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☆ The Fed's next move after raising rates to fight inflation
▼ + stars: | 2023-08-20 | by ( Bryan Mena | ) edition.cnn.com time to read: +7 min

Some investors are betting on rate cuts as soon as early next year, perhaps on expectations that the economy might soon deteriorate. If unemployment spikes because of higher interest rates, for example, the Fed would likely cut rates to stem job losses under its mandate of maximum employment. The Fed’s tough talk has rattled the bond market, helping push up long-dated yields. In addition to the possibility of cutting rates because of an economic downturn, the Fed could also cut rates if inflation slows too much. “If the Fed sees that inflation goes below the 2% target, they could start decreasing interest rates, but I don’t think they are going to start decreasing interest rates until that happens,” said Eugenio Alemán, chief economist at Raymond James.

Persons: there’s, Rather, Austan Goolsbee, Mike Hackett, they’ve, ”, Eugenio Alemán, Raymond James, Melissa Brown, China’s ‘ Lehman, Laura, Mengchen Zhang, Technology —, Zhongrong, Read, Thomas Barkin, Michelle Bowman, Kansas City Fed’s, Jerome Powell, Christine Lagarde Organizations: CNN Business, Bell, DC CNN, Federal, Federal Reserve Bank of Chicago, Treasury, Nationwide, CNN, Fed, Service, KBC Corporation, Xianheng, Science, Technology, National Association of Realtors, Body, Nvidia, Kansas City, Global, US Commerce Department, Labor Department, Central Bank Locations: Washington, “, China, BJ’s, Abercrombie, Kansas

☆ Ahead of two key inflation reports, what would a soft landing look like exactly?
▼ + stars: | 2023-08-06 | by ( Bryan Mena | ) edition.cnn.com time to read: +8 min

But aside from simply skirting a recession, it’s not obvious what the economy would look like in a soft landing. And who even declares that the Fed has officially defied the odds and achieved a soft landing? The main aspect of a soft landing, according to economists, is the absence of a recession, which is determined by the National Bureau of Economic Research (NBER.) In a soft landing, the job market has to remain intact. The other key feature of a soft landing is for the Fed to successfully control inflation, but that’s open to some interpretation.

Persons: we’ve, ”, Kayla Bruun, “, Julia Pollak, ” Pollak, Josh Markman, cooldown, Austan Goolsbee, ” Goolsbee, Raphael Bostic, Michelle Bowman, Patrick Harker, Armour, Ralph Lauren Organizations: CNN Business, Bell, DC CNN, Federal Reserve, Bank of America, Fed, National Bureau of Economic Research, Morning, Atlanta, ZipRecruiter, Labor, Bel Air Investment Advisors, Federal, Federal Reserve Bank of Chicago, Bloomberg, Atlanta Fed, “, Tyson Foods, UPS, Fox, Restaurant Brands, The National Federation of Independent Business, US Commerce Department, China’s National Bureau of Statistics, Disney, US Labor Department, National Statistics, University of Michigan Locations: Washington

Federal Reserve Board Chairman Jerome Powell speaks during a press conference following a closed two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., July 26, 2023. Other parts of the Labor Department report were less encouraging for Fed policymakers counting on a labor market softening to put more downward pressure on inflation. Traders of contracts tied to the Fed's policy rate now see less than a 30% chance of another rate hike by the end of this year, down from about a 35% chance before Friday's jobs report. "I think overall this still does point to a labor market that is slowly but steadily heading toward a soft landing," said Daniel Zhao, lead economist at Glassdoor. There are several more key data releases that will shape Fed policymakers' views before the next policy meeting in September.

