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    Federal Reserve officials saw 'little evidence' late last month that US inflation is easing and predicted it would remain elevated for 'some time', newly released minutes from July's policy meeting show. The minutes released on Wednesday showed policymakers committed to raising rates as high as necessary to bring inflation under control, and acknowledging that they would have accept lower economic growth for that to happen.  Inflation has been running hot and remained near a 40-year high at 8.5 percent in July, despite a rapid series of jumbo interest hikes that have taken the Fed's policy rate from near zero to 2.5 percent. The minutes from the July 26 to 27 policy meeting did not hint at a particular pace of future interest rate increases for future meetings, including the next one scheduled for late September.  Federal Reserve officials saw 'little evidence' late last month that US inflation pressures were easing and predicted it would remain elevated for 'some time' Fed policymakers noted in the minutes that lower growth could 'set the stage' for inflation to gradually fall to...
    A key measure of inflation in the US has risen again, hitting a new four-decade high as Americans continue to grapple with soaring prices.  The personal consumption expenditures (PCE) price index soared 6.8 percent in the 12 months through June, the biggest increase since January 1982 and a jump from May's reading of 6.3 percent. The PCE measure, which is preferred by the Federal Reserve for its flexible 2 percent target rate, is an alternative gauge to the better-known consumer price index, which jumped 9.1 percent in June from a year ago.  Federal Reserve Board Chairman Jerome Powell pauses during a news conference following a meeting of the Federal Open Market Committee (FOMC) on Wednesday The Fed has been raising its benchmark interest rate aggressively to tackle inflation, adding on another supersized 0.75 point rate hike on Wednesday. But the Fed faces tough choices about whether to continue raising rates after new data on Thursday showed the US economy contracted for the second quarter in a row.   Developing story, more to follow. 
    VIDEO2:0502:05Energy crisis: Europe is shooting itself in the foot, says advisory firmStreet Signs Asia Raising interest rates to tame demand — and therefore inflation — is not the right solution, as high prices have been driven mainly by supply chain shocks, one analyst said.  Global manufacturers and suppliers have been unable to produce and deliver goods to consumers efficiently during Covid lockdowns. And more recently, sanctions imposed on Russia have also curtailed supply, mainly of commodities. "Supply is very difficult to manage, we are finding across a whole bunch of industries, a whole bunch of businesses, they're having very different challenges just turning the taps back on," Paul Gambles, managing partner at advisory firm MBMG Group, told CNBC's "Street Signs" on Monday.    Referring to the energy crisis that Europe faces as Russia threatens to cut off gas supplies, he said that "on American independence day, this is sort of a co-dependence day where Europe is absolutely shooting itself in the foot, because so much of this has come about as a result of sanctions." "And the Fed are the first...
    “Natura non facit saltus”—“Nature never leaps.” That was the motto the great Victorian economist Alfred Marshall chose for the frontispiece of his Principles of Economics. Until recently, “the Fed never leaps” might have been our central bank’s motto. With rare exceptions, when it raised interest rates, it did so in baby steps of 25 basis points, or a quarter of one percentage point. But in May the Federal Reserve hiked rates 50 basis points for the first time since 2000, and it just raised them again, by 75 basis points—a move not seen since 1994. Why the big leap? Of course, the immediate cause is inflation, which has done some leaping of its own. After spending most of a decade below the Fed’s two percent target, it shot up last spring, and has been rising ever since. During the last 12 months, the Consumer Price Index rose by a whopping 8.6 percent—something not seen since 1981. Hence the Fed’s own, exceptional move. But pointing to high inflation begs the questions: How did the Fed let it get so high?...
    Federal Reserve Chairman Jerome Powell speaks at a news conference following a Federal Open Market Committee meeting on May 4, 2022 in Washington, DC.Win McNamee | Getty Images The Federal Reserve looks set to raise its benchmark rate again today, and may even hand out the first three-quarter-point hike in 28 years. The central bank is likely to raise its target federal funds rate again to address the worst inflation in about 40 years. It may move fast and raise interest rates by 75 basis points instead of 50 basis points, as was the previous expectation, because inflation has remained high. A basis point is equal to 0.01%. More from Invest in You:Want to give your finances a spring cleaning? First, get organizedHere's what to know about managing your debt in retirementWant to find financial success? Here's how to get started In May, inflation rose 8.6%, more than analysts expected and at the fastest clip since 1981. Yet consumers who are already grappling with higher prices putting a strain on their wallets may be wondering how increasing borrowing costs will...
