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☆ Morning Bid: A sticky inflation situation
▼ + stars: | 2023-08-10 | by ( ) www.reuters.com time to read: +5 min

With a relentless set of rate hikes, the Federal Reserve has managed to drive consumer price increases down to 3%, from last June's 9.1%. The Atlanta Fed compiles an index of core sticky consumer prices - goods or services for which the cost changes far more slowly. Reuters GraphicsLine chart with data from the Bureau of Economic Analysis and Federal Reserve shows PCE inflation slowed to 3% year-on-year in June, while core PCE inflation also eased to 4.2%. Chart shows economists polled by Reuters expecting the U.S. consumer price index to have increased 0.2% in July 2023 from the previous month, the same pace as June 2023. * Federal Reserve Bank of Atlanta President Raphael Bostic gives welcome remarks at a webinar, 1500 EDT/1900 GMT.

Persons: Brendan McDermid, Amanda Cooper, they're, Mary Daly, Raphael Bostic, Tomasz Janowski Organizations: New York Stock Exchange, REUTERS, Federal Reserve, American Automobile Association, Federal Reserve Bank, Cleveland, Atlanta Fed, Reuters Graphics, Reuters, Federal Reserve Bank of San Francisco, Yahoo Finance, Federal Reserve Bank of Atlanta, Thomson Locations: New York City, U.S, Manheim

☆ The rising cost of shelter represented 90% of last month’s inflation
▼ + stars: | 2023-08-10 | by ( Anna Bahney | ) edition.cnn.com time to read: +4 min

After steadily increasing, year-over-year shelter inflation has moved down for four consecutive months, from 8.2% in March to 7.7% in July. “Our baseline forecast suggests that year-over-year shelter inflation will continue to slow through late 2024 and may even turn negative by mid-2024,” the researchers wrote. Total inflation will go down when shelter inflation dropsCurrently, there is a disconnect between shelter inflation, which has remained higher, and other components of inflation that have fallen. For renters, shelter inflation includes rent and utility payments. The researchers at the San Francisco Fed crafted models combining several measures of local shelter and rent inflation to help explain how recent trends might affect the path of future shelter inflation.

Persons: San Francisco Fed, “, ” Organizations: DC CNN, Index, Federal Reserve Bank of San, Federal Reserve Bank of San Francisco . Housing, Housing, Federal, San Francisco, Bureau of Labor Statistics Locations: Washington, Federal Reserve Bank of San Francisco .

☆ Inflation rises for the first time in 12 months—but it’s not as bad as it looks
▼ + stars: | 2023-08-10 | by ( Mike Winters | ) www.cnbc.com time to read: +1 min

After a year of monthly declines, the year-over-year inflation rate has risen from 3% to 3.2%, still well above the Federal Reserve's target of 2%, according to the Labor Bureau's latest consumer index report. Moderating prices for houses and rent are expected to help lower core inflation in future CPI reports, according to the Federal Reserve Bank of San Francisco. To get a better sense of where inflation is headed, the Federal Reserve looks to core inflation, which measures the price of all goods and services excluding volatile food and energy prices. Core inflation continued to cool by 0.2%, as it did in June, after six months of increases closer to 0.4%. In June, Fed chair Jerome Powell said that he didn't anticipate core inflation returning to the central bank's 2% target until 2025.

Persons: Kurt Rankin, Rankin, Jerome Powell Organizations: Labor, PNC Financial Services, Federal Reserve Bank of San Locations: Federal Reserve Bank of San Francisco

☆ The Fed can’t decide how much money US households have left
▼ + stars: | 2023-07-05 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Interest rates are higher and so are prices, credit is drying up and there are signs that the labor market is finally softening. The problem is that no one, not even the Federal Reserve, knows how much longer the American consumer can keep on spending. Personal saving rates soared as a result, with US households amassing about $2.3 trillion in savings in 2020 and through the summer of 2021, according to Federal Reserve economists. Economists know that savings must be dissipating, but haven’t quite figured out just how much of that money is left. Just a few weeks later, economists at the Federal Reserve Board of Governors in Washington said just the opposite.

