Main Topic: The U.S. Federal Reserve's need to raise interest rates further to bring down inflation.
Key Points:
1. Governor Michelle Bowman supports the Fed's quarter-point increase in interest rates last month due to high inflation, strong consumer spending, a rebound in the housing market, and a tight labor market.
2. Bowman expects additional rate increases to reach the Fed's 2 percent inflation target.
3. Monetary policy is not predetermined, and future decisions will be data-driven. Bowman will consider consistent evidence of inflation decline, signs of slowing consumer spending, and loosening labor market conditions.
The majority of economists polled by Reuters predict that the U.S. Federal Reserve will not raise interest rates again, and they expect the central bank to wait until at least the end of March before cutting them, as the probability of a recession within a year falls to its lowest level since September 2022.
Experts are divided on whether the US Federal Reserve should raise its interest rate target to 3% to combat inflation and cushion against recessions, with some arguing that raising inflation targets would be futile.
The Federal Reserve raised interest rates to their highest level in 22 years, but experts expect the market to react less dramatically than in the past.
Federal Reserve Chair Jerome H. Powell stated in a speech at the Jackson Hole symposium that the central bank is prepared to raise interest rates further if needed, signaling that they do not believe inflation is fully under control. The Fed will proceed cautiously and assess economic data as they determine whether to make further policy adjustments.
Two Federal Reserve officials, Boston Fed President Susan Collins and Philadelphia Fed President Patrick Harker, suggested that the Fed may be nearing the end of interest rate increases, although Collins did not rule out the possibility of further hikes if inflation doesn't decline.
The president of the Federal Reserve Bank of Philadelphia believes that the US central bank has already raised interest rates enough to bring inflation down to pre-pandemic levels of around 2%.
The Bank of England may have to increase interest rates if the US Federal Reserve decides to raise rates to cut inflation, in order to prevent the pound from weakening and inflation from rising further.
The Federal Reserve is considering raising interest rates again in order to reduce inflation to its targeted levels, as indicated by Fed Governor Michelle W. Bowman, who stated that additional rate increases will likely be needed; however, conflicting economic indicators, such as job growth and wage growth, may complicate the decision-making process.
JPMorgan predicts that Turkish interest rates will increase by 10 percentage points in the next two central bank meetings due to fiscal spending plans and higher inflation.
Federal Reserve policymakers are not eager to raise interest rates, but they are cautious about declaring victory as they monitor data such as inflation and job growth; most do not expect a rate hike at the upcoming policy-setting meeting.
Goldman Sachs strategists predict that the Federal Reserve is unlikely to raise interest rates at its upcoming meeting, but expect the central bank to increase its economic growth projections and make slight adjustments to its interest rate projections.
Stocks may not be as negatively impacted by higher interest rates as some fear, as the Federal Reserve's forecast of sustained economic growth justifies the higher rates and could lead to increased stock valuations.
The Federal Reserve's plan to raise interest rates to 6% and the looming problem in the US oil supply will likely cause more trouble for the US economy, particularly for small businesses, according to "Shark Tank" star Kevin O'Leary.
At least one more interest-rate hike is possible, according to Federal Reserve officials, who suggest that borrowing costs may need to remain higher for longer in order to address inflation concerns and reach the central bank's 2% target.
The Federal Reserve has upgraded its economic outlook, indicating stronger growth and lower unemployment, but also plans to raise interest rates and keep borrowing costs elevated, causing disappointment in the markets and potential challenges for borrowers.
Chris Harvey of Wells Fargo Securities believes that the Federal Reserve will no longer increase interest rates, while Tom Kennedy from J.P. Morgan Global Wealth Management advocates for multi-asset investing.
Wall Street is concerned about the potential stress on the horizon as the Federal Reserve plans to keep interest rates higher for longer, and JPMorgan CEO Jamie Dimon warns that the world is unprepared for this scenario.
Jamie Dimon, CEO of JPMorgan Chase, is warning clients to prepare for a worst-case scenario of benchmark interest rates hitting 7% along with stagflation, despite market predictions of the end of the Federal Reserve's tightening cycle.
Minneapolis Federal Reserve President Neel Kashkari believes there is a 50% chance that interest rates will need to significantly increase in order to combat inflation, citing a strong case for the U.S. economy heading towards a "high-pressure equilibrium."
JPMorgan Chase CEO Jamie Dimon hopes for a soft landing as he acknowledges the possibility of interest rates rising further and warns of economic risks such as Ukraine, oil, gas, war, and Europe.