    Originally published June 12 MINNEAPOLIS (WCCO) — You don’t have to be told about how bad inflation is — you see it for yourself every day. READ MORE: 'We Hate Our Prices Too': St. Anthony Gas Station Shows Empathy Over Surging PricesTake gasoline: it’s $4.75 a gallon in Minnesota and the current national average is $5.01. In an effort to rein in inflation, the Federal Reserve later this week is expected to meet and raise interest rates. But as Esme Murphy tells us in this edition of Talking Points, raising interest rates is a painful remedy for consumers. It’s a gut check at the pump and the grocery store, but even those little luxuries we allow ourselves are also suddenly not so little anymore. According to Nerdwallet, eating out costs 7% more than it did last year, and tickets for movies, theaters and concerts are up nearly 6%. Inflation hasn’t been this bad in 40 years. One of the only possible remedies is a painful one: raising interest rates. And the Federal Reserve is considering raising interest rate again later...
    MINNEAPOLIS (WCCO) — It’s the busy lunchtime hour outside U.S. Bank Stadium where Teng Thao’s food truck business sizzles and sours at the same time. “Even though you make so much, the money you take out is too much to make a living,” Thao told WCCO. “But we have no choice.” READ MORE: Minnesota Fishing Opener: Supplies And Trips To The Lake Will Cost Extra This YearSuch is the predicament of work in an economy blessed by record job growth but plagued by inflation, which at 8.6% is at the highest year-to-year level since 1981, according to a new report released Friday by the U.S. Department of Labor. The jump in the Consumer Price Index, a wide-ranging survey of how much goods and services cost, came most from the spike in costs for food, gasoline and rent. “The meat and the chicken before the pandemic was $45 for 40 pounds,” Thao lamented. “Today it’s $107 — so the price has doubled.” READ MORE: Soaring Prices Impacting Minnesota Families: 'We're Already Struggling'The stock market took a deep dive on Friday after the...
    Former Federal Reserve Chairman Ben Bernanke said that the central bank waited too long in addressing inflation. “The question is why did they delay that? ... Why did they delay their response? I think in retrospect, yes, it was a mistake,” he told CNBC Monday. “And I think they agree it was a mistake.” Consumer prices have risen at an 8.3% pace in the 12 months ending in April, near the fastest in four decades. In order to drive down the inflation, the Fed raised its interest rate target by a quarter of a percentage point in March and half a percentage point this month. SENATE CONFIRMS POWELL FOR SECOND TERM AT FED AMID HIGHEST INFLATION IN 40 YEARS Bernanke, who helmed the Fed from 2006 to 2014, during the worst financial crisis since the Great Depression, said that one of the reasons he thinks the Fed, now led by Chairman Jerome Powell, waited to begin tightening was because Federal Open Market Committee members had concerns about shocking the market. “Jay Powell was on my...
    (CNN)No matter what happens, this is going to hurt. The main problem is inflation. Goods and services are getting much more expensive. US gas prices hit another high on Tuesday -- $4.37 per gallon. Globally, higher food and energy costs could last for years, according to the World Bank.RELATED: The 'everything rally' is now the 'everything sell-off' The recognized cure for inflation is to raise interest rates. This makes it more expensive for companies and people to borrow money and cuts down on how much they're spending. The Federal Reserve did that last week and plans to do it again in the months to come.Which thing will be more painful?Read MoreInflation affects everyone. The people who can least afford it are hurt the most. Read this CNN report written by Alicia Wallace about how inflation is squeezing single parents, more than half of whom make less than $15 per hour, according to Oxfam. Wallace talks to parents skipping meals and racking up debt. Interest rate hikes will hurt too. The entire point of raising rates is to slow down...
    JPMorgan Chase CEO Jamie Dimon said the Federal Reserve should have started raising interest rates sooner in order to tamp down explosive inflation. The billionaire noted some of the positives about the economy during a Wednesday interview, highlighting that jobs are plentiful and wages are going up despite the towering inflation. Dimon said the Fed now has to raise rates and reverse its quantitative easing. “If they can they’re going to try to slow down the economy enough so that 8% starts to come down over time,” Dimon told Bloomberg in reference to consumer prices, which increased by 8.5% for the 12 months ending in March. “I wish them the best, we’re a little late.” After saying the Fed was behind the curve on hiking interest rates, Dimon added that people should “take a deep breath” and give the central bank a chance but that he thinks the sooner the Fed moves to tighten its monetary policy, the better. ANXIOUS FED SET FOR HISTORIC MEASURE TO TRY TO CURB INFLATION The central bank is trying...
