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☆ The message top corporate CFOs are sending directly to Fed presidents isn't a bullish one
▼ + stars: | 2023-06-13 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +9 min

The Fed remains focused on the labor market and cooling wage growth while raising unemployment as the key to bringing hot services inflation down. "I shared with him [a regional Fed president] that they should stop, not pause," said another CFO on the call. "The consumer is being smart," the CFO said, but the Fed focus on bringing unemployment up can break the consumer. "I gave this message to him [a Fed president]: we can manage through this with unemployment below 4%." CFOs said the labor market remains tight and the wage gains, while slowing, have created a higher wage base which can't be turned back.

Persons: Jerome Powell, Drew Angerer, That's, Wall, Randy Kroszner, CFOs, Sara Eisen, Kroszner, it's Organizations: Federal Reserve, Federal, Market, Fed, CNBC, CNBC Fed Survey, Chatham House, Corporations, University of Chicago Booth School of Business Locations: Washington ,

☆ It's possible the Fed will pause rate hikes this time around, professor says
▼ + stars: | 2023-06-07 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailIt's possible the Fed will pause rate hikes this time around, professor saysRaghuram Rajan of the University of Chicago Booth says, however, that "the jury is still out" on how much more the U.S. Federal Reserve needs to do to manage inflation.

Persons: Raghuram Rajan, University of Chicago Booth Organizations: University of Chicago, U.S . Federal Reserve

☆ Debt ceiling crisis: How a US default would ricochet around the world
▼ + stars: | 2023-05-26 | by ( Hanna Ziady | ) edition.cnn.com time to read: +9 min

But if it does, it could make the 2008 global financial crisis feel like a walk in the park. The consequences are frightful.”The belief that America’s government will pay its creditors on time underpins the smooth functioning of the global financial system. During the 2011 standoff over raising the US debt ceiling, the S&P 500 index of leading US shares plunged more than 15%. “It’s unclear in a Treasury default crisis whether the Fed could do enough even with the types of efforts it deployed in March 2020,” Obstfeld said. “A default would be a message to investors all around the world of eroding confidence in America,” he added.

☆ We need to rethink the entire bank funding model, says former Fed Governor Randy Kroszner
▼ + stars: | 2023-05-02 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe need to rethink the entire bank funding model, says former Fed Governor Randy KrosznerRandy Kroszner, former Federal Reserve governor and economics professor at University of Chicago Booth of School Business, joins 'The Exchange' to discuss the market expectation for the Fed's next rate move.

☆ How Elon Musk upended Twitter and his own reputation in 6 months as CEO
▼ + stars: | 2023-04-27 | by ( Clare Duffy | ) edition.cnn.com time to read: +11 min

But it’s not clear just how and when Musk might return Twitter to growth. Musk’s primary plan to grow Twitter’s business through an overhauled subscription strategy has resulted in much chaos but only a limited number of actual subscriptions. In the process, Musk has also upended his own reputation. Disrupting the digital town squareFor years, what differentiated Twitter from other social platforms was that it served as a central hub for real-time news. Tesla (TSLA) shareholders recently complained to the company’s board that Musk appears “overcommitted.”“His reputation has been diminished significantly with Twitter … and once you lose it, it’s very difficult to recover,” Klepper said.

☆ European markets expected to open higher after bank lifelines eased crisis fears
▼ + stars: | 2023-03-17 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +1 min

Former Reserve Bank of India Governor Raghuram Rajan thinks it's still too early to tell whether the U.S. rescue plan to stem bank contagion risks has worked. "I think what's happened so far, in terms of the rescues, is sort of done the first aid. The question is — is there a slow bleed that is still going on," he told CNBC's "Street Signs Asia." Rajan, now a professor of finance at The University of Chicago Booth School of Business, noted questions remain around the collapse of Silicon Valley Bank. "How come a mid-size bank was oblivious of interest rate risk?"

☆ Fed's best option is to hike rates by 25 basis points and watch for a month and a half: Professor
▼ + stars: | 2023-03-17 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFed's best option is to hike rates by 25 basis points and watch for a month and a half: ProfessorRaghuram G Rajan of The University of Chicago Booth School, formerly governor of the Reserve Bank of India, says "doing zero would convey inappropriate signals at this point."

