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☆ Inflation will rebound first before ultimately falling as wages and global conflicts push prices higher, BlackRock's chief investment strategist warns
▼ + stars: | 2024-02-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

Inflation is on a rollercoaster path downwards, BlackRock's chief investment strategist warned. Despite a recent decline, the asset manager thinks prices could rebound in 2025 before continuing lower in the longer term. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementInflation could get worse over the next year before it gets better, according to BlackRock's chief investment strategist Wei Li. The world's largest asset manager has repeatedly warned that inflation will be on a rollercoaster ride, rather than fall in a straight line.

Persons: —, Wei Li, Li Organizations: Service, Business

☆ Don't trust the 'vibecession' as inflation isn't nearly as bad as it feels, Nobel economist Paul Krugman says
▼ + stars: | 2024-02-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The bad vibes spreading through the economy are unwarranted, according to Paul Krugman. Grocery prices soared in 2023, but inflation isn't nearly as bad as it feels, the Nobel economist said. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementThe "vibecession" in the economy isn't to be trusted, as Americans are making inflation out to be much worse than it seems, according to Nobel economist Paul Krugman.

Persons: Paul Krugman, Krugman, —, they're Organizations: Service, of Labor Statistics, Bureau of Labor Statistics, Federal Reserve Consumers, Department of Agriculture

☆ A hard-landing recession is guaranteed as the full impact of Fed rate hikes have yet to hit the economy, Morgan Stanley's chief economist says
▼ + stars: | 2024-02-27 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

A hard landing is guaranteed for the US Morgan Stanley's chief US economist. That's because the full impacts of Fed tightening haven't been fully felt in the economy. It could take 18 months after the last rate hike to feel the full weight of higher rates, economists say. Zentner is expecting the US to avoid a recession this year, as there's no data to support a soon-to-come downturn. AdvertisementStill, signs point to the Fed keeping interest rates elevated as it keeps an eye on inflation.

Persons: US Morgan Stanley's, Ellen Zentner, Morgan Stanley's, Zentner, Jamie Dimon's Organizations: US, Federal Reserve, CNBC, Analytics, Bank, Investors

☆ Millennials having fewer kids could be a drag on the economy for the next decade
▼ + stars: | 2024-02-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +7 min

At the current trajectory, that's set to weigh on the economy for the next decade or more. AdvertisementMillennials aren't having as many kids as previous generations, and that fact could end up dragging down economic growth for more than a decade. "What you're talking about is these birth rates dropping very, very low levels, which over the course of time has huge impacts on the economy," Pomeroy said. The impact of millennials having fewer kids will likely be worse than the impact of aging boomers — and the most dire consequences could come 10-15 years from now, Pomeroy estimated. The most important thing to encourage people to have more kids might be a cultural shift in how we talk about children, Buchholz says.

Persons: Millennials, —, James Pomeroy, Pomeroy, Todd Buchholz, …, boomers, Buchholz, That's, DINK, " Buchholz, it's Organizations: Service, Centers for Disease Control, White House, Medicare, Social Security, CNBC, Sony PlayStation Locations: China, Japan, Russia

☆ Russia's economy is so driven by the war in Ukraine that it cannot afford to either win or lose, economist says
▼ + stars: | 2024-02-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Russia's economy can't afford to win or lose the war in Ukraine, one economist says. AdvertisementRussia's economy is completely dominated by its war in Ukraine, so much that Moscow cannot afford either to win or lose the war, according to one European economist. AdvertisementOther areas of Russia's economy are hurting as the war drags on. So it cannot afford to win the war, nor can it afford to lose it. Russia's economy will see significantly more degradation ahead, one London-based think tank recently warned, despite talk of Russia's resilience in the face of Western sanctions.

Persons: That's, Renaud Foucart, —, Foucart Organizations: Ukraine, Service, Lancaster University, Kremlin, Russia Locations: Ukraine, Russia, Moscow, China, London

☆ The Fed cutting rates too early risks sparking a worst-case scenario of resurgent inflation, 'The Big Short' investor Steve Eisman says
▼ + stars: | 2024-02-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The investor of "The Big Short" fame said inflation could rise if the Fed cuts rates too early. AdvertisementThe best thing the Fed can do right now is nothing, because cutting interest rates too early risks sparking a "worst-case" scenario, according to "The Big Short" investor Steve Eisman. That caused inflation to skyrocket past 14% in 1980, while effective interest rates in the economy notched 19% the following year. The Fed has been fighting inflation since March 2022, when central bankers began their campaign to aggressively raise interest rates and tighten financial conditions. Fed officials have said they aren't poised to cut interest rates until they're more confident inflation will return to the 2% price target.

