22-07-2022, 04:08 AM
22-07-2022, 04:14 AM
As Fed Tightens, Economists Worry It Will Go Too Far
Economists see nearly 50-50 recession probability in latest WSJ survey
Fed Chairman Jerome Powell says the central bank wants to raise interest rates just enough to lower inflation, but not enough to tip the U.S. economy into a recession.
PHOTO: ELIZABETH FRANTZ/REUTERS
By Gwynn GuilfordFollow
and Anthony DeBarrosFollow
July 17, 2022 9:00 am ET
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Economists increasingly expect the Federal Reserve, in its efforts to push down inflation, to raise rates enough to trigger a recession, with many worrying the central bank will go too far.
Economists surveyed by The Wall Street Journal now put the chance of a recession sometime in the next 12 months at 49% in July, on average, up from 44% a month ago and just 18% in January.
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Some 46% of economists said they expect the Fed to raise interest rates excessively and cause unnecessary economic weakness. Slightly fewer, 42%, said they anticipated the Fed increasing rates about the right amount to balance inflation and growth. Around 12.3% thought it would raise rates too little.
“Fiscal and monetary policy was left too loose for too long and now the Fed is playing catch-up and this always comes with a chance of overshoot,” said James Knightley, chief international economist at ING, who currently puts the risk of recession in the next 12 months at 50%.
WHAT’S NEWS
The Wall Street Journal Whats News
U.S. Jobs Data Paint Unclear Picture
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Inflation in June reached a fresh 40-year high of 9.1%. Historically, getting inflation down from such high levels to 2%, the Fed’s target, would require higher unemployment and a recession. The Fed is hoping this time will be different.
“The big question is: will inflation slow by enough that the Fed doesn’t have to tighten so much that it tips the economy into a recession,” said David Berson, the chief economist of Nationwide Insurance. “We’re sort of on a knife’s edge there. The inflation numbers haven’t really improved although there are signs that perhaps it will slow.”
Respondents cut their growth forecasts for 2022, projecting inflation-adjusted gross domestic product to rise 0.7% in the fourth quarter of this year from a year earlier. That’s down from 1.3% projected in June and 3.6% nine months ago.
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However, even economists who expect a recession anticipate a relatively moderate one, based on the average forecast across a range of indicators.
“It’s a mild recession, not a repeat of the 2008 recession,” said Susan M. Sterne, economist at Economic Analysis Associates Inc.
“It’s a unique kind of downturn because it’s partially the Covid bounceback that’s created some of the excess” in jobs and inventories relative to more normal times, she said.
SHARE YOUR THOUGHTS
How concerned are you about a recession this year? Join the conversation below.
About 40% of economists said they expect a recession lasting six months or more. The average recession since 1950 has been 10.3 months, according to the National Bureau of Economic Research.
Economists’ labor market forecasts suggest that if there’s a recession, it will be relatively mild. Overall, the economists see an average monthly increase in payrolls of about 130,000 over the next four quarters. Around 30.9% expect the economy to shed jobs during at least one of the quarters from now until September 2023. However, even that more pessimistic group, on average, expects a mean gain of 9,500 jobs each month, on average, from July 2022 through September 2023. Economists tend to underestimate job loss ahead of a recession.
The main driver of economic weakness is Fed tightening. In June, the central bank raised its benchmark federal-funds rate target 0.75 percentage point, the biggest increase since 1994, bringing the range to 1.5% to 1.75%. The median of economists surveyed expects that range to hit 3.25% to 3.5% by the end of the year, about the same as what the Fed projected in June. That’s to deal with inflation, which economists see easing slightly to a 6.8% annual rate by December, on average, as measured by the consumer-price index.
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From the Archives
Why the Fed Raises Interest Rates to Deal With Inflation
Why the Fed Raises Interest Rates to Deal With Inflation
Why the Fed Raises Interest Rates to Deal With Inflation
Play video: Why the Fed Raises Interest Rates to Deal With Inflation
The Federal Reserve's main tool for managing the economy is to change the federal-funds rate, which can affect not only borrowing costs for consumers but also shape broader decisions by companies like how many people to hire. WSJ explains how the Fed manipulates this one rate to guide the entire economy. Illustration: Jacob Reynolds
There are hints that higher rates are already starting to bite. In addition to falling home sales, the two-year Treasury yield has risen above the 10-year Treasury yield, what economists call a yield-curve inversion. Yield-curve inversions signal that investors expect higher interest rates in the short run to lead to declining economic activity and future rate cuts—and historically have preceded recessions by 12 to 18 months. However, Mr. Berson cautions that downturns occur only after other short-term rates (such as the federal-funds rate) also rise above longer-term rates, and that hasn’t occurred yet.
