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☆ The Fed Keeps Hiking Interest Rates. Here’s Why You Should ‘Absolutely’ Act Now for Better Savings and CD Rates
▼ + stars: | 2023-02-01 | by ( ) www.wsj.com time to read: +6 min

By Martha C. WhiteThe Fed is set to send savings and CD rates higher yet again. On Wednesday, the Fed announced a quarter-percentage-point interest rate increase to its benchmark federal-funds rate, following its Jan. 31-Feb.1 meeting. Policy makers’ economic projections released in December show that Fed officials don’t expect inflation to hit 2.1% until 2025. “It’s going to be slow, but I think the trend is going to be higher” rates. If that’s your bank, he adds, you “absolutely should be taking advantage of a higher rate savings account.”

☆ Consumer Financial Protection Bureau targets excessive credit card fees in new rule proposal
▼ + stars: | 2023-02-01 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

WASHINGTON — The federal government's consumer protection watchdog proposed a new rule on Wednesday to ban excessive credit card late fees, potentially reducing them by as much as $9 billion per year. Congress banned exorbitant credit card fees under the Credit CARD Act in 2009, but an immunity provision instituted by the Federal Reserve Board of Governors enabled card companies to dodge enforcement standards, said Rohit Chopra, director of the Consumer Financial Protection Bureau. "Today's proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive." The proposal follows a March 2022 report that showed credit card issuers charged consumers $12 billion in late fees in 2020. "Given their current practices, we expect that credit card issuers will hike fees, based on inflation, as limits continue to rise."

Powell faces a similar task this year but with the inflation problem turned on its head. As such, the Fed, which has been under Powell's leadership since early 2018, has flagged a downshift this year to a gradual pace of interest rate increases to reduce the risk of a policy mistake. Part of that withdrawal of stimulus included starting its balance sheet drawdown. For some that made kicking off the balance sheet drawdown at the July meeting less attractive than the September meeting, when then-Chair Yellen would speak with the press at its conclusion. "I see no advantage at all to moving it to July," then Fed governor Lael Brainard said.

☆ Republican senators propose overhaul of Federal Reserve amid concerns about politics
▼ + stars: | 2022-12-21 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

Among its provisions, the bill would also shrink the 12 regional Fed banks to five. Regional Fed leaders contribute to monetary policy debates, gather local economic intelligence and vote on interest rate decisions on a rotating basis. The structure of regional Fed banks has long made reformers, both on the left and right, uncomfortable. Leaders of these regional Fed boards are chosen by their private boards, although they must be approved by the board in Washington before taking office. In contrast, the Fed in Washington, which oversees the regional Fed banks, is explicitly part of the government.

The proposed principles detailed expectations for banks with more than $100 billion in assets to incorporate financial risks related to climate into their strategic planning. Those financial impacts "pose an emerging risk to the safety and soundness of financial institutions and the financial stability of the United States," the Fed said. The Fed's plan would require banks to consider climate-related financial risks in their audits and other risk management and add climate-related scenario analysis to traditional stress testing. Fed Governor Christopher Waller dissented against Friday's proposal, raising the question of whether it poses a serious risk to large banks' soundness or U.S. financial stability. "The Federal Reserve conducts regular stress tests on large banks that impose extremely severe macroeconomic shocks and they show that the banks are resilient."

☆ U.S. Fed proposes framework for how banks manage climate-related financial risk
▼ + stars: | 2022-12-02 | by ( Expert Analysis | Reuters Professional | The Subsistence Farmer S Son Pushing For A Better Shake For Smallholders At Spices Brand Mccormick | ) www.reuters.com time to read: 1 min

