Tag: Federal Reserve System

The Economy Faces Big Risks in 2019. Markets Are Only Now Facing Up to Them.

ImageTraders outside the New York Stock Exchange this week. Worries about the economy’s future are finally starting to affect stock prices, even though the economy remains strong.CreditMary Altaffer/Associated Press After another week of exceptional volatility on Wall Street that has pummeled stock portfolios, there are two closely related questions worth asking. First, why is this […]

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Fed Minutes Signal December Interest Rate Increase

WASHINGTON — The Federal Reserve is poised to raise interest rates at its next policymaking session in mid-December, according to minutes of the central bank’s last meeting in early November published on Thursday. The account said “almost all” Fed officials also expected to continue raising the benchmark rate next year. President Trump has warned repeatedly […]

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Bond Market Signals Weakening Case for Interest Rate Increases

Before stock investors decided that the Federal Reserve chairman was flagging the end of interest rate increases, the bond market was signaling the case for raising rates had weakened. A measure of investors’ expectation for inflation over the next five years has fallen in recent weeks. The difference between the yields on five-year Treasury inflation-protected […]

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Speech by Fed Chief Jerome Powell Causes Markets to Jump

Stocks rose Wednesday afternoon after investors took comments by the Federal Reserve chairman to mean that the central bank could be closer than expected to ending its current push to lift interest rates. But investors, who have worried that rising interest rates could dampen economic growth, may be reading too much into the comments by […]

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For the American Economy, Storm Clouds on the Horizon

WASHINGTON — Emerging signs of weakness in major economic sectors, including auto manufacturing, agriculture and home building, are prompting some forecasters to warn that one of the longest periods of economic growth in American history may be approaching the end of its run. The economy has been a picture of health, expanding at a 3.5 […]

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DealBook: Paul Volcker, at 91, Sees ‘a Hell of a Mess in Every Direction’

Paul Volcker, wearing a blue sweatsuit and black dress socks, stretched out on a recliner in the den of his Upper East Side apartment on a Sunday afternoon. His lanky 6-foot-7 frame extended beyond the end of the chair’s leg rest. He added an ottoman to rest his feet. “I’m not good,” said Mr. Volcker, […]

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Fed Plans to Continue Raising Rates, Despite Trump’s Ire

WASHINGTON — The Federal Reserve’s official account of its latest policy meeting, published Wednesday, does not mention any discussion of President Trump’s demands that the Fed should stop raising interest rates. But it makes clear that Mr. Trump’s economic policies are very much on the Fed’s mind. The strength of economic growth, thanks in part […]

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Asian Markets Offer Hope for End to Global Stock Sell-Off

HONG KONG — Investors in Asia appeared to take a pause on Friday, after another day of selling swept Wall Street. Markets were mixed after a dramatic day of heavy selling on Thursday. The muted opening suggested the possibility that investors might set aside their worries, at least for a day. Futures markets that track […]

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Interest Rates Are Rising. That’s Great News for Most.

The cost to borrow money is on the rise. That is bad news for home buyers and other prospective borrowers. It helped cause a stock market sell-off on Wednesday, and prompted President Trump to say that the Federal Reserve has “gone crazy.” But it amounts to good news for the long-term direction of the economy. […]

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The Most Important Least-Noticed Economic Event of the Decade

Sometimes the most important economic events announce themselves with huge front-page headlines, stock market collapses and frantic intervention by government officials. Other times, a hard-to-explain confluence of forces has enormous economic implications, yet comes and goes without most people even being aware of it. In 2015 and 2016, the United States experienced the second type […]

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Fed Raises Rates for Third Time in 2018

WASHINGTON — The Federal Reserve, as expected, raised its benchmark interest rate by one quarter of a percentage point on Wednesday, and indicated it plans to raise rates again in December. The Fed repeatedly described economic conditions as “strong” in a statement following a two-day meeting of its Federal Open Market Committee, which sets monetary […]

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What to Watch From the Fed: An Interest Rate Increase and the Path Forward

WASHINGTON — Wednesday is Fed Day, meaning the Federal Reserve’s Open Market Committee, which sets monetary policy, will issue a policy statement at 2 p.m., following a two-day meeting. ■ Investors expect the Fed to increase its benchmark interest rate to a range of 2 percent to 2.25 percent, its third increase in 2018. ■ […]

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One Reason for Slow Wage Growth? More Benefits

The White House Council of Economic Advisers argued this month that the economic performance, and the benefits for workers, should be judged by the growth of total compensation rather than wages. Even using the White House measure, there is no sign of an acceleration in compensation since President Trump took office, but Michelle Meyer, an […]

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As Debt Rises, the Government Will Soon Spend More on Interest Than on the Military

Advertisement Tax cuts, spending increases and higher interest rates could make it harder to respond to future recessions and deal with other needs. ImageInterest payments on the federal debt could surpass the Defense Department budget in 2023.CreditCreditJeon Heon-Kyun/EPA, via Shutterstock Sept. 25, 2018 The federal government could soon pay more in interest on its debt […]

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How the Next Downturn Will Surprise Us

After the fall of Lehman Brothers 10 years ago, there was a public debate about how the leading American banks had grown “too big to fail.” But that debate overlooked the larger story, about how the global markets where stocks, bonds and other financial assets are traded had grown worrisomely large. By the eve of […]

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What Do We Actually Know About the Economy? (Wonkish)

The bottom line: the past decade has been a vindication, not a refutation, of good old-fashioned macro. Which brings me to the flip side: microeconomics is not as great as advertised. The dirty little secret of microeconomics I spent much of my academic, pre-public intellectual career straddling two surprisingly distinct economics sub-fields. To normal human […]

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She Dropped Out of High School. Now She’s President of the San Francisco Fed.

WASHINGTON — The Federal Reserve Bank of San Francisco has installed Mary C. Daly, a labor economist who currently serves as the head of research, as the institution’s new president beginning Oct. 1. Ms. Daly, 55, will succeed John C. Williams, who became president of the Federal Reserve Bank of New York this year. She […]

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Is This a Mid-1990s Moment for the Economy? Three Reasons for Optimism

A painful recession was fading into memory, yet the expansion felt unsatisfying to many. There was evidence of huge technological leaps everywhere except in the data on worker productivity. And the unemployment rate was falling to levels that forecasting models predicted would trigger a burst of inflation. That was the economic situation in the mid-1990s, […]

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What We Need to Fight the Next Financial Crisis

Ten years ago, the global economy teetered in the face of a classic financial panic, the most dangerous type of financial crisis. In a financial panic, investors lose confidence in all forms of credit, retreating to the safest and most liquid assets, like Treasury bills. The prices of risky assets collapse, and new credit becomes […]

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Inviting the Next Financial Crisis

As a few big companies with relatively few employees amass greater market power and profits, less is left over for workers, according to a 2017 working paper by economists from M.I.T., Harvard and the University of Zurich. As a candidate, Donald Trump spoke about getting tough on Wall Street, fighting corporate consolidation and looking out […]

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