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US Factory Gauge Shows 14th Month of Shrinking Activity
A measure of US factory activity remained stuck in contraction territory for a 14th month at the end of 2023, restrained by weaker orders. The Institute for Supply Management’s manufacturing gauge edged up 0.7 point to 47.4 last month, helped by a pickup in production, according to data released Wednesday. Readings below 50 indicate contraction, and the figure was near economists’ expectations. The December result extends the longest stretch of shrinking activity since 2000-2001, when the dot-com bubble burst and sparked a recession. Manufacturers were beset last year by high borrowing costs and waning demand for ... (full story)
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post: FOMC Minutes: Participants Viewed Policy Rate as Likely 'at or Near Its Peak' FOMC Minutes: All Officials Said Clear Progress Made in 2023 Towards Fed's 2% Inflation Target FOMC Minutes: Officials Judged That GDP Growth Would Cool, Labor Market Rebalancing Would… post: Fed Minutes Say Officials Saw Policy Remaining Restrictive For Some Tome - Officials Acknowledged Projections Show Cuts By End-2024 - Saw Policy Rate Likely At Or Near Peak - Several Said Rate Could Stay At Peak Longer Than AnticipatedMinutes of the Federal Open Market Committee December 12–13, 2023 The manager turned first to a review of developments in financial markets over the intermeeting period. Financial conditions eased, driven by a decline in interest rates, an increase in equity prices, and a depreciation in the dollar. The rise in equity prices was supported by the decline in Treasury yields and by earnings growth that exceeded consensus expectations. Implied volatility for equities diminished notably. The easing in financial conditions reversed some of the tightening that occurred over the summer and much of the fall. Yields on nominal Treasury securities declined sharply over the intermeeting period—more so at longer maturities—after having increased notably during the previous intermeeting period, as investors appeared to interpret incoming data as reducing risks of prolonged inflation pressures. In addition, market participants interpreted communications from FOMC participants as solidifying the view that the Committee's policy rate may be at its peak. Early in the period, the market also reacted to communications from the Treasury Department indicating that issuance of Treasury securities was likely to be more skewed toward shorter-dated maturities than previously expected. Models, on average, suggested that about two-thirds of the decline in longer-term yields on Treasury securities over the period was attributable to a reduction in term premiums and about one-third to a decline in expectations for the policy rate. Pricing of inflation derivatives over the intermeeting period suggested that investors had become more optimistic about the near-term outlook for inflation. The manager turned next to expectations for monetary policy. Respondents to the Open Market Desk's Survey of Primary Dealers and Survey of Market Participants largely converged around the view that the peak level of the federal funds rate for this tightening cycle had been reached. The modal path from the Desk surveys suggested that the first reduction in the policy rate would occur in June, unchanged from the October surveys. The average path for the policy rate implied by market pricing shifted down considerably over the period. Regarding developments in money markets and Desk operations, usage of the overnigh
Federal Reserve officials in December concluded that interest rate cuts are likely in 2024, though they appeared to provide little in the way of when that might occur, according ...
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- Posted: Jan 3, 2024 12:52pm
- Submitted by:Category: Fundamental AnalysisComments: 0 / Views: 2,632
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