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☆ Dallas Fed President Logan says current data doesn't justify pausing rate hikes yet
▼ + stars: | 2023-05-18 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Dallas Federal Reserve President Lorie Logan said Thursday that the economic data points so far don't justify skipping a rate increase at the central bank's next meeting in June. While noting some progress in bringing down inflation and cooling the labor market, Logan said the Fed still has work to do in achieving its goal for price stability. But she expressed concern that what she's seen so far has indicated only modest impact from the Fed rate hikes, which have totaled 5 percentage points. And it's a long way from here to 2% inflation," Logan said, referring to the Fed's longer-run goal. She noted that the Fed's preferred inflation data point, the core personal consumption expenditures price index, ran at a 4.9% annualized pace in the first quarter.

☆ There are 2 things needed to sustain this year's blistering rally in tech stocks
▼ + stars: | 2023-05-18 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

It said a further rally needs continued profitability at tech companies and rate cuts by the Federal Reserve. The Nasdaq Composite on Wednesday closed at a year-to-date high, at 12,500.57, and it's up more than 19% since the start of the year. While Federal Reserve anticipates a "mild recession" starting later this year, policymakers have indicated they won't begin cutting interest rates until 2024. High interest rates can hurt the potential value of future profit at growth companies. DataTrek said the Fed battling hot inflation "was not a factor during the winning years," it had outlined for the Nasdaq Composite.

Dow Jones Industrial Average (.DJI) constituent Cisco Systems Inc (CSCO.O) slipped 1.7% after it said a large backlog of products weighed on demand for new orders from customers. Shares of Walmart Inc (WMT.N) rose 2.8% after the retailer raised its annual sales and profit targets, benefiting from inflation-wary consumers trading down to cheaper groceries. And you got a little follow through from the optimism around getting a (debt ceiling) deal done," said Thomas Hayes, chairman at Great Hill Capital LLC. Bath & Body Works Inc (BBWI.N) gained 8.7% after the beauty and skincare firm raised its annual profit forecast. Declining issues outnumbered advancers for a 2.30-to-1 ratio on the NYSE and for a 1.47-to-1 ratio on the Nasdaq.

☆ Lawmakers are infuriated with Fed's inaction in its insider trading investigation
▼ + stars: | 2023-05-17 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

CNN —Congressional lawmakers grilled Federal Reserve Inspector General Mark Bialek Wednesday over possible insider trading among Fed officials in 2020, accusing the nation’s central bank of inaction. The heads of the Boston and Dallas Federal Reserve banks retired early in 2021 after trades they made before and during the pandemic came to light. Bialek told lawmakers there was no conflict of interest and that he was still able to conduct fair, independent investigations. This is not acceptable.”The Office of Inspector General declined to comment Wednesday night. A separate Fed investigation into SVB’s collapse, not involving Bialek, faulted Fed supervisors.

☆ The banking crisis is in its early stages and the Fed should opt for a 'hawkish pause' to rate hikes, former Dallas Fed President says
▼ + stars: | 2023-05-03 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The Fed should issue a "hawkish pause" in its rate hike cycle, the former Dallas Fed President said. That's because recent banking chaos is still in the early stages of unfolding, Robert Kaplan told Bloomberg. "I think we're in the early stages, not the late stages of this banking situation," Kaplan told Bloomberg in a televised interview early Wednesday. There's an 87% probability policymakers will raise the Fed funds rate by 25 basis points, bringing it to 5%-5.25%. In terms of the Fed, "let's say they raise then pause, or they pause and and signal a so-called hawkish pause, either way, the rhetoric needs to be that the Fed stands ready to raise rates," said Kaplan.

☆ 'The credit crunch has started': Here's what tighter lending standards mean for American consumers and businesses as banks navigate the SVB wreckage
▼ + stars: | 2023-04-08 | by ( Carla Mozée | ) www.businessinsider.com time to read: +6 min

"Each bank is going to apply those credit standards differently," a source told Insider. Requiring higher minimum credit scores and minimum repayments and curbing credit limits were among tweaks banks were making. Lending to consumers dropped and credit standards and terms "continued to tighten sharply," with marked rises in loan pricing. A "dramatic worsening of firm and consumer access to bank credit," is how a 2014 paper on the Federal Reserve's website describes a credit crunch. Tighter lending standards may have a big impact on floating-rate loans versus fixed loans, CFRA equity analyst Alexander Yokum told Insider.