“If we get tightening through the end of the year, as the Fed currently expects, and perhaps more than the market expects, there’s a very good chance we’ll see what I would say would be a true yield curve inversion,” he said. “If that happens, there’s a good chance the economy falls into recession the second half of next year.”
Economists see nearly 50-50 recession probability in latest WSJ survey
Fed Chairman Jerome Powell says the central bank wants to raise interest rates just enough to lower inflation, but not enough to tip the U.S. economy into a recession.
PHOTO: ELIZABETH FRANTZ/REUTERS
By Gwynn GuilfordFollow
and Anthony DeBarrosFollow
July 17, 2022 9:00 am ET
SAVE
TEXT
158
Economists increasingly expect the Federal Reserve, in its efforts to push down inflation, to raise rates enough to trigger a recession, with many worrying the central bank will go too far.
Economists surveyed by The Wall Street Journal now put the chance of a recession sometime in the next 12 months at 49% in July, on average, up from 44% a month ago and just 18% in January.
RECESSION
2006
'10
'15
'20
0
10
20
30
40
50
60
70
80
90
100
%
Some 46% of economists said they expect the Fed to raise interest rates excessively and cause unnecessary economic weakness. Slightly fewer, 42%, said they anticipated the Fed increasing rates about the right amount to balance inflation and growth. Around 12.3% thought it would raise rates too little.
“Fiscal and monetary policy was left too loose for too long and now the Fed is playing catch-up and this always comes with a chance of overshoot,” said James Knightley, chief international economist at ING, who currently puts the risk of recession in the next 12 months at 50%.
WHAT’S NEWS
The Wall Street Journal Whats News
U.S. Jobs Data Paint Unclear Picture
SUBSCRIBE
Inflation in June reached a fresh 40-year high of 9.1%. Historically, getting inflation down from such high levels to 2%, the Fed’s target, would require higher unemployment and a recession. The Fed is hoping this time will be different.
“The big question is: will inflation slow by enough that the Fed doesn’t have to tighten so much that it tips the economy into a recession,” said David Berson, the chief economist of Nationwide Insurance. “We’re sort of on a knife’s edge there. The inflation numbers haven’t really improved although there are signs that perhaps it will slow.”
Respondents cut their growth forecasts for 2022, projecting inflation-adjusted gross domestic product to rise 0.7% in the fourth quarter of this year from a year earlier. That’s down from 1.3% projected in June and 3.6% nine months ago.
Jan '22 forecast
Apr '22 forecast
June '22 forecast
July '22 forecast
2022
'23
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
%
However, even economists who expect a recession anticipate a relatively moderate one, based on the average forecast across a range of indicators.
“It’s a mild recession, not a repeat of the 2008 recession,” said Susan M. Sterne, economist at Economic Analysis Associates Inc.
“It’s a unique kind of downturn because it’s partially the Covid bounceback that’s created some of the excess” in jobs and inventories relative to more normal times, she said.
SHARE YOUR THOUGHTS
How concerned are you about a recession this year? Join the conversation below.
About 40% of economists said they expect a recession lasting six months or more. The average recession since 1950 has been 10.3 months, according to the National Bureau of Economic Research.
Economists’ labor market forecasts suggest that if there’s a recession, it will be relatively mild. Overall, the economists see an average monthly increase in payrolls of about 130,000 over the next four quarters. Around 30.9% expect the economy to shed jobs during at least one of the quarters from now until September 2023. However, even that more pessimistic group, on average, expects a mean gain of 9,500 jobs each month, on average, from July 2022 through September 2023. Economists tend to underestimate job loss ahead of a recession.
The main driver of economic weakness is Fed tightening. In June, the central bank raised its benchmark federal-funds rate target 0.75 percentage point, the biggest increase since 1994, bringing the range to 1.5% to 1.75%. The median of economists surveyed expects that range to hit 3.25% to 3.5% by the end of the year, about the same as what the Fed projected in June. That’s to deal with inflation, which economists see easing slightly to a 6.8% annual rate by December, on average, as measured by the consumer-price index.
Advertisement - Scroll to Continue
From the Archives
Why the Fed Raises Interest Rates to Deal With Inflation
Why the Fed Raises Interest Rates to Deal With Inflation
Why the Fed Raises Interest Rates to Deal With Inflation
Play video: Why the Fed Raises Interest Rates to Deal With Inflation
The Federal Reserve's main tool for managing the economy is to change the federal-funds rate, which can affect not only borrowing costs for consumers but also shape broader decisions by companies like how many people to hire. WSJ explains how the Fed manipulates this one rate to guide the entire economy. Illustration: Jacob Reynolds
There are hints that higher rates are already starting to bite. In addition to falling home sales, the two-year Treasury yield has risen above the 10-year Treasury yield, what economists call a yield-curve inversion. Yield-curve inversions signal that investors expect higher interest rates in the short run to lead to declining economic activity and future rate cuts—and historically have preceded recessions by 12 to 18 months. However, Mr. Berson cautions that downturns occur only after other short-term rates (such as the federal-funds rate) also rise above longer-term rates, and that hasn’t occurred yet.
