Inflation

The Federal Open Market Committee is widely expected to keep rates unchanged, but all eyes will be on Federal Reserve Chair Jerome Powell's commentary about the economic impacts of the Iran war and its longer-term impact on inflation.

New research sheds light on the real causes of bank failures; and the economic numbers aren't adding up to a recession, yet.

Chief economists at large and regional banks predicted ongoing inflation, in part because of the anticipated surge in oil prices as a result of the Iran war. The forecast from the American Bankers Association's Economic Advisory Committee did not account for the disappointing U.S. jobs report on Friday.

Treasury Secretary Scott Bessent said in a public appearance in Dallas Friday that the administration will seek alternative means of enacting the White House's tariff agenda after the Supreme Court struck down the tariffs as outside the bounds of the law.

The path of US interest rates remains in focus following the slower-than-expected US inflation print as traders fully price a Fed cut in July.

The Bureau of Labor Statistics released its January Consumer Price Index Friday, showing that inflation rose 0.2%, while the annual rate eased to 2.4% after holding at 2.7% for several months. The data reduces the likelihood that the Federal Reserve will cut interest rates in the near future. 

Federal Reserve Vice Chair Philip Jefferson said in a speech Friday that long-term productivity gains brought on by artificial intelligence could compel the central bank to maintain higher rates to keep prices stable.

Federal Reserve Gov. Lisa Cook said in a speech Wednesday night that the central bank's credibility depends on its ability to bring inflation back to its 2% target.

The Bureau of Labor Statistics Thursday indicated that the Core Consumer Price Index indicated that inflation rose by only 2.7% in November versus a year ago, a pace that is the slowest rate of price increases since 2021.

A survey compiled by the American Financial Services Association showed deteriorating business conditions during the third quarter of this year. The outlook for subprime borrowers was particularly grim.

Treasury Secretary Scott Bessent said the Federal Reserve Board should reject the renomination of any regional Federal Reserve Bank presidents who have not lived in their districts for three years, signaling a potential confrontation when reappointments come before the board in February.

The Bureau of Labor Statistics released its latest Consumer Price Index reading Friday morning, showing inflation rose by 0.3% in September, slightly below August's pace. The report also found core inflation steady at 3.0%, even as shelter costs eased and gasoline prices spiked.

Federal Reserve Vice Chair Philip Jefferson said Friday that the economic outlook is uncertain and that he was adopting a cautious approach to gauging whether slowing growth and a softening labor market outweigh inflation pressures from tariffs.

Personal income, which rose $95.7B in August, was overtaken by consumer spending, which jumped $129.2B, pushing the saving rate to 4.6% amid steady inflation and higher wages.

The American Bankers Association's Economic Advisory Committee expects the economy to grow, albeit at a slower pace than it previously anticipated. The group pointed to stubbornly high inflation and a weakening job market.

Federal Reserve Governor Stephan Miran floated the idea of conducting monetary policy with an eye toward the neutral rate and suggested that the president's immigration and fiscal policies will exert downward pressure on inflation.

Federal Reserve Board member Lisa Cook said artificial intelligence will be transformative, but cautioned government officials not to assume that gain in AI technology will offset inflationary pressure elsewhere arising in the economy.

The Bureau of Labor Statistics said the consumer price index rose to 0.3% in June to an annualized rate of 2.7%, making the case to cut interest rates more difficult for the Federal Reserve to justify at its next meeting later this month.

In a joint letter signed by over 50 bank trade groups, leaders in the banking industry urged regulators to revise bank regulatory thresholds upward to keep up with inflation.

The Federal Reserve's preferred measure of inflation moved further from its 2% target, underscoring the central bank's reluctance to cut rates.