Fed Meeting Highlights Economic
News with a Cut in InterestRatesTeedUp
InadequateProtectionof Drivers'Data
The central bank will almost certainly lower interest rates when it concludes its meeting on Wednesday. But there is still uncertainty over how big the cut will be. The Federal Reserve is almost certain to cut interest rates on Wednesday. The only mystery is how much it will cut.
After it started to raise interest rates in March of 2022, the Fed followed with 10 more rate hikes, ending in July 2023. By then, the Fed’s main interest rate was 5% higher than when it began.
The results were dramatic, though for some time economists and policymakers were mystified that more damage had not been done to the economy. But mortgage rates reached a peak of around 8%, while credit card rates rose, and consumer and business loans also soared. Yields on the 10-year Treasury hit a peak of 5% last year.
Inflation, cresting at 9% in June of 2022, began to abate and then continued on a more even downward trend, hitting 2.5% in August. That is not quite to the level of the Fed’s 2% annual target, but it is low enough for Chairman Jerome Powell and colleagues to turn to their other concern – a slowing labor market.
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S&P 500 jumps to record ahead of key Fed decision on interest rates
The S&P 500 hit a record high Tuesday as the market awaited the Federal Reserve’s key interest rate cut decision.
The broad market index was last up 0.3% at 5,650, after earlier touching a new record high of 5,670.81. The Nasdaq Composite gained 0.6%, and the Dow Jones Industrial Average advanced 75 points, or 0.2%. The 30-stock Dow also reached a fresh alltime high.
The S&P 500′s move to an all-time high comes during a historically tough period for the market. September has been the worst month for the benchmark over the last 10 years, averaging a 1.3% monthly loss, according to FactSet data.
Traders also overcame late-summer headwinds stemming from concerns over the health of the U.S. economy. Disappointing jobs and manufacturing data in August sparked a large one-day sell-off. However, equities were able to rebound thanks to more constructive data releases and expectations of the Fed lowering rates.
Source:
https://www.cnbc.com/2024/09/16/stock-market-today-live-updates.html
Photo: US News
Photo: CNCB
Justice Department files $100 million lawsuit against owner of ship that rammed into Baltimore'sKeyBridge
The Justice Department on Wednesday filed a lawsuit against the owner and operator of the container ship that rammed into the Francis Scott Key Bridge in March, seeking $100 million in damages for the structure's collapse, which killed six construction workers and led to massive economic losses.
On a call with reporters, Justice Department officials said the Singapore-based companies, Grace Ocean Private Limited and Synergy Marine Private Limited, were "well-aware" of issues on the ship, the Dali, that could cause power outages prior to the accident. The massive vesselstruck one of the bridge's columns in the early morning hours of March 26 after it lost power, causing a section of the structure to collapse into the water.
"The civil claims filed today alleges that the collision was caused by a series of catastrophic failures on board the Dali in the minutes before impact, all as a consequence of the alleged negligence," U.S. Attorney Erek Barron for the District of Maryland said on the call.
Justice Department officials said the U.S. government spent more than $100 million to respond to the disaster and reopen the Port of Baltimore. The state of Maryland, the officials said, may seek damages for rebuilding the bridge.
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Mortgageratesdrop
to lowest
since early February 2023 after Fed’s jumbo interest rate cut
Mortgage rates continued to decline this week, taking a little more pressure off America’s tight housing market as the Federal Reserve ramps up its efforts to keep the economy on an even keel.
The standard, 30-year fixed-rate mortgage averaged 6.09% in the week ended September 19, Freddie Mac said Thursday, down from last week’s 6.20% and substantially below a two-decade peak of 7.79% seen last fall. It’s the lowest level since early February 2023.
The latest news on mortgage rates is an encouraging sign for buyers on the sidelines waiting for housing affordability to improve.
A separate report from the National Association of Realtors released Thursday showed that sales of previously owned homes in the United States fell sharply in August, despite mortgage rates plummeting that month. But with mortgage rates continuing a downward trend, much more housing demand will likely be unleashed onto the market after the Federal Reserve finally cut interest rates this week for the first time in four years and signaled more rate cuts by year’s end.
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Photo: CBS News
Photo: CNN News
The number of Americans filing new applications for unemployment benefits dropped to a four-month low last week, pointing to solid job growth in September and offering confirmation that the economy continued to expand in the third quarter.
The weekly jobless claims report from the Labor Department on Thursday, the timeliest data on the economy's health, also showed jobless rolls shrunk to levels last seen in early June. The U.S. central bank on Wednesday cut interest rates by 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, which Federal Reserve Chair Jerome Powell said was meant to demonstrate policymakers' commitment to sustaining a low unemployment rate.
"These hard numbers confirm the message delivered by Fed Chair Powell yesterday," said Carl Weinberg, chief economist at High Frequency Economics.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 219,000 for the week ended Sept. 14, the lowest level since the middle of May, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.
Source:
https://www.reuters.com/markets/us/us-weekly-jobless-claims-unexpectedly-fall-2024-09-19/
Photo: Reuters