☆ The US oil and gas sector is stagnating as production slows amid low energy prices
▼ + stars: | 2023-03-29 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

A Wednesday Dallas Fed survey illustrated a slowdown in the US oil and gas sector to start 2023. Energy executives said oil production continued to increase but at a slower rate, the survey showed. "Growth in the oil and gas sector slowed to a crawl in the first quarter, as firms' faced increasing costs." "Our respondents also expressed a worsening view of the near-term outlook for the energy sector." March's financial tumult, starting with the collapse of Silicon Valley Bank, rattled the energy sector this month because it shifted broader economic outlooks, according to Gregory Brew, oil analyst at Eurasia Group.

☆ U.S. financial system vulnerable to bond market stress, Fed's Logan says
▼ + stars: | 2023-03-03 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

Logan, who holds a vote in this year's Federal Open Market Committee monetary policy meetings, did not comment on the outlook for monetary policy and the economy in her prepared remarks. She spoke amid ongoing concern about how financial markets, most notably the sector that trades U.S. government debt, will respond to the next chapter of stress. That said, a semi-annual monetary policy report released by the Fed on Friday sounded a somewhat sanguine note on market risk at the current moment. Trading in the Treasury market has been "orderly," although that particular market was more challenged on the liquidity front compared to others, it said. "The public and private sectors must work together to enhance market resilience so that these episodes will be far less frequent going forward," Logan said.

☆ The Fed's own economists are warning of a 19.5% housing correction and more rate hikes could set off a 'domino effect'
▼ + stars: | 2023-03-01 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

For more on that, I recommended reading my colleague Dan DeFrancesco's excellent 10 Things on Wall Street newsletter. And for today, let's see why the Fed's own economists are warning of a nearly 20% housing correction. They argued US home prices would have to tumble nearly 20% to bring the housing market back to fundamentals — and additional Fed rate hikes could lead to an even worse housing correction. Have you entered or exited the housing market in the last year? These four charts explain the troubling state of the housing market right now.

☆ US home prices could tumble nearly 20% and Fed economists warn further rate hikes risk an even worse housing correction: 'The bubble hypothesis merits attention'
▼ + stars: | 2023-02-28 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

Dallas Fed economists warned of a 19.5% housing market correction in a Tuesday research report. "[I]f the observed price-to-rent ratio grows at an explosive rate relative to its fundamental-based ratio estimated with long-term interest rate and rent growth data, the bubble hypothesis merits attention," they said. For the US housing market to return to its fundamentals, they estimated that a 19.5% correction would be necessary. There were signs that the US price-to-rent ratio began to fall in third quarter as prices cooled faster than rents, they added. For now, a modest housing correction remains the baseline scenario, but the authors warned that more hawkish monetary policy could trigger a steeper correction.

☆ Fed must be ready to hike rates for longer than now expected, Logan says
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +3 min

The Fed last year lifted interest rates further and faster than any time since the 1980s to fight inflation that, by the central bank's preferred measure, has run for two years at about triple its 2% target. Key to that, Logan said on Tuesday, will be substantial further slowing in wage growth and better "balance" in what is now an "incredibly strong" labor market. Logan also said she will need to see "convincing" signs that inflation is dropping sustainably and in a timely manner toward the 2% target. There are also risks, she said, of going too far and weakening the labor market more than necessary in pursuit of slowing inflation. "My own view is that, given the risks, we shouldn't lock in on a peak interest rate or a precise path of rates," she said.