Persons: Jerome Powell, Elizabeth Frantz, Raphael Bostic, Austan Goolsbee, Daniel Zhao, Kathy Bostjancic, Ann Saphir, Tim Ahmann, Lucia Mutikani, Jason Neely, Kevin Liffey, Paul Simao Organizations: Federal, Committee, REUTERS, Federal Reserve, Atlanta Fed, Bloomberg Television, Labor Department, Chicago Fed, Nationwide, Thomson Locations: Washington , U.S, U.S

"So why not be in a situation where you're just much more ready in case you...need to access this discount window?" An analysis of Fed data by Reuters, though, shows a lot still needs to be done to meet that goal. All told, about 3,800 banks borrowed from the discount window during the 11-year period detailed in the central bank data. The biggest banks also stepped up to borrow so as to reduce discount window stigma. Minneapolis Fed President Neel Kashkari said small banks should think of the discount window as a backup.

Persons: Brittany Hosea, Jerome Powell, I’ve, Lorie Logan, Banks, Goldman Sachs, Huberto Ennis, Michelle Bowman, Brad Tidwell, SVB, Austan Goolsbee, Richmond Fed's Ennis, Neel Kashkari, Ann Saphir, Michael S, Andrea Ricci Organizations: Bank, REUTERS, Federal Reserve, Reuters, Dallas, U.S, Fed, Reuters Graphics Reuters, Richmond Fed, National Credit Union Association, Chicago Fed, Federal Home Loan Bank, Minneapolis, Home Loan Bank, Thomson Locations: Santa Clara , California, U.S, Silicon, Washington, While California, Texas, Logan's, New Mexico, Louisiana, Henderson , Texas

☆ Gold subdued on dollar strength as markets await economic data
▼ + stars: | 2023-08-01 | by ( ) www.cnbc.com time to read: +2 min

A technician cleans impurities from melted gold bars at Primera Gold's laboratory in Bukavu, South Kivu Province, eastern Democratic Republic of Congo, May 12, 2023. Gold prices edged lower on Tuesday as the U.S. dollar climbed, while investors looked forward to key economic data this week for signs on how long the interest rates could keep rising to quell sticky inflation. Spot gold was down 0.1% at $1,961.49 per ounce by 0343 GMT, while U.S. gold futures dropped 0.5% to $1,961.10 per ounce. Gold prices ended July 2.3% higher, the biggest monthly rise in four months on expectations that an end to the rate-hiking cycle by global central banks was nearing. This is why the central banks are sticking with the data-dependent mantra," said Tim Waterer, chief market analyst at KCM Trade.

Persons: Jerome Powell, Nicholas Frappell, Austan Goolsbee, Tim Waterer, Waterer Organizations: Primera Gold's, U.S, ABC Refinery, Chicago Federal, KCM Trade Locations: Bukavu, South Kivu Province, Democratic Republic of Congo, Chicago

☆ Morning Bid: August cools Wall St stocks
▼ + stars: | 2023-08-01 | by ( ) www.reuters.com time to read: +4 min

China's factory underperformance stood out once again and underlined its struggling recovery - perhaps the main driver of stalling industrial activity everywhere. With markets increasingly impatient at the patchy and underwhelming economic stimulus plans seen from Beijing so far, China stocks fell back (.CSI300), bucking Tuesday's wider Asia stocks rally. Sterling and UK stocks (.FTMC) fell back. Ride-hailing giant Uber's stock rose more than 2% before the bell and ahead of its earnings report. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Mike Dolan, underperformance, Austan Goolsbee, Goolbee, Stanley Black, Decker, Zimmer Biomet, Revvity, Bernadette Baum Organizations: Federal Reserve, U.S ., Chicago Fed, Bank of England, Sterling, AMD, Caterpillar, Big Pharma, Pfizer, Merck, Ride, HSBC, BP, Uber, Prudential Financial, AIG, Starbucks, Molson Coors, Boston Properties, Caesars Entertainment, Illinois Tool, Natural Resources, Energy, Devon Energy, Gartner, Allstate, Paycom Software, Electronic, WEC, Rockwell, Public Service Enterprise, P Global, Dallas Fed, Chicago Federal, Reuters Graphics Reuters, Reuters, Thomson Locations: U.S, Wall, Beijing, China, Asia, ., Marathon, Eaton, Altria, Marriott, Illinois, Progressive