Persons: New York CNN — There’s, we’ve, ”, Torsten Slok, Lydia Boussour, Hanna Ziady, Xiaofei Xu, Beijing’s, Laura He, Wei Jianguo, Funflation, Beyflation — Taylor Swift, Fisher, don’t Organizations: CNN Business, Bell, New York CNN, Federal Reserve, Commerce Department, Federal Reserve Bank of San, Governors, Apollo Global Management, Consumer, Reuters, China Daily, Fisher Investments, National Statistics Locations: New York, Federal Reserve Bank of San Francisco, Washington, United States, EY, Boussour, China, Beijing, Japan, Italy, Netherlands, Swiftflation

☆ What the stock market is saying about when to expect a recession
▼ + stars: | 2023-07-02 | by ( Krystal Hur | ) edition.cnn.com time to read: +7 min

As the economy proved more resilient than expected, and the US has avoided recession so far, the case for a 2023 recession has been crumbling. The stock market, which entered bull market territory just a few weeks ago, has shown little sign this year that the economy could be headed for a downturn. Still, the bond market tells a different story: The New York Federal Reserve’s recession probability model calculates the probability that the US will enter a recession in the next 12 months by tracking the spread of 3-month and 10-year Treasury yields. US stock market closes early at 1 p.m. Tuesday: US stock market closed for July Fourth.

Persons: Brian Moynihan, “ We’re, ”, David Grecsek, Jerome Powell, it’s, “ we’re, Russell, Outflows, Brian Mulberry, Tim Courtney, Courtney ., “, Niño, Samantha Delouya, El Organizations: CNN Business, Bell, New York CNN —, Federal Reserve, Bank of America, CNN, Vanguard, JPMorgan Chase, Investors, Fed, Investment Company Institute, Zacks Investment Management, New, Federal Reserve Bank of San, Exencial Wealth, Oceanic, Atmospheric Administration, NOAA, PMI, Labor Locations: New York, Federal Reserve Bank of San Francisco, El

☆ The Fed is about to decide whether or not to keep ramping up its fight against inflation
▼ + stars: | 2023-06-13 | by ( Noah Sheidlower | ) www.businessinsider.com time to read: +7 min

Some anticipate the Fed will raise rates again in July in an attempt to bring inflation down to the 2% target. Even if the Fed forgoes a rate increase on Wednesday, Fed officials have suggested the Fed may hike rates again at later meetings. The survey also found people's expectations of job loss fell 1.3 percentage points to 10.9%, suggesting rising job market strength. "I do not think that wages are the principal driver of inflation," Fed Chair Jerome Powell told reporters after the Fed's May policy meeting. "For instance, recent evidence shows that wage growth tends to follow inflation, as well as expectations of future inflation."

Persons: —, it's, Jerome Powell, Adam Shapiro, Shapiro Organizations: Federal, Service, Committee, Fed, payrolls, Labor Statistics, Labor, Index, BLS, Bureau of Labor Statistics, Silicon Valley Bank, First Republic Bank, New York Federal Reserve, Federal Reserve Bank of San, National Federation of Independent Business Locations: Ukraine, Silicon, Federal Reserve Bank of San Francisco

☆ Stingy European savers will help the ECB, not LVMH
▼ + stars: | 2023-06-06 | by ( Francesco Guerrera | ) www.reuters.com time to read: +7 min

LONDON, June 6 (Reuters Breakingviews) - Pandemic-era lockdowns and government stimulus have left euro zone citizens with 1 trillion euros in extra savings. That will leave consumer goods giants like $445 billion LVMH (LVMH.PA) downcast, but the European Central Bank pretty pleased. Euro zone citizens put as much as 1 trillion euros – or 8% of GDP – in their piggy banks since the health emergency, according to Oxford Economics’ estimates. Finally, euro zone savers have been favouring the higher returns offered by illiquid assets instead of sticking with easily accessible cash. These investments account for 33% of euro zone citizens’ total financial assets, compared to 30% before the pandemic.

Persons: can’t, –, lockdowns, Christine Lagarde, George Hay, Oliver Taslic Organizations: Reuters, European Central Bank, Oxford Economics, White House, –, Federal Reserve Bank of San, San Francisco Fed, Walmart, United Airlines, American Airlines, U.S, U.S . Federal, Allianz, BMW, stingy, Thomson Locations: U.S, Ukraine, Federal Reserve Bank of San Francisco, U.S ., Europe, Germany, France, Italy, Spain, That’s, Asia

☆ Former Fed Chair Bernanke argues economy must slow further to bring down inflation
▼ + stars: | 2023-05-23 | by ( Bryan Mena | ) edition.cnn.com time to read: +4 min

Inflation has cooled in the past several months, according to the Fed’s preferred inflation gauge and the Consumer Price Index, though some Fed officials have said that it’s not cooling fast enough. Indeed, the labor market remains on strong footing. “Overheating in the labor market has played a minor role but an increasing one over time. Overall inflation crept up throughout that year, then the Fed began to raise interest rates in March 2022 from near zero. Despite the failures of three regional banks since March, the Fed still raised interest rates two more times during that period.

