Tag Archives: federal reserve

How to take advantage of rising interest rates | CNN

With the Federal Reserve’s interest rate hike on Wednesday — its fourth since March — consumers again face the question of where to park their savings for the best return and how to minimize their borrowing costs.

In its bid to beat back high inflation, the US central bank hiked its overnight lending rate another 75 basis points to a range of 2.25% to 2.50%. And more rate hikes are anticipated later this year.

“With inflation running north of 9%, we’re not at the finish line and there will be more interest rate increases to come in the months ahead,” said Greg McBride, chief financial analyst at Bankrate.com.

Here are a few ways to situate your money so that you can benefit from rising rates, and protect yourself from their downside.

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Stocks week ahead: How resilient is the US consumer? | CNN

Worries about an economic slowdown are running wild on Wall Street. Despite concerns about inflation, higher interest rates from the Federal Reserve, supply chain issues and geopolitical turmoil due to Russia’s invasion of Ukraine and Covid outbreaks in China, American consumers continue to do what they do best: shop until they drop.

Retail sales rose at a healthy 0.5% clip in March when compared to February and were up 6.9% from March 2021. Economists are expecting that the strong trend for retail lasted into April as well. The government will report retail sales figures for April on Tuesday. Forecasts are calling for a 0.7% jump from March levels.

In other words, experts don’t think negative headlines and recent market turmoil slowed down consumer spending.

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Buckle up: The Fed is about to get tough on inflation | CNN

Last month, the Federal Reserve raised interest rates for the first time since December 2018. Now there are growing expectations that the central bank is about to dramatically step up the size and pace of its rate hikes in order to put a brake on surging consumer prices.

St. Louis Federal Reserve president James Bullard, one of the more hawkish members among the Fed’s regional bank chiefs, reiterated at an event Monday that the Fed needs to “expeditiously” raise rates in order to tamp down inflation. (Inflation hawks typically push for higher rates while so-called doves favor lower rates to stimulate growth.) Bullard suggested the Fed could raise rates by as much as 75 basis points.

Fed chair Jerome Powell has started to sound a lot more hawkish in recent weeks, but he may not want to move as aggressively as Bullard would like. But it’s clear that rates are likely to start climbing a lot higher soon.

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Buckle up: The Fed is about to get tough on inflation | CNN

Last month, the Federal Reserve raised interest rates for the first time since December 2018. Now there are growing expectations that the central bank is about to dramatically step up the size and pace of its rate hikes in order to put a brake on surging consumer prices.

St. Louis Federal Reserve president James Bullard, one of the more hawkish members among the Fed’s regional bank chiefs, reiterated at an event Monday that the Fed needs to “expeditiously” raise rates in order to tamp down inflation. (Inflation hawks typically push for higher rates while so-called doves favor lower rates to stimulate growth.) Bullard suggested the Fed could raise rates by as much as 75 basis points.

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Inflation Hits a 40-Year High–And Businesses Ponder the R-Word | Inc.com

While the cost of capital remains relatively inexpensive and consumers keep their foot on the pedal of the economy, the recent inflationary surge will likely drive the Federal Reserve to act to cool the economy. The big question: Can the Fed apply the brakes without slowing the economy into a recession.

In March, inflation rose 8.5 percent, a 40-year high, according to the latest reading of the Labor Department’s consumer price index, or CPI. Meanwhile, groceries surged 10 percent in March from a year ago, while food overall rose 8.8 percent. Used car prices are more than 35 percent higher than they were a year ago, dropping slightly since January, and nationally a gallon of gas is currently hovering at around $4, up 18.3 percent in March and nearing a record set in 2008.

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Trump says the economy is booming. He’s right — but you don’t feel it | CNN

President Donald Trump touts the economy’s quick recovery as evidence of his administration’s success. He’s not wrong, but it’s not the full picture.

Federal Reserve Chairman Jerome Powell spent all last week testifying about the recovery on Capital Hill. His message: This is a tale of two economies, and one looks much stronger than the other.

On paper, the economy is roaring back even stronger than Powell and many economists expected.: More than 22 million jobs vanished in the spring lockdown, but 10.6 million jobs have since been added back.

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Here’s What the Federal Reserve’s Interest Rate Cut Means for You and Your Savings | Inc.com

The Federal Reserve announced on Wednesday that it would cut interest rates for the first time in a decade.

In an effort to sustain the US economy’s longest expansion on record, the Federal Reserve is cutting interest rates by a quarter-percentage-point, bringing the target range for the federal funds rate to between 2 percent and 2.25 percent.

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US opioid abuse ‘linked to jobs market’ says Fed boss | BBC News

Widespread opioid abuse is tied to a fall in the share of Americans working or looking for work, the head of the US central bank said on Thursday.

Federal Reserve Chair Janet Yellen said she was not sure if it was a cause of the decline or a symptom revealing more longstanding economic problems.

Technological changes and an ageing workforce also contributed, she said.

The Centers for Disease Control (CDC) estimate that prescription drug abuse costs $78.5bn (£61.5bn) annually.

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Final nail in coffin for Federal Reserve, central bank independence | Business Insider

One of the central tenets of the Federal Reserve and most central banks throughout the developed world in the modern era has been their ability to stay above the political fray.

With a few notable — and fairly disastrous — exceptions, the Fed has acted without fear of political retribution from the executive branch, although the chair still has to testify to Congress and the president periodically.

The assumption of independence, however, has come under fire in recent months. After President-elect Donald Trump floated the conspiracy theory that the Fed was intentionally manipulating interest rates to help President Barack Obama and Hillary Clinton, a hostile congressional questioning of Board Chair Janet Yellen in September, and the possibility of Trump packing the Board of Governors with sympathetic members, it no longer is a given that the Fed will be able to maintain its freedom going forward.

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US Factory Production Rebounded in September | ABC News

U.S. manufacturers boosted output modestly last month, led by greater production of construction supplies, autos and petroleum products.

Factory production rose 0.2 percent in September, following a decline of 0.5 percent in the previous month, the Federal Reserve said Monday. The broader industrial production category, which includes mining and utilities, ticked up 0.1 percent.

Even with the gain, manufacturing output has been flat in the past year. Factories have been hit by several headwinds: weak business spending on machinery and other equipment, a strong dollar that has made U.S. goods more expensive overseas, and sharp cutbacks in oil and gas drilling that have lowered demand for pipeline and other supplies.

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