On Tuesday, Goolsbee said his own decision at the Fed's next meeting in September will be driven by what happens on prices. And those metrics suggest, Goolsbee said, that the Fed is on the "golden path" of disinflation without a recession. But, he added, he does not see a tight connection between labor market tightness and inflation - meaning, he believes that inflation can fade even as the job market stays healthy. The Fed's September rate call will depend on what happens with inflation, as will how long the Fed will keep rates high and when it will start cutting, he said. "The answer is, it totally depends on whether we're able to navigate the path and get inflation down without a recession," he said.

Persons: Austan Goolsbee, Obama, Brendan McDermid, Goolsbee, that's, Banks, Ann Saphir, Andrea Ricci Organizations: University of Chicago, Democracy, REUTERS, Chicago Federal Reserve Bank, Reuters, U.S, Fed, Labor Department, Thomson Locations: New York City, U.S

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 26, 2023. European shares gained modestly after euro zone inflation fell further in July seeing that most measures of underlying price growth also eased. "Data out this week should remain superficially consistent with the 'soft landing' narrative," Citi market strategists wrote in a note. Japanese 10-year yields surged to a nine-year high up to 0.6% on Monday, and toward the new cap of 1.0%. U.S. crude rose 1.63% to $81.89 per barrel and Brent was at $85.56, up 0.67% on the day.

Persons: Brendan McDermid, Florian Ielpo, Paul Christopher, Christopher, Austan Goolsbee, Sterling, Brent, Lawrence Delevingne, Nell Mackenzie, Nick Macfie, Will Dunham, Deepa Babington Organizations: New York Stock Exchange, REUTERS, Dow Jones, Nasdaq, Apple Inc, Caterpillar Inc, Starbucks Corp, Devices, Markets, European Central Bank, Lombard, U.S, Citi, Intel, Lam Research, Wells Fargo Investment, Chicago Federal Reserve Bank, Bank of England, Bank of, Federal Reserve, Bank of Japan, Treasury, Thomson Locations: New York City, U.S, Wells Fargo, Boston, London

Second-quarter earnings for S&P 500 companies are estimated to have fallen 6.4% year-over-year, Refinitiv data through Friday showed. Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing. According to preliminary data, the S&P 500 (.SPX) gained 7.64 points, or 0.17%, to end at 4,589.15 points, while the Nasdaq Composite (.IXIC) gained 29.37 points, or 0.21%, to 14,348.50. Nearly half of the top 11 S&P 500 sectors posted gains, led by a rise in energy stocks (.SPNY). Adobe (ADBE.O) stocks rose, outperforming tech peers, after Morgan Stanley raised its rating to "overweight" on the photoshop maker.

Persons: Dow, Ross Mayfield, Austan Goolsbee, Jay Hatfield, Johnson, Morgan Stanley, Echo Wang, Johann M Cherian, Vinay Dwivedi, Richard Chang Organizations: Citigroup, Nasdaq, Amazon.com, Apple, Baird, Intel, Lam Research, Chicago Fed, Dow Jones, Infrastructure Capital Advisors, SoFi Technologies, ON Semiconductor, Dow, Johnson, Adobe, Thomson, & & ' Locations: Louisville , Kentucky, New York, U.S, Bengaluru

☆ Morning Bid: Beijing stimulus given benefit of the doubt
▼ + stars: | 2023-07-31 | by ( ) www.reuters.com time to read: +3 min

Yet that merely stoked wagers Beijing would have to dole up sizable stimulus at some point or risk social unrest, particularly with youth unemployment rising. So far, domestic investors seem to be giving Beijing the benefit of the doubt - foreign funds have been shunning Chinese stocks for a while. Any rise in Japan's paltry yields should, theoretically, be a plus for the yen and a negative for yen-funded carry trades. This in part reflects the still huge gulf between Japan rates and emerging markets and the fact that many carry trades are funded at one month rates and rolled over. Right now, investors can still borrow yen for one month at -0.1% to buy pesos and earn 11.1%.

