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REUTERS/Brendan McDermidNov 3 (Reuters) - Investors trying to navigate this year's relentless interest rate rises have more reasons to play it safe, after a pessimistic message from the U.S. Federal Reserve clouded the outlook for asset prices. Yet Chairman Jerome Powell’s message at Wednesday’s press conference – which followed its fourth straight 75 basis-point rate increase – did little to bolster the case for a less hawkish Fed. Investors are bracing for U.S. employment data on Friday for clues on whether the Fed’s rate hikes have begun to erode the economy’s strength. Signs that inflation is beginning to slow after the Fed’s barrage of rate hikes could bolster the case for a less aggressive monetary policy in coming months. Bartolini is becoming more bullish on mortgage-backed securities, which he expects to benefit from a decline in volatility sparked by smaller rate increases.

As it battles inflation that remains at four-decade highs, the Federal Reserve is expected to hike its key interest rate another 0.75% Wednesday. This interest rate, known as the federal funds rate, affects the cost of borrowing and the pace of investment throughout the economy. As a result, some experts believe the Fed must keep raising interest rates, even if it drives unemployment higher. The U.S. unemployment rate currently stands at 3.5%. "This forces the Fed to continue its aggressive approach on interest rates."

LONDON/TOKYO, Nov 2 (Reuters) - The U.S. dollar slipped on Wednesday as investors awaited for the U.S. Federal Reserve's policy decision amid speculation it might indicate a slowdown in future rate hikes. But for the December meeting, the futures market is split on the odds of a 75- or 50-bps increase. It will be a difficult balance to strike for Powell," said Daria Parkhomenko, FX strategist at RBC Capital Markets. Against the weakening dollar, the euro and sterling edged up to $0.9889 and $1.1494, respectively. YEN JUMPSThe yen , down a whopping 28% against the U.S. dollar this year, outperformed, with traders on alert for possible intervention around the Fed meeting.

☆ One sentence from the Fed got markets all worked up. Then Powell spoke
▼ + stars: | 2022-11-02 | by ( Allison Morrow | ) edition.cnn.com time to read: +5 min

BIG PICTUREThe Fed is operating on data that’s offered a murky view of the economy’s health in recent months. On one hand, the housing market is cooling off markedly, but higher borrowing costs so far haven’t made a dent in inflation. That may reassure the Fed that there’s room to keep rate hikes going without triggering a recession. There is a glut of avocados in America and that’s triggered a steep drop in wholesale prices. Don’t yell at me, I don’t make the rules…Anyway, starting Thursday, it’s festive cup season, which Starbucks fans seem excited for.

☆ Fed delivers fourth 75 bp hike, signals scale-back coming
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +6 min

This statement clearly suggests input from Vice Chair Brainard and opens the door for the Fed to slow down the pace of future rate hikes. Monetary policy today is not sufficiently tight enough. We’ll know when the Fed is done tightening; they’ll tell us by simply saying that monetary policy is sufficiently restrictive. “The last thing we need to see regarding what the Fed will do in the short run is the election. If there’s a sense that fiscal policy will be more cooperative with monetary policy, it will make the Fed’s job easier.”Compiled by the Global Finance & Markets Breaking News teamOur Standards: The Thomson Reuters Trust Principles.

☆ What to watch for in the Federal Reserve policy announcement
▼ + stars: | 2022-11-02 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +3 min

The supersized hike would bring the central bank’s benchmark lending rate to a new target range of 3.75% to 4%. Here’s what to watch for: According to the CME Fedwatch tool, traders believe there’s nearly a 90% chance of a three-quarter-percentage-point rate hike this month. And through it all, the job market has remained tight. Looking forward: Wednesday’s policy announcement and the press conference that immediately follows will be closely analyzed for any potential forward guidance by the Fed. The much bigger question is around how the Fed signals its future policy path,” wrote Luke Bartholomew, senior economist at abrdn, in a note.

☆ Premarket Stocks: Wall Street's recent love affair with the Fed could turn on a dime
▼ + stars: | 2022-11-02 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

New York CNN Business —Fed decision day is here — and so is some potential bad news for the market. Part of that was thanks to solid corporate earnings: Companies from GM to Coca-Cola reported strong profits and sales for the third quarter. We’ve been here before: This isn’t the first time investors rushed into markets on the belief that there would be a Fed pivot. Investors are seemingly addicted to the highs and lows of any perceived shifts in the Fed’s thinking, leaving markets excessively volatile. What’s more, only 66 companies have gone public so far this year, down more than 80% from a year ago.