Persons: Steve Eisman, —, Eisman Organizations: Service, Bloomberg, Fed, Deutsche Bank

☆ An under-the-radar recession indicator in the bond market is sounding the alarm for a hard landing
▼ + stars: | 2024-02-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

An under-the-radar recession indicator in the bond market is raising alarm that the economy could be heading for a hard landing, according to ING Economics. Strategists at the analytics firm pointed to a tight correlation between US Treasury yields and Bund yields in Europe, with both yields slipping in recent weeks as markets reprice their interest rate expectations over the short-run. That was the case in the Silicon Valley Bank crisis in early 2023, when a sell-off fueled by the collapse of SVB led Treasury yields and Bund yields to tumble in tandem. "The correlation between UST and Bund yields is significantly elevated, which usually points to a hard-landing narrative," strategists said in a note on Wednesday. New York Fed economists, meanwhile, are pricing in a 61% chance the economy could tip into recession by January of next year.

Persons: SVB Organizations: ING Economics, Treasury, Business, European Central Bank, ING, Bank, UST, Bund, ECB, New York Fed Locations: Europe, Silicon

☆ Steep rate cuts are coming as the job market looks poised to weaken, Wells Fargo strategist says
▼ + stars: | 2024-02-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Read previewSteep rate cuts from the Federal Reserve could be coming later this year thanks to weakening in the job market, which likely isn't as robust as some of the latest data has made it out to be, according to Wells Fargo strategist Erik Nelson. Advertisement"We need a catalyst, we need some data that shows these recent, strong data were just a blip. But much of that strength may be seasonal and no longer reflected in upcoming job reports, Nelson said. Other market commentators have warned that hiring activity could weaken in 2024 as tighter financial conditions take a toll on businesses. Though the jobless rate is low, continuing unemployment claims are hovering around 1.9 million, according to Fed data.

Persons: —, Wells, Erik Nelson, Nelson, Paul Dietrich Organizations: Service, Federal, Bloomberg, Business, Fed, New York Fed, Yale School of Management

☆ Baby boomers are driving the trend of Americans staying in their homes for twice as long as they did 2 decades ago
▼ + stars: | 2024-02-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Americans are staying in their homes twice as long as they used to, a trend largely driven by boomers. Around 40% of baby boomers have stayed in their homes for at least 20 years, per a Redfin analysis. That can be chalked up to the unaffordable housing market, with mortgage rates and prices both elevated. The shift is largely driven by baby boomers, the real estate listing site said, who are staying put as mortgage rates and home prices remain elevated. Most (54%) baby boomers who own homes own them free and clear, with no outstanding mortgage," Redfin said in a note on Wednesday.

Persons: —, That's, boomers, Gen Zers, Redfin, it'll Organizations: Service, Federal Reserve

☆ Russia's economic decline is in only in the early stages, and the country is masking significant 'degradation,' think tank says
▼ + stars: | 2024-02-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Russia's economic decline is still in the early stages, according to a London-based think tank. But talk of Russia's economic resilience is misguided, and there are deep-rooted issues that will continue to plague its economy, the think tank said. AdvertisementRussia's robust military spending has been a key factor in propping up its economic growth so far. "Significantly greater isolation and economic degradation is baked into the cake for the Russian economy and people." Russian inflation grew 7.2% year-per-year in January, well above the nation's 4% inflation target.

Persons: —, Mark Sobel, Sobel, Brent, that's Organizations: Service, Official Monetary, Financial, International Monetary Fund, Bloomberg, Yale School of Management . Companies Locations: London, Ukraine, Russia, Oilprice.com, Moscow

☆ US office buildings are facing a 30% price drop as remote work continues to upend the sector, Morgan Stanley says
▼ + stars: | 2024-02-12 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

US commercial real estate is headed for a $2 trillion wall of maturing debt in the next few years. America's office market is in flux and prices have further to fall amid "secular" challenges facing the sector, Morgan Stanley analysts said in a note. Commercial real estate pain has been a source of anxiety for the US banking sector, and regional banks in particular. Thus, the challenges facing CRE in general and office loans in particular are intricately linked to the regional banking sector." Real estate pros have been sounding the alarm on commercial real estate since early 2023 when the sector was in the spotlight following a spate of regional bank failures.

