Markets News Regulators 

The Fed could move markets this week when it tells us what it was thinking at the January meeting

“In what felt like an about face from its December meeting, Powell also emphasized that the Fed would be flexible with its balance sheet” writes Yuri Gripas for cnbc.com. Stocks were higher in the past week, even with Thursday’s sell off on stunningly weak December retail sales data.The Fed calmed the markets in late January when it said it could stop raising interest rates, but investors are watching the release of its meeting minutes for any sign the Fed could veer off its easy path.There could be discussion in the…

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Fed policymakers see one U.S. rate hike, or none, as growth slows

“In December, when the Fed raised interest rates a fourth time that year, most Fed policymakers penciled in two more rate hikes for this year” reports businessinsider.com. This week, as disappointing U.S. retail sales and industrial production data raised the prospect that the U.S. economy will slow more quickly than expected, three Fed policymakers gave an answer: one rate hike, or perhaps none at all.The first broad read of their views will come in March, when the Fed next releases forecasts for the economy and rates. Source: businessinsider.com

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Get used to wild swings for this stock market, and thank the Fed for that, says analyst

“Our call of the day, from Seema Shah, global investment strategist at Principal Global Investors, is less sanguine” writes Markets Reporter for marketwatch.com. A big data dump awaits, on the heels of that dismal retail sales data.Or, if the Fed was simply propping up markets, renewed fears of inflation and rising interest rates are likely.Shah worries that the market has swung from “excessively pessimistic to excessively optimistic,” and may be underestimating coming headwinds from a global slowdown.Investors have been haunted by three big themes this week: trade talks, U.S. politics…

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USD: US CPI: Nothing In It To Sway The Fed From Doing ‘Nothing’ For Now – CIBC

“Core price were up 0.2%, on expectations, with the 12 month rate holding at 2.2% (a tick above consensus)” writes Yohay’s Google Profile for forexcrunch.com. Nothing in this to sway the Fed from doing what its doing now, which is nothing at all on rates until the economy provides more evidence on how its holding up in 2019,” CIBC adds.Here is their view, courtesy of eFXdata: “By the magic of seasonal adjustment and methodology revisions, US CPI managed to be both a bit hotter and a bit cooler than expectations…

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Fed may use rebound as motive to revive rate hikes, market researcher James Bianco warns

“His base case calls for no interest rate hikes this year, but market researcher James Bianco has his guard up” writes unknown author for cnbc.com. Regardless of whether the Fed hikes or not, Bianco suggests there may not be much market upside left.”The stock market is rallying basically for one reason: The Fed backed off,” Bianco said.”We need earnings to step up. Source: cnbc.com

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The shock surge in US car loan delinquencies gives a clue why the Fed is treading carefully — even in a booming economy

“It’s likely the Federal Reserve, which is pausing its plan to raise interest rates for now, is using other yard sticks to gauge US economic health” writes Trista Kelley for businessinsider.com. “American consumers [are] exposed to any unexpected loss of their job or increase in interest rates,” says Russ Mould, Investment Director at UK investment platform AJ Bell.Fed economists said the surge in delinquent borrowers, defined as being at least 90 days behind on payments, was “surprising” considering the strong labor market and economy.As a percentage of GDP, US debt…

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Markets News Regulators 

Public confidence in inflation policy key to containing prices: paper

“Giving people a reason to doubt the central bank’s commitment to maintaining inflation near target is clearly costly.”” reports businessinsider.com. (Reuters) – Keeping the public confident inflation will be contained is key to keeping price rises contained, San Francisco Federal Reserve economists said in a paper on Monday that also suggested the unemployment level is all but irrelevant to the inflation trajectory.The research from the San Francisco Fed, which is viewed as a leader in labor market research, could play importantly into the central bank’s thinking on interest rates.But when…

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Fed’s Bowman talks up community bank resilience as she notes pressures from commercial real estate, agriculture

“She also was a senior executive of Farmers and Drovers Bank, a community bank in Council Grove, Kan., that her great-great grandfather helped charter in 1882” writes Senior Economics Reporter for marketwatch.com. Three out of four community banks hold assets of less than $500 million, Bowman said.Farm debt is increasing and delinquency rates on loans for both production and farm real estate have continued to edge higher, according to January report by the Kansas City Fed. Source: marketwatch.com

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Emerging markets set for a ‘rally’ after last year’s rout, says strategist

“With the U.S. Federal Reserve pledging to be “patient” in future rate hikes, emerging markets should do better this year, and may in fact even have “a decent rally,” one strategist told CNBC on Monday” writes -mary Nicola for cnbc.com. Last year, economic troubles in Argentina and Turkey, as well as the Fed tightening monetary policy, had caused a selloff in several emerging market currencies.Some emerging market stock indexes also saw steep declines.But those markets should turn around this year, said Mary Nicola, a G-10 foreign exchange and Asian fixed…

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