Speaking during an event at Atlanta’s Spelman College, Powell said that the Federal Reserve still isn’t assured that the fight with inflation is over or that inflation will get to the Fed’s target mark of 2%.

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might ease,” Powell said.

According to Powell, the Fed will rely on economic data to determine how to approach interest rate movement.

“Having come so far so quickly, the (Federal Open Market Committee) is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” he added.

One thing that seems fairly certain is that the Fed will likely keep the 5.25%-5.50% rate at least until the end of 2024. The rate has been unchanged for the past two meetings, and experts expect it to stay put for the upcoming December meeting as well.

The post Fed Chairman Jerome Powell Says There Will Be No Interest Rate Cuts Soon appeared first on theprimarymarket.com.

Collins told reporters that although inflation data is showing a positive outlook, however, the Fed remains bearish due to the knowledge that this outlook can turn. Earlier this month, the Fed decided to leave interest rates within the 5.25% to 5.5% range; a 22-year high.

On Tuesday, the latest Consumer Price Index (CPI) data showed that US inflation broadly slowed in October, which increased investors’ bets that the Fed is done with its rate-hiking agenda. While Collins acknowledges that goods prices have lowered significantly, she revealed that price slowdowns for some core services including housing have not been as extensive as she has hoped.

The post Boston Fed President Warns That Further Rates Hikes Possible appeared first on theprimarymarket.com.

Data from the National Association of Home Builders (NAHB) showed that home remodeler confidence fell during the third quarter. “While there is still demand for remodeling, we are seeing some customers pull back a bit, especially for larger projects, due to higher prices and increased interest rates,” NAHB Remodelers Chair Alan Archuleta observed.

Over the course of 2020 and 2021, the pandemic pushed interest in home improvement upward, especially with people spending more time in their homes. That interest has since started to return to pre-pandemic levels.

The post Home Improvement Spending to Tank Amid High Interest Rates appeared first on theprimarymarket.com.

While inflation has continued to fall, BoE Governor Andrew Bailey explained that a further drop needs to be achieved in order to bring inflation down to the central bank’s 2% target. “We’ve held rates unchanged this month, but we’ll be watching closely to see if further rate increases are needed. It’s much too early to be thinking about rate cuts,” Bailey revealed.

Since reaching double-digit figures, UK inflation has gradually eased to 6.7% in the year September, unchanged from the previous month. Still, this rate is higher than the rest of the G7 economies, pushing the UK to ramp up its fight against stubborn inflation.

The post Bank of England Holds Rates at 15-Year High appeared first on theprimarymarket.com.

On Tuesday afternoon, markets priced an 8% chance of a Fed interest rate hike in November, according to the CME FedWatch Tool. This comes after a 28.2% probability was priced last week and a 43.6% probability a month ago.

“Policymakers might take into account this additional tightening in financial conditions in the absence of further hikes,” JPMorgan chief US economist Michael Feroli acknowledged, speaking of the bond yield surge.

Further statistics expected to give cause to a rate pause include Thursday’s Consumer Prices Index, which is expected to rise 4.1% on a core basis year over year. This would be a slowdown from the 4.3% rise in August.

The post Market Bets on Federal Reserve Pause Rise appeared first on theprimarymarket.com.

September’s jobs report came in much stronger than expected, with more than double the amount of payrolls added than initially expected. Still, Bloomberg Economics does not believe that this data will seal the Federal Reserve’s next interest rate policy decision.

“The blowout September jobs report didn’t settle the debate about whether the Fed is done hiking rates,” Bloomberg observed. “Two critical upcoming economic indicators — CPI and the University of Michigan consumer-sentiment survey — may give a more definitive read. We expect September core CPI inflation to come in somewhat higher than consistent with the Fed’s 2% mandate, while higher gasoline prices may have pushed up short-term inflation expectations in the preliminary UMichigan survey for October.”

The post U.S. Inflation Expected to Persist, Force Interest Rates Higher for Longer appeared first on theprimarymarket.com.

On the back of rising bond yields and lowering economic growth expectations, stocks on the S&P 500 index have fallen by about 6.5% since the start of the year. The tech-heavy Nasdaq Composite also experienced its steepest monthly decline in September.

“In the new ‘higher for longer’ rates environment, the key risk for S&P 500 ROE will be higher interest expenses and lower leverage,” the Goldman analysts observed. “A scenario in which interest expense and leverage persistently weigh on ROE would be a departure from the historical trend.”

While higher rates remain a concern, stocks that analysts have identified as having low vulnerability against rising rates include Cisco Systems Inc., Costco Wholesale Corp., Cognizant Technology Solutions Corp., Paychex Inc., and Visa Inc.

