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☆ Powell leads markets on a needlessly wild ride
▼ + stars: | 2023-03-08 | by ( Ben Winck | ) www.reuters.com time to read: +4 min

That’s different from what investors expected from the Fed just two months ago. As investors’ perception of Powell takes a U-turn, upcoming economic data could make for a bumpy transition. Yet investors largely expected the central bank to raise by a little less, and start cutting later in 2023. Powell has repeatedly emphasized that the Fed’s rate decisions will rely heavily on the latest economic data. He repeated the comment to the House Financial Services Committee, adding that the Fed hasn't yet reached a decision on its next rate increase.

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," Powell said. Republicans focused on whether energy policy was restricting supply and keeping prices higher than needed, and whether restrained federal spending could help the Fed's cause. As of December, officials saw that rate rising to a peak of around 5.1%, a level investors expect may move at least half a percentage point higher now. With a 50-basis-point rate hike now in play, Brown said a strong monthly jobs report on Friday would likely lead to "calls for a 6% terminal rate," nearly a percentage point higher than Fed officials had projected as of December. How much remains unclear, but Powell said the focus will remain more squarely on how inflation behaves.

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," Powell said. The Fed's benchmark overnight interest rate is currently in the 4.50%-4.75% range. Senator Sherrod Brown, the Democratic chair of the committee, said the Fed's rate hikes ignored what he viewed as a chief cause of inflation - high corporate profits. "To restore price stability, we will need to see lower inflation in this sector, and there will very likely be some softening in labor market conditions," Powell said. Powell's last monetary policy report to Congress was in June, which was early in what became the most aggressive cycle of Fed rate increases since the 1980s.

"If corporate profits were to decline from the extremely high levels that we saw recently, would it be possible to sustain" growth in workers' benefits "even as we get inflation down to the target of 2%?" Democratic Senator Chris Van Hollen asked Powell during the Fed chief's semi-annual testimony before the U.S. Senate Banking Committee. "Wages affect prices and prices affect wages," Powell said, associating current earnings growth to the current ultra-low unemployment rate of 3.4%, and suggesting the labor market may need to weaken at least somewhat for inflation to fall. SHORTAGESUltimately, Powell said he felt profits would likely moderate on their own as the U.S. economy moves beyond the pandemic. "What we're seeing in the economy is pretty much about shortages ... supply chain blockages," Powell said.

"While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue," a Wells Fargo spokesperson said in a statement. Wells Fargo disclosed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for "collateral protection insurance," which covers auto lenders when borrowers are uninsured. The bank also concealed auto insurance issues from the U.S. Senate Banking Committee in November 2016, the investors alleged. Wells Fargo settled an auto borrower class action in 2019 for $386 million without admitting wrongdoing. In 2018, Wells Fargo agreed to pay $1 billion to U.S. regulators to settle probes of its auto insurance and mortgage practices.

Jan 20 (Reuters) - As an investment banker, Barry Silbert worked on some of the highest-profile corporate failures. Now, as founder of venture capital firm Digital Currency Group, parent of troubled crypto firm Genesis, he is grappling with problems closer to home. Unlike other prominent crypto moguls, Silbert kept a relatively low profile, eschewing the regular tweets favored by his peers. Nasdaq bought SecondMarket in 2015 for an undisclosed amount and Silbert relaunched SecondMarket’s crypto trading division as Genesis Trading the same year, incorporating it into his growing crypto empire. In an open letter posted to Twitter on Jan. 10, Gemini's Cameron Winklevoss demanded the DCG board remove Silbert as CEO and install a new leader.

