Money

Fed may soon pause rate hikes as inflation eases

Published

2 years ago

July 13, 2023

ticker NEWS

Inflation in the U.S. eased in the previous month to its slowest pace in over two years, providing relief to Americans who have been grappling with a period of escalating prices

This development also increases the likelihood of the U.S. Federal Reserve refraining from further interest rate hikes, following an anticipated increase scheduled for this month.

According to the U.S. Labor Department, the consumer price index (CPI) rose by 3 percent in June compared to the previous year.

This figure represents a significant drop from the peak inflation rate of 9.1 percent observed in June 2022. Additionally, June’s inflation rate declined from 4 percent in May and was last close to 3 percent in March 2021.

However, it is important to note that inflation still remains above the Federal Reserve’s target of 2 percent.

The Fed has indicated its intention to raise interest rates to a 22-year high during its meeting on July 25-26, citing recent indications of stronger-than-expected economic activity.

The June inflation report is not expected to alter this outcome. At their previous meeting, officials opted to maintain the benchmark federal funds rate within a range of 5 percent to 5.25 percent, marking their first pause after ten consecutive increases since March 2022.

Most officials at the June meeting anticipated two more rate increases within the year.

Core consumer prices, which exclude the volatile food and energy categories, increased by 4.8 percent in June compared to the previous year.

This growth rate represents the slowest pace since October 2021 and a decrease from 5.3 percent in May.

Economists had previously estimated core prices to rise by 5 percent. Notable changes in specific categories included sharp declines in prices for used cars and airline fares, while prices for car insurance and recreation rose.

Rent saw an increase in June but at the slowest monthly pace since early 2022.

The Fed is primarily focused on curbing persistently high core inflation and considers it a better predictor of future inflation than the overall inflation rate.

Core inflation has been driven by rising car prices, strong demand for labour-intensive services, and an earlier surge in housing rental prices.

The market responded positively to the inflation figures, as they affirmed that the Federal Reserve is making progress in its efforts to control high inflation.

Stocks rose, and bond yields fell as a result.

Despite the Fed’s rate increases, the US economy has demonstrated resilience this year, defying predictions of an economic downturn.

Although hiring slowed in June, it remained strong, and unemployment rates remained historically low. The most recent estimate from the Atlanta Fed indicates that US economic output rose at an annual rate of 2.3 percent during the recently concluded second quarter.

Money

Inflation rise reduces chances of Reserve Bank rate cut

Inflation spikes, drastically reducing chances of a Reserve Bank rate cut amid economic pressures and rising costs

Published

5 days ago

October 29, 2025

ticker NEWS

Inflation spikes, drastically reducing chances of a Reserve Bank rate cut amid economic pressures and rising costs

In Short:
– Rate cut likelihood by the Reserve Bank has decreased due to a rise in annual inflation to 3.2 per cent.
– Significant price increases in housing, recreation, and transport are raising concerns for the Reserve Bank.

The likelihood of a rate cut by the Reserve Bank has decreased significantly after a surge in annual inflation.

The Australian Bureau of Statistics reported that inflation for the year ending September rose to 3.2 per cent, reflecting a 1.1 per cent increase.

Trimmed mean inflation, a crucial measure for the Reserve Bank, was recorded at 1 per cent for the quarter and 3 per cent for the year. The bank anticipates inflation to reach 3 per cent by year-end, while trimmed mean inflation is expected to slightly decrease.

The quarterly rise of 1.3 per cent in September exceeded expectations. Governor Bullock noted that a deviation from the Reserve Bank’s projections could have material implications.

Financial markets reacted promptly, with the Australian dollar rising against the US dollar, while the ASX200 index fell.

The most significant price increases were observed in housing, recreation, and transport, indicating widespread price pressures that concern the Reserve Bank.

Despite the unexpected inflation rise, some economists believe the Reserve Bank may still consider rate cuts in December, viewing current price spikes as temporary due to the winding back of subsidies.

Economic Pressures

Broad-based economic pressures suggest that the Reserve Bank may not reduce interest rates at its upcoming meeting. Analysts highlight the need for ongoing support for households facing cost-of-living challenges.

