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☆ Fed's Mester: with inflation high, better to act "aggressively"
▼ + stars: | 2022-09-26 | by ( Ann Saphir | ) www.reuters.com time to read: +2 min

Mester said she would be "very cautious" about assessing inflation, and would need to see several months of declines in month-to-month readings to be convinced it had peaked. Similarly, she said she will "guard against being complacent" on long-term inflation expectations that have recently dropped a bit but may not, she said, be as well-anchored as hoped and could rise again. Register now for FREE unlimited access to Reuters.com RegisterPolicymakers faced with uncertainty over inflation expectations should risk setting policy too tight rather than too loose, she said. The Fed last week increased its policy rate to 3%-3.25% in its third 75 basis point hike in so many meetings. Register now for FREE unlimited access to Reuters.com RegisterReporting by Ann Saphir; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ Forget a soft landing. The market’s best hope is a ‘growth’ recession
▼ + stars: | 2022-09-26 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

It wants to achieve a soft landing — that Goldilocks ideal of cooling the economy enough to bring down prices but not enough to cause a recession. The new aim appears to be for a so-called growth recession: A prolonged period of meager growth and rising unemployment. The pain is sharper and lasts longer than that of a soft landing, but a “growth” recession doesn’t pull the entire economy into contraction the way a proper recession would. It looks like a recession, and feels like a recession, but it isn’t a recession — at least not officially. A growth recession is still painful.

☆ Stocks could continue skittish trading until interest rate move calms down
▼ + stars: | 2022-09-23 | by ( Patti Domm | In | ) www.cnbc.com time to read: +6 min

The S & P 500, Dow and Nasdaq were all down sharply for the week. The S & P was down 4.6%, ending the week at 3,693. Fed Vice Chair Lael Brainard , St. Louis Fed President James Bullard , San Francisco Fed President Mary Daly and Fed Governor Michelle Bowman are among the speakers. Other global central banks joined the Fed in raising rates, and interest rates around the world rose in tandem. If those levels break, the S & P could touch 3,385 before the selling is over, he said.

☆ With inflation still high, the Fed may be a long way from where it can stop hiking
▼ + stars: | 2022-09-19 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Current market pricing in fed funds futures indicates that the Fed's "terminal rate," or the point where it stops hiking, will hit 4.39% in April 2023. In fact, those expectations for higher rates are causing Wall Street economists to rethink their projections for growth. Goldman Sachs also has raised its expectations for rate hikes this year, though it still sees a terminal rate in the 4%-4.25% range. "Thus far, higher rates have inflicted little widespread pain on the real economy, so the Fed has room to continue hiking into restrictive territory," the Morgan Stanley economist said. "Bottom line is that the Fed needs more evidence that its actions are taking a bite out of the real economy."

☆ All the economic good news, from jobs to inflation, was just a momentary blip. The worst is yet to come.
▼ + stars: | 2022-08-30 | by ( Neil Dutta | ) www.businessinsider.com time to read: +10 min

From inflation to consumer spending, there are clear signs that the economy is still in real danger of being pushed into a recession. While Americans' expectations for inflation over the next 12 months have ebbed somewhat, they're still sitting at 6.2%. With strong private demand, consumers are signaling that while labor-market conditions are strong, momentum is slipping. This means the increase in consumers' spending in the first half of the year was driven exclusively by them tapping into their savings. Prematurely easing inflation-reduction policy with inflation rates still elevated risks pushing up inflation expectations and entrenching a higher inflation rate into the economy.

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