    A customer shops at at a grocery store on February 10, 2022 in Miami, Florida. The Labor Department announced that consumer prices jumped 7.5% last month compared with 12 months earlier, the steepest year-over-year increase since February 1982.Joe Raedle | Getty Images That higher interest rates help stamp out inflation is essentially an article of faith, based on long-held economic gospel of supply and demand. But how does it really work? And will it work this time, when bloated prices seem at least partially beyond the reach of conventional monetary policy? It is this dilemma that has Wall Street confused and markets volatile. In normal times, the Federal Reserve is seen as the cavalry coming into quell soaring prices. But this time, the Fed is going to need some help. "Can the Fed bring down inflation on their own? I think the answer is 'no,'" said Jim Baird, chief investment officer at Plante Moran Financial Advisors. "They certainly can help rein in the demand side by higher interest rates. But it's not going to unload container ships, it's not going...
    Welcome to the Glean, MinnPost’s twice-daily roundup of Minnesota news. Minneapolis Fed President Neel Kashkari said he was wrong that the inflation spike in the U.S. was temporary and that he now supports raising interest rates. A doctor formerly employed by M-Health Fairview says a supervisor told her not to report an allegation made to her by a patient who claimed to have been sexually assaulted by one of the doctor’s male colleagues to the Minnesota Medical Board, and that she was retaliated against and eventually fired because she did file the report. Drivers in Minneapolis killed 11 pedestrians in 2021, the highest number killed since 1998. A man walking in St. Paul Thursday night suffered life-threatening injuries after being struck by the driver of a silver BMW. The Flaten Museum at St. Olaf is displaying for the first time pieces from its  collection of 147 Nazi propaganda posters and broadsides. A landlord in Minneapolis’ Uptown neighborhood is seeking to evict tenants displaying a Nazi flag. Article continues after advertisement Schwan’s is now Yelloh. Rep. Ilhan Omar is excited about...
    Bloomberg/Bloomberg Fight disinformation. Get a daily recap of the facts that matter. Sign up for the free Mother Jones newsletter.It finally happened: For the first time since 2018, after months of murmurs, the Federal Reserve rose interest rates. As I wrote previously, it has been clear for the past few weeks that the Fed would begin raising rates. For most of the pandemic, the rate has been near zero. Raising rates is a big deal, and it could (likely will!) have material effects on your life. There’s a reason that the Wall Street Journal has it splashed on its website’s homepage in aggressively large font, replacing its ongoing coverage of Russia’s invasion of Ukraine: The idea behind Wednesday’s move is to combat inflation. Prices have risen far above the targets set by the central bank, causing particular strain at (as you may have heard) the gas pump. A traditional view of interest rates is that raising them is monetary policy that helps curb inflation. In the speak of someone who doesn’t droll over stock returns, this means the Federal Reserve is raising interest...
    Hass avocados are displayed in the produce section at a United Market on Feb. 7, 2022 in San Anselmo, California.Justin Sullivan | Getty Images The Federal Reserve is set to hike interest rates this year for the first time since 2018 to address the worst inflation in 40 years spurred by the coronavirus pandemic. Consumers already hit with higher prices might be wondering how it will help cool off rising costs. In January, the consumer price index surged 7.5% on the year, more than economists expected and the fastest gain since February 1982. It also marked the fourth month in a row of record price increases. More from Invest in You:If you are quitting a job, here are some options for health insuranceHere are the top jobs in the U.S. — and how to land themThis company just decided to give employees a 4-day week permanently "This is something really hard for the typical consumer to understand, seeing these fast price raises that are so unfamiliar to large parts of our population who haven't seen inflation rates like this before,"...
    Share this: The Federal Reserve on Jan. 26, 2022, signaled plans to begin raising interest rates “soon” – possibly in March – in a bid to tamp down inflation before it poses a serious risk to the U.S. economy. A separate report released the next day showed the economy grew 6.9% in the fourth quarter of 2021. An interest rate hike would be the first time the central bank has increased its benchmark lending rate in over three years. Lifting the borrowing costs consumers and businesses pay for loans has the effect of slowing economic activity, which in turn could curb inflation. But there are also concerns that it could put on the brakes too quickly. We asked Alexander Kurov, a finance professor at West Virginia University, and Marketa Wolfe, an economist at Skidmore College, to explain what the Fed is doing and what it means for you. 1. Why is the Fed raising interest rates? Short-term interest rates in the U.S. are now essentially zero.
