US Federal Reserve Chair Jerome Powell has told lawmakers that the US remains a "long way" from achieving low and stable inflation, even after 15 months of the central bank's efforts to cool the economy. Powell said that while inflation had moderated somewhat since last year, it was still too high. He added that the Fed could raise interest rates higher than the current level of just above 5%. Last week, the Fed left interest rates unchanged, but has not declared victory over inflation. Powell said the July meeting would be "live", indicating a rate increase could occur then.
The median price of houses in Perth is expected to exceed $700,000 for the first time next year, according to a forecast report from Domain. Prices are predicted to rise by 1-3% by the end of the 2023-24 financial year, reaching between $704,000 and $718,000. Perth has experienced more stability compared to other capital cities due to affordability and positive migration patterns. Perth unit prices are also expected to grow steadily, but would still be lower than the record high in mid-2014. Population pressures and increased migration are driving housing demand and prices higher.
Australian capital city property markets could reach record high prices by the end of June next year due to strong population growth and a lack of new homes being built, according to a forecast by Domain. The forecast predicts that house prices in Sydney could rise 6% to 9% over the same period, while Melbourne would see subdued growth between 0% and 2% for houses and a fall of 2% to 1% growth in units. The forecast is roughly in line with predictions by major banks, but other economists are more downbeat.
Oil prices held steady in early trade on Thursday, following gains the previous day. Brent futures slipped 0.1% to $77.04 a barrel, while US West Texas Intermediate (WTI) crude futures were down 0.1% at $72.48. The market is weighing an unexpected draw in US crude oil stocks against the prospect of weaker demand after the Federal Reserve chairman hinted at further interest rate hikes. US crude oil inventories fell by about 1.2 million barrels in the week ended 16 June, defying analysts' forecasts for a build of 300,000 barrels.
US President Joe Biden is hosting Indian Prime Minister Narendra Modi for a state visit, including a private dinner at the White House and a gala dinner and address to Congress. The US is seeking to draw India closer, despite Modi's government facing criticism for cracking down on dissent. The events demonstrate that Biden believes he needs India as an ally in the face of confrontations with Russia and China, despite India's resistance to taking a stance on the war in Ukraine and concerns over Modi's undermining of democracy. Meanwhile, Supreme Court Justice Samuel Alito has published an opinion essay in The Wall Street Journal in response to questions about a fishing trip he took in 2008 with billionaire Paul Singer, who later had cases before the Supreme Court. Alito argues that he was not required to disclose the trip or recuse himself from the cases. The justices are facing increasing scrutiny over their ethical obligations to report gifts and recuse themselves from cases involving their benefactors.
Indian shares opened lower on Thursday due to caution following comments from U.S. Federal Reserve Chair Jerome Powell about the possibility of further rate hikes to address inflation. The Nifty index fell 0.07% to 18,844.05, while the Sensex lost 0.10% to 63,459.22.
The Indian rupee is expected to rise against the US dollar despite comments from Federal Reserve Chair Jerome Powell that suggest more interest rate hikes are likely. Non-deliverable forwards indicate the rupee will open at around 81.94-81.98 to the dollar, compared to 82.0375 in the previous session. Other Asian currencies are also expected to rise. Powell's comments come after the Fed's updated dot plot showed a median projection of two additional rate hikes this year.
The US dollar is near a one-month low against a basket of currencies, after Federal Reserve Chair Jerome Powell confirmed further US rate increases are likely. The dollar index is at 102.05, close to its five-week low of 102.00, while the euro has hit a one-month high. Sterling, meanwhile, has reached a one-year high ahead of the Bank of England's interest rate decision.
US Federal Reserve Chairman Jerome Powell's testimony to Congress confirmed that the likelihood of two more interest rate hikes this year has increased. Powell's comments indicate that the Fed remains committed to its hawkish stance on monetary policy, despite concerns about stubbornly high inflation rates. The central banks' inflation targets are arbitrary and there is no scientific basis for them, but Powell has indicated that the Fed is not concerned with the speed at which rates are raised, but rather with the level to which they are raised. The Fed and other major central banks are facing an unconventional inflation cycle that reflects structural changes in the global economy, and there are concerns that excessive tightening of monetary policy could lead to financial stress, distress, and a spike in unemployment. Powell's comments suggest that the Fed is taking a cautious approach to monetary policy and is waiting for more data before making any further rate decisions. However, there are concerns that central banks may get it wrong and either do too much or too little, causing unnecessary damage to their economies.
Investors are sceptical that the Federal Reserve will keep US interest rates at elevated levels for much longer, despite hawkish comments from Fed Chair Jerome Powell. Powell told lawmakers on Wednesday that the central bank may need to raise rates twice more this year to bring inflation down to its 2% target. However, futures markets tied to the Fed’s policy rate reflect bets for only one additional rate increase this year, followed by cuts in January.
Gulf stock markets were mostly subdued on Thursday due to falling oil prices and a hawkish tone on rates from U.S. Federal Reserve Chair Jerome Powell. Powell stated that the Fed's outlook for two more interest rate increases is likely if the economy continues in its current direction. Most Gulf currencies are pegged to the dollar, so any changes in U.S. monetary policy are followed by Saudi Arabia, the United Arab Emirates, and Qatar. The benchmark indexes in Qatar, Dubai, and Saudi Arabia all slipped slightly, while Abu Dhabi's benchmark index made marginal gains. Crude oil prices also dipped on Thursday.