Persons: Ben Bernanke, ” Bernanke, Olivier Blanchard, Blanchard, they’re, Mary Daly, ” Daly, isn’t Organizations: DC CNN, Former Federal, Fed, International Monetary Fund, Brookings Institution, Federal Reserve Bank of San Locations: Washington, Washington ,, Federal Reserve Bank of San Francisco

May 15 (Reuters) - Greg Becker, the former chief executive officer of Silicon Valley Bank, is set to appear before the U.S. Congress on Tuesday, two months after the collapse of his bank sparked panic among bank customers and investors, forcing the government to backstop deposits. California banking regulators moved quickly to shut down Silicon Valley Bank on March 10 after depositors withdrew $42 billion in 24 hours. Becker will testify before the Senate Banking Committee alongside Scott Shay and Eric Howell, the former chair and president, respectively, of Signature Bank. When his manager left to work for Silicon Valley Bank, Becker followed, he said on a 2021 Bloomberg podcast. Before becoming president and CEO of SVB Financial Group, Becker co-founded SVB Capital, the company's investment arm.

☆ San Francisco Fed Ties to S.V.B. Chief Attracts Scrutiny to Century-Old Setup
▼ + stars: | 2023-05-15 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

The collapse of Silicon Valley Bank has drawn attention to the relationship between the Federal Reserve Bank of San Francisco, which was in charge of overseeing safety and soundness at the lender, and the bank’s former chief executive, Greg Becker, who for years sat on the San Francisco Fed’s board of directors. The bank’s collapse on March 10 has prompted criticism of the Fed, whose bank supervisors were slow to spot and stop problems before Silicon Valley Bank experienced a devastating run that necessitated a sweeping government response. Mr. Becker’s position on the San Francisco Fed board would have given him little formal power, according to current and former Fed employees and officials. The Fed’s 12 reserve banks — semiprivate institutions dotted across the country — each has a nine-person board of directors, three of whom come from the banking industry. Those boards have no say in bank supervision, and serve mainly as advisers for the Fed bank’s leadership.

☆ California banking regulator says SVB oversight inadequate
▼ + stars: | 2023-05-08 | by ( ) www.reuters.com time to read: +2 min

Regulators have since pledged tougher oversight of the banking sector while lawmakers have also complained that officials were too slow to address its poor risk management. Former SVB chief executive Gregory Becker is due to testify before Congress next week. According to the report released Monday, DFPI played a supporting role, with primary oversight for SVB conducted by the Federal Reserve Bank of San Francisco, which could devote more staff to supervision. SVB "was slow to remediate regulator-identified deficiencies, and regulators did not take adequate steps to ensure SVB resolved problems as fast as possible," according to the report. In just one eight-hour period on March 9, SVB depositors submitted withdrawal requests amounting to about $42 billion.

☆ Help Still Wanted: Fewer Job Openings Won’t Faze the Fed
▼ + stars: | 2023-05-02 | by ( Justin Lahart | ) www.wsj.com time to read: +1 min

Fed policy makers have been arguing that a drop in the number of job vacancies could effectively cool off the job market. Photo: Jeff Chiu/Associated PressThere was a big debate among economists and U.S. policy makers last year over whether job openings could come down without tanking the job market. Well, job openings are down and the job market is still strong, but the debate is hardly resolved. Newsletter Sign-up Markets P.M. Agenda-setting analysis and commentary on the biggest corporate and market stories from our Heard on the Street team. Data on job openings from the Labor Department and, before December 2000, from a series constructed by Federal Reserve Bank of San Francisco economist Regis Barnichon that goes back to 1951, shows that there has never been a decline of 20% or more in job openings without a substantial increase in the unemployment rate.

☆ What to Watch as the Fed Releases Its Look Into Silicon Valley Bank
▼ + stars: | 2023-04-28 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

The bank had a large share of deposits above the government’s $250,000 insurance limit. The bank’s leaders also made a big bet on interest rates staying low. That became a problem as the Fed, trying to control rapid inflation, carried out its most aggressive rate increase campaign since the 1980s. The bank held longer-term bonds that dropped in value as interest rates rose, because newer debt issued at the higher rates became more attractive for investors. Was it a problem at the Federal Reserve Bank of San Francisco, which supervised the bank, or did the fault rest with the Federal Reserve Board, which has ultimate responsibility for bank oversight?

