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Best Buy Co Inc (BBY.N) jumped 12.4%, leading gains on S&P 500 (.SPX) index, after forecasting a smaller drop in annual sales than previously estimated, confident that a ramp up in deals and discounts will lure more customers. "People are hopeful that consumers can still squeeze out a strong holiday season despite the headwinds they're facing," said Brandon Pizzurro, director of public investments at GuideStone Capital Management. "It would be an upside surprise if consumers really brought their full wallet to the table this year, probably what's driving Best Buy movement today." Gains in Best Buy boosted the S&P 500 retail (.SPXRT) sector index, but a 9.4% fall in Dollar Tree Inc (DLTR.O) capped the upside as the discount retailer lowered its annual profit forecast for the second time. Energy (.SPNY) led gains among the 11 major S&P 500 sector indexes, up 3.0%, as oil prices rose after top exporter Saudi Arabia said OPEC+ stuck with output cuts.

☆ Fed's Mester wants more progress on inflation before ending interest rate hikes
▼ + stars: | 2022-11-21 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Cleveland Federal Reserve President Loretta Mester said Monday inflation will need to show more signs of progress before she's ready to stop advocating for interest rate increases. While acknowledging that recent data has been encouraging, the central bank official told CNBC that the progress is only a start. Markets rallied in recent days following data showing the rate of price increases slower than estimates, though inflation is still running at a 7.7% annual rate as gauged by the consumer price index. In recent days, the Fed has faced some criticism that its focus on inflation could cause unnecessary damage to the economy. Mester said the Fed is trying to bring down inflation "as painlessly as possible."

☆ Fed's Mester says she supports smaller rate hike in December
▼ + stars: | 2022-11-21 | by ( ) www.reuters.com time to read: +2 min

Nov 21 (Reuters) - The Federal Reserve can downshift to smaller interest rate hike increments from next month as it fine-tunes its policy actions to help bring down high inflation while keeping the economy humming, Cleveland Fed President Loretta Mester said on Monday. I don't have a problem with that, I do think that's very appropriate," Mester said in an interview with broadcaster CNBC. "But I do think we're going to have to let the economy tell us going forward what pace we have to be at." Investors overwhelmingly expect a rate increase of 50 basis points at the Fed's next policy meeting on Dec. 13-14. "Right now my forecast is that we're going to see some real, good progress on inflation next year," Mester said.

Falling oil prices are often seen as good news for world markets, signaling weaker inflationary pressures as well as a boost to households' purchasing power and corporate profit margins. Oil slid to a 10-month low on Monday, accelerating a decline that has now reached around 15% in the last two weeks. The S&P 500 energy sector index slid almost 3% to a four-week low before recovering. China's pandemic plight is also fueling safe-haven demand for the dollar - which rose strongly on Monday - and a stronger dollar tends to weigh on commodity and energy prices. All else equal, a stronger dollar tightens financial conditions, which may be what policymakers want in the fight against inflation, but growth and risk appetite will suffer.

☆ Dollar slides, CPI data suggests Fed could slow pace of rate hikes
▼ + stars: | 2022-11-10 | by ( Herbert Lash | ) www.reuters.com time to read: +5 min

"Inflation is clearly moving in the right direction, and that keeps a more hawkish Fed at bay," he said. The spike higher in the yen versus the dollar stirred speculation the Bank of Japan intervened, which analysts doubted. Fed funds futures priced in a drop in expectations for the U.S. central bank's peak target rate, which fell below 5%. The likelihood of a 50-basis-point rate hike by the Fed instead of a 75-basis-point increase in December rose to 71.5%. CPI rose 7.7% in October on a year-over-year basis, down from 8.2% in the prior month, as headline inflation fell below 8% for the first time since February.

☆ Fed's Mester cheered by CPI, but says big risks remain on inflation
▼ + stars: | 2022-11-10 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

She also isn’t sure how far the Fed needs to go with pushing rates higher, saying that depends on what happens with inflation, which remains high. Mester said the Fed faces a challenging trade-off between lifting rates too much or too little. The report drove many analysts to speculate that inflation trends are finally starting to moderate. Mester said the news was good on the inflation data but it’s just the start of what’s needed. Mester reiterated that market volatility and broader economic pain could result from the Fed’s efforts to bring inflation down.

☆ Fed's Mester says central bank has yet to make a dent in inflation
▼ + stars: | 2022-10-11 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

“Despite some moderation on the demand side of the economy and nascent signs of improvement in supply-side conditions, there has been no progress on inflation,” Mester said. At its September policy meeting officials raised their federal funds target rate range to between 3% and 3.25% and penciled in more increases into next year, eyeing a 4.6% federal funds rate. The fed funds target was at near zero levels in March and recent Fed increases have been in increments of 0.75 percentage point, which is much larger in size than changes over recent decades. When it comes to the path the Fed has been on, "I don’t think it’s aggressive relative to where inflation is and how fast inflation has moved up." Mester said that inflation should come down to 3.5% by next year and back to the Fed’s 2% target in 2025.

☆ Fed's Mester: Doesn't see financial stability problems for US
▼ + stars: | 2022-09-29 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

Mester touched on market conditions amid very unsettled conditions across the globe. She acknowledged that Bank of England actions this week to buy bonds to stabilize markets there appeared at odds with its work to lower inflation. Mester said she does not see a case for slowing down on rate rises right now. "I probably am a little bit above that median path because I see more persistence in the inflation process," Mester said. Getting above a 4% fed funds rate is important to helping to lower inflation, she said.

☆ 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.

☆ 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.

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