Persons: Morgan Stanley, That's Organizations: Real Capital, National Association of Realtors, Mortgage, Association, New York Community Bank

☆ Spring home buying season is near. Real estate pros say this year's rush could push prices up 5% after a weak 2023.
▼ + stars: | 2024-02-10 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

The housing market will see a stronger, prolonged spring homebuying rush this year, real estate pros say. Buyers and sellers are slowly wading back into the market as mortgage rates edge lower. That's not what economists had originally expected for the housing market this year. "Until we see mortgage rates really improve, we don't expect owners to come back very, very quickly." Affordability conditions have been steadily improving after a bad year for the housing market.

Persons: —, Redfin, Daryl Fairweather, Fairweather, Skylar Olsen, Olsen, Zillow, " Fairweather, Freddie Mac, That's, –, aren't Organizations: Service, National Association of Realtors Locations: Zillow

☆ Russia's wartime economy is flush with resources and is weathering Western sanctions, European economist says
▼ + stars: | 2024-02-07 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Economists have said Russia's economy is in rapid decline, evidenced by the plunge in the ruble and soaring inflation. Russia's only problem appears to be its worker shortage, Santi says. AdvertisementEconomists are divided over whether Western sanctions have successfully crimped Russia's economy, or if Moscow has managed to sidestep most of the consequences. Russia, for its part, has put up a show of defiance against Western sanctions, with Putin repeatedly emphasizing the resilience of the economy. In January, the Kremlin's budget deficit was five times smaller than it was last year, Russia's finance ministry said on Wednesday.

Persons: —, Michael Santi, Santi, Putin Organizations: Service, Business, Gallup, Bloomberg, Carnegie Endowment Locations: Moscow, Ukraine, European, Russia, Switzerland, Armenia, Serbia, Kazakhstan, Europe

☆ Baby Boomers are approaching 'peak burden' on the economy
▼ + stars: | 2024-02-04 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +6 min

A wave of retiring Boomers means the generation will soon be at "peak burden" to the economy. It's the Baby Boomers, who are aging fast and approaching their "peak burden" years in regard to their drag on the economy and the resources of younger generations. Advertisement"The peak burden is [when] all the baby boomers have hit retirement," Millar told Business Insider. And it isn't the case that Baby Boomers will derail economic growth nearly as much as, say, a full-blown recession, according to Dean Baker, an economist who described the Baby Boomers as a "time bomb" in a 1998 paper. In 2022, empty-nester baby boomers owned 28% of large homes in the US, a Redfin analysis found, double the share of millennial families.

Persons: —, Zers, Jonathan Millar, Millar, Dean Baker, That's, Boomers, David Rosenberg, Baker, Gen Organizations: Boomers, Service, Barclays, National Association of Realtors, Chamber of Commerce, Rosenberg Research, Social, Insurance Trust Fund, Social Security Administration Locations: Millennials

☆ There's little reason to be optimistic about a soft landing this year as the 'runway is in an earthquake zone,' Harvard economist says
▼ + stars: | 2024-02-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Growing hope for an economic soft landing is misplaced, economist Ken Rogoff wrote this week. The Harvard economist sees the runway for the economy in an "earthquake zone" in 2024. AdvertisementThere's little reason to be optimistic about a soft-landing, as the economy is set to land in an "earthquake zone" in 2024, according to top economist Ken Rogoff. Advertisement"Despite the widespread belief that the global economy is headed for a soft landing, recent trends offer little cause for optimism. The US also faces trouble as the national debt continues to surge and interest rates look poised to stay higher-for-longer.

Persons: Ken Rogoff, —, Doom, Rogoff Organizations: Harvard, Service, Syndicate, International Monetary Fund, Fed, Federal Reserve, New York Fed, Cleveland Fed Locations: China, Europe, Ukraine, Russia

☆ The Fed's first rate cut won't happen until June after surprisingly cautious guidance from the central bank, Bank of America says
▼ + stars: | 2024-02-01 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The first Fed rate cut probably isn't coming until June, according to Bank of America. Central bank chief Jerome Powell pushed back on hopes for a March rate cut on Wednesday. AdvertisementThe Fed's first rate cut is now unlikely to come in March after the central bank struck a surprisingly hawkish tone at Wednesday's Federal Open Market Committee meeting, according to Bank of America. Investors still see an aggressive pace of rate cuts by the end of the year, despite lowered hopes for a March cut. AdvertisementExperts have warned that Fed rate cuts could be a double-edged sword for the economy, particularly if the Fed cuts interest rates rapidly.