☆ Julie Powell, food writer behind ‘Julie & Julia,’ dead at 49
▼ + stars: | 2022-11-01 | by ( Dan Heching | ) edition.cnn.com time to read: +2 min

CNN —Julie Powell, a bestselling author who chronicled her efforts to prepare every recipe in Julia Child’s “Mastering the Art of French Cooking,” which later inspired the movie “Julie & Julia,” died Oct. 26 at her home in New York. Her death was confirmed to the New York Times by her husband, Eric Powell, who said the cause was cardiac arrest. Amy Adams as Julie Powell in the 2009 film "Julie & Julia." Columbia/Scott Rudin Prods/Kobal/ShutterstockPowell’s book was turned into a 2009 film directed by Nora Ephron, with Meryl Streep playing Julia Child and Amy Adams in the role of Powell herself. “We were lucky enough to be the conduit.”At the center of Powell’s blog, and later the acclaimed film that used it as a base, was the writer’s admiration for Julia Child’s cooking and way of life.

☆ Elizabeth Warren to Jerome Powell: Just how many jobs do you plan to kill?
▼ + stars: | 2022-11-01 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

The Democrats, including Sen. Elizabeth Warren, Sen. Bernie Sanders and Rep. Katie Porter, highlighted comments from economists who worry the Fed is moving too aggressively to squash inflation. Yet the lawmakers note that Powell himself has conceded the Fed can’t cure the supply-related problems that have lifted food and energy prices. The Democrats asked Powell to respond by Nov. 14 to a series of questions about just how much economic pain Americans should be bracing for. They also want Powell to detail the breakdown of job loss by sector, gender, race, educational attainment and wage quartile. Powell said last month that no one knows if the Fed’s inflation fight will cause a recession, or how deep that recession might be.

☆ Wall St Week Ahead Hopeful U.S. stock rally set for date with Federal Reserve reality
▼ + stars: | 2022-10-28 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. Meanwhile, cash-heavy investors afraid of missing out on a sustained rally have contributed to the bullish move, market participants said. More than 150 S&P 500 companies are due to report quarterly results next week, including Eli Lilly (LLY.N), ConocoPhillips (COP.N) and Qualcomm (QCOM.O). Investors will also closely watch next Friday's monthly jobs report for signs of whether the Fed's actions have tempered the labor market. "The market is thinking good things," said Kristina Hooper, chief global market strategist at Invesco.

☆ First on CNN: Senate Democrat warns Fed it’s ‘foolish’ to keep lifting interest rates
▼ + stars: | 2022-10-27 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

But the concern is the Fed is doing too much too soon,” Hickenlooper wrote in a letter on Thursday to Fed Chairman Jerome Powell. In a bid to get inflation under control, the Fed has raised interest rates more rapidly than at any point since the early 1980s under legendary Fed chairman Paul Volcker. “I write to urge the Federal Reserve to pause and seriously consider the negative consequences of again raising interest rates,” Hickenlooper wrote, adding that families have been stung by surging borrowing costs for homes and cars. “Will raising interest rates lead to more oil, lower prices of oil, more food, lower prices of food? Former President Donald Trump repeatedly slammed Powell — his handpicked Fed chairman — for raising interest rates and shrinking the Fed’s balance sheet.

☆ Top Senate Democrat warns the Fed against causing mass job losses
▼ + stars: | 2022-10-26 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

“For working Americans who already feel the crush of inflation, job losses will make it much worse. The comments from the Ohio Democrat, who publicly supported Powell’s renomination as Fed chair, underscore the intense pressure facing the Fed ahead of next week’s decision on interest rates. Bank of America estimates the US economy will start losing 175,000 jobs a month early next year due to the Fed’s rapid interest rate hikes. California Rep. Ro Khanna slammed the central bank for “failed policy” that led to high inflation and expressed concern the Fed will now overcompensate. Massachusetts Democratic Sen. Elizabeth Warren has described the Fed’s rate hikes as “extreme” and set the stage for blaming the central bank for a downturn.

☆ Premarket stocks: The housing market is a mess, but this isn't 2008
▼ + stars: | 2022-10-17 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

But within those reports, investors found ominous clues about the future of the housing market, underscoring fears of an upcoming crisis. “We’ve had a time of a red-hot housing market all over the country,” Fed President Jerome Powell told me in September. “For the longer term what we need is supply and demand to get better aligned so that housing prices go up at a reasonable level…and people can afford houses again. “This is the sharpest turn in the housing market since the housing market crash in 2008,” said Redfin’s chief economist, Daryl Fairweather, last month. What’s next: Investors will next look to housing starts data next week as an indicator of where the housing market is headed.