The former Goldman Sachs chairman and CEO, Lloyd Blankfein, believes that the Federal Reserve may not need to keep interest rates high for an extended period, as cuts to rates could be on the horizon sooner than expected due to relatively subdued inflation, despite the tough rhetoric from top Fed officials.
J.P. Morgan strategists predict that the Federal Reserve will maintain higher interest rates until the third quarter of next year due to a strong economy and continued inflation, with implications for inflation, earnings, and equity valuations as well as potential impact from a government shutdown.
Billionaire investor Bill Ackman predicts that the Federal Reserve is likely done raising interest rates as the economy slows down, but warns of continuing spillover effects and expects bond yields to rise further.
Interest rates for certificates of deposit and high-yield savings accounts have increased significantly in recent years due to the Federal Reserve's rate hikes, but it is uncertain if rates will continue to rise or if they have reached their peak.
The Federal Reserve may not raise interest rates again this year due to an already uncertain political climate in Washington, as well as a cooling economy, slowing inflation, and potential negative impacts from high interest rates and a government shutdown.
JPMorgan Chief Market Strategist predicts a recession and discusses the Federal Reserve's stance on interest rates and the performance of mega-cap versus mid-sized stocks.
Higher-for-longer interest rates are expected to hinder U.S. economic growth by 0.5%, potentially leading unprofitable public companies to cut their workforce, according to strategists at Goldman Sachs, who also noted that the Federal Reserve's current benchmark rate is insufficient to cause a recession. Additionally, the firm warned that the high rates could increase the U.S. debt-to-GDP ratio to 123% over the next decade without a fiscal agreement in Washington.
The Federal Reserve officials suggested that they may not raise interest rates at the next meeting due to the surge in long-term interest rates, which has made borrowing more expensive and could help cool inflation without further action.
Investors are betting that the Federal Reserve may not raise interest rates again due to recent market moves that are expected to cool economic growth.
Federal Reserve officials are cautious about raising interest rates further due to the risks of stifling economic growth and increasing unemployment, despite expectations of a potential rate hike, according to newly released minutes from their September meeting.
Several housing groups, including the Mortgage Bankers Association, are urging the Federal Reserve to reduce rates as mortgage rates climb to 7.5%, fearing that further increases may lead to a recession.
JPMorgan Chase's profits surge in the third quarter, surpassing expectations and reinforcing the bank's dominance despite the challenges faced by the industry; CEO Jamie Dimon warns of economic risks, including inflation, rising interest rates, and global conflicts in Ukraine and Israel.
BMO Senior Economist Jennifer Lee discusses the factors that could lead the Federal Reserve to raise interest rates, including upward pressure on prices, a resilient U.S. consumer, energy prices, and inflation expectations.
Profits for JPMorgan Chase, Citigroup, and Wells Fargo rose in the third quarter, despite challenges faced by smaller banks, signaling strength in the largest banks in the industry; however, JPMorgan CEO Jamie Dimon warns of economic risks such as inflation, interest rate hikes, and global conflicts.
JPMorgan Chase's third-quarter profit jumps 35%, but CEO Jamie Dimon warns of economic instability due to global conflicts and high inflation, emphasizing the need for the bank to be prepared for various outcomes.
JPMorgan Chase CEO Jamie Dimon warns that the ongoing conflicts in Ukraine and Israel could have significant impacts on energy and food markets, global trade, and geopolitical relationships, potentially making it the most dangerous time the world has seen in decades. However, the bank managed robust loan growth and increased revenue in the third quarter, benefiting from rising interest rates and acquisitions. Other major U.S. banks, including Wells Fargo and Citi, also reported strong results driven by rising interest rates.
Higher interest rates have boosted the earnings of big banks like JPMorgan Chase, Citigroup, and Wells Fargo, but an increase in loan write-offs and signs of consumer spending cutbacks indicate that customers are struggling.
Federal Reserve Chair Jerome H. Powell stated that the central bank may need to raise interest rates further if economic data continues to show strong growth or if the labor market stops cooling.
The Federal Reserve is cautious about raising interest rates as Treasury yields approach 5%, especially if it tightens financial conditions and impacts the economy.
The Federal Reserve may need to increase interest rates further to combat persistent inflation in the US economy, despite the recent surge in Treasury yields prompting investors to question further rate hikes, according to Richard Clarida of Pimco. Clarida also highlighted the challenge of deciding when to start cutting interest rates and predicted that the US dollar will return to a more normal level once rate differentials close.
