Trading News

Fed’s Bullard Leaves Open Possibility of Larger December Hike

0

S&P 500

3,583.07

-86.84(-2.37%)

 

Dow 30

29,634.83

-403.89(-1.34%)

 

Nasdaq

10,321.39

-327.76(-3.08%)

 

Russell 2000

1,682.40

-46.01(-2.66%)

 

Crude Oil

85.55

-3.56(-4.00%)

 

Gold

1,650.20

-26.80(-1.60%)

 

Silver

18.20

-0.72(-3.80%)

 

EUR/USD

0.9724

-0.0059(-0.60%)

 

10-Yr Bond

4.0100

+0.0580(+1.47%)

 

GBP/USD

1.1180

-0.0150(-1.33%)

 

USD/JPY

148.7300

+1.5480(+1.05%)

 

BTC-USD

19,132.23

-37.77(-0.20%)

 

CMC Crypto 200

435.82

-12.36(-2.76%)

 

FTSE 100

6,858.79

+8.52(+0.12%)

 

Nikkei 225

27,090.76

+853.34(+3.25%)

 

(Bloomberg) — Federal Reserve Bank of St. Louis President James Bullard left open the possibility that the central bank would raise interest rates by 75 basis points at each of its next two meetings in November and December, while saying it was too soon to make that call.

Most Read from Bloomberg

Rolex Prices to Drop Further as Supply Surges: Morgan Stanley

Diesel Hits Chaos Mode in Fresh Blow for Global Economy

Secret Service Minimized Threats Before Jan. 6, Documents Show

Putin Tried for Years to Stop His Military From Using Western Parts — And Mostly Failed

A $25 Billion Grocery Deal Takes Fight to Walmart

The Fed hiked rates by 75 basis points for the third straight meeting last month, to a target range of 3% to 3.25%. Officials projected 125 basis points of tightening for the rest of the year, suggesting a 75 basis-point move in November and 50 basis points in December. A further 25 basis points of tightening was penciled in for 2023, according to their median estimate.

“Whether the committee would want to pull some proposed or thought-of policy-rate increases from 2023 into the December meeting, I think that’s a judgment that is premature to make,” he said Saturday in Washington during an event on the sidelines of the annual meeting of the International Monetary Fund and World Bank.

The US central bank is raising interest rates at the most rapid pace since the 1980s to curb inflation at 40-year highs. Investors now see a solid chance the Fed will raise rates 75 basis points in both November and December after data Thursday showed core consumer prices rising more than anticipated in September.

Projections released Sept. 21 by the Fed showed officials expecting rates to rise to 4.4% this year and 4.6% next, according to their median estimate.

Bullard said it probably didn’t make much difference from a macroeconomic perspective if that additional tightening happened later this year or in the first quarter of 2023. But he reminded the audience that he has been a fan of “frontloading” rate increases by rapidly moving policy to a level that restrains inflation, at which point officials can pause and take stock.

“You want to get where you need to be and then after you can react to data,” he said, adding that there was a “bullish case” for next year if declines in inflation forecast by both the central bank and private sector economists are proved correct.

“If that dynamic comes in it’s going to look very good, and we’ll be able to basically stay where we are and watch the inflation come down,” he said. “But there is a lot of risk also that inflation goes still higher and then we have to react to that.”

Bullard also backed continuing to shrink the central bank’s balance sheet at the current pace for some time.

“It is way too early to say that we would change this policy any time soon,” Bullard said during a panel discussion, in response to a question about whether the Fed would alter its balance-sheet runoff, currently at a pace of a maximum $95 billion a month.

Bullard votes on monetary policy this year and has been one of the more hawkish officials on its 19-member policy committee.

He said he’s glad that the Fed’s 75 basis-point rate increases hadn’t caused any significant market turmoil. “We’ve managed to get this far with relatively low financial stress,” Bullard said.

Responding to questions, he said moves in the dollar in response to Fed rate hikes were “not surprising.” The greenback has surged 16.4% in the 12 months, according to the Bloomberg Dollar Spot Index.

“It will not always be this way,” Bullard said. “If the Fed can get to a place where the committee thinks that we’re putting meaningful downward pressure on inflation with the level of the policy rate that we have,” and other central banks change their policies and perhaps become more aggressive, “you might see other movements in the dollar.”

(Updates with Bullard comments from third paragraph.)

Most Read from Bloomberg Businessweek

This Is What the Gas Station of the Future Will Look Like

Exxon’s Exodus: Employees Have Finally Had Enough of Its Toxic Culture

America Is Unleashing Its Economic Arsenal

Coming Soon on Netflix: A New Netflix

Twitter Faces Only Bad Outcomes If the $44 Billion Musk Deal Closes

©2022 Bloomberg L.P.

