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Several indicators suggest that housing services inflation is likely to come down in the coming months. There is more uncertainty surrounding inflation in core services excluding housing," Jefferson said in remarks to a Harvard University economics class. The Fed uses the PCE index to sets its inflation target. "I'm under no illusion that it's going to be easy to get the inflation rate back down to 2%," Jefferson said. Jefferson did not detail his views on the Fed's upcoming policy decision, or how much higher he thinks the target federal funds rate might have to move beyond the 4.5% to 4.75% range set at the Fed's last meeting.

☆ Morning Bid: A new R*
▼ + stars: | 2023-02-23 | by ( ) www.reuters.com time to read: +3 min

REUTERS/Joshua RobertsA look at the day ahead in European and global markets from Wayne Cole. While it held rates at 3.5% as expected, the commentary warned that restrictive policy would be needed for a "considerable time". Indeed, it's looking like global supply chains will never be the same, what with the pandemic, the Russian-Ukraine war and Sino-U.S. tensions. Most developed nations also face a decline in working-age populations and sharply rising dependency ratios. All of which suggests higher inflation is here to stay and the neutral level of real interest rates has shifted upward.

☆ Fed is 'absolutely' committed to 2% inflation target, Williams says
▼ + stars: | 2023-02-22 | by ( ) www.reuters.com time to read: 1 min

Feb 22 (Reuters) - New York Federal Reserve Bank President John Williams on Wednesday said the U.S. central bank is "absolutely" committed to bringing inflation back down to its 2% target over the next few years, by bringing demand down in line with constrained supply. "Our job is clear: our job is to make sure we restore price stability, which is truly the foundation of a strong economy," Williams said at a conference hosted at the bank. He noted that with global supply chains still disrupted, goods prices may not continue their recent decline, and inflation in core services excluding housing continues to be far too high, driven by too much demand relative to supply. Reporting by Ann Saphir Editing by Chris ReeseOur Standards: The Thomson Reuters Trust Principles.

☆ This one chart shows why January's stock rally hit a wall in February
▼ + stars: | 2023-02-22 | by ( Zev Fima | ) www.cnbc.com time to read: +6 min

This year-to-date chart tracks how each new report led to a corresponding move in the S & P 500. Holding on to that crucial positive update, the market continued to grind higher into the December consumer price (CPI) index reading released on Jan. 12. The market rode the "disinflation" high for another day, with the S & P 500 hit a year-to-date high on the Feb. 2. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.

☆ The Fed’s favorite inflation gauge will be the big market hurdle of next week
▼ + stars: | 2023-02-18 | by ( Zev Fima | ) www.cnbc.com time to read: +7 min

Most important this week is Friday's core personal consumption expenditure (PCE) price index for January. In comparison, the consumer price index (CPI), released this past week, only tracks price changes over time. The market is expecting the core PCE price index to rise 0.4% monthly and 4.9% annually. In addition to the core PCE price index, we're going to be looking closely at the housing and utilities component. Lastly, the January producer price index came in hotter than expected, rising 0.7% from December versus expectations for 0.4% increase.

☆ Premarket stocks: Why traders are so infatuated with inflation
▼ + stars: | 2023-02-14 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

What’s happening: Investors will get some market direction clarity on Tuesday morning with the release of key inflation data. It’s not all about the Fed: Traders are infatuated with CPI, but it’s likely going to affect markets more than it will future Fed policy. “CPI is the big inflation report that affects markets more than any other,” he said. Even beyond housing, the services sector has seen year-over-year inflation higher than 3.9% every month since March 2021, said Chaudhuri. And as Powell noted in Washington last week, the stickiness of core services inflation is his greatest concern.

The Fed's policy rate is currently in a 4.50%-4.75% target range. By the Fed's preferred measure, inflation is still running at a 5.0% annual rate. Harker last week flagged the prospect of rate cuts in 2024 should inflation continue to ease. However, following the CPI release on Tuesday, traders of interest rate futures now see the Fed raising borrowing costs three more times, bringing the policy rate to the 5.25%-5.50% range by July, if not June. "My own view is that, given the risks, we shouldn't lock in on a peak interest rate or a precise path of rates," she said.

