Federal Reserve expects unemployment to rise

Job Fait

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • More US companies brace for job cuts amid likely recession, survey shows
  • A new survey published on Monday by the National Association for Business Economics, which shows that about 20% of the group’s members expect employment at their company to fall in the coming months.
  • Wage growth has been a big contributor to stubbornly high inflation, which remains about three times higher than the pre-pandemic average.
  • The results “indicate widespread concern about entering a recession this year,” Coronado said. More than half of respondents see the possibility of a recession over the next year at 50% or higher, the survey showed.
  • The economy added just 223,000 jobs in December, the smallest gain in two years, and there have been a number of high-profile tech layoffs over the past month.
  • Federal Reserve officials have made it clear that they expect unemployment to climb as a result of their aggressive interest rate hike campaign
  • That could mean more than 1 million Americans lose their jobs over the course of this year.

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Former Federal Reserve official: US Dollar in question due to future of globalized economy

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Economist Zoltan Pozdar Warns of End of the Current US Dollar Dominance
  • Back in May 2022, Former Federal Reserve and U.S. Treasury Department official, Zoltan Pozsar, suggested that the current dominance of the US dollar is in question due to future conditions of the globalized economy.
  • Zoltan warned that of particular interest is the rise of China, the conflict in Ukraine and the subsequent sanctions, and the rise of cryptocurrency.
  • Credit Suisse’s Zoltan Pozsar argues Bretton Woods II crumbled when the G7 countries seized Russia’s foreign exchange reserves. Keeping money inside financial institutions like the IMF was considered risk free. That is clearly no longer the case. Similarly, Bretton Woods I collapsed when Nixon took the US of the gold standard back in 1971 when dollars were convertible to gold at a fixed exchange rate of $35 an ounce. This led to Bretton Woods II, backed by “inside money” or the dollar, which itself is not linked to gold or any other commodity.
  • Now the basis of this system, which has operated for the past 50 years, is being called into question. The sanctions on Russia, which showed that reserves accumulated by central banks can simply be taken away, raised the question of “what is money?”
  • That question may explain why Pozsar believes a huge shift in the way the world organizes money and reserves is now underway, “creating a “Bretton Woods III backed by outside money,” (gold and other commodities). Including crude oil and bitcoin.

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More Job Cuts: Tech Industry takes big hit

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Job cuts surge 127% in November as companies brace for economic downturn
  • Employers announced plans to cut 320,000 jobs this year, analysis shows
  • Companies announced 76,835 job cuts in November, led by the technology sector, the analysis showed. That is 417% higher than the same time one year ago.
  • Amazon, Apple, DoorDash, Meta, Morgan Stanley, Lyft and Twitter are among the companies either implementing hiring freezes or letting workers go as the Federal Reserve moves to raise interest rates at the fastest pace in decades in order to combat inflation.

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As The Federal Reserve battles inflation CEO of JP Morgan warns the US is months away from a recession

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • JPMorgan CEO Jamie Dimon warns the US is just MONTHS away from a recession as the Fed battles to fight rising inflation – and is more likely to keep raising borrowing costs
  • JPMorgan Chase CEO Jamie Dimon predicted that the US will fall into a recession in the coming months as the Federal Reserve tries to combat rampant inflation
  • Although inflation has fallen to 8.3 percent as of August, it remains stubbornly high, with September’s report likely to influence the Fed’s decision
  • The central bank has been aggressively increasing interest rates to quell inflation, with rates expected to end at 4.4 percent this year
  • More aggressive rate hikes are also expected due to strong job growth and falling unemployment rates, as well as uncertainty in Ukraine

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Third straight month Central Bank raises interest rates by 75 points

Revelations 18:23 ’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Federal Reserve raises interest rates by 75 basis points for third straight month
  • The Federal Reserve on Wednesday raised its benchmark interest rate by 75 basis points for the third straight month as it struggles to bring scorching-hot inflation under control, a move that threatens to slow U.S. economic growth and exacerbate financial pain for millions of households and businesses.
  • The three-quarter percentage point hikes in June, July and September — the most aggressive series of increases since 1994 — underscore just how serious Fed officials are about tackling the inflation crisis after a string of alarming economic reports.

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Federal Reserve ready to raise Interest Rates again

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Federal Reserve Prepares More Big Rate Hikes Amid Risk That High Inflation Could ‘Become Entrenched’
  • With surging inflation showing no signs of abating, Fed policymakers plan to raise interest rates by either 50 or 75 basis points at the upcoming meeting in July.
  • While tighter monetary policy “could slow the pace of economic growth for a time,” it is “critical” to achieving long-term inflation goals, central bank officials agreed, pledging to take more aggressive action even if it means hurting economic growth.