Advertisement

Bloomberg

Torched Stocks Are About the Only Thing Working in Fed’s Favor

(Bloomberg) — Inflation shows few signs of cooling in the economy. The same cannot be said of markets, which are starting to seem like the only thing the Federal Reserve has going for it these days.Most Read from BloombergRolex Prices to Drop Further as Supply Surges: Morgan StanleyDiesel Hits Chaos Mode in Fresh Blow for Global EconomySecret Service Minimized Threats Before Jan. 6, Documents ShowPutin Tried for Years to Stop His Military From Using Western Parts — And Mostly FailedA $25 Billio

Reuters

Credit Suisse prepares Swiss business sales to raise capital – FT

The parts that are being considered for sale include a stake in the SIX Group, which runs the Zurich stock exchange, an 8.6% holding in Madrid-based tech company Allfunds, two specialist Swiss banks, Pfandbriefbank and Bank-Now and Swisscard, a joint venture with American Express, the newspaper added. “We will update on progress on our comprehensive strategy review when we announce our third-quarter earnings,” Credit Suisse told Reuters in an emailed statement. The hotel could be worth 400 million Swiss francs, as reported by finance blog Inside Paradeplatz early this month.

SmartAsset

Pension vs. Social Security: Which Will Give You More Retirement Money?

Most retired workers depend on multiple streams of income during their retirement. Two of the most common such income streams are Social Security and pensions. If we look at pension vs. Social Security income, we find significant differences. Retired workers … Continue reading → The post Pension vs. Social Security: Key Differences appeared first on SmartAsset Blog.

Insider Monkey

10 Best Gene Editing Stocks To Buy

In this article, we discuss 10 best gene editing stocks to buy. If you want to see more stocks in this selection, check out 5 Best Gene Editing Stocks To Buy. A report by The Wall Street Journal dated September 16 suggests that Intellia Therapeutics, Inc. (NASDAQ:NTLA) revealed positive early-stage trial results for its CRISPR […]

Insider Monkey

Should You Now Sell Your Peloton Interactive (PTON) Stake?

Merion Road Capital, an investment advisor, released its third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, Merion Road Small Cap Fund returned -11.5% compared to 2.1% return for the Russell 2000 Index, and its Long Only Large Cap returned -6.4% compared to -4.9% return for the […]

Bloomberg

Hunt Wins Backing of Bailey’s BOE, Leaving Truss Sidelined in UK

(Bloomberg) — Chancellor of the Exchequer Jeremy Hunt won a crucial endorsement from the Bank of England for his plan to stabilize the UK’s strained public finances that leaves Prime Minister Liz Truss looking increasingly marginalized. Most Read from BloombergRolex Prices to Drop Further as Supply Surges: Morgan StanleyDiesel Hits Chaos Mode in Fresh Blow for Global EconomySecret Service Minimized Threats Before Jan. 6, Documents ShowPutin Tried for Years to Stop His Military From Using Wester

TheStreet.com

Disney World Set to Bring Back Hugely Popular Event

Disney and Comcast’s Universal Studios are in constant competition for customers to choose their theme park for vacations. The competition has been fierce since covid restrictions lifted, as both parks have been launching new attractions and the return of fan favorites that people have been anxiously waiting to return. The holidays have helped by been bringing back iconic rides and attractions at both theme parks.

Kotaku

Overwatch 2: Genji Might Be Too Good Right Now, Blizzard Muses

Overwatch 2 has had a bit of a rough start. But as a variety of bugs are addressed and discussed, Blizzard is highlighting hero balance as it eyes future seasons. A certain shuriken-wielding hero in particular is on nerf watch, as the developer observed an early “dominating win-rate” in favor of the cyborg ninja Genji.

Bloomberg

Meta’s Shares Are a Hard Sell as Good Old Facebook Days Are Over

(Bloomberg) — In most market environments, a company with one of the lowest valuations in the Nasdaq 100 Index, a solid balance sheet and sales growth averaging 34% a year would be an obvious buy. In the case of Meta Platforms Inc., it’s not so obvious. Most Read from BloombergRolex Prices to Drop Further as Supply Surges: Morgan StanleyDiesel Hits Chaos Mode in Fresh Blow for Global EconomySecret Service Minimized Threats Before Jan. 6, Documents ShowPutin Tried for Years to Stop His Military

Bloomberg

UBS Joins Wall Street Chorus Warning of More US Credit Defaults

(Bloomberg) — The odds are rising that corporate borrowers will struggle to repay their debts as the Federal Reserve opts for jumbo interest-rate hikes to combat inflation, according to UBS Group AG.Most Read from BloombergWorld Faces New Threats From Fast-Mutating Omicron VariantsRolex Prices to Drop Further as Supply Surges: Morgan StanleyStocks Upended by Inflation Survey’s Sobering View: Markets WrapPutin Tried for Years to Stop His Military From Using Western Parts — And Mostly FailedCore

Apple or Amazon Could Buy These Two Pandemic Stock Darlings

Previous article

China’s Xi downplays need for rapid growth, proclaims Covid achievements

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Trading News