If the economy is so good, why are Americans feeling so bad?

11 minutes ago

Fed Chairman Powell acknowledged the disconnect between the statistics – which show the economy is performing well – and widespread public dissatisfaction with the state of the economy following the inflationary surge that has shaken household budgets after the pandemic.

“We know we say the economy is doing well, and it is, but we also know people are still feeling the effects of high prices,” he said. “The world has suffered a global inflationary shock, and inflation has increased everywhere. And it stays with you because the price level doesn’t come back down.

The Fed, charged with managing inflation, aims to keep prices rising at a steady 2% rate rather than falling across the board. Sustained deflation typically only occurs during times of severe economic distress, such as the Great Depression.

Although wage increases have more or less kept pace with rising prices, it may be some time before the new price levels appear to return to normal for most household budgets, Powell said.

“It takes a few years of real wage gains to make people feel better, and that’s what we’re trying to create,” he said. “Inflation has fallen considerably. The economy is still strong here; wages are increasing but at a sustainable level. I think what needs to happen is happening and, for the most part, has happened. But it will take time before people regain confidence and feel that way.”

-Diccon Hyatt

Will Powell resign if Trump asks?

16 minutes ago

Trump appointed Powell to his post during his first term, but often criticized him publicly and urged him to lower interest rates.

During the campaign, members of Trump’s inner circle suggested that he might try to move the Federal Reserve, which plays a crucial role in managing the economy, more closely to under the control of the president.

Powell was nominated for a second term by President Joe Biden and his current four-year term in the position continues until 2026. When a reporter asked Powell to leave his post if asked by Trump, he responded with his briefest response of the press conference. : “No.”

-Diccon Hyatt

Powell: elections will have no short-term impact

51 minutes ago

Chairman Powell said the Federal Reserve does not expect Donald Trump’s victory in the presidential election to have any near-term impacts on the committee’s plans.

However, it could have long-term effects depending on what policies Trump implements once he takes office, Powell said.

“We don’t know what the timing and substance of any policy changes will be,” Powell said. “We therefore do not know what the effects on the economy would be, in particular whether and to what extent these policies would be important for achieving our objective variables: maximum employment and price stability.”

Fed Chair Jerome Powell Says Federal Reserve Confident in Soft Landing

57 minutes ago

Federal Reserve Chairman Jerome Powell said the committee remains confident in its ability to revive the economy for a period of soft landing.

“We remain confident that with an appropriate recalibration of our policy, the strength of the economy and the labor market can be maintained with inflation falling sustainably to 2%,” Powell said.

Federal Reserve highlights labor market concerns in statement

1 hour 27 minutes ago

This month, the Federal Reserve added a new addition to its statement on the state of the economy, emphasizing that officials are closely monitoring the labor market.

“Since the start of the year, labor market conditions have generally improved and the unemployment rate has increased but remains low,” the statement said.

Members are paying a lot of attention to the committee’s statement, crafting it to send a direct message to market participants. The statement is often thoroughly revised, with members adding and deleting sentences from previous statements.

Federal Reserve cuts interest rate by a quarter point

1 hour 33 minutes ago

In a widely anticipated move, the Federal Reserve cut its benchmark interest rate by a quarter point on Thursday.

In a unanimous vote, the Fed’s policy committee lowered its federal funds rate in a range of 4.5% to 4.75%, its lowest level since March 2023. The reduction is designed to ripple through the wider economy, reducing borrowing costs on credit cards. credit, car loans and other debts.

Learn more about the decision here.

Markets await Federal Reserve interest rate decision

1 h 51 min ago

The US stock market stuttered slightly in the early afternoon as investors awaited the Federal Reserve’s decision on interest rates.

The S&P 500 and Nasdaq Composite rose 0.6% and 1.2%, respectively, down slightly from their previous highs. The Dow Jones Industrial Average was down 0.7% from its previous close.

After Donald Trump’s victory in the presidential election, the main indices changed trend. best one day performance since 2022 Wednesday.

Follow the stock market’s reaction to the Fed’s decision here.

What happened at the last FOMC meeting?

2 hours 10 minutes ago

If the Fed lowers its key rate today, it will only be the second time since 2020.

At its last meeting in September, the committee reduced the federal funds rate by 50 basis points for the first time in four years. The move kicked off what is expected to be a campaign of rate cuts aimed at reducing the cost of borrowing and stimulating the economy.

The move surprised some Fed observers and not all policymakers agreed with the decision. Fed Governor Michelle Bowman voted for a more modest cut of 25 basis points.

Read more about the latest Federal Reserve meeting here.

What to expect from the Federal Reserve’s November meeting

2 hours 34 minutes ago

Investors and economists are keeping Federal Reserve officials at their word for their November meeting.

In their speeches leading up to a “blackout period” beginning October 26, Fed officials indicated that gradual reductions in interest rates over the next few months were in order, and none of the major economic data released since then has been surprising enough to upend that perception, economists say.

That leaves economists and traders confident the Federal Reserve will lower its benchmark federal funds rate by a quarter point when it makes its decision Thursday.

Learn more about what to expect from today’s meeting here.