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☆ Ex-Treasury chief Larry Summers sees interest rates peaking above 5% - and says markets have priced in most of this hiking cycle
▼ + stars: | 2022-10-21 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Larry Summers expects the Federal Reserve to keep raising interest rates to north of 5%. The ex-Treasury chief has warned inflation poses a graver threat to the US economy than painful rate hikes. While Summers expects rates to rise above that level, investors will likely welcome his view that market expectations are about right now. Higher interest rates make borrowing more expensive and encourage saving over spending or investing. At the same time, Summers has warned that many people aren't fully grasping the economic fallout from the Fed hiking rates to 5%.

☆ It would be a 'real mistake' to assume other countries will avoid UK-like turmoil, and the US must watch its fiscal issues, former Treasury Secretary Larry Summers says
▼ + stars: | 2022-10-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Other nations could see the same market turmoil that played out in the UK, ex-Treasury Secretary Larry Summers warned. He pointed to the risk of a "doom loop" created by unsustainable deficits and rapidly rising interest rates. "Things can change extraordinarily fast if you lose credibility," Summers said in an interview with Bloomberg TV. Summers also noted liquidity issues in the market which could eventually lead to a situation where there are more sellers than buyers. "The fiscal issues need, sooner or later, to be back on the table in the United States."

☆ Former Treasury Secretary Larry Summers says chance of recession next year is substantial
▼ + stars: | 2022-10-20 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +2 min

New York CNN Business —Former US Treasury Secretary Larry Summers said on Thursday that it’s “substantially” more likely than not that the United States will enter a recession next year. But this recession will likely be relatively short and mild. There is currently a 98.1% chance of a global recession next year, according to a probability model run by Ned Davis Research. “I think the Fed has to do what is necessary to contain inflation,” said Summers, who has been critical of the Fed in the past. But there are “no silver bullets or miracle cures,” said Summers — especially not in the three weeks ahead of US midterm elections.

☆ Asia stumbles as China COVID, sterling wobbles shake sentiment
▼ + stars: | 2022-10-12 | by ( Kanupriya Kapoor | ) www.reuters.com time to read: +4 min

Sterling rose 0.4% to $1.1008 in late Asian trade but there are broader concerns about the direction of policy in Britain. In Japan, the rampaging dollar breached 146 yen for the first time in 24 years, prompting authorities in Tokyo to pledge necessary steps in the foreign exchange market if needed. Renewed U.S. dollar strength also sent the risk-sensitive Australian dollar to $0.6247, the lowest since April 2020. U.S. inflation data on Wednesday and Thursday is expected to keep the Fed on an aggressive rate hike path. It was the third straight dip in prices as investors worried about falling fuel demand and tightening COVID-19 curbs in China.

☆ Biden shushes economists' recession warnings: 'Every six months they say this'
▼ + stars: | 2022-10-12 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +3 min

Biden said that he doesn't think there will be a recession, but if there is one it'll be "slight." In an interview with CNN's Jake Tapper, Tapper asked Biden if the American people should prepare for a recession. "I don't think there will be a recession," Biden said. Biden pointed out that warning bells so far haven't led to a downturn. Every six months they look down at the next six months and say 'hey listen, it's going to happen,'" Biden told Tapper.

☆ 'Selling Sunset' realtor Christine Quinn says she buys basic clothes at Costco and Uniqlo to save money for expensive purses
▼ + stars: | 2022-10-11 | by ( Kate Duffy | ) www.businessinsider.com time to read: +3 min

Christine Quinn, from Netflix's "Selling Sunset," shops at low-cost stores for everyday clothes. Quinn told the WSJ she bought leggings from Costco, crop tops from Uniqlo, and tank tops from Hanes. "I do like Costco," Quinn told the Journal. The realtor said she owns black leggings from American retailer Costco, crop tops from Japanese retailer Uniqlo, and men's tank tops from Hanes. Quinn told the Journal that Uniqlo offers comfortable clothes that "don't break the bank."

☆ Premarket stocks: White-collar workers are feeling the brunt of the Fed's rate hikes
▼ + stars: | 2022-10-10 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Stocks fell sharply as investors evaluated the report, which showed more jobs than expected were added to the US economy and indicated that more pain-inflicting interest rate hikes from the Federal Reserve lie ahead. White-collar office workers appear to be feeling the brunt of the Fed’s actions: The financial and business sector saw a large decline in employment last month. What’s happening: The US economy added 263,000 jobs in September, higher than analyst estimates of 250,000. Business support services — such as telemarketing, accounting and administrative and clerical jobs — are also bleeding jobs. Meanwhile, legal services lost 5,000 jobs, and advertising services also dropped 5,000 jobs.

☆ Larry Summers blasts UK tax cuts as 'utterly irresponsible' and warns of possible contagion
▼ + stars: | 2022-09-27 | by ( Elliot Smith | ) www.cnbc.com time to read: +6 min

The sudden sell-off in the pound and U.K. bond markets led economists to anticipate more aggressive interest rate hikes from the Bank of England . I was surprised when the new chancellor spoke over the weekend of the need for even more tax cuts," Summers said on Twitter. U.K. inflation unexpectedly fell to 9.9% in August, and analysts recalibrated their eye-watering expectations after the government stepped in to cap annual household energy bills. 'Emerging market currency crisis'Sterling has fallen by roughly 7-8% on a trade-weighted basis in less than two months, and strategists at Dutch bank ING noted Tuesday that traded volatility levels for the pound are "those you would expect during an emerging market currency crisis." The likening of the U.K. to an emerging market economy has become more prevalent among market commentators in recent days.