☆ Fed must be ready to hike rates for longer than now expected, Logan says
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +3 min

The Fed last year lifted interest rates further and faster than any time since the 1980s to fight inflation that, by the central bank's preferred measure, has run for two years at about triple its 2% target. Key to that, Logan said on Tuesday, will be substantial further slowing in wage growth and better "balance" in what is now an "incredibly strong" labor market. Logan also said she will need to see "convincing" signs that inflation is dropping sustainably and in a timely manner toward the 2% target. There are also risks, she said, of going too far and weakening the labor market more than necessary in pursuit of slowing inflation. "My own view is that, given the risks, we shouldn't lock in on a peak interest rate or a precise path of rates," she said.

☆ Fed still has work to do on inflation but it doesn't derail our view we're in a bull market
▼ + stars: | 2023-02-14 | by ( Zev Fima | ) www.cnbc.com time to read: +6 min

We think the market is looking past these readings to what Federal Reserve Chairman Jerome Powell recently highlighted as the central bank's main focus, core services excluding housing or so-called super core. Super core inflation Keying in on this sub-index is going to be crucial if we are going to try and think about additional rate hikes from here from the perspective of a Fed official. Here are the top services components in the CPI data outside of food, energy, and housing and how they're trending. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Traders work on the floor of the New York Stock Exchange (NYSE) on February 14, 2023 in New York City.

☆ Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago
▼ + stars: | 2023-02-14 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

The consumer price index, which measures a broad basket of common goods and services, rose 0.5% in January, which translated to an annual gain of 6.4%. The component accounts for more than one-third of the index and rose 0.7% on the month and was up 7.9% from a year ago. Energy also was a significant contributor, up 2% and 8.7%, respectively, while food costs rose 0.5% and 10.1%, respectively. The central bank has hiked its benchmark interest rate eight times since March 2022 as inflation rose to its highest level in 41 years last summer. That's why some Fed officials, including Powell, say they are looking more closely at core services inflation minus shelter prices in determining the course of policy.

☆ Inflation has gone supercore
▼ + stars: | 2023-02-13 | by ( Christine Romans | ) edition.cnn.com time to read: +4 min

The new favorite: supercore inflation. Supercore inflation refers to prices that rise when workers get paid more for their services. “Supercore inflation was a strong 6.4% on a year-over-year basis through December 2022, but it is moderating,” said Mark Zandi, Moody’s chief economist. For the three months through December, supercore inflation is up only 2.4% annualized, and just 0.9% annualized in the month of December. “Supercore inflation is still way too hot, but it has begun to cool off, and all signs point to it and overall inflation getting back to something more comfortable over the coming 12-18 months,” Zandi told CNN.

☆ Are we on the brink of a corporate credit crisis?
▼ + stars: | 2023-02-13 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +9 min

Economists at S&P Global Ratings forecast that speculative-grade (perceived to have a lower level of credit quality compared to more highly rated, investment-grade, companies) corporate default rates in the US and Europe will double this year alone. So are we on the brink of a corporate credit crisis? Before the Bell spoke with Ruth Yang, managing director and global head of thought leadership at S&P Global Ratings to discuss what lies ahead for the corporate credit market. Before the Bell: What’s your big picture view of the credit economy right now? There will be slower growth with thinner margins and that’s going to change how people look at their investment opportunities.

☆ Recession alarm bells are ringing, but (much) less loudly than before
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

Feb 10 (Reuters) - The rapid reopening of China's economy, plunging European gas prices and cooling U.S. inflation suggest a global recession may not be as deep and protracted as feared just weeks ago. The International Monetary Fund raised its 2023 global growth outlook and a painful euro area recession that was once seen as all-but-certain is less of a concern. Citi sees a 30% chance of a global recession this year, down from 50% in the second half of last year. But rallying stocks do not mean the world will escape a recession, rather that China's post-COVID economic reopening should limit the downturn. And economists polled by Reuters forecast global growth would barely clear 2% this year, a level associated with significant downturns historically, and flagged the risk that it could be even slower.