    WASHINGTON -- America's inflation spikes have prompted the Federal Reserve to pick up the pace in normalizing its pandemic-era monetary policy.On Wednesday, the central bank said it will wrap up its stimulus program faster than originally announced, and its updated economic projections show multiple interest rate increases in 2022.The central bank, which first announced in November that it was "tapering" its monthly asset purchases, said Wednesday that it will do so at a quicker pace.Starting in January, the Fed will cut its monthly purchases of Treasury securities by $20 billion and cut its monthly mortage-backed securities buys by $10 billion. That leaves the purchases at $40 billion for Treasury securities and $20 billion for mortgage-backed securities each month.That's consistent with what Federal Reserve Chairman Jerome Powell told Congress in late November.EMBED More News Videos Prices for U.S. consumers jumped 6.8% in November compared with a year earlier as surging costs for food, energy, housing and other items left Americans enduring their highest annual inflation rate since 1982. At this pace, the Fed is another two meetings away from completing the...
    The Federal Reserve will begin slowing its massive monthly purchases of government bonds after months of economic uncertainty stemming from the COVID-19 pandemic, a first step toward raising its interest rate target. The central bank announced on Wednesday that it will start reducing its monthly purchases of $120 billion in Treasury bonds and mortgage-backed securities. The news came after a highly anticipated two-day meeting of the Fed's monetary policy committee. Some economists had hoped that the Fed would have already begun scaling back its ultra-loose monetary policies — which includes holding interest rates at near zero — because of stubbornly high inflation. Fed Chairman Jerome Powell has consistently said that the bond-purchasing would not ease until “substantial further progress” has been made on meeting the central bank’s employment and inflation targets. The Fed’s goal of sustained 2% inflation has already been met, although its goal of reaching full employment before raising interest rates is still not likely to occur soon. Wednesday’s news that the bank’s historic asset-purchasing program is being wound down does show that the Fed...
    Bill Ackman, founder and CEO of Pershing Square Capital Management.Adam Jeffery | CNBC Billionaire hedge fund manager Bill Ackman called Friday for the Federal Reserve to begin reining in the support it has provided for the U.S. economy during the pandemic. In separate tweets, the head of Pershing Square Holdings, with $13.1 billion under management, said the central bank should start turning off the monetary juice right away. He teed up his position by saying he met last week with officials at the Fed's New York branch, which houses the trading desk that carries out the wishes of officials regarding interest rates and the monthly asset purchase program. "The bottom line: we think the Fed should taper immediately and begin raising rates as soon as possible," he said. "We are continuing to dance while the music is playing," he added, "and it is time to turn down the music and settle down." The statements come just a few days before the Federal Open Market Committee is set to begin its two-day policy meeting Tuesday. For Ackman, insisting on the...
    By Howard Schneider WASHINGTON, March 25 (.) – The U.S. economy could head for several years of growth above trend as families spend perhaps $ 2 trillion on excess savings from the pandemic, the president of the US said. Richmond Federal Reserve, who noted that inflation will be high for a while. But Tom Barkin, in an interview with . late Wednesday, did not elaborate on how that robust outlook will influence the Fed’s policies on interest rates or bond purchases, assuring that it would only make and discuss those decisions as data shows that the economy meets or does not meet the objectives of the central bank. Investors and journalists may be interested in where you placed your “point,” or your estimated target interest rate, in the set of projections issued by Fed officials last week, but Barkin, a voting member of the Committee Federal Open Market this year, he said it distracts from the central bank’s intention to allow results, not forecasts, to boost monetary policy. “I don’t think it matters. I think what matters is the results...
    Feds: COVID-19 vaccine will begin moving 24 hours after the first one is approved McDonalds Travis Scott Meal proves to be popular, leading to shortages and upcoming change Fed sees interest rates near zero until end of 2023, sets new economic conditions to be met before raising rates THE FED © AFP/Getty Images Federal Reserve Chairman Jerome Powell will holds a press conference later Wednesday. The Federal Reserve on Wednesday said it doesn’t expect to raise rates until the end of 2023 at the earliest and it set out new economic conditions that must be met before it will raise them. Load Error In a statement, the Fed said it decided to keep its policy interest rate at near zero and expects this will be appropriate until two things happen: labor market conditions return to the “maximum employment” and inflation has risen to 2% and “is on track to moderately exceed 2% for some time.” Greg McBride, chief financial analyst at Bankrate.com, said this language means investors should “get used to the low rates because they are...
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