Latest news with #TheFed
Forbes
01-05-2025
- Business
- Forbes
The Fed's Worst Nightmare ‘Just Got Worse' As Bitcoin Surges Toward $100,000 Price
Bitcoin has surged toward $100,000 per bitcoin, soaring this week to levels not seen since before the markets' tariff tantrum (and helped by a predicted $10 trillion Wall Street surprise). Front-run Donald Trump, the White House and Wall Street by subscribing now to Forbes' CryptoAsset & Blockchain Advisor where you can "uncover blockchain blockbusters poised for 1,000% plus gains!" The bitcoin price has added almost 30% since crashing to April lows as fears swirl around the future of the U.S. dollar. Now, after a leak revealed growing establishment 'panic' over U.S. president Donald Trump's plans for bitcoin and crypto, analysts are warning a Federal Reserve 'nightmare' is coming true as data reveals the worst U.S. quarterly economic performance in three years. Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin and crypto market bull run 'The Fed's worst nightmare just got worse,' analysts with the The Kobeissi Letter posted to X. 'The market knows that stagflation has arrived. The Fed is facing the lose-lose situation they thought would never arrive.' The analysts also pointed to the Fed's preferred personal consumption expenditures (PCE) price index data that was unchanged in March after advancing 0.4% in February. "The PCE Price Index is now at its highest reading since July 2024, before the 'Fed pivot' began," Kobeissi analysts wrote. In September, Fed chair Jerome Powell surprised markets with an interest rate cut, kicking off a monetary policy loosening cycle that's been on pause for months. Kobeissi researchers have previously warned of the looming threat of 'stagflation,' referring to a combination of economic stagnation and climbing inflation. 'We have rising inflation with a weakening economy,' they wrote following this week's data drop. 'The Fed is officially in a lose-lose situation.' Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curious The Fed will meet next week to decide whether to change interest rates, with the market currently predicting it will leave rates on hold. However, traders are betting the Fed will begin cutting in June, something that's expected to boost the bitcoin price and risk assets. "For bitcoin, such a scenario is a positive factor, since the easing of monetary policy traditionally leads to an influx of liquidity into risky assets," Tracy Jin, chief operating officer of bitcoin and crypto exchange MEXC, said in emailed comments. Bitcoin's performance in recent months at first disappointed traders as the bitcoin price fell along with stocks in the face of Trump's escalating trade war. However, the bitcoin price has surged back through April, making it one of the years better performing assets so far. 'Since president Trump's Liberation Day announcement, bitcoin has charted its own course, surging past $90,000 and demonstrating remarkable resilience against the headwinds affecting traditional markets," David Hernandez, crypto investment specialist at 21Shares, said via email. 'This outperformance relative to the Nasdaq represents a significant departure from historical patterns. As the impacts of president Trump's tariff policies begin to materialize more fully across the economy, we anticipate bitcoin could further disassociate from equities. The asset shows strong potential to outperform other risk assets as investors seek hedges against policy-driven market volatility.'
Forbes
21-04-2025
- Business
- Forbes
Stagflation Fears Rise: How To Prepare For Inflation & Unemployment
Unemployment combined with inflation is an economic phenomenon known as stagflation. Rising prices ... More and a slowing job market can put extreme pressure on household budgets. When the person in charge of the U.S. money supply predicts rising unemployment and inflation, people listen. Unemployment combined with inflation is an economic phenomenon known as stagflation. It is destructive, challenging to manage and rare. Find out who's concerned about stagflation, what's driving the worry, how you might be affected, and what you can do to prepare. Federal Reserve Chairman Jerome Powell made this prediction at an economic event in Chicago on April 15, according to The Telegraph: "So unemployment is likely to go up as the economy slows in all likelihood and inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public." Powell leads the Federal Reserve, the central bank of the U.S. Known informally as "The Fed," the central bank manages the U.S. monetary policy and regulates banks. The monetary policy has two goals: stable prices and maximum employment. The Fed pursues those goals by adjusting interest rates, buying or selling bonds on the open market and fine-tuning how much cash banks must hold as reserves. When Powell predicted rising unemployment and higher prices—the two components of stagflation—he cited U.S. tariffs as instigating factors. U.S. President Trump has initiated, paused, restarted and raised tariffs since taking office. Tariffs in place when Powell spoke included: Tariffs are taxes imposed on imported goods. Importers pay the taxes when the goods arrive at a U.S. port. Tariffs can have positive and negative effects on an economy. One positive is a potential reduction in foreign competition, which should create jobs in the U.S. But tariffs also raise costs for businesses, encouraging labor cutbacks and higher prices. Higher prices can stifle consumer spending, which slows economic growth. More concerning is that tariffs can prompt other countries to raise taxes on U.S. exports. These retaliatory actions may offset any benefit from the initial tariff. Powell is not the only one predicting Trump's tariffs will raise unemployment and prices. According to Fox Business, an analysis from Goldman Sachs concludes that Trump's tariffs will negatively affect the overall