Persons: Jerome Powell, —, Jerome Powell's presser, aren't, Powell, Jeff Gundlach Organizations: Bank of America, Service, Fed

☆ 'Black Swan' author Nassim Taleb says the US is heading for a debt 'death spiral'
▼ + stars: | 2024-01-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

The US is headed for a debt "death spiral" if politicians don't rein in spending, Nassim Taleb said. "The Black Swan" author said debt troubles will continue if Congress can't"A debt spiral is like a death spiral," Taleb said at an event on Monday. AdvertisementThe US is facing a "death spiral" as a result of its mounting debt and the inability of politicians to confront the issue, according to "The Black Swan" author Nassim Taleb. In fact, rising debt in the US is a "white swan," Taleb said, and is an event that poses an obvious risk to markets versus a "black swan" event, which can occur without much warning. "A debt spiral is like a death spiral," he added.

Persons: Nassim Taleb, Swan, Taleb, —, Per, Goldman Sachs Organizations: Service, Per Bloomberg, Universa Investments, Fed, Investors Locations: West, Congress

☆ The average US homebuyer has gained $40,000 in buying power in the last 3 months as mortgage rates cool
▼ + stars: | 2024-01-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Homebuyers have gained more purchasing power as mortgage rates have edged lower. That's due to a steady decline in mortgage rates, with the 30-year fixed rate hovering around 6.7%. That's thanks to the recent decline in mortgage rates, which has taken the cost of borrowing on a 30-year fixed mortgage to around 6.7%, Freddie Mac data shows. With rates hovering around 6.7%, that means the typical homebuyer will pay $2,545 on their monthly mortgage payment – down from the median monthly payment of $2,713 when mortgage rates hovered around 7.8%. Prospective buyers shouldn't try to time interest rates before entering the housing market, Redfin chief economist Daryl Fairweather said.

Persons: Homebuyers, Redfin, —, Freddie Mac, shouldn't, Daryl Fairweather, Fairweather Organizations: Service, Fed

☆ The office apocalypse will see a wave of buildings demolished or converted to residential, New York City real estate exec says
▼ + stars: | 2024-01-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

The New York City property exec and veteran real estate broker pointed to potential trouble heading for the US office space, thanks to the plunging demand for office buildings since the pandemic, and poor lending conditions across the commercial real estate sector. AdvertisementExperts have been warning of trouble in the commercial real estate sector for the last year as credit conditions in the economy tighten. Many commercial real estate mortgages are financed at interest rates around 3.5%-4%. New York City alone has around 100 million square feet of empty office space, Knakal estimated. Office buildings, meanwhile, could soon double the price decline they saw in 2023, the real estate firm Cohen & Steers estimated.

Persons: —, Bob Knakal, Knakal, Banks, Cohen, Steers Organizations: Service, Business, New, CNBC, National Association of Realtors . New Locations: New York City, National Association of Realtors . New York City

☆ Boeing's embarrassing 737 Max disaster could hit entire US economy, aviation expert says
▼ + stars: | 2024-01-26 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Read previewBoeing's 737 Max 9 fiasco could impact the entire US economy, according to Boyd International president Mike Boyd. Finance, the aviation expert pointed to the January 5 incident on an Alaska Airlines flight, during which the door blew out of the 737 Max 9 aircraft. Over a hundred 737 Max 9 planes were grounded by the Federal Aviation Administration this month, sparking a wave of flight cancellations and an investigation that found many 737 Max planes had loose bolts. AdvertisementIt's not the first time Boeing's 737 Max fleet has had issues. In 2019, two Boeing 737 Max planes crashed, killing nearly 350 people.