“If we get tightening through the end of the year, as the Fed currently expects, and perhaps more than the market expects, there’s a very good chance we’ll see what I would say would be a true yield curve inversion,” he said. “If that happens, there’s a good chance the economy falls into recession the second half of next year.”
22-07-2022, 04:18 AM
22-07-2022, 04:22 AM
Europe's inflation very much depend on how the rate moves
USD/EUR - US Dollar Euro
Real-time FX
0.9786
-0.0036(-0.37%)
USD/EUR - US Dollar Euro
Real-time FX
0.9786
-0.0036(-0.37%)
22-07-2022, 04:24 AM
how connected sg with australia depends on how the arte moves in this one year period
SGD/AUD - Singapore Dollar Australian Dollar
Real-time FX
1.0386
-0.0031(-0.30%)
SGD/AUD - Singapore Dollar Australian Dollar
Real-time FX
1.0386
-0.0031(-0.30%)
22-07-2022, 09:57 AM
sg investors see how much FED' powell will continue to hike rates agressively when the likely of us recession is on the card
https://www.economist.com/leaders/2022/0...OMEALw_wcB&gclsrc=aw.ds
https://www.economist.com/leaders/2022/0...OMEALw_wcB&gclsrc=aw.ds
22-07-2022, 09:59 AM
Elon musk already sell off his bitcoin holdings few days ago
https://markets.businessinsider.com/news...omy-2022-7
https://www.youtube.com/watch?v=F2ai8R4VasU
https://markets.businessinsider.com/news...omy-2022-7
https://www.youtube.com/watch?v=F2ai8R4VasU
22-07-2022, 10:02 AM
musk is a good in indicator of how US's stock market is faring right now
https://www.barrons.com/articles/twitter...1651087619
https://www.barrons.com/articles/twitter...1651087619
22-07-2022, 10:06 AM
genting sg's coming earning 2022
THE easing of Covid-19 restrictions in Singapore has helped to accelerate the recovery at Marina Bay Sands (MBS), a bright spot in Las Vegas Sands’ financials for the second quarter ended Jun 30.
The world’s largest casino company on Wednesday (Jul 20) reported total adjusted property Ebitda (earnings before interest, taxes, depreciation and amortisation) of US$209 million, down from US$244 million in the prior year.
This was driven mainly by contributions from MBS with an adjusted property Ebitda of US$319 million – nearly tripling from US$112 million the previous year – as the bulk of the group’s Macau casinos remained in the red.
https://www.businesstimes.com.sg/compani...ings-in-q2
THE easing of Covid-19 restrictions in Singapore has helped to accelerate the recovery at Marina Bay Sands (MBS), a bright spot in Las Vegas Sands’ financials for the second quarter ended Jun 30.
The world’s largest casino company on Wednesday (Jul 20) reported total adjusted property Ebitda (earnings before interest, taxes, depreciation and amortisation) of US$209 million, down from US$244 million in the prior year.
This was driven mainly by contributions from MBS with an adjusted property Ebitda of US$319 million – nearly tripling from US$112 million the previous year – as the bulk of the group’s Macau casinos remained in the red.