WASHINGTON, Dec 2 (Reuters) - The U.S. Federal Reserve on Friday proposed new guidance for how large banking institutions manage climate-related financial risks, in line with proposals from other key financial regulators. The proposed principles detailed expectations for banks with more than $100 billion in assets to incorporate financial risks related to climate into their strategic planning. Issuance of the proposal for public comment was approved in a 6-1 vote of the Fed Board of Governors, with Governor Christopher Waller dissenting. Reporting by Chris Prentice; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ Morning Bid: Uneasy Chair
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. While inflation looks past its peak, labour markets remain super tight and Powell speaks before another crucial nationwide employment report on Friday. Futures market expectations for peak Fed rates next May ticked back above 5% ahead of the speech, with about 35 basis points of rate cuts from there still priced by yearend. China and Hong Kong shares extended gains on Wednesday as market participants cheered an easing of COVID-19 measures in Guangzhou city. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Morning Bid: Consumer inflation, crypto deflation
▼ + stars: | 2022-11-10 | by ( ) www.reuters.com time to read: +5 min

Annual consumer price rises are expected to have eased back a touch last month to 8.0%, the lowest since February, with core inflation rates ticking lower to 6.5%. Falling used car prices, one aggravator of inflation indices over the past year, will be watched closely - as will the relative calm in oil prices. Minneapolis Fed President Neel Kashkari said it's "entirely premature" to discuss any pivot away from the Fed's current policy course. Broader markets were steady to negative around the world, mostly in a holding pattern ahead of the inflation report. The United States and China also laid out markers this week ahead of an expected meeting between their presidents at the summit.

Nov 4 (Reuters) - Even as global central banks rapidly tightened financial conditions this year, U.S. households, banks and businesses have so far been able to adapt, Federal Reserve Vice Chair Lael Brainard said as the Fed released its semiannual report on financial stability. More than half of those participating in the survey cited market liquidity and stress as a "salient risk," an issue not mentioned at all in the Fed's May financial stability report. TREASURY MARKET CONCERNS REVISITEDThe report noted deteriorating liquidity in the Treasury market, but said that overall it had functioned smoothly over the last few months. Liquidity conditions were particularly poor for older vintages of bonds - so-called "off the run" securities - and for Treasury Inflation Protected Securities, the report found. The Inter-Agency Working Group on Treasury Market Surveillance - comprising officials from the Fed Board, Treasury, New York Fed, Securities and Exchange Commission and Commodity Futures Trading Commission - is expected to provide an update on its progress toward enhancing the resilience of the Treasury market, the Fed said, though it did not provide a timeline for that.

A down shift in the rate hiking pace by the Bank of Canada this week just stoked that speculation. And even in the face of some spooky corporate health warnings, stock markets fed off Fed 'pivot' talk yet again and have been chomping at the bit for a fortnight. When that 2-10 yield curve inverted in April for the first time in almost three years - shortly after the Fed's first hike - recession angst took a firm grip. Fed economists argued vociferously that the 2-10 yield curve was not reliable and insisted a 'soft landing' was still possible if more accurate shorter-term yield curve spreads that remained positive were used instead. An elongated measure of the yield curve between 3 months and 10 years - used by the New York Fed in its recession probability models - dropped into negative territory for the first time since the pandemic hit.

☆ Tesla and Truss, 5% and 150
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +4 min

A Tesla model 3 car is seen in their showroom in Singapore October 22, 2021. read more The latest European tech sector earnings on Thursday were downbeat, too. Bank of England Deputy Governor Ben Broadbent said the BoE would respond to changes in Truss's tax and spending policies. read moreKey developments that should provide more direction to U.S. markets later on Thursday:* European Union summit in Brussels* U.S. Oct Philadelphia business index. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Morning Bid: Mystery Dance
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. Sudden and sometimes unexplained stock rallies are often hallmarks of prolonged bear markets. U.S. stock futures have retraced a bit - but an hour is a long time in markets these days. read moreElsewhere, China's stocks surged ahead of the Communist Party Congress and amid an expected rise in domestic inflation. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Morning Bid: Gimme Shelter
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. read moreBut with the pound falling anew against the dollar on the credit rating and IMF warnings, the real problem is in UK government bonds, or gilts. read moreWith Wall Street stocks hitting a new low for the year on Tuesday, global shares sank to two-year lows on Wednesday. Fed chairman Jerome Powell and a host of other Fed speakers are in the diary again for later on Wednesday. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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