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☆ Wall Street retreats as Fed worries outweigh earnings
▼ + stars: | 2022-10-20 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +3 min

The New York Stock Exchange building is seen from Broad Street in Lower Manhattan in New York, January 20, 2016. But stocks were unable to hold their gains as strong weekly jobless claims and comments from Federal Reserve Bank of Philadelphia President Patrick Harker bolstered concerns about the Fed hiking rates and potentially tilting the economy into a recession. Better-than-expected results thus far has pushed earnings growth expectations for third-quarter for S&P 500 companies to 3.1% from a 2.8% increase earlier in the week, but still well below the 11.1% increase that was forecast at the start of July. Other data showed sales of existing homes fell for an eight straight month, while another reading showed factory activity in the Federal Reserve Bank of Philadelphia's district contracted again in October. The S&P 500 posted 3 new 52-week highs and 23 new lows; the Nasdaq Composite recorded 40 new highs and 204 new lows.

☆ Philadelphia Fed finds factory activity pulled back in October
▼ + stars: | 2022-10-20 | by ( Michael S. Derby | ) www.reuters.com time to read: +1 min

NEW YORK, Oct 20 (Reuters) - Factory activity in the Federal Reserve Bank of Philadelphia's district contracted again in October, the bank said in a report Thursday. The bank's index for general activity stood at -8.7 for last month, a modest improvement from September's -9.9 reading. Economists had expected a better performance, however, at a forecasted reading of -5. The report found local factory operators reporting higher employment and inflationary pressures, and that they also see activity falling over the next half year. Register now for FREE unlimited access to Reuters.com RegisterReporting by Michael S. Derby; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

☆ Fed's Harker says high inflation calls for more rate hikes
▼ + stars: | 2022-10-20 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

Against the current federal funds rate target of between 3% and 3.25%, “given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year,” Harker said. But the point is approaching where the central bank will be able to step back and see how the impact of its rate rise cycle is affecting the economy, the official said. Harker warned in his speech that while inflation surged very quickly, lowering it will take time, which creates uncertainty for monetary policy. That means “labor markets will stay quite healthy” as the Fed works to lower inflation, Harker said. Against the current 6.2% year-over-year increase in the August personal consumption expenditures price index -- the Fed’s preferred inflation measure -- Harker sees inflation at 6% this year, around 4% next year and 2.5% by 2024.

☆ Fed's Harker says housing shortage a key inflation driver
▼ + stars: | 2022-09-27 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, Sept 27 (Reuters) - Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday that a shortage of housing in the U.S. is a key driver of the nation's historic surge in inflation pressures. "Since the Great Recession, the United States has not built enough housing to keep price growth relatively modest," Harker said in an essay published on the bank's website. This shortage of homes "is a major driver of the far-too-high inflation plaguing our country." Harker said "inflation is far too high across most goods and services in our economy," and added the Fed "is working to stabilize inflation and put the economy on a firmer footing for the long haul." Harker is not currently a voting member of the rate-setting Federal Open Market Committee.

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