☆ Silicon Valley Bank: What experts think of US regulators response to the fallout
▼ + stars: | 2023-03-13 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailSilicon Valley Bank: What experts think of US regulators response to the falloutAaron Klein, senior fellow in economic studies at The Brookings Institute, Raghuram Rajan, professor of finance at the University of Chicago Booth School of Business, and David Bahnsen, founder and chief investment officer of the Bahnsen Group, join 'The Exchange' to discuss the Fed's response to the SVB fallout, bank market risk, and the contagion effect from SVB.

☆ Watch CNBC's full interview with Raghuram Rajan, David Bahnsen and Aaron Klein
▼ + stars: | 2023-03-13 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Raghuram Rajan, David Bahnsen and Aaron KleinAaron Klein, senior fellow in economic studies at The Brookings Institute, Raghuram Rajan, professor of finance at the University of Chicago Booth School of Business, and David Bahnsen, founder and chief investment officer of the Bahnsen Group, join 'The Exchange' to discuss the Fed's response to the SVB fallout, bank market risk, and the contagion effect from SVB.

☆ Corporations are keeping food expensive because they can
▼ + stars: | 2023-03-08 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

To be sure, food manufacturers have to factor in costs of labor and transportation, which remain elevated compared with a few years ago. Anyway, it isn’t just food companies taking advantage of the inflationary moment. Many food companies are forecasting that they might slow down or pause price increases — but not lower them, Danielle explains. But [companies] have, I think, taken price increases that exceed that,” said Mark Lang, an associate professor of marketing at the University of Tampa who specializes in food marketing. Lower prices could, for example, make people think food quality has gone down — or make them think they were paying too much in the first place.

☆ Food is getting cheaper. But not for you
▼ + stars: | 2023-03-08 | by ( Danielle Wiener-Bronner | ) edition.cnn.com time to read: +6 min

When food producers started raising prices a few years ago, they blamed their own costs, including higher ingredient prices. Many food companies are forecasting that they might slow down or pause price increases — but not lower them. But ingredients typically make up a small portion of overall food costs. Companies are maintaining elevated prices, or continuing to increase them, at a time when many Americans are already struggling to pay for food, especially as pandemic-era food stamp benefits expire. So people keep buying food at the grocery store, despite higher prices — giving producers an opportunity to convince retailers that those higher prices won’t drive customers away.

☆ Fed should look at how to efficiently support markets in times of stress -Bowman
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +1 min

March 3 (Reuters) - The Federal Reserve should consider how to most efficiently support financial markets in times of strained liquidity using information it has gleaned from its interventions at the onset of the COVID-19 pandemic, Fed Governor Michelle Bowman said on Friday. The U.S. central bank should explore how "to minimize the Fed's footprint and amount of asset purchases needed to restore market functioning" in times of severe stress, Bowman said in prepared remarks at a conference organized by the University of Chicago Booth School of Business at which she was moderating a panel on market dysfunction in global financial markets. Bowman did not comment on her outlook for the U.S. economy or monetary policy in her brief speech. The Fed's targeted purchase of affected assets to quickly support financial market functioning, as occurred in Treasury markets in the spring of 2020, also meant "a key issue for central banks to consider is how to clearly distinguish asset purchases from the central bank’s monetary policy actions," Bowman added, as well as how to communicate an exit strategy to reduce the resulting enlarged balance sheet over time. Reporting by Lindsay Dunsmuir; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ U.S. financial system vulnerable to bond market stress, Fed's Logan says
▼ + stars: | 2023-03-03 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

Logan, who holds a vote in this year's Federal Open Market Committee monetary policy meetings, did not comment on the outlook for monetary policy and the economy in her prepared remarks. She spoke amid ongoing concern about how financial markets, most notably the sector that trades U.S. government debt, will respond to the next chapter of stress. That said, a semi-annual monetary policy report released by the Fed on Friday sounded a somewhat sanguine note on market risk at the current moment. Trading in the Treasury market has been "orderly," although that particular market was more challenged on the liquidity front compared to others, it said. "The public and private sectors must work together to enhance market resilience so that these episodes will be far less frequent going forward," Logan said.