Persons: —, Max, Mike Boyd, Boyd, That's, Scott Kirby, I'm, Calhoun, Dave Calhoun, Stan Deal Organizations: Service, Boyd International, Business, Yahoo, Finance, Alaska Airlines, Max, Boeing, United Airlines, United, Boeing Commercial, Federal Aviation Administration Locations: Chicago, Seattle, Alaska, United

☆ Russia's war in Ukraine has sent wages soaring as workers grow scarce and private business competes with the military
▼ + stars: | 2024-01-25 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Wages in Russia are soaring thanks to the nation's war with Ukraine. AdvertisementA severe shortage of workers in Russia means the private sector is beefing up compensation to attract talent — and competing directly with the military for manpower. That puts Russia's military in a tough position competing with the private sector. Salaries for military servicemen rose 10.5% last summer, far short of the heftiest private sector pay increases. In its war effort, Russia mostly relies on volunteers to fight its war in Ukraine.

Persons: —, That's Organizations: Bloomberg, Service, Engineers, Junior, UK Ministry of Defence, Defense Ministry, Moscow Times Locations: Russia, Ukraine, Moscow, Soviet

☆ American consumers won't save the economy in 2024 and their wild holiday spending spree was a 'last hurrah', Wells Fargo says
▼ + stars: | 2024-01-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

download the appSign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read previewAmerican consumers won't be able to prop up the US economy forever, and their wild spending spree over the holiday season was likely a "last hurrah," according to Wells Fargo. The job market also looks poised to keep softening, especially if the Fed chooses to keep interest rates higher-for-longer. "We do not believe that good holiday sales mean the spending strength will continue into and through the middle of this year." Strong consumer spending is believed to have propped up growth for much of 2023 as the Fed aggressively raised interest rates to control inflation.

Persons: —, Wells, Scott Wren, Macquarie Organizations: Service, Business, Retail, National Federation of Independent Business, Philadelphia Fed, Wells Fargo, Wall, Fed Locations: Wells Fargo

☆ Live updates: Tesla to report 4th-quarter earnings
▼ + stars: | 2024-01-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

It indicates the ability to send an email. Electric-vehicle demand could hit a low later this year, Morgan Stanley saysA Tesla supercharger station at Burbank Town Center, in Burbank on Friday, Sept. 4, 2020 in Burbank, CA. Kent Nishimura /Getty ImagesMorgan Stanley has warned of an imbalance of EV supply and demand which could weigh on Tesla this year. "Looking ahead, are we approaching maximum market negativity on EVs? We believe the trough may happen towards the latter part of 2024," the bank said in a note, citing influences stemming from the EU Parliamentary and US presidential elections.

Persons: Morgan Stanley, Kent Nishimura, Hertz Organizations: Burbank Town Center, Getty, EU Parliamentary Locations: Burbank, Burbank , CA, China

☆ Inside Tesla's make-or-break earnings report
▼ + stars: | 2024-01-24 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. In today's big story, we're previewing Tesla's make-or-break earnings report. And then there's the ultimatum Elon Musk issued to Tesla's board about wanting more voting rights or taking his AI projects elsewhere. Business Insider's Jennifer Sor has a roundup of what five Wall Street firms expect ahead of Tesla's earnings report. TeslaHow Musk pitches Tesla's year ahead will also be a telling signal, Nora told me.

Persons: —, Donald Trump, Stephen Lam, Elon Musk, Jennifer Sor, Nora Naughton, BI's, Tesla, Nora, Kiran Raichura, Raichura, Goldman Sachs, Kraft Heinz, Sam Altman, it's, Glenn Harvey, Eddie Trunk, Brooks Kraft, Staples Organizations: Service, New Hampshire Republican, Tesla, Reuters, Capital Economics, Monster Beverage, Google, Google Google, Netflix, BI, of Fame, Apple, IBM, Brooks, Brooks Kraft LLC, Getty

☆ Empty-Nest Baby Boomers Won't Sell 3-Bedroom Homes Millennials Need
▼ + stars: | 2024-01-23 | by ( Eliza Relman | Jennifer Sor | ) www.businessinsider.com time to read: +6 min

As people age, they need homes that are more accessible and easier to maintain. Large homes often have multiple floors, yards, and other features that make them trickier to navigate for older people. AdvertisementSchuetz says there's not a dearth of large homes in the US. Instead, there's really just a mismatch between large homes and occupants who don't need them. But many more family-sized apartments and other homes will need to be built to make up for the lack of large homes on the market.

Persons: —, Jenny Schuetz, Redfin, Schuetz, Daryl Fairweather, Redfin's, I've, Fairweather, it's, there's Organizations: Service, Business, Brookings Institution

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