Pre-sale stock: interest rates will continue to rise. How high will they rise?

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What will the Federal Reserve do at its December meeting? Analysts can speculate whatever they want, but Fed officials They say they will use tough economic data to make their next decision.

This means that major housing, employment and inflation reports are likely to have significant market impacts as investors speculate what they might mean for the future of interest rates.

What is happening: Nobody can move markets like Federal Reserve Chairman Jerome Powell – in just a few words on Wednesday it crushed investor hopes for the interest rate pivot and sent stocks lower. “We have ways to cut it,” Powell said of the current Fed’s lifting system aimed at fighting persistent inflation. “It’s too early, in my opinion, to think or talk about pauses.”

But Powell added an important caveat. Fed It could start to slow the pace of those agonizing spikes as soon as possible in December. “Our decisions will depend on the totality of the incoming data and its implications for the outlook for economic activity and inflation,” Powell said on Wednesday.

So what will the Fed look at between today and Next policy decision on December 14th?

Labor market: The Federal Reserve’s biggest concern is a tight US labor market, and Friday’s jobs report is unlikely to ease any tension.

The government report is expected to show that the economy added 200,000 more jobs in October – down from last month, but still a very strong number as job demand continues to outpace labor supply.

This means more inflation. Companies have to pay higher wages to attract employees and be able to charge more for their goods and services. The Fed will closely monitor hourly wage growth in the report. In September, wages were up 5% from a year ago.

Possible upside: Another jobs report is expected in December before the Federal Reserve meeting. If both reports show a downward trajectory in employment, that may be enough to satisfy Federal Reserve officials, even if the unemployment rate remains historically low.

Inflation data: Expect new data from two major indicators measuring the pace of inflation ahead of the upcoming Federal Reserve meeting.

The Consumer Price Index (CPI) for October, which tracks changes in the prices of a fixed set of goods and services, will be released on November 10.

Core CPI prices, which exclude oil and food, rose 0.6% in September on a monthly basis, matching August’s pace and coming in well above expectations for a 0.4% increase, not a great sign for the Fed. Analysts expect to see another significant increase of 0.5%. in October.

The Fed will also see October data from its preferred measure of inflation, personal consumption expenditures (PCE), on Dec.

Personal consumption expenditures reflect changes in the prices of goods and services purchased by consumers in the United States. The Fed believes that the measure is more accurate than the CPI because it represents a broader range of purchases than a broader range of buyers.

Core personal consumption expenditures rose 5.1% year-over-year in September, above August’s 4.9% rate but below the consensus estimate of 5.2%, per Refinitiv.

Living: The housing market has been hit hard by the Fed’s efforts to fight inflation, one of the first areas in the economy to show signs of slowing.

The 30-year fixed-rate mortgage averaged 6.95% last week, up from 3.09% just one year ago, and higher borrowing costs are driving down demand.

“The housing market was very overheated for the two years following the pandemic with increased demand and lower rates,” Powell said on Wednesday. “We understand that this is where our policies have a very significant impact.”

New and existing home sales figures for October, due on November 18 and 23, will show the continuing impact of this policy before the next meeting.

The US economy remains strong in the face of rising interest rates, but things are falling more quickly across the pond.

Officials warned this week that the UK will face tough economic times and high interest rates until next year.

The Bank of England raised interest rates by three-quarters of a percentage point on Thursday, the largest increase in 33 years, as it tries to combat spiraling inflation.

But the bank also issued a stark warning. She said that economic output is already shrinking and that he expects The recession will continue through the first half of 2024 “as higher energy prices and tighter financial conditions affect spending.”

The two-year recession will be longer than the one that followed the 2008 global financial crisis, although the Bank of England said any drop in GDP heading into 2024 is likely to be relatively small.

Nor does the central bank believe that inflation will begin to decline until next year. Policy makers have warned that this will require further rate hikes in the coming months.

Elon Musk has been busy on Twitter HQ. Aside from tweeting and deleting the conspiracy theory, he has talked about implementing some big changes in the $44 billion acquisition. Here’s what happened so far:

Layoffs begin: Elon Musk began laying off Twitter employees Friday morning, according to a memo sent to employees. The email sent Thursday evening notified employees that they would receive a notification by 12 p.m. ET on Friday informing them of their employment status.

The email added that to “help ensure the safety” of employees and Twitter’s systems, the company’s offices will be temporarily closed and access to all badges will be suspended. ”

Twitter had about 7,500 employees before the Musk acquisition.

Several Twitter employees have already filed a class-action lawsuit alleging that the layoffs violate the federal Worker Retraining Notification Amendment Act.

WARN requires a company with more than 100 employees to provide 60 days’ written notice if it intends to eliminate 50 or more jobs at a “single job location.”

Force uniformity: In less than a week since Musk’s acquisition of Twitter, the company’s C-suite appears to have been removed almost entirely, through a combination of layoffs and resignations.

Twitter’s board of directors also dissolved last week, according to a securities filing.

The company filing states that all former members of Twitter’s board of directors, including recently ousted CEO Parag Agrawal and chairman Brett Taylor, are no longer directors “in accordance with the terms of the merger agreement.” This makes Musk, according to the recording, “the sole director of Twitter.”

Cashing blue checks: On Tuesday, Musk said he plans to charge $8 a month for Twitter’s subscription service, called “Twitter Blue,” with a promise to allow anyone who pays to receive a coveted blue checkmark to verify their account. This is a sharp haircut from his original plan to charge users $19.99 per month to get or keep a verified account.

in tweet, the world’s richest man used an expletive to describe his assessment of “the current Twitter lords and peasants system of who has or doesn’t have a blue checkmark”. He added, “Power to the people! Blue for $8 a month.”

Advertisers paused: Elon Musk wrote an open letter to advertisers just hours before confirming his Twitter takeover, making clear that he did not want the platform to become a “free-for-all.” But this attempt to reassure the advertising industry, which makes up the vast majority of Twitter’s business, doesn’t seem to be working.

General Mills (GIS), Mondelez International (MDLZ), Pfizer (PFE) and Audi (AUDVF) have reportedly joined a growing list of companies that have paused their Twitter advertising in the wake of Musk’s acquisition.

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