Persons: Wayne Cole, China's, it's, That's, Austan Goolsbee, Sam Holmes Organizations: Beijing, Nikkei, Bank of Japan, Federal Reserve Bank of Chicago, Western Digital Corp, Aercap, Thomson Locations: Wayne, Beijing, Asia, Pacific, Japan, Chicago

Second-quarter earnings for S&P 500 companies are now estimated to have fallen 6.4% year-over-year, according to Refinitiv data. Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing. Seven of the top 11 S&P 500 sectors gained, led by a 2.0% rise in energy stocks (.SPNY). The S&P index recorded 25 new 52-week highs and no new low, while the Nasdaq recorded 71 new highs and 37 new lows. Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru Editing by Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

Persons: Chris Zaccarelli, Austan Goolsbee, Johnson, Morgan Stanley, Johann M Cherian, Vinay Dwivedi Organizations: Citigroup, Dow, Nasdaq, Apple, AMD, Independent, Alliance, Microsoft, Intel, Lam Research, Chicago Fed, Dow Jones, Financial, SoFi Technologies, ON Semiconductor, Johnson, UBS, Adobe, NYSE, Thomson, & & ' Locations: U.S, Xpeng, Bengaluru

Second-quarter earnings for S&P 500 companies are estimated to have fallen 6.4% year-over-year, Refinitiv data through Friday showed. The tech-heavy Nasdaq led Wall Street higher last week as megacap growth companies such as Alphabet (GOOGL.O), Meta Platforms (META.O) as well as chipmakers Intel (INTC.O) and Lam Research (LRCX.O) posted strong quarterly earnings. Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing. Eight of the top 11 S&P 500 sectors posted gains, led by a 2% rise in energy stocks (.SPNY). The S&P 500 posted 27 new 52-week highs and one new low; the Nasdaq Composite recorded 95 new highs and 57 new lows.

Persons: Ross Mayfield, Austan Goolsbee, Jay Hatfield, Johnson, Morgan Stanley, decliners, Echo Wang, Johann M Cherian, Vinay Dwivedi, Richard Chang Organizations: Citigroup, Dow, Nasdaq, Amazon.com, Apple, Baird, Intel, Lam Research, Chicago Fed, Dow Jones, Infrastructure Capital Advisors, Financial, SoFi Technologies, ON Semiconductor, Johnson, Adobe, NYSE, Thomson, & & ' Locations: Louisville , Kentucky, New York, U.S, Bengaluru

☆ The Fed has paused before. Here’s what happened next
▼ + stars: | 2023-07-25 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +8 min

The Fed had a similar predicament in 2006After raising interest rates 17 consecutive times between June 2004 and June 2006, Fed officials became concerned that they could inadvertently damage the economy if they continued to hike rates. When the Fed met again in September, many officials expressed concerns that raising interest rates after a short, six-week pause would broadcast the wrong message. Lacker continued to be the sole Fed official who favored raising interest rates until his term expired at the end of the year. “It’s pretty easy to believe that the Fed will find that it didn’t raise rates enough and so choose to raise rates somewhat further before stopping and, later on, reducing rates,” he said. Fed officials then opted for a pause in the fall of 1994 and raised rates further in the winter.

