Wirtschaftswoche: The Fed remains on course

As the US Federal Reserve hiked another three-quarters point on Wednesday, the fourth consecutive hike of this magnitude, the central bank sent mixed messages about its path. The policy statement that accompanied the rate decision stressed that officials would soon slow increases. But Fed Chair Jerome H. Powell seemed to be communicating the opposite, telling a news conference that it was “premature to think of a pause” in the Fed’s aggressive campaign to curb inflation. One of those messages appealed to investors more than the other: the policy memo sent stocks on Wall Street briefly higher; They dropped Mr. Powell’s comments. Fed officials have expressed concern that they are doing too little to fight inflation, but they are also aware of the risks of over-expenditure. On Wednesday, Mr Powell acknowledged the window for a so-called soft landing, which would prevent the economy from sliding into recession, had “narrowed”.

Employers added 261,000 jobs in October, further evidence of the resilience of the job market amid the Fed’s efforts to cool the economy. Job growth remains unusually strong, but it’s moderating – taking the market “from white to red,” as one economist put it. The still low unemployment rate rose to 3.7 percent. Fed officials may be looking for clearer signs of a slowdown, but the latest jobs report gives President Biden a hopeful message ahead of the midterm elections as it lends credence to the claim that the country is not yet in a recession. But Republicans could use the same data to tell voters their own opinion that the economy has been weakened under Mr. Biden.

Before Elon Musk took over Twitter, rumors were circulating that he had plans for mass layoffs. The leadership had tried to allay worries about imminent cuts by telling staff there was no confirmation of Mr Musk’s intentions. But now many of those executives are gone, and last week the billionaire began eliminating the site’s 7,500 employees. Employees received the news in an email Friday morning, and while she didn’t detail the number of jobs that would be eliminated, previous internal messages suggested about half of Twitter employees were likely to lose their jobs would. Under the agreement Mr. Musk entered into with the social media service, he is required to maintain employee pay and benefits before becoming an owner, so Mr. Musk may have to pay at least two fired Twitter employees a month, among other things. Regarding the remaining employees, Friday’s email said Mr Musk “looks forward to communicating with everyone soon about his vision for the company.”

According to popular belief, the first midterm elections of a president’s term are a referendum on him and his party. In this election, that means in particular a referendum on the economic management of the Democrats. With inflation hitting a 40-year high, President Biden has touted robust job growth and sought to highlight the bright spots in more worrying economic data. Gas prices — which are disproportionately influencing people’s confidence in the country’s direction — have also fallen in recent weeks, which could give Democrats a boost. But American voters will have many factors to weigh in this week’s election, including the Supreme Court’s decision on abortion, the Jan. 6 hearings, a volatile stock market and rising mortgage rates. At the same time, prior to elections, misinformation about voting machines and ballot boxes is circulating in an attempt to influence how and whether people vote.

source

Leave a Reply

Your email address will not be published. Required fields are marked *