☆ Why Wall Street shouldn’t sweat the midterms
▼ + stars: | 2022-10-06 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +4 min

New York CNN Business —The midterm elections are a little more than a month away, and if Wall Street had a vote, it’d be for more gridlock. Just a few months ago, many political observers and Wall Street experts were predicting that the GOP would gain control of the Senate and possibly even the House. The conventional wisdom on Wall Street is that the market prefers when politicians bicker and little actually gets done. Clifton also pointed out that “there were two notable exceptions” to the usual midterm market moves: 1974 and 1978. The Fed’s next scheduled meeting is on November 2, just six days before the midterms.

☆ Mortgage demand rises for the first time in six weeks despite sharply higher interest rates
▼ + stars: | 2022-09-21 | by ( Diana Olick | ) www.nbcnews.com time to read: +2 min

Mortgage application volume increased last week for the first time in six weeks, according to the Mortgage Bankers Association, despite a rise in interest rates. “The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week,” Kan said. Mortgage rates shot even higher this week, according to a separate survey by Mortgage News Daily. Investors will be watching specifically for commentary not on a current rate hike but on what may be ahead. “The forecasts will amplify whatever volatility we already may have seen with the rate hike decision.

☆ Jay Powell just went full Volcker
▼ + stars: | 2022-09-21 | by ( Allison Morrow | ) edition.cnn.com time to read: +10 min

But in just a few months, that sizable jump has become the norm, and it’s almost certainly sealed Jay Powell’s status as the Paul Volcker of the 2020s. “Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment,” Warren tweeted. Bottom line: Powell continues to draw from the Volcker playbook, which means he’s unlikely to waver on the Fed’s target rate of 2% inflation, lest the central bank’s credibility take another blow. Only time will tell whether that 40-plus-year-old playbook still applies in an economy that’s fundamentally different from the one Volcker confronted. Trump also lied about the square footage of his Trump Tower triplex apartment to inflate the value at over $300 million, James alleges.

☆ How much ‘pain’ is the Fed willing to inflict? Wednesday’s rate hike will offer clues
▼ + stars: | 2022-09-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

Federal Reserve Chairman Jerome Powell has acknowledged the economic pain this rapid tightening regime may cause. A larger hike is possible, but unlikelySome economists even expect the Fed to implement a massive — and historic — full-point rate hike on Wednesday. It meant that people understood the seriousness of the Fed’s commitment to getting inflation rates back down to 2%, he said. They want higher bond yields,” former New York Federal Reserve President Bill Dudley told CNN back in May. The Federal Reserve announces its rate hike decision Wednesday at 2 p.m.

☆ Breakingviews: Fed makes inflation fight Joe Biden’s problem
▼ + stars: | 2022-09-21 | by ( John Foley | ) www.reuters.com time to read: +4 min

For now, the Fed thinks it can manage this without a hard landing. Even so, Powell is correct to say that inflation is worse than even a reversal in growth. Around half of small businesses now say inflation is their biggest challenge, according to the U.S. Chamber of Commerce, and the public agrees, a Pew survey showed in May. The Fed said in a statement that inflation remained elevated, echoing its previous statement in July, with “modest growth” in spending and production. In its updated set of economic projections, the Fed forecast 4.4% unemployment in 2024, compared with its previous forecast of 4.1%.

☆ Jerome Powell’s Inflation Whisperer: Paul Volcker
▼ + stars: | 2022-09-19 | by ( Nick Timiraos | ) www.wsj.com time to read: 1 min

The Federal Reserve’s annual August retreat in Jackson Hole, Wyo., was imminent, and markets were rallying on expectations the central bank might slow its pace of interest rate increases. Fed officials thought investors were misreading their intentions given the need to slow the economy to combat high inflation. In a widely anticipated speech, Chairman Jerome Powell decided to be blunt. He scrapped his original address, according to two people who spoke to him, and instead delivered unusually brief remarks with a simple message—the Fed would accept a recession as the price of fighting inflation.

The average 30-year mortgage rate climbed to 5.89%, the highest level since 2008, according to new data published Thursday by Freddie Mac. Mortgage rates briefly declined for a period this summer even as the Federal Reserve raised the key interest rate to fight inflation. In remarks Thursday morning, Powell signaled the Fed intends to keep rates higher for longer. The higher mortgage rates are already weighing on home prices. Even as mortgage rates tick higher, home shoppers should be able to easily find rates lower than the average, Freddie Mac said.

☆ With stocks falling again, here's how to protect your portfolio
▼ + stars: | 2022-08-29 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +6 min

Now stocks appear to be reversing course, having fallen steeply in the wake of Powell’s address. While it may be a bumpy road ahead, there are ways to mitigate potential damage to your portfolio in the coming months. Forget timing the marketYou may be tempted to sell equities and move the proceeds into cash or a money market fund. You’ll tell yourself you will move the money back into stocks when things improve. So check to see that your current allocation to stocks and bonds matches your risk tolerance and your ideal retirement date.

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