☆ Fed's Logan says financial system vulnerable to bond market stress
▼ + stars: | 2023-03-03 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

Logan, who holds a vote on this year’s Federal Open Market Committee monetary policy meetings, did not comment on the outlook for monetary policy and the economy in her prepared remarks. Before joining the Dallas Fed last year as its leader, Logan was a key official at the New York Fed designing and implementing the monetary policy directives of the FOMC. Those increases coupled with the Fed’s ongoing efforts to shed bonds to reduce its market footprint, have raised questions about what authorities might do to support markets in the future. A paper this week from the New York Fed said the official sector needs to move toward finding a more formalized approach to providing support. Logan said authorities are continuing to work on methods to formalize how they might intervene and to shore up underlying market strength.

☆ Fed's Mester says hot inflation data affirms case for more rate hikes
▼ + stars: | 2023-02-24 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

The government inflation report “is another indication that the impulse of inflation and price pressures is still with us. Mester spoke in the wake of the release of government data on incomes, spending and price pressures. “We just need to see all those prices coming back down and we haven't seen that sustainably yet,” Mester said. Since Mester called for a 50 basis point hike, jobs data has been very robust and inflation has been stronger than expected, suggesting her case for larger action remains in place. Mester reiterated in the interview that she still believes the federal funds rate, now at between 4.5% and 4.75%, needs to get above 5% and stay there to bring inflation down.

Some estimates have suggested the unemployment rate, currently at more than a five-decade low of 3.4%, may have to approach 7% for inflation to fall on a reasonable timetable. But a series of rapid rate hikes last year, which pushed the Fed's benchmark overnight interest rate from near zero to the current 4.50%-4.75% range, has so far been relatively cost-free. Those projections have inflation dropping to 2.1% by the end of 2025, with the economy growing throughout and the unemployment rate rising only to around 4.6%. By contrast, they said "the cost of lowering inflation to the Fed's 2% target by 2025 will likely be associated with at least a mild recession." Perhaps too reliant on the tame inflation of recent decades, the Fed made a "significant error" by not raising interest rates "preemptively" when inflation began accelerating in 2021, the group concluded.

☆ Fed's Collins says more rate hikes needed to curb 'too high' inflation
▼ + stars: | 2023-02-24 | by ( Michael S. Derby | ) www.reuters.com time to read: +1 min

NEW YORK, Feb 24 (Reuters) - Boston Federal Reserve President Susan Collins said on Friday more interest rate increases are needed to tame high levels of U.S. inflation. One of the U.S. central bank's newest regional bank presidents, she is not a voting member of the rate-setting Federal Open Market Committee this year. Collins, who took over as Boston Fed chief in July, 2022, voted in favor of every one of the aggressive rate hikes the Fed delivered last year while she was a voting member of the FOMC. Collins spoke after the release earlier on Friday of fresh data suggesting U.S. inflation pressures, which had been easing, may be more resilient than thought. The data suggested more Fed action will be needed, either in the form of more aggressive rate increases, a higher stopping point for rate increases, or a combination of both.

☆ Fed can't tame inflation without 'significantly' more hikes that will cause a recession, paper says
▼ + stars: | 2023-02-24 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

The Federal Reserve building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, January 26, 2022. The Federal Reserve is unlikely to be able to bring down inflation without having to raise interest rates considerably higher, causing a recession, according to a research paper released Friday. The Fed has implemented a series of interest rate hikes in an effort to tame inflation that had been at its highest level in some 41 years. That change implemented "average inflation targeting," allowing inflation to run hotter than normal in the interest of a more inclusive employment recovery. Fed Governor Philip Jefferson released a reply to the report, saying that the current situation differs from previous inflation episodes.

