Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
Powell to Set Stage for Slowing Fed Rate Hikes Amid Hawkish Tone (November 27, Bloomberg) Chair Jerome Powell is expected to this week cement expectations that the Federal Reserve will slow its pace of interest-rates increases next month, while reminding Americans that its fight against inflation will run into 2023.
Turmoil Grips China Markets as Covid Protests Cloud Reopening (November 27, Bloomberg) A sense of uncertainty swept through Chinese markets on Monday as growing protests against Covid curbs and a record number of infections complicated the nation’s path to reopening.
“Collapse” in home prices is coming, experts say (November 28, Axios) The residential real estate market has screeched to a halt, and some economists believe home prices are about to drop significantly.
Bottom line: Some decline in home prices is likely in the offing. It won’t be a disaster. And lower prices will be welcomed by frustrated, would-be buyers.
Global Yield Curve Inverts in Signal a Recession Is Brewing (November 28, Bloomberg) Global bonds joined US peers in signaling a recession, with a gauge measuring the worldwide yield curve inverting for the first time in at least two decades.
The inversion of the yield curve is typically seen to herald a recession, as investors switch money to longer-term bonds due to pessimism over the economic outlook.
Congressional Leaders Say They Will Act to Prevent Rail Strike (November 29, New York Times) Democratic and Republican leaders in Congress vowed on Tuesday to pass legislation averting a nationwide rail strike, saying they agree with President Biden that a work stoppage just days before Christmas would disrupt shipping and deal a devastating blow to the nation’s economy.
Private hiring increased by just 127,000 jobs in November, well below estimate, ADP reports (November 30, CNBC) Private hiring slowed sharply during November in a sign that the historically tight labor market could be losing some steam, according to a report Wednesday from payroll processing firm ADP.
Companies added just 127,000 positions for the month, a steep reduction from the 239,000 the firm reported for October and well below the Dow Jones estimate for 190,000. It also was the lowest total since January.
Stock Traders Cheer Powell’s Risk-Friendly Shift (November 30, Bloomberg) Stocks rallied across the board as Jerome Powell signaled a slowdown in the pace of tightening as early as December, while indicating more hikes to fight inflation.
Amid all the optimism, the S&P 500 hit a two-month high, notching the longest monthly winning streak since August 2021. The gauge also breached its 200-day moving average: a threshold seen by some analysts as heralding more gains.
Key inflation measure that the Fed follows rose 0.2% in October, less than expected (December 1, CNBC) Inflation rose in October about in line with estimates, sending a sign that price increases at least might be stabilizing, the Commerce Department reported Thursday.
The core personal consumption expenditures price index, a gauge that excludes food and energy and is favored by the Federal Reserve, rose 0.2% for the month and was up 5% from a year ago. The monthly increase was below the 0.3% Dow Jones estimate, while the annual gain was in line.
U.S. adds 263,000 jobs in November and wages rise sharply — far too much for the Fed’s liking (December 2, Marketwatch) The U.S. created a robust 263,000 new jobs in November, a historically strong pace of hiring that’s good for workers but that also threatens to prolong a bout of high U.S. inflation.
The Fed is expected to keep raising interest rates — and push the economy closer to recession — until hiring slows, labor shortages ease and wage growth wanes.
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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.