Persons: Ben Bernanke, Bernanke, “, ” Michael Moskow, ”, Cathy Minehan, Jeffrey Lacker, Lacker, Jerome Powell, Liu Jie, Athanasios Orphanides, Austan Goolsbee, William English Organizations: New, New York CNN, Federal, Traders, Fed, Committee, Washington , D.C, Bloomberg, Getty, Chicago Fed, Boston Fed, Richmond Fed, Massachusetts Institute of Technology, European Central Bank, Food Forum, Yale University Locations: New York, Washington ,, Xinhua, Chicago

☆ Business conditions are expected to improve as inflation slows
▼ + stars: | 2023-07-24 | by ( Bryan Mena | ) edition.cnn.com time to read: +4 min

Washington, DC CNN —American businesses are expected to fare better in the coming months, according to a survey of economists and analysts released Monday. A survey from the National Association for Business Economics released Monday showed that businesses have rejoiced in better economic conditions. Meanwhile, a majority of respondents reported that wages at their firms were unchanged — the first time more economists reported no wage gains than rising wages since 2021. The Fed doesn’t necessarily need a recession to do that, but some research suggests the labor market must cool further. The labor market is closely watched by Fed officials since higher labor costs feed into inflation.

Persons: haven’t, ”, Julia Coronado, Austan Goolsbee, cooldown, Brian Moynihan, bode Organizations: DC CNN, Federal Reserve, University of Michigan’s, Consumers, National Association for Business, Employers, Chicago Fed, Bank of America, Bureau of Labor Statistics, National Federation of Independent, Fed Locations: Washington

☆ Wall Street is getting more optimistic the U.S. can avoid a recession
▼ + stars: | 2023-07-18 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Wall Street has gone from more than a year of worrying about a recession to thinking that one actually may not happen. At this point, the outgoing executive said, it doesn't even matter much if the U.S. hits a technical recession. "What matters is if you have a deep recession that changes the unemployment, and that's not happening," he said. Chicago Fed President Austan Goolsbee is among those who think the economy can avoid a recession even with 5 percentage points worth of rate hikes since March 2022. Finally, those expecting a "soft landing" for the economy rose to 68%, against 21% of those who see a hard landing.

Persons: Morgan Stanley, James Gorman, CNBC's Leslie Picker, Goldman Sachs, Goldman, Spencer Hill, Hill, Gorman, Austan Goolsbee, Goolsbee Organizations: Citi, Reserve, Chicago Fed, CNBC, Bank of America Global Fund, Survey Locations: U.S

While recent inflation data was encouraging, he said, "one data point does not make a trend." Reuters Graphics Reuters Graphics'STRANGE BUSINESS CYCLE'Until the Fed declares its inflation war at an end, however, economists and market analysts say risks to a benign outcome will remain. "At 3.5%, July won't be the last time the Fed hikes," Furman said in an interview. Ed Al-Hussainy, senior rates analyst at Columbia Threadneedle, meanwhile, is skeptical that the impact of rapid rate hikes has already been absorbed. "To say we have the same economy with real rates at negative 2% as we do at positive 2%, I don't buy it."

Persons: Jerome Powell, Christopher Waller, Waller, Thomas Barkin, Nick Bunker, Jason Furman, Obama, Furman, Ed Al, Columbia Threadneedle, Raphael Bostic, Austan Goolsbee, shouldn't, Goolsbee, Howard Schneider, Dan Burns, Paul Simao Organizations: Federal Reserve, Reuters Graphics, Richmond Fed, Reuters Graphics Reuters, Fed, Harvard University, White, Columbia, Atlanta Fed, Chicago Fed, CNBC, Thomson Locations: U.S

☆ Americans continue to feel confident about the economy and inflation
▼ + stars: | 2023-07-14 | by ( Bryan Mena | ) edition.cnn.com time to read: +1 min

Washington, DC CNN —Inflation’s steady slowdown in recent months has kept Americans feeling optimistic about the future. Consumer sentiment tracked by the University of Michigan rose 13% in July, the second straight month of improvement, according to a preliminary reading released Friday morning. Meanwhile, the report showed that consumers’ expectations for inflation rates remained at their lowest levels since early 2021. Consumers see inflation rates of 3.4% in the year ahead, and while that’s well below last year’s 5.4% peak, it’s slightly higher than the previous reading. “I feel like we are on a golden path of avoiding recession,” Chicago Fed President Austan Goolsbee told CNBC last week.