Money

Wall Street hits record highs on low inflation

Wall Street hits record highs on cool inflation and strong earnings ahead of key Federal Reserve interest rate decision

Published

1 week ago

October 26, 2025

Ahron Young

Wall Street hits record highs on cool inflation and strong earnings ahead of key Federal Reserve interest rate decision

In Short:
– U.S. stocks rose to record highs on Friday due to lower inflation and strong corporate earnings.
– Key earnings reports from major companies are expected next week, influencing market trends.

U.S. stocks rose to record highs on Friday due to lower-than-expected inflation data and positive corporate earnings.The S&P 500 and Nasdaq achieved their largest weekly gains since August. The Dow saw its biggest jump from Friday to Friday since June.

The Labor Department reported that the Consumer Price Index was slightly cooler than analysts’ predictions, easing concerns about inflation impacts from tariffs. This development suggests a likely interest rate cut by the Federal Reserve at its upcoming meeting.

Ryan Detrick from Carson Group noted the positive inflation news may facilitate forthcoming Fed rate cuts. Despite the ongoing government shutdown affecting data releases, this CPI report provided much-needed clarity.

Earnings reports are continuing, with 143 S&P 500 companies having reported results. Growth expectations for third-quarter earnings have risen to 10.4%. Detrick indicated a strong opening to the earnings season with a significant percentage of companies exceeding expectations.

This coming week, key earnings will be reported from Meta Platforms, Microsoft, Alphabet, Amazon, and Apple, alongside industrial companies like Caterpillar and Boeing.

The Dow rose 472.51 points to 47,207.12. The S&P 500 increased by 53.25 points to 6,791.69, while the Nasdaq gained 263.07 points, reaching 23,204.87.

Alphabet gained 2.7% following a deal expansion with Anthropic. Coinbase saw a 9.8% increase from a JPMorgan upgrade. In contrast, Deckers Outdoor’s shares fell 15.2% after lowering sales forecasts.

Market Trends

Advancing stocks on the NYSE outnumbered decliners by 2.18 to 1. The S&P 500 had 34 new highs, with the Nasdaq recording 124.

Trading volume was 19.04 billion shares, lower than the average of the past 20 days.

Money

US stocks face tests from Tesla, Netflix earnings

US markets brace for Tesla and Netflix earnings amid rising volatility and delayed inflation data

Published

2 weeks ago

October 19, 2025

Ahron Young

US markets brace for Tesla and Netflix earnings amid rising volatility and delayed inflation data

In Short:
– Earnings reports from Tesla and Netflix might affect U.S. stock performance next week amid high inflation concerns.
– Increased market volatility arises from U.S.-China trade tensions and fewer S&P 500 stocks in an uptrend.

This coming week, earnings reports from companies including Tesla and Netflix are anticipated to impact U.S. stock performance.

Investors are also awaiting delayed U.S. inflation data, which could test market stability as it remains near record highs.Recent trading activity has shown increased volatility, influenced by ongoing U.S.-China trade tensions and concerns regarding regional bank credit risks. The CBOE volatility index has seen a rise, indicating increased market uncertainty.

The S&P 500 entered its fourth year of growth amidst these fluctuations, having previously experienced a period of calm. Experts suggest market risks are intensifying as valuations reach peak levels.

Market Volatility

Concerns regarding U.S.-China trade relations escalated last week when the U.S. threatened to raise tariffs by November 1 over China’s rare-earth export policies. President Donald Trump is scheduled to meet with President Xi Jinping in two weeks to discuss these issues.

Despite these challenges, major stock indexes gained ground over the week, with the S&P 500 up 13.3% year-to-date. However, a noticeable decline in the number of S&P 500 stocks in an uptrend raises caution among investors about underlying market weaknesses.

The upcoming third-quarter earnings will be closely monitored, especially as the government shutdown halts economic data releases. Companies like Procter & Gamble, Coca-Cola, RTX, and IBM are due to report. The delayed U.S. consumer price index is also expected to provide crucial insights ahead of the Federal Reserve’s monetary policy meeting on October 28-29.