The U.S. economy is slowing, but not crashing. In the dismal science, this is what counts as good news. That’s the message I took away from the latest inflation data, released May 15, 2024, which showed U.S. consumer prices rising 3.4% in the 12 months to April 2024. This is down slightly from the 3.5% […]
With the economy looking bright enough, the Federal Reserve seems content to play the waiting game
If there’s one thing you can say about Fed policymakers, it’s that they don’t make decisions on a whim. When the Federal Open Market Committee met on Jan. 31, 2024, it held interest rates steady – as most observers expected. That marks six months since the Fed last changed the base rate. And people should […]
As we ring in 2024, can the US economy continue to avoid a recession?
With economic forecasters rewriting their 2024 outlooks following recent moves from the Federal Reserve, The Conversation turned to two financial economists to share their thoughts on the upcoming year. D. Brian Blank and Brandy Hadley are professors who study finance, firm financial decisions and the economy. They explain what they’re watching in 2024. 1. At […]
Fed faces twin threats of recession and financial crisis as its inflation fight raises risks of both
There is wide agreement among economists and market observers that the Federal Reserve’s aggressive interest rate hikes will cause economic growth to grind to a halt, leading to a recession. Less talked about is the risk of a financial crisis as the U.S. central bank simultaneously tries to shrink its massive balance sheet. As expected, […]
UK prime minister forced from office amid economic turmoil, chaos in parliament and a party in disarray
The U.K. government is in tatters after Prime Minister Liz Truss resigned on Oct. 20, 2022 – the second leader to be forced out in mere months. It follows an economic mess largely of her own making that resulted in U-turns, a high-profile firing, curious absences and plummeting support. The resignation means that Truss will […]
Fed likely to stay the course on interest rate hike as inflation ticks up but gas prices ease
The Federal Reserve received mixed news in the latest data on U.S. inflation as it mulls another rate hike. Consumer prices rose 8.3% in August from a year earlier, data released on Sept. 13, 2022, shows. While this pace is down from the 8.5% annual gain experienced in July, it’s still higher than what some […]
the pros and cons of borrowing abroad versus at home
A government which decides to borrow – either because it has programmed a budget deficit or needs to refinance maturing debts – faces two, non-mutually exclusive possibilities: borrow domestically in the local currency or borrow externally in a foreign currency. Developed countries borrow predominantly at home and in their currencies. This is because they have […]
Fed rate hikes, recession fears and political backlash leave ESG investors at a crossroads
The Federal Reserve raised interest rates again on May 3, 2023, by a quarter point, making it the Fed’s 10th rate hike since March 2022 in an ongoing fight to tame inflation. These rate hikes have been reverberating through the economy, raising prospects of a recession amid heightened concerns about the fragile state of banks. […]
A hawkish Fed signals further rate hikes and sees a slowing economy – but not recession
The U.S. Federal Reserve hiked its benchmark interest rate by a further three-quarters of a percentage point on July 27, 2022. The jump was expected by most economists, although some had thought the central bank would go further in its attempts to put the brakes on soaring inflation and impose a full point increase. The […]
Rural Americans aren’t included in inflation figures – and for them, the cost of living may be rising faster
When the Federal Reserve convenes at the end of January 2023 to set interest rates, it will be guided by one key bit of data: the U.S. inflation rate. The problem is, that stat ignores a sizable chunk of the country – rural America. Currently sitting at 6.5%, the rate of inflation is still high, […]