Stocks Close Broadly Lower as Powell Signals Faster Tapering by Fed

Wall Street's main indexes closed lower on Tuesday after Federal Reserve Chair Jerome Powell signaled that the U.S. central bank would consider speeding up its withdrawal of bond purchases as inflation risks increase, piling pressure onto a market already nervous about the latest COVID-19 variant.

In a testimony before the Senate Banking Committee, Powell indicated that he no longer considers high inflation as "transitory" and that the Fed would revisit the timeline for scaling back its bond buying program at its next meeting in two weeks. read more

Jerome Powell Says Fed To Discuss Accelerated Tapering of Bond Purchases at Next Policy Meeting

Federal Reserve Chair Jerome Powell on Tuesday said the U.S. central bank likely will discuss speeding up its "taper" of large-scale bond purchases at its next policy meeting, amid a strong economy and expectations that a surge in inflation will persist into the middle of next year.

"At this point the economy is very strong and inflationary pressures are high and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner, and I expect that we will discuss that at our upcoming meeting in a couple of weeks," Powell said in testimony before the U.S. Senate Banking Committee.

Let the Inflation Battle Begin

The Biden Administration had indicated that it would decide on the next Fed Chair by Labor Day. With Thanksgiving this week, the decision was long overdue. On Monday, November 22, President Biden decided to reappoint the sitting Chair for another term.

Paul Tudor Jones Calls Inflation 'Single Biggest Threat' to Financial Markets

Billionaire hedge fund manager​ Paul Tudor Jones believes inflation will not be going away anytime soon, posing a big threat to the US markets and economy. ​ 

During an appearance Wednesday on CNBC’s “Squawk Box,” Tudor Jones said, “I think to me, the number one issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory. It’s probably the single biggest threat to certainly fina...

Breaking the Supply Chain Bottleneck

Since the start of the global pandemic, historically low interest rates and government spending have inhibited saving and encouraged borrowing and spending to lift the economy during the challenging period. The US Federal Reserve and government have pumped far more liquidity into the financial system than during the 2008 global financial crisis. We have seen an increase in inflationary pressures because of the stimulus. Moreover, the pandemic’s unintended consequences have created shortages and supply chain bottlenecks that have only exacerbated rising prices.

Federal Reserve Reviewing Ethics Policies in Wake of Prolific Trading Disclosed by Two Senior Officials

The Federal Reserve is reviewing the ethics policies that govern the financial holdings and activities of its senior officials in the wake of recent disclosures that two regional Fed presidents engaged in extensive trading last year.

Robert Kaplan, president of the Dallas Federal Reserve Bank, in 2020 traded millions of dollars of stock in companies such as Apple, Amazon, and Google, while Eric Rosengren, president of the Boston Fed, traded in stocks and real estate investment trusts, according to financial disclosure forms.

Atlanta Fed President Bostic Says October Would Be 'Reasonable' Time To Begin Tapering Bond Purchases

It would be "reasonable" for the Federal Reserve to trim its bond-buying program beginning in October if strong job gains continue, Atlanta Fed President Raphael Bostic said in the latest call by a U.S. central banker to start tapering the purchases soon and end them fast.

The Fed has been buying $120 billion in U.S. Treasury bonds and mortgage-backed securities each month to stem the economic fallout from the coronavirus pandemic, but is now moving toward reducing the stimulus as the recovery gains momentum.

Minneapolis Fed’s Neel Kashkari Says Delta Variant Could Alter Timeline for Fed’s Tapering Plan

Minneapolis Federal Reserve President Neel Kashkari on Thursday said the highly transmissible Delta variant of the novel coronavirus could throw a "wrinkle" into the labor market recovery and the timeline for a reduction in the Fed's asset-purchase program.

"If we see a very strong labor market this fall, the way I've been expecting, then I think we could say we probably have made 'substantial further progress,'" Kashkari said in a virtual appearance at the Midsize Bank Coalition of America, referring to the bar the Fed set before slowing its $120 billion-a-month in asset purchases.

GDP Grows at 6.5% Annual Rate in Second Quarter, Slower Than Expected

U.S. economic growth solidly in the second quarter as massive government aid and vaccinations against COVID-19 fueled spending on travel-related services.

Gross domestic product increased at a 6.5% annualized rate last quarter, the Commerce Department said on Thursday in its advance estimate of second-quarter GDP. The economy grew at a revised 6.3% rate in the first quarter

Federal Reserve Chair Powell Says Elevated Inflation Will Moderate

Federal Reserve Chair Jerome Powell said Wednesday that inflation, which has been surging as the recovery strengthens, “will likely remain elevated in coming months” before “moderating.”

At the same time, in testimony to the House Financial Services Committee, Powell signaled no imminent change in the Fed’s ultra-low-interest rate policies.