Powell sees ongoing rate hikes, says recession a ‘possibility’

22/6/2022 6:42:00 PM

Highlight: Powell sees ongoing rate hikes, says recession a ‘possibility’ - Bloomberg

Highlight: Powell sees ongoing rate hikes, says recession a ‘possibility’ - Bloomberg

(June 22): Federal Reserve Chair Jerome Powell said the Central Bank will keep raising interest rates to tame inflation and conceded that a US recession was “certainly a possibility”.“We anticipate that ongoing rate increases will be appropriate,” Powell said Wednesday in his semiannual testimony to the Senate Banking Committee. “Inflation has obviously surprised to the upside over the past year, and further surprises could be in store. We therefore will need to be nimble in responding to incoming data

(June 22): Federal Reserve Chair Jerome Powell said the Central Bank will keep raising interest rates to tame inflation and conceded that a US recession was “certainly a possibility”.“We anticipate that ongoing rate increases will be appropriate,” Powell said Wednesday in his semiannual testimony to the Senate Banking Committee. “Inflation has obviously surprised to the upside over the past year, and further surprises could be in store. We therefore will need to be nimble in responding to incoming data and the evolving outlook.”

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Biden says US recession avoidable after call with Summers(June 20): President Joe Biden reiterated that a US recession isn’t “inevitable” following a conversation with former Treasury Secretary Lawrence Summers, who sees a significant chance the country will find itself battling stagflation. “I was talking to Larry Summers this morning, and there’s nothing inevitable about a recession,” Biden told reporters Monday at Rehoboth Beach, Delaware. “I think we’re going to be able to get a change in Medicare and a reduction in the cost of insulin.” The White House and

A (June 22): Federal Reserve Chair Jerome Powell said the Central Bank will keep raising interest rates to tame inflation and conceded that a US recession was “certainly a possibility”.× Copy URL The suspects’ lawyer says MACC is still investigating the RM300 million false claim case.BENGALURU (June 21): Gold prices edged up on Tuesday as the US dollar eased, while investors kept a keen eye on posturing from major central banks on interest rate hikes for a clearer outlook for bullion.for the latest news you need to know.

“We anticipate that ongoing rate increases will be appropriate,” Powell said Wednesday in his semiannual testimony to the Senate Banking Committee. “Inflation has obviously surprised to the upside over the past year, and further surprises could be in store. FOUR people who were recently arrested on suspicion of making false claims for development projects worth more than RM300 million on the east coast, have been released on the Malaysian Anti-Corruption Commission (MACC) bail. We therefore will need to be nimble in responding to incoming data and the evolving outlook.2% at US$1,841.” Powell’s remarks largely reiterated comments at a press conference last week after he and his colleagues on the Federal Open Market Committee raised their benchmark lending rate 75 basis points — the biggest increase since 1994 — to a range of 1. “The case is still being investigated.5% to 1.64) after ECB Chief Economist Philip Lane said the ECB will raise interest rates by 25 basis points at its July meeting, but the size of its September hike is still to be decided, suggesting a larger 50 basis point hike could be on the cards.

75%. “I hope all quarters will stop making speculation.1% to US$1,842. While Powell told reporters last week that another 75 basis-point increase, or a 50 basis-point move, was on the table for the next meeting in late July, Wednesday’s text made no reference to the size of future rate hikes. Fed Governor Christopher Waller said Saturday that he would support a 75-basis-point rate increase in July should economic data come in as he expects.” Last Friday, Bernama reported that a managing director of a government-linked company involved in real estate was among the four people arrested on alleged involvement in making false claims involving development projects worth more than RM300 million on the east coast. “We understand the hardship high inflation is causing,” Powell said Wednesday. "The (gold) market is sitting tight as, after a historic week for global central banks; policymakers will get to explain the reasoning behind their decisions this week," said Stephen Innes, managing partner at SPI Asset Management. “We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so. – Bernama, June 22, 2022.35 yen, not far off a 24-year high of 135.

” Investors expect the US Central Bank to keep raising rates to a peak around 3.6% by the middle of next year, according to interest-rate futures. "While the street does not expect Powell to reinvent the policy wheel, we could expect him to reinforce the idea that the Fed is in data-dependent mode. “Financial conditions have tightened and priced in a string of rate increases and that’s appropriate,” Powell said in response to a question following his opening remarks. “We need to go ahead and have them.” The Labor Department’s consumer price index rose 8. Now, a growing chorus of investors is calling on policymakers to move fast to end the uncertainty. “The next big dollar input will be when Fed Chair Jerome Powell delivers his semi-annual monetary policy testimony to the Senate — which judging from the latest FOMC meeting should be pretty hawkish and means that any dollar downside today is likely to be limited,” ING analysts said in a note.

6% last month from a year earlier, a four-decade high. University of Michigan data showed US households expect inflation of 3.3% over the next five to 10 years, the most since 2008 and up from 3% in May.5% to US$21. The rising cost of living has angered Americans and hurt the standing of President Joe Biden’s Democrats with voters ahead of November congressional midterm elections. Powell heard sharp criticism of his performance on inflation, especially from Republicans, with Alabama Senator Richard Shelby telling him sharply that “the Federal Reserve failed the American people”.2 per cent to 0.

Fed officials have admitted that they were too slow to tighten and are now trying to front-load rate increases in the most aggressive policy pivot in decades.88, and palladium gained 0. While a recession isn’t in the Fed’s forecast, economists are increasingly flagging the likelihood of a downturn sometime in the next two years. Former New York Fed President Bill Dudley said in a Bloomberg Opinion column Wednesday that a recession is “inevitable” within the next 12 to 18 months. An economist at the Fed, Michael Kiley, said in a paper Tuesday that the risk of a large increase in the unemployment rate is above 50% over the next four quarters, based on a simulation incorporating inflation data, unemployment, corporate bond yields and Treasury yields. Subscribe to Mid-day email alert We deliver news to your inbox daily. “The American economy is very strong and well positioned to handle tighter monetary policy,” Powell said in his opening remarks. — Reuters Advertisement.

Asked about a recession, he said that was “certainly a possibility. It is not our intended outcome at all,” noting that events in the last few months have made it harder for the Fed to achieve the soft landing it seeks of lower inflation and a healthy labour market. “We’re not trying to provoke and don’t think we need to provoke a recession,” he said. Concern over the outlook for global growth has seen oil prices ease back somewhat in the last few days, potentially providing some relief to sky-high gasoline prices. At the same time, US hiring remains strong and consumption indicators suggest demand is holding up despite the blow to real disposable income from higher inflation.

Powell called the labour market “extremely tight”. “The tightening in financial conditions that we have seen in recent months should continue to temper growth and help bring demand into better balance with supply,” Powell said. Policy makers’ latest forecasts, released last week, show the level of rates roughly doubling in the second half of the year to a target range of 3.25% to 3.5%.

They saw rates peaking next year at 3.8%. Officials have also begun shrinking their massive balance sheet. The combined impact of higher borrowing costs and so-called quantitative tightening is expected to come at some cost to jobs. Unemployment was near a 50-year low of 3.

6% last month and Fed officials forecast it rising to 4.1% by the end of 2024, when they see rates peaking at 3.8%. Inflation was projected to decline toward their 2% goal by then from current readings of more than three times that level, according to the gauge that the Fed targets. Forward guidance from officials on the future path of policy, as well as the rate increases they’ve already delivered, have helped push 10-year Treasury yields above 3%, about double from the start of the year, while the S&P 500 stock index is down more than 20%.

Surging mortgage rates are helping to cool the the housing market. Subscribe to Mid-day email alert We deliver news to your inbox daily .