Uh-Oh. More good news that may be bad for your economic health
CBC
23-06-22 08:00
The Canadian economy is continuing to show positive signs, with retail sales rising and the housing market rebounding. However, economists are concerned that these indicators may prompt central bankers to raise interest rates, which could negatively impact consumers. Many economists are predicting another rate hike when the Bank of Canada announces its decision on 12 July. Rising interest rates would result in higher costs for borrowers and could dampen consumer spending. The continued surge in prices, despite rising interest rates, is a global phenomenon, with inflation persisting around the world.
The US Federal Trade Commission (FTC) has accused Amazon of tricking customers into signing up for its Prime service. The FTC said Amazon used “manipulative, coercive or deceptive” design tactics, known as “dark patterns”, on its website to push millions into enrolling, and “knowingly complicated” the cancellation process. The FTS wants the courts to impose a financial penalty on Amazon and to stop it from engaging in these practices. Amazon has denied the claims, calling them “false on the facts and the law” and contending that it makes things “clear and simple for customers to both sign up for or cancel their Prime membership”.
The lawsuit against Amazon is not focused on antitrust law, but legal experts are speculating whether it is the first step by new FTC Chair Lina Khan to take on the tech giant in this regard. Khan, who shot to fame in 2017 with an academic article arguing that Amazon was unfairly dominating the US economy, has been under scrutiny since her appointment and her previous criticism of the company. The FTC’s antitrust bureau has been investigating Amazon’s competitive practices for years.
The FTC is also set to face Microsoft in court over whether the tech giant’s $69bn takeover bid for Activision Blizzard should proceed.
The US House of Representatives has voted to censure Rep. Adam Schiff as punishment for his handling of an Intelligence Committee investigation in 2019 into President Donald Trump’s finances and links to Russia, as well as his role in Trump’s impeachment. Schiff, a California Democrat, is running for the Senate in next year’s election. Five Democrats on the House Ethics Committee opposed the reprimand. Schiff said he would do the same thing again if necessary and that Trump was behind the effort to censure him. Former Speaker of the House of Representatives Nancy Pelosi accused Republicans of wasting time and attempting to curry favour with Trump. Meanwhile, some Republicans in the Senate are nervously watching other GOP House members who are attempting to impeach President Joe Biden and his administration officials.
US stock index futures dipped slightly lower on Thursday, following Federal Reserve Chair Jerome Powell's hawkish stance on interest rate hikes during his testimony to lawmakers on Wednesday. Powell indicated that further rate increases are likely if the economy continues on its current path. However, financial markets are still pricing in a 25-basis-point rate increase in July and no further hikes thereafter. Megacap companies have experienced declines for the third consecutive day, led by Powell's remarks on the Fed's inflation objective. Investors are also keeping an eye on initial jobless claims and housing sales data, as well as comments from three Fed policymakers.
US banks are reportedly seeking to soften a regulatory proposal that would increase bank capital requirements. The US Federal Reserve and other bank regulators are finalising a proposal to implement international capital standards agreed by the Basel Committee on Banking Supervision in the wake of the global financial crisis. Bankers are specifically concerned about an aspect of the draft proposal that would impose higher capital charges on non-interest revenue, such as the fees charged on credit cards or investment banking services.
Federal Reserve Chair Jerome Powell has stated that the central bank will likely raise interest rates at least once more this year due to high inflation in the service sector and a tight job market. Powell noted that although inflation has moderated somewhat since last year, inflation pressures continue to run high. The Fed has aggressively raised its benchmark rate since March 2022 in an effort to slow the economy and reduce inflationary pressure. While rising rates have had a significant impact on the housing market, the effects on business and prices in service industries have been slower to materialize. Powell expressed concern that the tight labor market could put upward pressure on wages and inflation. However, signs of a cooling labor market have emerged, with monthly job openings declining from a record high in March 2022.
Federal Reserve Chair Jerome Powell defended the need for further interest rate increases, despite concerns about the impact on jobs. Powell faced questioning from Senator Sherrod Brown about the potential loss of jobs for minority groups due to the Fed's efforts to control inflation. Powell stated that working families are the most directly affected by inflation, but the Fed still believes it is necessary to raise rates again this year.
Federal Reserve Chair Jerome Powell defended the need for further interest rate increases despite concerns about the impact on jobs. Powell faced questioning from Ohio Senator Sherrod Brown about the potential loss of jobs for minority groups due to the Fed's efforts to control inflation. Powell responded by stating that working families are the ones who suffer most directly and quickly from inflation. He also mentioned that the Fed believes it will be appropriate to raise rates again this year, possibly twice, if the economy performs as expected.
U.S. Federal Reserve Governor Michelle Bowman believes that "additional policy rate increases" will be necessary to control inflation, which has remained stubbornly high since late last year. While she supported the decision to hold rates steady at the recent Fed meeting, Bowman indicated that she is among the majority of officials who see the central bank approving at least two more quarter-point rate hikes in 2023. However, there are differences of opinion among central bankers, with some arguing for more rate increases and others calling for further study of the data before making a decision. The Fed's preferred measure of inflation is currently more than double its 2% target.
