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☆ US economy still churning out jobs at brisk clip; wage pressures subsiding
▼ + stars: | 2023-04-07 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

Labor market tightness is drawing more people into the workforce, with 480,000 entrants last month, which could help to further restrain wage growth. The unemployment rate for Blacks dropped to an all-time low of 5.0%. Economists expect the labor market to loosen up considerably starting in the second quarter as companies respond more to slowing demand caused by the higher borrowing costs. Details of the household survey from which the unemployment rate is derived were upbeat. The employment-to-population ratio, viewed as a measure of an economy's ability to create employment, increased to 60.4% from 60.2% in the prior month.

☆ Borrowing from key Fed lending facilities cools a bit in latest week
▼ + stars: | 2023-04-06 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

Total lending to the three main programs aimed at bolstering bank liquidity stood at $323.3 billion as of Wednesday, down from $332.7 billion on March 29. At the start of March, before banking sector problems emerged, total Fed liquidity lending to banks was just shy of $5 billion. In its weekly report, the Fed said banks sought $69.7 billion from its discount window lending facility as of Wednesday, down from $88.2 billion on March 29. Lending via the Bank Term Funding Program stood at $79 billion as of Wednesday, versus $64.4 billion the prior Wednesday. Credit tied to the Federal Deposit Insurance Corporation’s work to wind down failed banks stood at $174.6 billion on Wednesday, down from $180.1 billion on March 29.

Governments around the globe are stepping in with extraordinary rescue plans to keep the banking system stable. US regulators orchestrated a $30 billion cash infusion into First Republic Bank, a regional bank with a similar profile to the failed Silicon Valley Bank. The stock fell another 5% in morning trade, as rumors of a takeover -- either by UBS or the government -- continued to swirl. But the Federal Reserve loaned out $150 billion to banks last week, including $12 billion in its new emergency lending program. We're nowhere close to what banks were borrowing during the global financial crisis -- but that's still a lot of money.

☆ What caused the global banking crisis this week and will it lead to a recession?
▼ + stars: | 2023-03-17 | by ( Mark Thompson | ) edition.cnn.com time to read: +7 min

Silicon Valley Bank’s customers were frantically pulling their money from the California-based lender before US regulators intervened to take control. Thursday, March 16 — First Republic Bank was teetering on the brink as customers withdrew their deposits. In guaranteeing all deposits at Silicon Valley Bank and Republic Bank, the US Federal Reserve is on the hook for $140 billion. Then there’s the $54 billion the Swiss National Bank offered Credit Suisse in the form of an emergency loan. The $318 billion the Fed has loaned in total to the financial system is about half what was extended during the global financial crisis.

☆ Yellen says U.S. inflation fight 'not a straight line' after price rise data
▼ + stars: | 2023-02-25 | by ( David Lawder | ) www.reuters.com time to read: +3 min

BENGALURU, Feb 25 (Reuters) - U.S. Treasury Secretary Janet Yellen told Reuters on Saturday that new U.S. data showing inflation jumped unexpectedly in January signals that the fight against inflation "is not a straight line" and more work is needed. The strongest U.S. consumer spending data in nearly two years on Friday showed that the Fed's preferred measure of inflation, the personal consumption expenditures price index (PCE), jumped unexpectedly in January, calling into question whether the Fed remains behind in its inflation fight. Revisions to prior data showed that previous disinflation was milder than previously reported, and that data added to financial market fears that the Federal Reserve could continue raising interest rates into summer. "I think this report showed that it's not going to be a straight line - disinflation is not a straight line," Yellen said, adding that inflation "remains a problem." "It’s one read, but core inflation still remains at a level that's above what's consistent with the Fed’s objective.

☆ 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.

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.

☆ GDP data will probably soften as we move into spring, says JPMorgan's Michael Feroli
▼ + stars: | 2023-02-23 | 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 EmailGDP data will probably soften as we move into spring, says JPMorgan's Michael FeroliMichael Feroli, JPMorgan chief U.S. economist, joins 'Squawk on the Street' to break down rate hikes, his GDP forecast and jobless claims numbers.