The post Higher Rates Affecting Profits, Goldman Analysts Warn appeared first on theprimarymarket.com.

“I think the market is correct in expecting the Fed to skip this meeting” and “maintain its vigilance,” Marvin Loh, State Street senior global macro strategist commented. Still, Loh added that he expects the central bank to contemplate at least one more rate hike before concluding its monetary tightening campaign in an effort to beat down inflation.

Since March 2022, the Federal Reserve has implemented 11 interest rate hikes, raising them to a range of 5.25% to 5.5%. This is the most aggressive fight against inflation that the Fed has carried out since the 1980s. In his address later on Wednesday, Fed Chair Jerome Powell is expected to note that the job to cool inflation to the Fed’s 2% target is not yet complete, thereby opening the door to further hikes.

The post Federal Reserve Expected to Hold Rates Steady, Ponder Further Hikes appeared first on theprimarymarket.com.

Although economists believe that inflation and economic data continue to move in the Federal Reserve’s favor as it seeks to loosen its interest rate policy, this development is raising market bets that the central bank will need to raise interest rates at least once more before the end of the year, potentially in its September meeting.

Pantheon Chief Economist Ian Shepherdson explained that while fluctuating inflation data can be expected going forward, underlying consumer inflation is expected to fall to less than 3% by the end of the year. “We expect the Fed to remain on hold but to signal willingness to hike again depending on the data,” Shepherdson explained.

The post Federal Reserve Experiences Setback in Bid to End Rate Hikes appeared first on theprimarymarket.com.

Money markets have priced a 45% chance that the ECB will implement a 25 basis point hike at its meeting on Thursday; a rise from the previous 40% probability reported on Monday. Still, investors expect that there is a higher likelihood that the ECB will keep rates constant, instead opting to institute a 25 bp hike later in the year.

On Tuesday, money markets priced an 80% chance that the ECB will implement a 25 bp hike after September before holding rates constant for the remainder of the year. This is up from a previous 75% probability given on Monday. In addition to the ECB’s upcoming meeting, analysts are also looking to digest the latest inflation data from the U.S. in the form of Wednesday’s consumer price index report.

The post Money Markets Price 80% Chance of 25 BP Hike By ECB Before Year End appeared first on theprimarymarket.com.

Speaking during an event at Atlanta’s Spelman College, Powell said that the Federal Reserve still isn’t assured that the fight with inflation is over or that inflation will get to the Fed’s target mark of 2%.

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might ease,” Powell said.

According to Powell, the Fed will rely on economic data to determine how to approach interest rate movement.

“Having come so far so quickly, the (Federal Open Market Committee) is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” he added.

One thing that seems fairly certain is that the Fed will likely keep the 5.25%-5.50% rate at least until the end of 2024. The rate has been unchanged for the past two meetings, and experts expect it to stay put for the upcoming December meeting as well.

The post Fed Chairman Jerome Powell Says There Will Be No Interest Rate Cuts Soon appeared first on theprimarymarket.com.

Collins told reporters that although inflation data is showing a positive outlook, however, the Fed remains bearish due to the knowledge that this outlook can turn. Earlier this month, the Fed decided to leave interest rates within the 5.25% to 5.5% range; a 22-year high.

On Tuesday, the latest Consumer Price Index (CPI) data showed that US inflation broadly slowed in October, which increased investors’ bets that the Fed is done with its rate-hiking agenda. While Collins acknowledges that goods prices have lowered significantly, she revealed that price slowdowns for some core services including housing have not been as extensive as she has hoped.

The post Boston Fed President Warns That Further Rates Hikes Possible appeared first on theprimarymarket.com.

Data from the National Association of Home Builders (NAHB) showed that home remodeler confidence fell during the third quarter. “While there is still demand for remodeling, we are seeing some customers pull back a bit, especially for larger projects, due to higher prices and increased interest rates,” NAHB Remodelers Chair Alan Archuleta observed.

Over the course of 2020 and 2021, the pandemic pushed interest in home improvement upward, especially with people spending more time in their homes. That interest has since started to return to pre-pandemic levels.

The post Home Improvement Spending to Tank Amid High Interest Rates appeared first on theprimarymarket.com.

While inflation has continued to fall, BoE Governor Andrew Bailey explained that a further drop needs to be achieved in order to bring inflation down to the central bank’s 2% target. “We’ve held rates unchanged this month, but we’ll be watching closely to see if further rate increases are needed. It’s much too early to be thinking about rate cuts,” Bailey revealed.

