The U.S. economy added 678,000 new jobs in February. That was the most new jobs since July. Economists surveyed by Bloomberg had expected the economy to add 423,000 jobs in the month. The official unemployment rate fell to 3.8%. Average hours earnings, however, lagged
In as straight forward a statement as the Federal Reserve can make, Fed chair Jerome Powell said the U.S. central bank will start a new cycle of higher interest rates with a 25 basis point increase on March 16. (It takes 100 basis points to make one percentage point.)
The Personal Consumption Expenditures index, the Federal Reserve’s preferred measure of inflation, rose at a year over year 6.1% rate in January. That tops the 5.8% annual rate in December. Economists had been projecting a 6% increase for January.
I know it’s easy to forget that there’s other market moving news on the horizon (besides what the next day will bring in the Russian invasion of Ukraine) but tomorrow, Friday, February 25, the government will report the Personal Consumption Expenditures (PCE) price index, the inflation index that the Federal Reserve uses, for January. That measure is projected to show inflation rising at an annual rate of 6% in January, according to economists surveyed by Bloomberg. The core rate, which excludes food and fuels, is forecast to climb to an annualized 5.2%. The PCE index was up 5.8% year over year in December. The core rate was up 4.9% year over year in December.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My one-hundredth-and fifth YouTube video “Russia sanctions and the Federal Reserve’s interest rate increases” went up today. So how will the seemingly imminent confrontation between the United States and Russia over the fate of Ukraine, and the likelihood of continuing economic sanctions against Russia change the prospects for interest rate increases by the Fed in the coming months. Ya think that the prospect of sanctions on Russia and possible Russian cyberattacks might change the Fed’s schedule?
The personal consumption expenditures (PCE) price index, the inflation index that the Federal Reserve uses, is projected at an annual rate of 6% in January, according to economists surveyed by Bloomberg. The core rate, which excludes food and fuels, is forecast to climb to an annualized 5.2%.
Yes, interest rates and the Federal Reserve and the Ukraine/Russia conflict are likely to dominate stock market direction this week, but don’t forget the power of the Iran/United States nuclear talks to move oil prices or the power of moves by Chinese regulators to wipe billions off the value of the country’s Internet stocks
Back on January 26–a date so far in the past if judged by changes in financial data–according to minutes of that central bank meeting related today, February 16, Federal Reserve officials concluded that they would start raising interest rates soon and were on alert for persistent inflation that would justify a faster pace of tightening. Since then, CPI inflation has jumped to an annual 7.5% in January and employers have added almost 500,000 new jobs. The markets have no doubt that the Fed will raise interest rates at its March 16 meeting and has strongly moved to favor a 50 basis point increase in the Fed Funds rate rather than the traditional 25 basis point move. The financial markets now price in 150 basis points of interest rate increases in 2022
Today what counts in the market is Vladimir Putin’s intentions. Jerome Powell? Maybe tomorrow. And that’s in spite of a jump in producer prices, which usually translates not consumer inflation.
This could lead the Federal Reserve to move more cautiously on raising interest rates, say, a 25 basis point increase rather than 50 at the central bank’s March 16 meeting. If, that is, you think any piece data is likely to change the Fed’s mind. U.S. consumers lowered their expectations for future inflation in January, according to a survey by the Federal Reserve Bank of New York. The median expectation for inflation one year from now fell in this survey for the first time since October 2020, to 5.8% from the 7.5% current inflation rate.
CPI inflation climbed at a 7.5% annual rate in January, the Bureau of Labor Statistics reported this morning. That was above the 7.3% expected by economists surveyed by Bloomberg and a big jump from the 7.0% annual rate reported in December. The inflation number just about guarantees that the Federal Reserve will raise its short-term benchmark interest rates at its March 16 meeting from the current 0% to 0.25% range.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My ninety-ninth YouTube video “50 basis points because the Fed is scared not to” went up today.
