Economic news

President Joe Biden, in a speech emphasizing the progress made on the economy during his administration, said he has never called Federal Reserve Chairman Jerome Powell during his time as president.

The move signals the end of the Federal Reserve's battle against runaway inflation in the wake of the COVID-19 pandemic. Fed officials expressed divergent views on further action this year.

Lower inflation doesn't equate to lower prices, and costs of living may still be higher than pre-pandemic, especially rents. But the varying cooldown could help.

Underlying U.S. inflation unexpectedly picked up in August on higher prices for housing and travel, undercutting the chances of an outsize Federal Reserve interest-rate cut next week.

Other estimates suggest nonbank mortgage employment grew in July as the industry cautiously added staff to handle incremental growth in demand for loans.

The Federal Reserve's independence in setting monetary policy is critical to global confidence in U.S. markets and the dollar's status as reserve currency of choice. Making those functions constitutionally separate from the executive branch is the best way to ensure that independence.

The Federal Reserve's preferred measure of inflation held steady at 2.6% for the third month in a row, a positive reading that increases the odds of a September rate cut.

The stock prices of banks that have large exposure to commercial real estate loans surged after comments from Federal Reserve Chair Jerome Powell. His remarks could be a sign that relief is coming on both sides of those banks' balance sheets.

In his speech at the Federal Reserve's Jackson Hole Economic Symposium, the Fed chair said employment losses are now a bigger risk than elevated inflation.

"Fed watchers will be parsing Powell's comments for signs that a 50bp rate cut is on the table for September," noted Lauren Saidel-Baker, an economist with ITR Economics. "However, the notoriously tight-lipped chair is unlikely to confirm this, making a 25bp cut the most likely outcome."