☆ House Financial Services Chair Waters doesn't plan to subpoena Sam Bankman-Fried to testify at hearing on FTX collapse
▼ + stars: | 2022-12-07 | by ( Brian Schwartz | ) www.cnbc.com time to read: +3 min

House Financial Services Committee Chairwoman Maxine Waters told Democrats she doesn't plan to subpoena former FTX CEO Sam Bankman-Fried to testify at Tuesday's hearing about the crypto exchange's rapid demise, according to people with direct knowledge of the conversation. Those at the meeting say Waters said she wants committee staff try to convince Bankman-Fried to voluntarily testify, those with knowledge of the meeting said. As of late Wednesday, Bankman-Fried has yet to agree to voluntarily testify to the House committee, two of the people explained. Waters invited Bankman-Fried to voluntarily testify before the panel and could always change her mind and subpoena him before Tuesday. John Jay Ray III, the new FTX CEO, is scheduled to testify at next week's House hearing.

☆ Fed may cut size of rate increases, but is not 'softening' inflation fight, Waller says
▼ + stars: | 2022-11-13 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, Nov 13 (Reuters) - The U.S. Federal Reserve may consider slowing the pace of rate increases at its next meeting but that should not be seen as a "softening" in its commitment to lower inflation, Federal Reserve Gov. Until we get inflation down, that endpoint is still a ways out there." The 7.7% annualized increase in inflation recorded in October is still "enormous," Waller said, noting that even if the Fed scaled back from three quarter point increases to a half point increase at its next meeting, "you're still going up." The Fed has raised rates a total of 3.75 percentage points this year beginning in March, including four three quarter point increases, a rapid shift in monetary policy aimed to cool the worst surge of inflation since the 1980s. Analysts and economists have warned that the monetary tightening will further the risk of recession, impacting employment.

☆ Key U.S. senator urges probe into FTX collapse
▼ + stars: | 2022-11-10 | by ( ) www.reuters.com time to read: 1 min

WASHINGTON, Nov 10 (Reuters) - U.S. Senate Banking Committee Chair Sherrod Brown said on Thursday it is critical that U.S. financial agencies investigate what led to cryptocurrency exchange FTX’s collapse and he pledged to take steps to ensure the stability of American markets. "It is crucial that our financial watchdogs look into what led to FTX’s collapse so we can fully understand the misconduct and abuses that took place," the Democratic senator said. "I’m committed to finding the best path forward to protect consumers and the stability of the U.S. markets and banking system." Reporting by David Shepardson Editing by Chris ReeseOur Standards: The Thomson Reuters Trust Principles.

☆ Gold subdued as dollar ticks higher; investors eye Fed outlook
▼ + stars: | 2022-10-26 | by ( ) www.cnbc.com time to read: +1 min

Gold prices were flat on Wednesday on a firmer dollar, although the bullion was anchored in a narrow range with investors awaiting further guidance on U.S. Federal Reserve 's policy tightening. Spot gold was flat at $1,653.06 per ounce, as of 0118 GMT, while U.S. gold futures were down 0.2% at $1,654.20. The Fed is widely expected to deliver a fourth straight supersized interest-rate hike when they meet in November. Top gold consumer, China's net gold imports via Hong Kong halved from the previous month in September, data showed on Tuesday. Spot silver fell 0.1% to $19.32 per ounce, platinum dipped 0.1% to $914.04 and palladium rose 0.9% to $1,940.55.

☆ Fed's Powell, on eve of next rate hike, urged to protect jobs
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +3 min

[1/2] Federal Reserve Board Chairman Jerome Powell hosts an event on "Fed Listens: Transitioning to the Post-pandemic Economy" at the Federal Reserve in Washington, U.S., September 23, 2022. REUTERS/Kevin LamarqueOct 25 (Reuters) - U.S. Senate Banking Committee Chair Sherrod Brown on Tuesday urged Federal Reserve Chair Jerome Powell to be careful about tightening monetary policy so much that millions of Americans already suffering from high inflation also lose their jobs. Fed policymakers are widely expected to deliver a fourth straight supersized interest-rate hike when they meet next week, bringing the policy rate to 3.75%-4% as part of what has been the sharpest set of rate increases in about 40 years. But he has also argued that beating inflation - running at more than three times the Fed's 2% target - is the only way to ensure long-term labor market strength. Fed policymakers say the research shows inflation is being driven both by sky-high demand and supply constraints, and that regardless of the cause, they are committed to doing what they can to bring it down.

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