Economic news

Federal Reserve Chair Jerome Powell said the central bank would not hesitate to take rates to their lower bound again, despite the challenges that rising rates have posed to banks. Economists and policy experts say other parts of the crisis playbook warrant reconsideration.

The JPMorgan Chase CEO's comments contrast with the consensus view after 5.25 percentage points of hikes that lifted the benchmark rate to 5.5% — the highest level in 22 years. Money markets are pricing in cuts from next year.

In their latest economic forecasts, 12 of 19 Fed officials said they expect to raise rates once more this year. 

The Federal Reserve's rate hikes so far are just "catching up," the JPMorgan chairman and CEO says. Dimon predicts inflation will be at 4% early next year and "won't be coming down for a whole bunch of reasons."

As the United Nations General Assembly convenes in New York to discuss global development, delegates must not overlook the importance of financial services for small businesses in emerging economies.

New-car inventories were rising after years of supply-chain woes. But the stalemate between auto manufacturers and their employees could change that dynamic — and cause knock-on effects for lenders.

Mergers and acquisitions are rebounding and equity capital markets are thawing, says C.S. Venkatakrishnan. That's a welcome forecast after a persistent slump sapped investment banking revenue across the industry. 

Speaking in an interview following the G-20 summit in New Delhi, Treasury Secretary Janet Yellen said she is optimistic that the United States will be able to tame inflation without dipping the economy into recession.

More than half of 526 respondents to a Markets Live Pulse survey said that personal consumption — the most important driver of economic growth — will shrink in early 2024, which would be the first quarterly decline since the onset of the pandemic.

Federal Reserve Chair Jerome Powell said inflation relief from the housing sector is "in the pipeline" but some say strong underlying demand and an inadequate housing supply could disrupt future rate pauses or cuts.

The Federal Reserve has been reducing its liabilities steadily since last March, and those effects are starting to be felt. But how low it should ultimately go — and how long it can stay low — is a tricky question.

The reserve bank formally kicked off its search to replace former President James Bullard, who held a doctorate in economics and was lauded for his communication skills.

In his highly anticipated speech in Jackson Hole, the Federal Reserve chair acknowledged the progress made in cooling down inflation, but said the central bank would not hesitate to raise rates further if needed.

Federal Reserve chair Jerome Powell is expected to tout the economy's brightening prospects while communicating to markets that the central bank's fight against inflation is not yet over in his address at an economic summit in Jackson Hole, Wyo. on Friday.

As consumers' cushion shrinks, they are becoming more dependent on their paychecks to maintain their standard of living. Economists are split on whether wage growth is strong enough to fill the gap.

Key data points have shown price and wage pressures continue to dissipate, which should bolster the case for an end to rate increases, but strong labor-market activity may keep policymakers uneasy.

Tighter credit standards and lower demand for business loans could make it harder for the Fed to achieve the soft landing it's seeking. Still, bankers are cautiously optimistic, noting that some businesses are using their savings to invest at a time when borrowing costs are high.

Community bankers anticipate that interest rates could soon level off and the broader economy may avert a downturn as a result. If that forecast proves true, lenders could minimize credit losses and enjoy stronger loan demand than they had expected earlier in the year.

The central bank might be able to avoid a recession, but must not sacrifice the economic well-being of communities harmed the most by high interest rates.

Moody's said higher funding costs, a potential decline in bank capital and growing risk in the commercial real-estate industry prompted many of the downgrades.