U.S. job market. The Budget Lab at Yale University estimates prices will rise an average of 3% in the short term, with increases up to 87% on shoes and apparel. Stagflation is uncommon. It last hit the U.S. in the 1970s after a cutback in oil production outside the U.S. prompted then-President Nixon to ration fuel. The economy slowed, the labor market shrank and prices rose. In those days, people quantified the declining state of the economy by summing the inflation rate and the unemployment rate, a value called the Misery Index. In 1969, the Misery Index was 8.95. It eclipsed 17 in 1975 and 20 in 1980. By comparison, the Misery Index today is 6.6, with inflation at 2.4% and unemployment at 4.2%. A rising Misery Index could create a range of difficulties, such as: Stagflation is scary in part because it's hard to fix. The remedy for inflation is to slow the economy by raising interest rates. However, a slowing economy usually creates more unemployment. Efforts to stimulate the economy have the opposite trade-off. They may help with jobs but they will encourage higher prices. The Fed tried both strategies in the 1970s, first prioritizing jobs and then working to manage inflation. Attacking inflation with higher interest rates, while accepting the negative impact on employment, proved the better strategy. Still, the recovery was slow. The Misery Index remained above 11 from 1973 to 1984. Solid finances plus valued job skills help you manage rising prices and a tough labor market. Try these strategies: The more time you spend on these strategies, the better results you will see. Ideally, you would keep at it until your job is secure, credit card debt is repaid and you have an ample emergency fund. At that point, you can soften your spending restrictions—just don't abandon them, or you will have to repeat the hard work again in the future. If stagflation doesn't materialize, even better. You'll be financially strong and have the skills to reach your biggest financial goals.
The Guardian
02-04-2025
- Business
- The Guardian
Global investors cautious, gold rises as markets await ‘liberation day' tariff announcement
Show key events only Please turn on JavaScript to use this feature Show key events only Please turn on JavaScript to use this feature Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said that after the US manufacturing data yesterday, The Fed is still expected to deliver its next rate cut in June – and not before – but things could change rapidly depending on how much Trump policies will hit the US economy. Today's tariff announcement could give a fresh direction to global markets, but it would be naive to think that today will mark the end of the tariff shenanigans. More likely, it marks the start of another phase of uncertainty and turmoil. The real risk isn't just the tariffs themselves but the constant threat of escalation, reversals, and retaliation. She added: Good news for investors is that an economic slowdown is not necessarily synonym of market selloff, as the Fed would step in by lowering rates and buying bonds to ensure financial stability. Inflation – on the other hand – is expected to be one-off and hopefully heal itself with economic slowdown. The problem is that the supply-side shocks tend to be inflationary – as we saw during the pandemic times. And the tariffs could disrupt the global supply chains and bring inflation back before giving the Fed time to reach its 2% target. For now, investors show an increased appetite for bonds – and that despite the expectation of a further rise in global debt levels. As such, the US 10-year paper is amassing haven flows – the 10-year yield fell to as low as 4.13% yesterday from around 4.80% peak reached by mid-January. Similarly, the 10-year European government bond yields eased by almost 30bp since their mid-March peak. In equities, the European indices rebounded and the Stoxx 600 recovered by more than 1%. But the futures point at little appetite before the tariff announcement. Share Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. It's world tariff day. Donald Trump is set to announce his latest round of tariffs at 4pm ET (8pm GMT), threatening to unleash a global trade war on what he has dubbed 'liberation day'. Asian stocks were little changed after a choppy session, with Japan's Nikkei ending the day 9 points higher. Hong Kong's Hang Seng dipped by 0.2% and the South Korean Kospi fell by 0.6% while the Chinese markets were unchanged. Earlier on Wall Street, the S&P 500 finished 0.38% higher while the Nasdaq rose by 0.87% and the Dow slipped slightly. Gold is trading 0.2% higher at $3,116.2 an ounce, after hitting a new all-time high of $3,148.8 an ounce yesterday, as investors rush into safe assets. Ben Bennett, Asia-Pacific investment strategist at Legal & General Investment Management, told Reuters: Nervousness is the dominant sentiment right now. Investors are hoping for some clarity… But tariffs are already weighing on business sentiment, and this will probably feed through into lower global economic activity in the coming months. The US president spent Tuesday 'perfecting' the trade plan, according to his press secretary Karoline Leavitt. The plans for further tariffs have rattled investors, company executives and economists, and triggered heated rows with the US's largest trading partners. Among them, Canada's prime minister, Mark Carney, has called the tariffs 'unjustified' and pledged to retaliate, and the European Union has said it has a 'strong plan' to retaliate. According to the Washington Post, Trump plans to impose 20% tariffs on most goods imported to the United States, rather than targeting certain countries or products. This is clearly not good for economies around the world. A new report from Aston Business School has shown that if Trump imposed 25% tariffs, triggering retaliatory action, it could cause a $1.4tn hit to the world economy. Yesterday, survey data showed US manufacturing contracted in March after growing for two consecutive months, while factory gate inflation jumped to the highest level in nearly three years amid mounting anxiety over tariffs on imported goods. The Agenda 12.15pm GMT: US ADP Employment change for March 2pm GMT: US Factory orders for February 8pm GMT: Trump to announce latest US tariffs Share
