain on the hunt for more definitive signs that the Fed is winning its war on inflation and can therefore definitively ease up on their hawkish stance. Initial jobless claims for the week ending Nov. 26 were 225,000, a decrease of 16,000 from the prior week and below expectations of 235,000. Finally, on Friday the all-important nonfarm payrolls report was released, indicating a 263,000 payrolls increase in November, above the 200,000 expected.

☆ Chinese protesters are reacting to a broken social contract
▼ + stars: | 2022-12-01 | by ( Diana Fu | Diana Fu Is Associate Professor Of Chinese Politics At The University Of Toronto | Non-Resident Fellow At The Brookings Institution. She Is Author Of The Book | ) www.nbcnews.com time to read: +6 min

However, a deeper cause for this unrest is that the protesters are responding to a broken social contract between the Chinese Communist Party and the people. Despite swift censorship, a Chinese social media post referencing the incident had been viewed 180,000 times before it was deleted. With 20% youth unemployment, businesses closing, migrant workers left homeless and preventable deaths mounting, some Chinese citizens are withdrawing their consent to be ruled. Chinese protesters normally avoid such rhetoric, preferring to stick to bread-and-butter economic or local issues, which are more likely to yield concessions. It is significant that this time, Chinese protesters are borrowing a tactic from Hong Kong protesters in 2020 — holding up pieces of blank paper.

☆ 10-year Treasury yield slides as traders weigh Fed policy outlook, await key economic data
▼ + stars: | 2022-12-01 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +1 min

Yield and prices have an inverted relationship and one basis point is equivalent to 0.01%. The 2-year Treasury yield was last at 4.3573% after declining by over one basis point. Treasury yields declined on Thursday as traders digested comments from U.S. Federal Reserve Chair Jerome Powell on interest rate policy plans and looked ahead to key economic data. Markets assessed the outlook for future interest rate hikes after Powell said on Wednesday that the pace of rate hikes could be slowed as soon as December. The central bank has implemented four consecutive 75 basis point rate hikes so far this year, and traders are now expecting a 50 basis point increase from its December meeting.

chartAccording to Morgan Stanley, the relief rally that engulfed risk assets produced the second-largest year-to-date easing in U.S. financial conditions, worth 30 basis points. By this measure, financial conditions now are easier than they were before the Fed's September and November rate hikes. If all that is true, there may be less need to focus so heavily on financial conditions, and a more balanced monetary policy now is sensible. To be clear, the Fed isn't completely turning its back on financial conditions. By this measure, financial conditions have tightened considerably in recent months.

☆ Dollar sinks to 3-month low vs yen as Powell says Fed to go slow
▼ + stars: | 2022-12-01 | by ( Kevin Buckland | ) www.reuters.com time to read: +2 min

TOKYO, Dec 1 (Reuters) - The dollar tumbled to a three-month low versus the yen on Thursday as traders keyed on comments by Federal Reserve Chair Jerome Powell that interest rate hikes could be scaled back "as soon as December." He added however that controling inflation "will require holding policy at a restrictive level for some time." Markets are currently pricing 91% odds that the Fed slows to a 50 basis point rate increase on Dec. 14, and just 9% probability of another 75 basis point bump. In November, the dollar dropped 7.15% versus the yen, its worst month in 14 years, as investors positioned for a Fed pivot. The dollar index - which measures the currency against six major peers including the yen and euro - extended Wednesday's more than 1% drop into Thursday, dipping as low as 105.69.

☆ Sam Bankman-Fried just explained what happened at FTX: Everything to know
▼ + stars: | 2022-12-01 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

While the world's most powerful finance official took the lunchtime billing, it was Sam Bankman-Fried who held the primetime slot. Sam Bankman-Fried, FTX CEO, at a digital assets hearing in 2021. Within minutes of starting, Sorkin asked Bankman-Fried directly if there was a commingling of funds between the two now-bankrupt companies he founded, FTX and Alameda Research. When Sorkin asked whether Bankman-Fried feels he has any criminal liability, Bankman-Fried said that's not what he's focused on right now. Earnings on deck: Toronto-Dominion Bank, Bank of Montreal, and Dollar General Corporation, all reporting.

☆ US recession odds are 'extremely elevated' and a downturn is likely to hit within the next year, chief economist says
▼ + stars: | 2022-12-01 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

Vincent Reinhart, the chief economist of Dreyfus Mellon, is expecting a recession to hit within the next 12 months. "There is an extremely elevated chance of recession," he told Bloomberg on Thursday. "It's hard in a sense that they have to put pain on the economy to get inflation down," he said. "But it's spillover to service inflation, that's what you've got to worry about, that's what Powell's worried about. The durable part of inflation that's still above the Fed's goal."

☆ Premarket stocks: Powell revives hopes of a Fed pivot. That's a bad thing
▼ + stars: | 2022-12-01 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

New York CNN Business —Federal Reserve Chair Jerome Powell made investors very happy on Wednesday. Powell’s admission that “the path ahead for inflation remains highly uncertain” means that rate hikes could be here for a while. This isn’t the first time investors rushed into markets on the belief that there would be a Fed pivot. Powell said on Wednesday that there is still a chance the economy avoids recession but the odds are slim. But the labor market still remains historically tight despite the Federal Reserve’s efforts to cool demand and bring down inflation.