WASHINGTON, March 30 (Reuters) - The secretive world of Federal Reserve bank supervision has been laid bare by the collapse of Silicon Valley Bank and critics say it needs an overhaul to make it more nimble, transparent and decisive. Typically, bank supervisors do most of their work behind closed doors. Bank supervision is typically conducted behind closed-doors because of concerns that publicizing bank missteps could spur bank runs and undermine confidence in the overall system. SVB's rapid growth also was a factor for Fed supervisors. Barr said part of his review would look at whether Fed supervision was appropriate for the bank's "rapid growth and vulnerabilities."

☆ US Federal Reserve watchdog launches probe of SVB supervision
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +1 min

March 28 (Reuters) - The U.S. Federal Reserve's Office of Inspector General (OIG) has launched an independent review of the failure of Silicon Valley Bank (SVB), an OIG spokesperson said on Tuesday. The review, which was launched on March 14, will assess the board's and the Federal Reserve Bank of San Francisco's supervision of the failed lender, the spokesperson told Reuters in a statement. The independent oversight authority plans to complete its investigation within six months, the spokesperson added. The probe was reported earlier by Bloomberg News. Reporting by Rahat Sandhu in Bengaluru and Pete Schroeder; Editing by Leslie Adler and Jamie FreedOur Standards: The Thomson Reuters Trust Principles.

☆ Premarket stocks: How big of a problem is greedflation?
▼ + stars: | 2023-03-29 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +9 min

“Executives at SVB and Signature [Bank] took wild risks and must be held accountable for exploding their banks,” Warren said. Republican Senators say the Fed’s focus on climate change led to banking turmoilRepublican Senators repeatedly insinuated on Tuesday that the recent US banking turmoil came as a result of the Federal Reserve’s focus on climate change. In his opening statement, Republican Sen. Tim Scott of South Carolina, the ranking member of the banking committee, called the Fed’s focus on climate change a waste of time. It’s what our supervisors do all the time.”In an interview with Montana Public Radio in 2014, Daines said that “the jury’s still out” on whether climate change is real. The public reasonably expects supervisors to require that banks understand, and appropriately manage, their material risks, including the financial risks of climate change.”

A pedestrian walks past the Federal Reserve Headquarters on March 21 in Washington, DC. Daines also accused the Federal Reserve Bank of San Francisco of prioritizing addressing climate change over the risks presented by higher interest rates. In an interview with Montana Public Radio in 2014, Daines said that "the jury’s still out" on whether climate change is real. These responsibilities are tightly linked to our responsibilities for bank supervision. The public reasonably expects supervisors to require that banks understand, and appropriately manage, their material risks, including the financial risks of climate change.”

☆ Premarket stocks: Silicon Valley Bank left a void that won't easily be filled
▼ + stars: | 2023-03-20 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

There’s no doubt that the failure of Silicon Valley Bank left a large void in tech. To find out, Before the Bell spoke with Ahmad Thomas, president and CEO of the Silicon Valley Leadership Group. Before the Bell: What’s the feeling on the ground with tech and VC leadership in Silicon Valley? Ahmad Thomas: Silicon Valley Bank has been a key part of our fabric here for four decades. FDIC sells most of failed Signature Bank to FlagstarFrom CNN’s David GoldmanA week after Signature Bank failed, the Federal Deposit Insurance Corporation said it has sold most of its deposits to Flagstar Bank, a subsidiary of New York Community Bank.

☆ Premarket Stocks: Who do we blame for the fall of SVB?
▼ + stars: | 2023-03-16 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Blame the Fed: SVB’s downfall was largely caused by a record $42 billion bank run that left the bank in desperate need of cash. But the Fed’s rate hikes had undermined the value of bonds, a critical source of capital for SVB. “The Federal Reserve failed as a bank supervisor,” he wrote. On Capitol Hill, frequent Fed critic Sen. Elizabeth Warren has been quick to blame Federal Reserve Chair Jerome Powell for a lack of oversight. Blame SVB: Others say the blame should be placed on the banks themselves.

