The Federal Reserve faces new questions as the U.S. economy continues to perform well despite high interest rates, prompting economists to believe a "soft landing" is possible, with optimism rising for an acceleration of growth and a more sustainable post-pandemic economy.
Central banks are exploring the issuance of digital currencies to promote financial inclusion and provide easier access to money for unbanked populations, with the potential to reduce dependence on cash, increase local currency adoption, and impact the role of international currencies such as the US dollar.
The Federal Reserve is losing its power to influence the US economy, according to Wall Street economist Richard Koo, potentially requiring higher interest rates to drive inflation down and leading to a selloff in stocks and bonds.
Morgan Stanley's top economist, Seth Carpenter, believes that the US is nearing a dream economic scenario with falling inflation and steady growth, suggesting that the Federal Reserve is close to achieving a soft landing.
The U.S. economy may achieve a soft landing, as strong labor market, cooling inflation, and consumer savings support economic health and mitigate the risk of a recession, despite the rise in interest rates.
Bank of America warns that the US economy still faces the risk of a "hard landing" due to rising oil prices, a strong dollar, and potential interest rate hikes by the Federal Reserve, contrasting with the optimistic outlook of other Wall Street banks.
The United States Federal Reserve's financial woes and potential implications for cryptocurrency are discussed on the latest episode of "Macro Markets," highlighting challenges posed by inflation and the consequences of loose monetary policies during the pandemic.
The US Federal Reserve is still in the early research phase and far from making any decisions on a central bank digital currency, according to Federal Reserve Vice Chairman Michael Barr, who also emphasized the need for clear support from the executive branch and legislation from Congress before any moves are made. Barr expressed concerns about stablecoins and called for strong federal oversight to avoid risks to financial stability and the US payments system.
Treasury Secretary Janet Yellen and Goldman Sachs may be optimistic about a "soft landing" scenario for the US economy, but the author remains skeptical due to factors such as a deeply inverted yield curve, declining Leading Economic Indicators, challenges faced by the consumer, global growth concerns, and the lagging impact of the Fed's monetary policy, leading them to maintain a conservative portfolio allocation.
Investors are more focused on the release of new forecasts from the Federal Reserve, which will reveal their views on the prospect of an economic "soft landing" and the rate environment that will accompany it.
Federal Reserve Chair Jerome Powell indicates that while policymakers project a "soft landing" for the US economy, he does not confirm it as a baseline expectation due to external factors beyond their control such as the autoworker strike, government shutdown, and higher borrowing costs.
The House Financial Services Committee has approved a bill banning the Federal Reserve from creating a central bank digital currency, which must now be considered by the House of Representatives.
The Federal Reserve left interest rates unchanged while revising its forecasts for economic growth, unemployment, and inflation, indicating a "higher for longer" stance on interest rates and potentially only one more rate hike this year. The Fed aims to achieve a soft landing for the economy and believes it can withstand higher rates, but external complications such as rising oil prices and an auto strike could influence future decisions.
The US economy may struggle to achieve a "soft landing" with low inflation and low unemployment due to several economic uncertainties and headwinds, including toughened lending standards and the resumption of student loan payments, according to experts.
The Federal Reserve has released a paper discussing the benefits of tokenizing real-world assets on blockchains, stating that it has the potential to provide access to otherwise inaccessible markets and improve liquidity.
The US economy is facing turbulence as inflation rates rise, causing losses in US Treasuries and raising concerns about the impact of high interest rates on assets like Bitcoin and the stock market. With additional government debt expected to mature in the next year, there is a fear of financial instability and the potential for severe disruptions in the financial system. The Federal Reserve may continue to support the financial system through emergency credit lines, which could benefit assets like Bitcoin.
Bitcoin and gold are expected to thrive amidst fiscal problems in the US economy and a potential pivot from the Federal Reserve, according to macro investor Luke Gromen. Gromen also suggests that the launch of a gold-backed currency by the BRICS alliance may weaken the US dollar as the world's reserve currency.
The Federal Reserve is in a better position to deliver a soft landing for the U.S. economy due to facing different problems compared to the 2007-2008 financial crisis, according to F/m Investments CIO and President Alex Morris.
The surge in long-term Treasury yields is jeopardizing the Federal Reserve's plans for a soft landing as it keeps interest rates high, increasing the risk of a recession.
The US Federal Reserve should proceed carefully when deciding whether or not to hike interest rates further to bring down inflation, according to two senior officials, as they aim for a "soft landing" to tackle inflation without harming the US economy.
Digital currencies, particularly payment stablecoins, have the potential to upgrade America's financial system and benefit families and businesses by making transactions easier, faster, and cheaper, but this can only be achieved if Washington passes stablecoin legislation that prioritizes financial stability and consumer safety.
The dollar’s status as the world's reserve currency is at risk unless the US controls its spending, warns bond market expert Jeffrey Gundlach. High interest rates and the growing US debt could lead to out-of-control inflation and jeopardize the future of the US dollar.
The lack of regulatory clarity for stablecoins in the U.S. could lead to the migration of the industry to Europe, where comprehensive regulations are already in place, potentially diminishing the U.S. dollar's demand and hegemony in global transactions.
The belief is that the Federal Reserve will engineer a soft landing for the economy, which is expected to result in a rise in the stock market.