Persons: ”, Joanne Hsu, “, Austan Goolsbee Organizations: DC CNN, University of Michigan, Consumers, Chicago Fed, CNBC Locations: Washington

The benchmark S&P 500 (.SPX) was solidly higher for most of the afternoon, but stocks sold off toward the end of the session. "The jobs report today I think is consistent with what the Fed would like to see," said Josh Jamner, investment strategy analyst at ClearBridge Investments. Among S&P 500 sectors, defensive groups fell the most, with consumer staples (.SPLRCS) down 1.3%. For the week, the S&P 500 fell about 1.2%, the Dow slid roughly 2% and the Nasdaq dropped 0.9%. The S&P 500 posted 11 new 52-week highs and five new lows; the Nasdaq Composite recorded 45 new highs and 63 new lows.

Persons: Levi Strauss, Quincy Krosby, stoked, Josh Jamner, Brendan McDermid, Russell, Dow, Austan Goolsbee, Alibaba, decliners, Lewis Krauskopf, Sinead Carew, Bansari Mayur Kamdar, Johann M, Caroline Valetkevitch, Shinjini Ganguli, Richard Chang Organizations: Dow, Nasdaq, LPL, Reserve, ClearBridge Investments, Dow Jones, Energy, New York Stock Exchange, REUTERS, Chicago Fed, Rivian Automotive, Ant Group, NYSE, Thomson Locations: U.S, New York City, New York, Bengaluru

The U.S. added the fewest jobs in 2-1/2 years in June, although persistently strong wage growth pointed to still-tight labor market conditions, U.S. government data showed. "The jobs report today I think is consistent with what the Fed would like to see," said Josh Jamner, investment strategy analyst at ClearBridge Investments. According to preliminary data, the S&P 500 (.SPX) lost 12.42 points, or 0.28%, to end at 4,399.17 points, while the Nasdaq Composite (.IXIC) lost 18.33 points, or 0.13%, to 13,660.72. Energy (.SPNY) and materials (.SPLRCM) were among the biggest-gaining S&P 500 sectors, while defensive groups including consumer staples (.SPLRCS) lagged. Friday's jobs report kicks off a busy month of data including reports on inflation and corporate earnings ahead of the Fed meeting at the end of July.

Persons: Levi Strauss, payrolls, Josh Jamner, Austan Goolsbee, Carol Schleif, Alibaba, Lewis Krauskopf, Bansari Mayur Kamdar, Johann M, Caroline Valetkevitch, Shinjini Ganguli, Richard Chang Organizations: Reserve, ClearBridge Investments, Nasdaq, Dow Jones, Energy, Chicago Fed, BMO Family, Rivian Automotive, Ant Group, Thomson Locations: U.S, New York, Bengaluru

"The economy is still adding more jobs than new entrants to the labor market," wrote Vanguard Global Chief Economist Joseph Davis and Senior International Economist Andrew Patterson. Wage growth "remains well above levels the Fed would be comfortable with" in the fight to return inflation to the 2% target. With job growth in prior months revised down by more than 100,000 jobs, the June jobs report is "a fairly soft print" with three-month average job gains now at 244,000 compared to more than 400,000 a year ago, said Omair Sharif of Inflation Insights. But progress towards a more balanced labor market is coming "slowly, slowly...These are still healthy figures" even as the pace softens. Reporting by Howard Schneider; Editing by Dan Burns, Nick Zieminski, Andrea Ricci and Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

Persons: Joseph Davis, Andrew Patterson, Omair Sharif, Austan Goolsbee, Let's, Goolsbee, Jerome Powell, Powell, Howard Schneider, Dan Burns, Nick Zieminski, Andrea Ricci, Chizu Organizations: Federal Reserve, Vanguard Global, Senior, Fed, Chicago Fed, CNBC, Reuters Graphics Reuters, Labor Statistics, Thomson Locations: U.S

