+34
The data suggests Warsh should announce a rate hike this week. But will he dare face the wrath of Donald Trump?
The data suggests Warsh should announce a rate hike this week. But will he dare face the wrath of Donald Trump? Kevin Warsh, chairman of the US Federal Reserve, is due to annouce the latest decision on interest rates on Wednesday.
Photographer: Al Drago/Bloombergchairman faces what on paper looks to be a fairly straightforward decision on whether to increase interest rates this week. In practice it will be anything but.with a rate rise on Wednesday. Core inflation, which strips out volatile items like energy and food, rose more than had been expected in August compared to a month earlier. That is a sign that inflation is beginning to weave its way into the wider economy.
Meanwhile, 10 days ago the US non-farm payrolls report – essentially the nation’s jobs report – showed the US economy added 162,000 jobs in August. That was far ahead of expectations, showing the strength of the underlying economy. It’s an oversimplification to say the Fed would only look at those two data points, but they would suggest that a rate hike is necessary to throttle inflation.
They would also suggest that the wider economy is strong enough to tolerate an increase without being forced into contracting for now. Jim Flavin doubles down on resistance to DCC sale ahead of shareholder voteHousing supply won’t increase simply because councils set higher density targets Add in the fact that markets reacted hawkishly to last week’s inflation report and have priced in a rate hike before year end, along with the fact that Warsh has faced a credibility problem since he flubbed his press conference after the Fed’s last interest rate decision in July, and it would seem he almost has to hike this week.
That, though, ignores the fact that US president Donald Trump is publicly calling for a rate cut and made moves to undermine Warsh’s predecessor Jay Powell while also seeking to fire Fed governor Lisa Cook. Does he increase rates and risk the ire of Trump and all that comes with that? Or does he try to hold steady and risk the ire of the market?
The yield on 10-year Treasuries , topped 5 per cent for the first time since 2023 on Monday. That implies traders expect inflation to keep rising. In July, Warsh characterised the Fed as the referee in markets, but in truth it is the key player. Your move, Kevin.
Dublin Airport carbon emissions set to surge after passenger cap removedIrishman in Lapland: ‘I bought a house for €32,000. It’s a magic place to live’My body still thinks I’m pregnant but I’m miscarrying
Kevin-Warsh Federal-Reserve Interest-Rates United-States Donald-Trump European-Central-Bank-Ecb
Ireland Latest News, Ireland Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Surging energy prices set to exert further pressure on GovernmentClamour is becoming louder for a budget that will help families navigate a difficult winter
Read more »
Rangers Beat Celtic 3-0 in League Cup Quarter-Final as Dan Neil Scores TwiceRangers defeated Celtic 3-0 at Ibrox in the Premier Sports Cup quarter-final, with skipper Dan Neil scoring twice and Kevin Kelsy adding another.
Read more »
First Ministers of Northern Ireland, Scotland and Wales to pressure Downing Street for independence referendumsThe First Ministers of Northern Ireland, Scotland and Wales are set to sign a landmark memorandum of understanding in Cardiff, aiming to compel the UK government to hold referendums on independence. Despite opposition from Downing Street and the DUP, the leaders will push for the right of their nations to determine their own futures through democratic means.
Read more »
Premier League Revises VAR Decision Over Erling Haaland's Controversial Manchester Derby GoalThe Premier League's Review Board has opened a probe into the VAR ruling that allowed Erling Haaland's 60th‑minute goal to stand after a post‑review that questioned the defender's off‑side position. Former United stars and analysts weigh in, raising concerns about the use of technology and the importance of on‑field review.
Read more »
Global stocks fall amid surge in oil prices and rising government bond yieldsTechnology stocks under pressure as leaders of top AI companies push for slower pace of development
Read more »