"We didn't expect it to be this strong," Powell said, but it "shows why we think this will be a process that takes quite a bit of time." It has just confounded all sorts of attempts to predict," Powell said, noting that wage growth has slowed even with continued strong job gains. Officials raised the target interest rate a quarter point to a range between 4.5% and 4.75% at that session, and said in the latest policy statement that "ongoing increases" would be needed. 1 2 3 4 5As of December, the Fed's preferred measure of inflation was increasing at a 5% annual rate, still more than double the Fed's target. While Powell said he expected "significant declines in inflation" this year, the U.S. economy was still "in the beginning of getting that down."

☆ We're not on the edge of a recession, says JPMorgan's chief U.S. economist Mike Feroli
▼ + stars: | 2022-12-07 | 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 EmailWe're not on the edge of a recession, says JPMorgan's chief U.S. economist Mike FeroliMichael Feroli, JPMorgan's chief U.S. economist, joins 'Closing Bell' to discuss growing rates of consumer spending in Q4, labor cost pressures running stronger than pricing power and what he sees as the likelihood of a recession.

☆ Toll Brothers' stock is cheap relative to its homebuilding peers, JPMorgan says in upgrade
▼ + stars: | 2022-11-22 | by ( Samantha Subin | ) www.cnbc.com time to read: +1 min

Toll Brothers is trading at a sizeable discount to its peers and offers a favorable risk-reward outlook for investors looking to play the homebuilder sector, JPMorgan said Tuesday. Analyst Michael Rehaut upgraded the stock to overweight from neutral, noting it trades at a 0.95 current price-to-book ratio and estimates its 2023 multiple at 0.77. The analyst said that's well below average ratios of 1.31 and 1.14, respectively, for larger-cap peers. The upgrade puts Toll Brothers in line with JPMorgan's other overweight-rated homebuilding names. JPMorgan upped its price target on Toll Brothers to $58 from $47 a share, which implies that shares could gain 29% from Monday's close.

☆ Premarket stocks: Recession fears receded this earnings season
▼ + stars: | 2022-11-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

So can the United States avoid a serious recession? What’s happening: As the third-quarter earnings season wraps up, it appears that CEOs may think so. The past month has brought with it a solid earnings season and a bevy of encouraging economic data that shows a slowing pace of inflation. The United States will enter a “mild recession in the second half of 2023, they said. All regions of the United States saw month-over-month and year-over-year declines.

☆ The US economy will tip into a 'mild' recession next year as the Fed winds down rate hikes - but a hard landing could be coming, JPMorgan says
▼ + stars: | 2022-11-16 | by ( Phil Rosen | ) www.businessinsider.com time to read: +4 min

The Fed's tightening campaign will continue, with 100 basis points more remaining until March, JPMorgan analysts wrote. "The almost 500bp of expected cumulative hikes is already delivering a commensurate tightening of financial conditions," the analysts wrote. In particular, the Fed will be watching the labor market, which has stayed red-hot throughout 2022. "Labor market conditions will be an important driver of infla-tion both in the near term and further into the future." Ultimately, between the labor market historic inflation, the Fed still faces a steep challenge in trying to skirt a hard landing for the economy, JPMorgan said.

☆ Economists predict home prices will fall, even if the US avoids a recession
▼ + stars: | 2022-10-12 | by ( Alcynna Lloyd | ) www.businessinsider.com time to read: +4 min

It means US home prices are now on a downward trajectory even if the economy avoids a recession. It could mean home prices will fall in the coming months, even if the US avoids a recession. Inflationary pressures have had the opposite impact on rental prices, which continue to climb — although growth is now moderating. "The uncertainty and volatility in financial markets is heavily impacting mortgage rates," Sam Khater, the chief economist at Freddie Mac told Insider. In a separate statement, Khater said that "impacted by higher rates, house prices are softening," and home sales are falling.

☆ 'Bring the pain': Major banks raise forecasts for rate hikes after Fed's stern actions
▼ + stars: | 2022-09-22 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Goldman Sachs The call : A 75 basis point move in November, 50 basis points in December and 25 basis points in February, for a peak of 4.5%-4.75%, up half a percentage point from the previous expectation. Citigroup The call : November to see 75 basis points, followed by 50 in December and 25 in February, adding a cumulative 25 basis points for a terminal rate of 4.5%-4.75%. Both calls were 25 basis points higher than previous. One more 25 basis point hike in February, followed by a 50 basis point cut "in the latter portion of the year." UBS The call : 75 basis points in November, another 50 in December, with three 25 basis point cuts later in 2023.

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