https://www.businesstimes.com.sg/compani...ings-in-q2
22-07-2022, 10:16 AM
22-07-2022, 10:26 AM
https://naijaonpoint.com.ng/blackstone-r...-slowdown/
https://www.bloomberg.com/opinion/articl...#xj4y7vzkg
from now till the market's recession in US there is no need to panic for investors investors investing in small market like the sgx blue chip
https://www.bloomberg.com/opinion/articl...#xj4y7vzkg
from now till the market's recession in US there is no need to panic for investors investors investing in small market like the sgx blue chip
22-07-2022, 10:30 AM
johor will be the star performance of the whole malaysia once the link is completed
https://www.straitstimes.com/asia/se-asi...an-ibrahim
https://www.straitstimes.com/asia/se-asi...an-ibrahim
25-07-2022, 10:24 AM
funds are coming in to buy up the three local bank shares when
Inverted Singapore bond yield curve adds to expectations for higher mortgage rates
Singapore Savings Bonds priced off the daily average yields of government bonds, but unlikely to track any yield curve inversions
MON, JUL 25, 2022 - 5:50 AM
https://www.businesstimes.com.sg/banking...gage-rates
Inverted Singapore bond yield curve adds to expectations for higher mortgage rates
Singapore Savings Bonds priced off the daily average yields of government bonds, but unlikely to track any yield curve inversions
MON, JUL 25, 2022 - 5:50 AM
https://www.businesstimes.com.sg/banking...gage-rates
25-07-2022, 10:30 AM
how aggressive can FED powell be when
https://www.cato.org/blog/federal-spendi...-1790-2050
and how the rate hike will affect old man joe 's vote in the coming days
https://www.cato.org/blog/federal-spendi...-1790-2050
and how the rate hike will affect old man joe 's vote in the coming days
25-07-2022, 10:32 AM
https://fred.stlouisfed.org/series/FYGFGDQ188S
understanding the bahaviour of FED and its us government in charge
https://www.theatlantic.com/business/arc...rt/265185/
understanding the bahaviour of FED and its us government in charge
https://www.theatlantic.com/business/arc...rt/265185/
25-07-2022, 10:35 AM
https://www.pgpf.org/chart-archive/0025_...-debt-hist
and our dear sg inverted sg debt curve
https://www.businesstimes.com.sg/banking...gage-rates
and our dear sg inverted sg debt curve
https://www.businesstimes.com.sg/banking...gage-rates
25-07-2022, 10:39 AM
On Jul 20, the yield on 10-year Singapore Government Securities (SGS) closed at 2.78 per cent — below the 2-year SGS yield of 2.84 per cent.
Yields on the 2-year bond have been higher than yields on the 5-year bond since. singapore tightening of its monetarty policy on the 14 of July 2022, a day after US 's inflation rate hit its 40 year high
Yields on the 2-year bond have been higher than yields on the 5-year bond since. singapore tightening of its monetarty policy on the 14 of July 2022, a day after US 's inflation rate hit its 40 year high
25-07-2022, 10:42 AM
how the aggressive US's rate hike after july 14 2022 changed this situation in US and the world
https://www.pgpf.org/analysis/2019/06/cb...tial-risks
https://www.pgpf.org/analysis/2019/06/cb...tial-risks
25-07-2022, 10:47 AM
if FED continue to rate hike in US, the inverse relationship will get more inverse
Historically, an inverse relationship between the yields of 2-year and 10-year US Treasuries has been a reasonably accurate predictor of a recession.
Historically, an inverse relationship between the yields of 2-year and 10-year US Treasuries has been a reasonably accurate predictor of a recession.
25-07-2022, 10:51 AM
25-07-2022, 11:27 AM
since 1965 into 2050
living in small island in singapore we learned to live with
https://advisor.visualcapitalist.com/psy...ket-cycle/
https://www.youtube.com/watch?v=xguam0TKMw8
living in small island in singapore we learned to live with
https://advisor.visualcapitalist.com/psy...ket-cycle/
https://www.youtube.com/watch?v=xguam0TKMw8
25-07-2022, 11:31 AM
the Empire strikes back soon
https://www.youtube.com/watch?v=JYOBSGr1kIM
https://www.youtube.com/watch?v=JYOBSGr1kIM
25-07-2022, 11:32 AM
under nixon era US's default on its us debt obilgation
25-07-2022, 03:36 PM
https://www.bloomberg.com/news/articles/...cpc_search&utm_campaign=NB_ACQ_DSAXX_DSATESTTCPAXX_EVG_XXXX_XXX_COALL_EN_EN_X_BLOM_GO_SE_XXX_XXXXXXXXXX&gclid=Cj0KCQjw_viWBhD8ARIsAH1mCd61UsuPsq98OiOqHwTgWMBu4FzwxTWANO18hs37kjqhndRb-3DhDg4aArR2EALw_wcB&gclsrc=aw.ds
https://www.youtube.com/watch?v=wSDDjQYwoNw
https://www.youtube.com/watch?v=wSDDjQYwoNw
25-07-2022, 03:41 PM
25-07-2022, 03:43 PM
good to kill this speculation earlier
https://www.washingtonpost.com/business/...on-crypto/
https://www.youtube.com/watch?v=xfiNclQuxus
https://www.washingtonpost.com/business/...on-crypto/
https://www.youtube.com/watch?v=xfiNclQuxus
25-07-2022, 03:47 PM
25-07-2022, 03:52 PM
25-07-2022, 10:35 PM
26-07-2022, 10:33 AM
target $12 by end 2022
https://sg.finance.yahoo.com/news/decent...22346.html
https://sg.finance.yahoo.com/news/decent...22346.html