☆ Asian stocks jump after Powell hints at rate hike slowdown
▼ + stars: | 2022-12-01 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, Dec 1 (Reuters) - Asian equities jumped on Thursday, while the dollar slid as investors poured into risky assets after Federal Reserve Chair Jerome Powell opened the door to a slowdown in the pace of monetary tightening. Powell's comments at the Brookings Institution in Washington sent Wall Street equities soaring, while the U.S. dollar and Treasury yields fell. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) jumped 2% in early Asian trade. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 5.2 bps at 4.321%. In commodity markets, gold prices climbed to a two-week high in early Asian trade on Thursday.

☆ Asia-Pacific stocks rise as Fed signals smaller rate hikes ahead
▼ + stars: | 2022-12-01 | by ( Jihye Lee | ) www.cnbc.com time to read: 1 min

Federal Reserve Chair Jerome Powell says he continues to believe in a path to a "soft-ish" landing — even if the path has narrowed over the past year. "I would like to continue to believe that there's a path to a soft or soft-ish landing" Powell said at the Brookings Institution. "Our job is to try to achieve that, and I think it's still achievable," Powell said. "If you look at the history, it's not a likely outcome, but I would just say this is a different set of circumstances." — Sarah Min

☆ Markets 'completely ignored' Powell's balanced inflation remarks and are not pricing in key risks, Mohamed El-Erian says
▼ + stars: | 2022-12-01 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Markets are dismissing inflation risks after Powell signaled rate hikes may slow, Mohamed El-Erian said. But inflation is likely to stay sticky next year, and there are still credit and earnings risks for stocks. "So the marketplace is saying inflation risks are over. The market isn't focusing yet on credit and earnings risk, and that's because … there's no sign of a recession," El-Erian added. So keep an open mind, and let's not repeat the mistake of last year, when we all embraced transitory inflation," El-Erian said.

☆ Federal Reserve chairman says a December rate-hike slowdown is possible
▼ + stars: | 2022-11-30 | by ( ) www.nbcnews.com time to read: +5 min

“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. Powell said Fed estimates of inflation in October showed its preferred measure still rising at about triple the central bank’s 2% target. The yield on the 2-year Treasury note , the maturity most sensitive to Fed rate expectations, dropped to about 4.47% from 4.52%. In rate futures markets, traders added to the prevailing bets that the Fed would slow its pace of rate hikes at its meeting in two weeks. Bottlenecks in goods production are easing and goods price inflation appears to be easing as well, and this, too, must continue.” But “we will likely see housing services inflation begin to fall later next year,” he said.

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.

☆ Dollar heads for biggest monthly loss since 2010 ahead of Powell speech
▼ + stars: | 2022-11-30 | by ( Amanda Cooper | ) www.reuters.com time to read: +4 min

LONDON, Nov 30 (Reuters) - The dollar eased from a one-week high on Wednesday ahead of a speech by Federal Reserve Chair Jerome Powell, while optimism over a possible loosening in China's COVID restrictions set it on course for its biggest monthly loss since late 2010. But after almost two years of near-relentless acceleration in inflation, markets could welcome any sign that the worst may be over. European assets got a lift on Tuesday after inflation in Spain and a number of major German states cooled. It has lost around 4.3% in November, marking its worst monthly performance since September 2010 , according to Refinitiv data. The offshore yuan gained ground against the dollar, which fell 1% to 7.0802.

☆ World stocks in upbeat spirits, Fed's Powell in the spotlight
▼ + stars: | 2022-11-30 | by ( Dhara Ranasinghe | Foo Yun Chee | ) www.reuters.com time to read: +4 min

[1/2] The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 29, 2022. REUTERS/StaffLONDON, Nov 30 (Reuters) - World equity markets rallied on Wednesday and focus turned to Jerome Powell, who speaks later in the day in what will be the U.S. Federal Reserve chief's last opportunity to steer sentiment ahead of the Fed's December meeting. European stock markets rallied (.STOXX) and U.S. equity futures pointed to a firm start for Wall Street , . MSCI's broadest gauge of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) rallied more than 1% to its highest since September. Hong Kong's Hang Seng Index rallied more than 2% (.HSI), although Japan's blue-chip Nikkei fell 0.2% (.N225).

☆ Asia stocks rebound despite disappointing China data
▼ + stars: | 2022-11-30 | by ( Kane Wu | ) www.reuters.com time to read: +3 min

MSCI's broadest gauge of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) reversed morning losses to gain 0.67%. "Despite the surge in cases and recent protests, China has not hardened its COVID approach and is continuing to fine-tune its policy, which is encouraging to investors." "Headlines from China regarding COVID restrictions and protests are causing jitters among investors. A series of U.S. data concerning manufacturing, inflation and jobs will also be released this week. Oil prices posted gains of more than 1% in Asian trade on Wednesday on falling U.S. crude inventories and a lower greenback, but concerns OPEC+ will leave output unchanged at its upcoming meeting and weak China data limited gains.

Helping to boost prices, U.S. crude oil stocks were expected to have dropped by about 7.9 million barrels in the week ended Nov. 25, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories rose by about 2.9 million barrels, while distillate stocks were seen rising about 4.0 million barrels, according to the sources, who spoke on condition of anonymity. Thin liquidity and an overall lack of trading volumes towards the year-end could also be propping up the market, according to Virendra Chauhan at Energy Aspects. On the supply side, OPEC+ is likely to keep oil output policy unchanged at a meeting on Sunday, five OPEC+ sources said, although two sources said an additional production cut was also likely to be considered, to support prices. "Oil’s rally ran out of steam after reports that OPEC+ might end up keeping their output steady.

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