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Federal Reserve raises interest by .75 percent, and more could be coming in days to come

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • BREAKING NEWS: Federal Reserve raises interest rates by three-quarters of a percentage point in the biggest hike since 1994 in a bid to slow rapid inflation
  • Federal Reserve raised the interest rate to .75 per cent in an attempt to rein in the record high levels of inflation
  • Officials agreed to increase at their two-day meeting that wrapped Wednesday
  • It is the biggest hike since 1994
  • The move will increase its benchmark short-term rate, which affects many consumer and business loans, to between 1.5% and 1.75%
  • Will likely result in higher interest rates for car and home loans
  • ‘We’re strongly committed to bringing inflation back down. And we’re moving expeditiously to do so,’ Chairman Jerome Powell said
  • More interest rate hikes could follow in the days to come
  • Voters list inflation and economy as their top concerns

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Central banks to boost interest rates “A Real Possibility”

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Fed likely to boost interest rates by three-quarters of a point this week
  • Markets are beginning to anticipate an even faster pace of interest rate hikes, and Federal Reserve officials apparently are contemplating the possibility as well.
  • Fed policymakers are entertaining the idea of a 75-basis-point rate increase this week, according to CNBC’s Steve Liesman.
  • Bond yields pointed to the possibility of a more aggressive Fed as the yield on the 10-year Treasury shot up to 3.37%, while the 2-year yield, which mostly closely tracks Fed intentions, accelerated to 3.34%.
  • A 75 basis point move is “a real distinct possibility,” Liesman said.

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Fed officials say high inflation weighing on consumers and needs to be controlled

By Jonnelle Marte

(Reuters) – Federal Reserve officials said on Tuesday they are vigilant of the ways that higher inflation can affect U.S. households and dampen consumer sentiment and want to get it under control.

While wages are rising for some workers, consumer sentiment is down to a “level that you might associate with a recession,” said Richmond Fed President Thomas Barkin, citing the consumer sentiment survey from the University of Michigan.

“I think that’s very much because of the impact that prices have on people,” including those who spend a significant part of their pay on food and gas, Barkin said during a virtual panel organized by the Fed.

Atlanta Fed President Raphael Bostic said the central bank aims for low inflation because it doesn’t want households to stress about rising prices. “That’s one of the reasons why, you know, I think you’ve heard from all of us concerns about the higher levels of inflation that we’ve seen recently and the need to get that back under control,” Bostic said.

The Fed this month began to reduce the pace of its monthly asset purchases, the first step in scaling back the support offered to the U.S. economy during the pandemic. Fed officials would like to wind down the bond purchases before they raise interest rates.

Some policymakers say the Fed should be prepared to act in case inflation lasts longer than expected. St. Louis Fed President James Bullard, speaking earlier in the day, said the Fed should “tack in a more hawkish direction” over its next couple of meetings to be prepared in case inflation does not ease.

“If inflation happens to go away we are in great shape for that. If inflation doesn’t go away as quickly as many are currently anticipating it is going to be up to the (Federal Open Market Committee) to keep inflation under control,” Bullard said on Bloomberg Television.

(Reporting by Jonnelle Marte and Howard Schneider; Editing by Chizu Nomiyama)

Fed report shows wage pressures amid ‘modest to moderate’ economic growth

By Ann Saphir and Lindsay Dunsmuir

(Reuters) -U.S. employers reported significant increases in prices and wages even as economic growth decelerated to a “modest to moderate” pace in September and early October, the Federal Reserve said on Wednesday in its latest compendium of reports about the economy.

“Outlooks for near-term economic activity remained positive, overall, but some Districts noted increased uncertainty and more cautious optimism than in previous months,” according to the summary of information from the Fed’s 12 regional districts, prepared as part of a broad range of briefings ahead of policymakers’ Nov. 2-3 meeting.

Employment increased, though labor growth was dampened by a low supply of workers, despite wage increases designed to attract new hires and keep existing employees, the report said.

Most districts reported “significantly elevated prices,” with some expecting prices to stay high or increase further, and others expecting inflation to moderate. “Many firms raised selling prices indicating a greater ability to pass along cost increases to customers amid strong demand,” the Fed districts reported.

The report will do little to change the immediate course of Fed policy, with central bankers poised to begin reducing their $120 billion in monthly bond purchases as soon as next month after what most see as substantial improvement in the labor market since the end of last year.

But it could help shade discussions of what the Fed ought to do next, particularly as inflation has been running well above the Fed’s 2% target for the last several months.

Policymakers are keenly focused on the drivers of those price rises and whether they will, as most expect, recede next year.

If current high inflation persists, the Fed may need to start raising rates sooner than widely assumed, several policymakers have said recently.

Wednesday’s report showed companies in most districts were feeling price and wage pressures from supply chain bottlenecks as well as from labor constraints.

The Philadelphia Fed reported on one firm that was offering as much as “$90,000 for a second-year CPA position that might have commanded $65,000 before the pandemic.”

The Cleveland Fed said nearly 60% of its contacts reported raising wages recently, but with supply chains slowing production of goods, even that appeared not to be enough. One auto dealer, the district reported, noted that “supply chain disruptions were causing his labor challenges, adding, ‘nothing to sell makes it hard to keep employees.'”

A furniture retailer told the Boston Fed it had raised prices more than 30% since February 2021 to reflect increased shipping and materials costs.

The San Francisco Fed reported competition for talent and workers’ willingness to switch jobs as driving up wages, with one contact from the banking sector calling it “a wage war.”

Meanwhile, the increase in available workers that many employers expected to see as pandemic unemployment benefits expired and schools came back into session failed to materialize in many districts, the report showed.

(Reporting by Ann Saphir and Lindsay Dunsmuir; Editing by Andrea Ricci)