☆ Larry Summers Says Hard Landing 'Substantially More Likely'
▼ + stars: | 2022-09-27 | by ( ) www.wsj.com time to read: 1 min

Why Driverless Cars Are Taking ‘Hyper-Realistic’ Virtual Driving LessonsNo matter how many real-world miles driverless cars experience, it’s unlikely they’ll come up against all of the rare and dangerous incidents they could encounter. So now, driverless car companies have turned to hyper-realistic virtual worlds to safely test their cars against some of the most extreme scenarios. Illustration: George Downs

☆ Reversing UK confidence crash requires policy U-turn: economists
▼ + stars: | 2022-09-27 | by ( Andy Bruce | ) www.reuters.com time to read: +2 min

Commuters, reflected in windows of an office, walk across London Bridge toward the financial district, in London, Britain, September 26, 2022. "The first step in regaining credibility is not saying incredible things," Summers said on Twitter on Tuesday. Register now for FREE unlimited access to Reuters.com RegisterSummers pointed to surging interest rates of long-dated British debt as a "hallmark of situations where credibility has been lost". On Monday the Bank of England and Treasury released statements in the hope of reassuring investors, with the central bank saying it would not hesitate to raise interest rates if needed. Register now for FREE unlimited access to Reuters.com RegisterEditing by Kate HoltonOur Standards: The Thomson Reuters Trust Principles.

☆ Markets hate Liz Truss’ plan for the UK. Just look at these charts
▼ + stars: | 2022-09-23 | by ( Julia Horowitz | ) edition.cnn.com time to read: +3 min

London CNN Business —When the UK government, led by new Prime Minister Liz Truss, unveiled its plan to rescue the British economy on Friday, the reaction from investors was instantaneous: They hated it. UK stocks, as measured by the FTSE 100 (UKX) in London, hit their lowest level since March. The Bank of England on Thursday pushed its key rate to its highest level since 2008. “It makes me very sorry to say, but I think the UK is behaving a bit like an emerging market turning itself into a submerging market,” Summers said. “We think the market may be underpricing the chances of parity.”

☆ 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.

☆ The Fed has to balance its latest rate hike with trying not to tank the economy. Here's what to know.
▼ + stars: | 2022-09-21 | by ( Phil Rosen | ) www.businessinsider.com time to read: +7 min

Today, I'm breaking down what to know about the Fed's third jumbo rate hike, and how markets could look in its aftermath. In this March 21, 2018, file photo, Federal Reserve Chairman Jerome Powell speaks following the Federal Open Market Committee meeting in Washington. A third, outsized rate hike is an unprecedented move by the Federal Reserve. For this meeting in particular, billionaire David Rubenstein warned that a 100-basis-point hike this week would shock and depress markets and investors. What's on deck for markets after a third consecutive large rate hike?

☆ The Fed raising rates to over 5% wouldn't be surprising, former Treasury Secretary Larry Summers says
▼ + stars: | 2022-09-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed may raise its policy rate as high as 5%, former Treasury Secretary Larry Summers said. Despite the volatility that could bring to stocks, the Fed risks making a policy error if doesn't go far enought to contain inflation. "The Fed has to be prepared to stay the course," Summers warned. Economists think that will likely take a while, given that inflation is still flying sky-high at 8.3%. "So I think that lesson that in terms of minimizing the risk of a stagflationary catastrophe, the Fed has to be prepared to stay the course."

☆ Larry Summers urges the Fed to keep raising rates - and warns that hiking too slowly risks an economic disaster
▼ + stars: | 2022-09-19 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Larry Summers urged the Federal Reserve to keep hiking interest rates to beat inflation. It would be riskier for the central bank to act too slowly than too aggressively, he said. "We've got a substantial underlying inflation problem that doesn't come out without very substantial monetary policy adjustment," the economist told Bloomberg on Friday. Summers told Bloomberg that if the Fed is serious about curbing inflation, he wouldn't be surprised if rates peaked at north of 5%. Moreover, Summers flagged "enormous uncertainty" in markets exposed to Russia's invasion of Ukraine, including oil, natural gas, diesel, and fertilizer.

☆ Premarket trading: It's getting late in the game. Will the Fed risk a Hail Mary?
▼ + stars: | 2022-09-15 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Markets plummeted as the report stoked fears that the central bank and Chair Jerome Powell would decide to hike rates more aggressively, inflicting serious economic pain. Investors are putting the odds of a three-quarter percentage point hike next week at 75%, according to CME FedWatch data. The odds for a full point hike are hovering around 25% in the wake of the inflation report, up from 0% one week ago. It meant that people understood the seriousness of the Fed’s commitment to getting inflation rates back down to 2%, he said. “I wouldn’t discount a 100 basis point rate hike,” Marvin Loh, senior strategist at State Street, told me.

☆ In the war on recession, Uncle Sam wants YOU — to party, party, party
▼ + stars: | 2022-08-25 | by ( Desmond Lachman | ) www.businessinsider.com time to read: +8 min

Eventually the slowing demand spreads out across the economy: lower wages, higher unemployment rates, less consumer spending, and fewer homebuyers. This conventional view on the inevitability of a recession is highly plausible and should not be dismissed lightly. This soaring demand for goods coupled with crippled supply led to a shortage of goods — and sent prices soaring. And while concerns about the economy and the possibility of a recession have increased, people have kept spending. But as price inflation of goods cools, the shift to spending on services can keep the economy going.

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