Yahoo
11-03-2025
- Business
- Yahoo
What is a recession? Here's what to know amid tariff talks, what it could mean for Oklahoma
President Donald Trump declined to say if the United States could see a recession even while the country faces trade wars over tariffs, rising inflation and more. During Fox's 'Sunday Morning Futures' filming about the possibility, Trump said he 'hates to predict things like that.' "There is a period of transition," he told Fox host Maria Bartiromo, "because what we're doing is very big." Following that, Monday's U.S. stocks opened lower as investors considered the risk of a recession, given Trump's inability to clarify. Around 9:05 a.m. CT, the broad S&P fell by 1.79%, the Dow dropped by .85%, and the Nasdaq was lowered by 2.77%, adding to the country's already volatile stock market. Economists with the New York Federal Reserve (The Fed) have a few concerns amid the presidential transition, decisions like layoffs, and tariff battles. Here's what to know about a recession and if America is headed that way soon. In simple terms, a recession is when the economy shrinks. But recessions are not simple things. During recessions, economic activity declines across the board, lasting months to several years. Economic activity, along with the Gross Domestic Product (GDP), employment rates, consumer spending, retail sales and industrial production, is a factor in deciding if a recession is occurring. Related: What jobs are the most protected from a recession? Typically, it is a product of the economy shrinking due to a lack of consumer spending and business investment. What follows is company layoffs, slow hiring, rising unemployment and stalling wage growth. Minor recessions can cost the economy nearly 2 million jobs, according to USA Today reports. Severe recessions can result in up to 4 million jobs lost. Read more: When was the last recession? Here's a list of the most recent economic downturns. Economists have been forecasting a recession for some time now, but as it currently stands, the country is not in one. Economists are not able to predict precise moments when a recession begins; however, it is predicted that a recession could begin sooner than initially believed. Fifty-four percent of economists at companies and trade groups predict the chances of a downturn in the next 12 months is 50% or less. Meanwhile, 44% percent believe there is a "better than even chance of a slump," according to a survey conducted April 4-12 by the National Association of Business Economics. According to the National Bureau of Economic Research, the last U.S. recession occurred during the COVID pandemic in 2020, when millions of Americans lost jobs and large-scale shutdowns took place. It only lasted a matter of months, however. Before that, the last recession felt in the U.S. was the "Great Recession," which occurred between 2007 and 2009. It was the most significant economic downturn since the Great Depression. This article originally appeared on Oklahoman: What is a recession? Tariff talk sparks worry, what to know in Oklahoma
Yahoo
30-01-2025
- Business
- Yahoo
Redfin CEO Glenn Kelman on leading during the LA wildfires: ‘People think you're a saint just for picking up the telephone'
In today's CEO Daily: Alena Botros talks to Redfin CEO Glenn Kelman on leading during the LA wildfires. The big story: The Fed vs Trump. The markets: Moving up. Analyst notes from Apollo, , Goldman Sachs, and Convera. Plus: All the news and watercooler chat from Fortune. Good morning. It's a hard time to be the chief executive of a real estate company. Home prices and rents soared throughout the pandemic, and mortgage rates followed once the Federal Reserve began its quantitative tightening. The pandemic is over and the central bank has begun to loosen its monetary policy, but home prices, rents, and mortgage rates are still high. So the housing world is at a standstill. For the second straight year, existing home sales have fallen to their lowest level in almost three decades. That means not a lot of people are buying or selling homes. On top of it all, wildfires recently tore through Los Angeles decimating neighborhoods and thousands of structures. 'Redfin has been through the wringer,' Glenn Kelman, its chief executive of almost 20 years told me. One of his real estate agents lost her home to the fires, all the while clients are calling her because they are worried about their homes. Not to mention, the wildfires ignited a discussion on the role real estate services companies play in preventing price gouging. It's illegal, but that hasn't stopped some landlords from doing it. So Kelman has a lot going on, more than usual, it seems. But how he handles it when disaster strikes can be telling, and sometimes that means having the emotional conversations. 'People think you're a saint just for picking up the telephone,' he said. 'So I worry that I have to have some novel words of wisdom or comfort, and mostly what I do is, I just call and the other person starts talking, and I listen for a long time, and it does my heart good. It does the other person good.' Those types of conversations sometimes end with the employee asking if the company will stand by them in times of slower home sales, when their incomes take a hit. It might sound like an emotional question, but it's a financial one, Kelman explained. Redfin has decided to do that, but 'it can't be a blank check,' he said. — Alena Botros Contact CEO Daily via Diane Brady, Linkedin. More news below. This story was originally featured on