But the year-over-year price drops for goods have been helping pull overall inflation measures lower, the data compiled by the U.S. software company showed. "Current demand levels are driving retailers to hold prices down and continue to clear out excess inventory," Brown said. New CPI data is scheduled to be released next week, with economists expecting it to show another slowdown. The CEA study tried to isolate the pace of wage growth only in the sectors referred to by Powell, and concluded that it is slowing fast. Wage growth for production workers and supervisors "have both eased substantially."

☆ Premarket stocks: Here's what keeps Jerome Powell up at night and interest rates high
▼ + stars: | 2023-02-08 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Structural changes in the labor market: The US economy added an astonishing 517,000 jobs in January, blowing economists’ expectations out of the water. “The labor market is extraordinarily strong,” he said. Core services inflation: Powell noted that he’s seeing disinflation in the goods sector and expects to soon see declining inflation in housing. Service-sector inflation, which is more sensitive to a strong labor market, is up 7.5% from the year prior through the end of 2022, and has not abated, he said. Tech layoffs, Big Oil and soft landings: What investors are watching▸ The labor market is strong, but tech layoffs keep coming.

☆ ECB's Knot sees big May rate hike if core inflation doesn't fall: MNI
▼ + stars: | 2023-02-08 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, Feb 8 (Reuters) - The European Central Bank may extend its streak of large interest hikes into May if core inflation doesn't ease by then, ECB policymaker Klaas Knot said on Wednesday. "Once we see a clear and decisive turn in underlying inflation dynamics, I...expect us to move to smaller steps." He expected inflation in core goods to start falling too, also thanks to easing supply constraints. But he warned that inflation in core services may prove sticker and may get a further boost from rising wages. He expected workers to gain more bargaining power in salary negotiations as the economy holds up better than the ECB expected only a few weeks ago.

"It tells me that so far, we're not seeing much of an imprint ... on the labor market," Kashkari said. Bond yields have rocketed higher and interest rate futures markets now are squarely priced for a federal funds rate reaching at least 5.1%. LABOR MARKET CONCERNSOn Monday, Atlanta Fed President Raphael Bostic was one of those who said the central bank may need to lift borrowing costs higher than previously anticipated given the job gains. "We've seen no progress so far, virtually no progress in core services ex housing, and that's very tied to the labor market." Reporting by Lindsay Dunsmuir; Editing by Andrew Heavens, Chizu Nomiyama, Andrea Ricci and Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

☆ Explainer: The Fed says disinflation is welcome. What is that, exactly?
▼ + stars: | 2023-02-02 | by ( Ann Saphir | ) www.reuters.com time to read: +6 min

But what, exactly, is disinflation, and why is it welcome? Central banks globally tend to target 2% annual inflation (the Fed formally adopted a 2% target in 2012). DISINFLATION = SLOWING INFLATIONCurrently inflation by the Fed's preferred measure - the personal consumption expenditures (PCE) price index - is running at about 5%. Economists expect those softer new leases to start showing up in official measures in coming months - another part of the "good story" of disinflation, Powell said. Former Fed Chair Alan Greenspan famously warned in 2003 that with inflation low, at 1.8%, "substantial further disinflation would be an unwelcome development."

☆ Live updates of the Federal Reserve's big rate decision and Powell's press conference
▼ + stars: | 2023-02-01 | by ( Fred Imbert | ) www.cnbc.com time to read: 1 min

Inflation is easing in some areas of the market but it's too early for the Federal Reserve to say the battle's been won, said Fed Chair Jerome Powell. "It would be very premature to declare victory, or to think that we've really got this." The disinflation process, he said, is in its early stages, but the "job is not fully done." Core services excluding housing have yet to experience disinflation, he added. Powell also expects inflation to continue moving up in housing services, before moving down.