[1/3] Federal Reserve Vice Chair Lael Brainard speaks at the University of Chicago Booth School of Business, in Chicago, Illinois, U.S., January 19, 2023. In addition, she said the full impact of last year's aggressive Fed interest rate increases has yet to be felt. "It remains possible that a continued moderation in aggregate demand could facilitate continued easing in the labor market and reduction in inflation without a significant loss of employment," Brainard said. Even as the Fed parses the progress it has made on inflation, she said it would "stay the course." "Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 percent on a sustained basis," Brainard said.

☆ Fed Vice Chair Brainard: Inflation is easing, but our work isn't done
▼ + stars: | 2023-01-19 | by ( Alicia Wallace | ) edition.cnn.com time to read: +3 min

That’s the message Thursday from Fed Vice Chair Lael Brainard, speaking at the University of Chicago Booth School of Business. “Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis,” Brainard said. After four consecutive blockbuster hikes that were three-quarters of a point in size, the Fed downshifted during its last meeting, approving a half-point increase. Still, Brainard said she believes it’s possible the Fed could achieve a soft landing — a reduction in inflation without a significant amount of job loss. “That said, I’d say for the United States, recent data suggests slightly better prospects that we could see continued disinflation in the context of moderate growth.”The next two-day meeting for the Fed’s rate-setting committee starts January 31.

☆ Fed Governor Lael Brainard sees high rates ahead even with progress on inflation
▼ + stars: | 2023-01-19 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Federal Reserve Governor Lael Brainard said Thursday that interest rates need to remain high, even though there are signs inflation is starting to ease. Brainard pointed to a number of areas where she sees inflation starting to come down. Housing costs remain high, but Brainard and other Fed officials expect those to ease later in the year as apartment leases catch up with declines in commercial real estate. Instead, traders see the rate topping out about a quarter percentage point below that, and the Fed starting to reduce rates later this year. "Inflation is high, and it will take time and resolve to get it back down to 2%.

☆ WEF Davos: Fireside chat with Raghuram G. Rajan
▼ + stars: | 2023-01-18 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWEF Davos: Fireside chat with Raghuram G. RajanCentral banks are exploring issuing central bank digital currencies, or CBDCs, but what exactly they look like and how they’ll work is still a matter of debate. China has pushed ahead with real-world trials of its own CBDCs while other central banks are debating whether such digital currencies are even needed. Raghuram Rajan, professor of finance at the University of Chicago Booth School of Business, talks to CNBC's Arjun Kharpal.

☆ Will crypto continue to be a speculative asset?
▼ + stars: | 2023-01-18 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWill crypto continue to be a speculative asset? CNBC's Arjun Kharpal asks finance professor Raghuram Rajan, from the University of Chicago Booth School of Business, if crypto will continue to be a speculative asset after the market crash in 2022.

☆ Corporate profit reports in the week ahead could show whether there's an 'earnings recession'
▼ + stars: | 2023-01-13 | by ( Patti Domm | In | ) www.cnbc.com time to read: +6 min

Investors in the week ahead will focus on how much inflation and the slowing economy have chiseled away at corporate profits, as companies including Goldman Sachs , Netflix and Procter & Gamble report earnings. "This is going to be the start of the clock ticking on an earnings recession," said Amanda Agati, chief investment officer of PNC Asset Management Group. Economic recession talk heats up "There's never been a recession without an earnings recession since World War II," Agati said. Art Hogan, chief market strategist at B. Riley Financial, said this coming earnings week could be an important step towards assessing the health of corporate balance sheets. Week ahead calendar Monday Martin Luther King Jr. Day Markets closed Tuesday Earnings: Goldman Sachs , Morgan Stanley , Citizens Financial, United Airlines, Interactive Brokers 8:30 a.m.

Reuters GraphicsThe U.S. central bank is already adjusting to one unanticipated set of changes - an outbreak of inflation coupled with stalled growth in the U.S. labor force. "You have to identify the regime change ... Then you have to understand the transition dynamics ... and have a clear vision and insight into all of those ... "Markets calibrated to ... Chinese growth and low interest rates may prove fragile." Like recessions, which are typically identified only well after they have started, other economic turning points aren't always apparent in the moment. But as evidence of that accumulated following the 2007-2009 recession, it was only embodied into Fed policy in 2020 under a new approach that leaned against premature interest rate increases.

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