☆ U.S. Federal Reserve to review its oversight of Silicon Valley Bank
▼ + stars: | 2023-03-13 | by ( Pete Schroeder | ) www.reuters.com time to read: +2 min

WASHINGTON, March 13 (Reuters) - The U.S. Federal Reserve announced on Monday it is reviewing its oversight of Silicon Valley Bank (SIVB.O) in the wake of its abrupt failure Friday. The Federal Reserve Bank of San Francisco was responsible for Silicon Valley Bank's supervision. "The San Francisco Fed had all the tools necessary to prevent this from happening," Senator Bill Hagerty, a Tennessee Republican, said in an interview. "We need to understand why the San Francisco Fed wasn’t utilizing all the tools at its disposal from an oversight standpoint." A spokesperson for the San Francisco Fed did not immediately respond to a request for comment.

March 10 (Reuters) - Greg Becker, the chief executive officer who presided over the collapsed Silicon Valley Bank, joined the company three decades ago as a loan officer. Becker graduated from Indiana University with a bachelor's degree in business, according to Silicon Valley Bank's website. When his manager left to work for Silicon Valley Bank, Becker followed, he said in 2021 on a Bloomberg podcast. Representatives for Silicon Valley Bank did not immediately respond to a request for comment. Before becoming president and CEO of SVB Financial Group, Becker co-founded SVB Capital, the company's investment arm.

☆ CEO of failed Silicon Valley Bank no longer a director at SF Fed
▼ + stars: | 2023-03-10 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

March 10 (Reuters) - The chief executive officer of failed Silicon Valley Bank, Greg Becker, is no longer on the board of directors at the Federal Reserve Bank of San Francisco. The spokesperson declined to say how Becker exited the San Francisco Fed board. Becker served as a Class A director at the San Francisco Fed, one of three finance executives representing member banks in the San Francisco Fed district. The 12 regional Federal Reserve banks are quasi-private institutions overseen by the Fed in Washington. The directors of the Fed banks have been in the spotlight in recent years as the central bank has faced criticism that bank directors lacked racial and gender diversity and were too weighted towards the business and banking community.

☆ It's official: Remote work is going to make it easier to buy a home
▼ + stars: | 2023-01-04 | by ( James Rodriguez | ) www.businessinsider.com time to read: +12 min

Remote work pushed housing trends into warp speedIn some ways, the pandemic's housing shifts were a long time coming. The shift to remote work also hastened many people's desire for more space. Across the country, remote workers chose to part ways with roommates or seek out larger homes. Elon Musk asserted his authority at Twitter by putting an end to remote work. On the other hand, as my colleague Aki Ito previously argued, a recession could further ingrain remote work as employers look to cut spending on real estate.

☆ Sen. Warren demands answers from Silvergate Bank about its business dealings with FTX
▼ + stars: | 2022-12-06 | by ( Gretchen Morgenson | Gretchen Morgenson Is The Senior Financial Reporter For The Nbc News Investigative Unit. A Former Stockbroker | She Won The Pulitzer Prize In For Her | ) www.nbcnews.com time to read: +13 min

“Life as a crypto firm can be divided up into before Silvergate and after Silvergate,” Bankman-Fried gushed in a testimonial featured recently, and prominently, on Silvergate Bank’s website. But in a conversation with an investment manager, a former top FTX employee said Silvergate was FTX’s primary banking partner. As a regulated bank, Silvergate has a duty to monitor clients’ accounts for suspicious activities that could signal fraud, money laundering or tax evasion, the filings note. FTX frequently used the Silvergate Exchange Network, according to the former FTX employee with direct knowledge of the transactions. A Silvergate spokeswoman said the change reflected a shift in functions taken on by a new president at the bank.

☆ The softening of real estate prices in the hottest pandemic markets only confirms that the surge in remote work created the illusion of a housing shortage
▼ + stars: | 2022-11-22 | by ( Alcynna Lloyd | ) www.businessinsider.com time to read: +4 min

Their presence led to a run-up in housing costs and real estate investor activity. But elevated home prices are "being misinterpreted as a shortage" says Erin Sykes, economist for Nest Seekers. "I'm not convinced there is a housing shortage, more so a mismatch of housing types and locations," she told Insider. According to an October housing report from ATTOM, institutional investors nationwide accounted for only 6.7% of housing inventory in the third-quarter of 2022 — down from the 8.4% seen in Q3 of 2021. As homebuyer and investor activity fades, and more employers call workers back into the office, Sykes says the so-called housing shortage could be on its last leg.

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