☆ U.S. inflation subsiding as consumer prices fall; labor market still tight
▼ + stars: | 2023-01-12 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

Cooling inflation could allow the Federal Reserve to further scale back the pace of its interest rate increases next month. "To be sure, the efforts by the Fed have begun to bear fruit, even though it will be a while before the promised land of a 2% inflation rate is here." Food prices climbed 0.3%, the smallest gain in nearly two years, after rising 0.5% in the prior month. Fruit and vegetable prices fell as did those for dairy products, but meat, poultry and fish cost more. The labor market remains tight, with the unemployment rate back at a five-decade low of 3.5% in December, and 1.7 jobs for every unemployed person in November.

☆ The S&P 500 and the VIX are near key thresholds, which could test the market’s mood
▼ + stars: | 2023-01-12 | by ( Michael Santoli | ) www.cnbc.com time to read: +4 min

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. On balance, the result for stocks is a hesitation right near a fulcrum point for the S & P 500 – its 200-day moving average and the downtrend line from the January 2022 peak. In the very short term (like on a five-day rate-of-change scale) the S & P as of Wednesday's close was getting slightly stretched. -In the '90s, the Fed thought unemployment anywhere below around 5% to 6% would cause inflation to accelerate, but that proved wrong. For all of 2022, it has been smart to sell into rallies in the S & P at or above the 200-day average and when the VIX has dropped to or below 20.

☆ Expectations for the Fed to downsize future rate hikes soar after CPI shows inflation cooled in December
▼ + stars: | 2023-01-12 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Investors on Thursday were pricing in a more than 90% chance the Fed will reduce the size of its interest rate hike in February. The more bullish view on a potential downshift was sparked by cooler prices in the December inflation report. But there are 'lingering pressures' within core inflation for the Fed to consider. Investors also chopped down expectations for a March 22 rate hike of 50 basis points, to 5.4% from 18.6%. Core CPI that excludes energy and food prices rose 0.3%, meeting expectations but it was slightly higher than 0.2% in November.

"Eventually I want us to get to 25" basis point rate hikes, he said. Asked in a Wall Street Journal interview early on Monday about her preferred rate-hike size for the Jan. 31 to Feb.1 meeting, San Francisco Fed President Mary Daly said both 25 and 50 basis point rate hikes are "on the table" for her. She, like Bostic, expects the Fed policy rate - now at 4.25% to 4.5% - to need to rise to a 5% to 5.25% range to do the job on inflation. After nearly a year of aggressive rate hikes designed to slow the economy and bring soaring inflation to heel, Fed policymakers say they are encouraged by the recent slowing in jobs and wage growth that could signal cooler inflation ahead. But they are loathe to stop interest rate hikes or even downshift to smaller rate-hike increments too soon, for fear of entrenching high inflation and ultimately forcing the Fed to raise rates further.

☆ Important inflation data and big bank earnings could create volatility for markets in week ahead
▼ + stars: | 2023-01-06 | by ( Patti Domm | In | ) www.cnbc.com time to read: +6 min

Other speakers include Atlanta Fed President Raphael Bostic Monday. On Thursday, Philadelphia Fed President Patrick Harker, Richmond Fed President Tom Barkin and St. Louis Fed President Bullard all speak at separate events. Minneapolis Fed President Neel Kashkari and Boston Fed President Susan Collins have appearances Friday. The most important inflation report in the week ahead is the consumer price index, released Thursday. Import prices 10:00 a.m. Consumer sentiment 10:00 a.m. Minneapolis Fed President Neel Kashkari 10:20 a.m. Philadelphia Fed's Harker 9:00 a.m. Boston Fed President Susan Collins

☆ Core services inflation remains stubbornly high, says Fed's Lisa Cook.
▼ + stars: | 2023-01-06 | 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 EmailCore services inflation remains stubbornly high, says Fed's Lisa Cook. CNBC's Steve Leisman reports on the latest comments from Federal Reserve Governor Lisa Cook.

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