"But at the same time, it just puts the Fed in a position where they've got more work to do." Wall Street's main indexes ended sharply lower in a broad selloff in the previous session, with the benchmark S&P 500 posting its biggest daily percentage drop in six weeks, after employment data on Thursday showed the number of jobs more than doubled in June. Six of the 11 major S&P 500 sectors advanced in mid-day trading, with commodity stocks such as energy (.SPNY) and materials (.SPLRCM) up over 1% each and outperforming the broader market. Among other movers, the S&P 500 banking index (.SPXBK) gained 1.4%. The S&P index recorded three new 52-week highs and four new lows, while the Nasdaq recorded 28 new highs and 49 new lows.

Persons: Levi Strauss, we're, Steve Wyett, they've, Austan Goolsbee, Russell, Wells, Tesla, Bansari Mayur Kamdar, Johann M, Caroline Valetkevitch, Shinjini Organizations: Dow, Nasdaq, BOK, Traders, Chicago Fed, Dow Jones, JPMorgan Chase, Citigroup, Alibaba, Ant Group, NYSE, Thomson Locations: Beijing, Washington, China, Bengaluru

"That would be a Fed triumph and that can involve a couple of rate increases over this year." Remarks from Goolsbee previously sounded more skeptical of the need for further rate hikes on top of what the Fed has already done. The report is suggestive of labor market cooling, Goolsbee said, and the full effect of the Fed's 500 basis points of rate hikes since last March is still to come. Financial markets are pricing a Fed rate hike when policymakers next meet, in two and a half weeks. Services inflation even pre-pandemic was typically higher than the Fed's 2% goal, he said.

Persons: Austan Goolsbee, Goolsbee, we're, Ann Saphir, Chizu Organizations: Chicago Federal Reserve Bank, CNBC, Fed, Thomson

☆ Expect more rate hikes from the Fed after the latest jobs report
▼ + stars: | 2023-07-07 | by ( Bryan Mena | ) edition.cnn.com time to read: +7 min

Job gains remain robust, wage growth is still going strong, and unemployment continues to hover near historic lows. That means the job market is still fueling demand in the economy, which the Fed has been trying to slow through rate hikes. Assessing the labor marketThe Fed wants to see the labor market slow down broadly, bringing it into “better balance,” as Powell has frequently described it. And there has been some progress on bringing the job market back into better balance while inflation has come down. “The focus is on the path of wage inflation because of its pass-through to services inflation,” said Sonia Meskin, head of US Macro at BNY Mellon IM.

Persons: Austan Goolsbee, “, ”, Lorie Logan, John Williams, Jerome Powell, Powell, Dave Gilbertson, Powell homed, Goolsbee, Gilbertson, Sonia Meskin, Joe Biden’s Organizations: DC CNN, Federal Reserve, Federal Reserve Bank of Chicago, Fed, Federal Reserve Bank, Dallas, Central Bank Research Association, ” Fed, New, ”, CNN, Labor, CNBC, BNY Mellon, Commerce Department Locations: Washington, New York, April’s

☆ Fed's Goolsbee sees 'golden path' to lower inflation without a recession
▼ + stars: | 2023-07-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Chicago Federal Reserve President Austan Goolsbee said Friday he's confident inflation can be tamed without a recession, even with additional interest rate increases likely. Speaking to CNBC following the release of the June nonfarm payrolls report, he said the ongoing job growth is part of the Fed's "golden path" toward restoring price stability without taking the economy. "That's the golden path, and I feel like we're on that golden path. Though Goolsbee said he is confident the that inflation is ebbing, he also sees more tightening as likely. "That is on the golden path where we get inflation down to something like our target and we do it without a recession."

Persons: Austan Goolsbee, nonfarm payrolls, Goolsbee, CNBC's Steve Liesman, Let's, Payrolls, haven't Organizations: Chicago Federal, CNBC, Federal Open Market

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