Since reaching double-digit figures, UK inflation has gradually eased to 6.7% in the year September, unchanged from the previous month. Still, this rate is higher than the rest of the G7 economies, pushing the UK to ramp up its fight against stubborn inflation.

The post Bank of England Holds Rates at 15-Year High appeared first on theprimarymarket.com.

On Tuesday afternoon, markets priced an 8% chance of a Fed interest rate hike in November, according to the CME FedWatch Tool. This comes after a 28.2% probability was priced last week and a 43.6% probability a month ago.

“Policymakers might take into account this additional tightening in financial conditions in the absence of further hikes,” JPMorgan chief US economist Michael Feroli acknowledged, speaking of the bond yield surge.

Further statistics expected to give cause to a rate pause include Thursday’s Consumer Prices Index, which is expected to rise 4.1% on a core basis year over year. This would be a slowdown from the 4.3% rise in August.

The post Market Bets on Federal Reserve Pause Rise appeared first on theprimarymarket.com.

September’s jobs report came in much stronger than expected, with more than double the amount of payrolls added than initially expected. Still, Bloomberg Economics does not believe that this data will seal the Federal Reserve’s next interest rate policy decision.

“The blowout September jobs report didn’t settle the debate about whether the Fed is done hiking rates,” Bloomberg observed. “Two critical upcoming economic indicators — CPI and the University of Michigan consumer-sentiment survey — may give a more definitive read. We expect September core CPI inflation to come in somewhat higher than consistent with the Fed’s 2% mandate, while higher gasoline prices may have pushed up short-term inflation expectations in the preliminary UMichigan survey for October.”

The post U.S. Inflation Expected to Persist, Force Interest Rates Higher for Longer appeared first on theprimarymarket.com.

On the back of rising bond yields and lowering economic growth expectations, stocks on the S&P 500 index have fallen by about 6.5% since the start of the year. The tech-heavy Nasdaq Composite also experienced its steepest monthly decline in September.

“In the new ‘higher for longer’ rates environment, the key risk for S&P 500 ROE will be higher interest expenses and lower leverage,” the Goldman analysts observed. “A scenario in which interest expense and leverage persistently weigh on ROE would be a departure from the historical trend.”

While higher rates remain a concern, stocks that analysts have identified as having low vulnerability against rising rates include Cisco Systems Inc., Costco Wholesale Corp., Cognizant Technology Solutions Corp., Paychex Inc., and Visa Inc.

The post Higher Rates Affecting Profits, Goldman Analysts Warn appeared first on theprimarymarket.com.

“I think the market is correct in expecting the Fed to skip this meeting” and “maintain its vigilance,” Marvin Loh, State Street senior global macro strategist commented. Still, Loh added that he expects the central bank to contemplate at least one more rate hike before concluding its monetary tightening campaign in an effort to beat down inflation.

Since March 2022, the Federal Reserve has implemented 11 interest rate hikes, raising them to a range of 5.25% to 5.5%. This is the most aggressive fight against inflation that the Fed has carried out since the 1980s. In his address later on Wednesday, Fed Chair Jerome Powell is expected to note that the job to cool inflation to the Fed’s 2% target is not yet complete, thereby opening the door to further hikes.

The post Federal Reserve Expected to Hold Rates Steady, Ponder Further Hikes appeared first on theprimarymarket.com.

Although economists believe that inflation and economic data continue to move in the Federal Reserve’s favor as it seeks to loosen its interest rate policy, this development is raising market bets that the central bank will need to raise interest rates at least once more before the end of the year, potentially in its September meeting.

Pantheon Chief Economist Ian Shepherdson explained that while fluctuating inflation data can be expected going forward, underlying consumer inflation is expected to fall to less than 3% by the end of the year. “We expect the Fed to remain on hold but to signal willingness to hike again depending on the data,” Shepherdson explained.

The post Federal Reserve Experiences Setback in Bid to End Rate Hikes appeared first on theprimarymarket.com.

Money markets have priced a 45% chance that the ECB will implement a 25 basis point hike at its meeting on Thursday; a rise from the previous 40% probability reported on Monday. Still, investors expect that there is a higher likelihood that the ECB will keep rates constant, instead opting to institute a 25 bp hike later in the year.

On Tuesday, money markets priced an 80% chance that the ECB will implement a 25 bp hike after September before holding rates constant for the remainder of the year. This is up from a previous 75% probability given on Monday. In addition to the ECB’s upcoming meeting, analysts are also looking to digest the latest inflation data from the U.S. in the form of Wednesday’s consumer price index report.

The post Money Markets Price 80% Chance of 25 BP Hike By ECB Before Year End appeared first on theprimarymarket.com.