Nov 11, 2019

The most interesting thing this week: U.S. CPI

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Data: Bureau of Economic Analysis, Bureau of Labor Statistics; Chart: Andrew Witherspoon/Axios

While all eyes will be on Fed Chair Jerome Powell's testimony before Congress this week, investors would be wise to keep an eye on the October CPI report for the latest on U.S. inflation.

What's happening: The Fed's favored measure of inflation, core personal consumption expenditures, has consistently fallen short of the central bank's 2% target this year, the BLS' inflation metric — the core consumer price index — has been at or above that number every month this year and solidly above 2% since July.

Why it matters: The Fed's three interest rate cuts this year have buoyed investor enthusiasm for stocks and other risky assets. If inflation begins moving meaningfully higher in the CPI report, the Fed may need to reverse course on those rate cuts to fend off inflation.

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Federal Reserve Chairman Jerome Powell's last word

Jerome Powel before Congress on Nov. 14. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Fed chair Jerome Powell said the Fed’s monetary policy stance is appropriate, for now, though he noted in a speech Monday night the central bank is not on a “preset course.”

Why it matters: It was Powell's final public remarks — and the last opportunity to recalibrate market expectations — before the Fed enters its "quiet period" ahead of the next interest rate decision.

Go deeperArrowNov 26, 2019

The market got the rate cuts it wanted

Data: CME FedWatch Tool; Note: Data as of Nov. 13 at 5:44pm CT; Chart: Andrew Witherspoon/Axios

Fed chair Jerome Powell again laid out his rose-colored view of the U.S. economy on Wednesday, telling the congressional Joint Economic Committee that he sees the U.S. as “being in a good place." He reiterated that a "material reassessment" of the economic outlook would be required for the Fed to raise or cut interest rates any time soon.

Why it matters: Powell's testimony was the cherry on top of the good news sundae that has sent traders' appetite for risk soaring over the last two weeks, and priced out expectations for further U.S. interest rate cuts through the end of next year.

Go deeperArrowNov 14, 2019

College students as the Fed

Pace University won this year’s “National College Fed Challenge” — an annual collegiate competition hosted by the Federal Reserve on Friday.

How it works: Students evaluate the economy and present a monetary policy decision — just like the Fed's rate-setting committee — to a panel of judges who are working Fed officials.

Go deeperArrowNov 25, 2019