☆ Fed's Logan supports slower rate hike pace, possibly higher stopping point
▼ + stars: | 2023-01-18 | by ( Ann Saphir | ) www.reuters.com time to read: +2 min

"If you’re on a road trip and you encounter foggy weather or a dangerous highway, it’s a good idea to slow down. "That’s why I supported the (Fed's) decision last month to reduce the pace of rate increases. And the same considerations suggest slowing the pace further at the upcoming meeting." With so much unknown about 2023, she said, the Fed should not "lock in" on a peak policy rate but instead stay flexible by increasing rates in smaller increments. Inflation by the Fed's preferred gauge, the personal consumption expenditures price index, has averaged 5.8% at an annual rate for the past two years.

☆ House prices might plunge 20% in the hottest US markets - and the slump could hammer the wider economy, top investor says
▼ + stars: | 2022-11-17 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Home prices could tumble 20% in some of the hottest US markets, top investor Peter Boockvar said. He cited the surge in prices during the pandemic, and soaring mortgage rates pricing out buyers. The Bleakley Advisory boss warned a housing slump could hit consumer spending and the wider economy. "It's an extraordinary rise, and now you have 7% mortgage rates, which are 15-year highs," he said. Paul Krugman, a Nobel Prize-winning economist, has also predicted a housing slump.

☆ US home prices could crash 20% if the Fed fails to 'thread the needle' when tightening, central bank economist finds
▼ + stars: | 2022-11-16 | by ( George Glover | ) www.businessinsider.com time to read: +4 min

US home prices could fall another 20% as mortgage rates rise, a Dallas Fed study found. The central bank has raised interest rates by 75 basis points at four consecutive meetings as it works to curb soaring prices. Homebuyer demand is expected to fall as mortgage rates climb higher, with many analysts warning Americans to brace for a major housing market correction. The housing market would suffer such a significant correction partly because it was squeezed so high before and during the pandemic. But any housing market downturn would likely be far less severe than the crash that helped to trigger the 2008 financial crisis, according to the economist.

☆ Home price declines will accelerate even as sales bottom out early next year, economist says
▼ + stars: | 2022-11-16 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

The decline in home prices will accelerate even as sales are headed for a bottom early next year, according to Pantheon Macroeconomics. "The good news for homebuilders is that a floor is coming," Pantheon economist Kieran Clancy said in a note. "The good news for homebuilders is that a floor is coming," Pantheon economist Kieran Clancy said in a note. "Mortgage rates have peaked, suggesting that demand will flatten in the months ahead, albeit at an extremely depressed level. Accordingly, we expect housing starts and sales to bottom out early next year, even as the decline in home prices accelerates."

☆ Fed's Logan: Inflation data a 'welcome relief,' still long way to go
▼ + stars: | 2022-11-10 | by ( Lindsay Dunsmuir | ) www.reuters.com time to read: +3 min

The closely watched inflation data, released earlier on Thursday, provides support for the central bank to dial back its hefty rate hikes, and Logan also backed such an approach. The Fed's rate-setting committee "should adjust other elements of policy to deliver appropriately tight conditions even as the pace slows. We must remain firmly committed to our 2% inflation goal," Logan said. "So far, I believe we are seeing a normal financial market response to tighter monetary policy," Logan noted. Nevertheless, it is important to remain attentive to any unexpected responses to further policy tightening, Logan said.

☆ Exxon orders shale stand-down over rash of oilfield worker injuries
▼ + stars: | 2022-09-28 | by ( Liz Hampton | ) www.reuters.com time to read: +3 min

REUTERS/Nick OxfordCompanies Exxon Mobil Corp FollowSept 28 (Reuters) - Exxon Mobil (XOM.N) issued a temporary "stand-down" across its U.S. shale operations last week following back-to-back worker injuries, including one fatality, according to people familiar with the matter. The stand-down follows two worker accidents within days at production sites run by Exxon's shale unit and comes as Exxon is facing multiple negligence lawsuits. In March, a woman was crushed to death at another West Texas site operated by Exxon. Exxon or its shale subsidiary XTO Energy this year have faced at least six negligence lawsuits resulting from injuries in west Texas, according to complaints filed in Harris County District Court in Houston. It separately reported 15 fires at its New Mexico operations, according to the state's oil regulator.

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