Tag: Fed

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S&P erases gains for year as stocks plunge 2% on Fed, growth concerns

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Evelyn Cheng | @chengevelyn
12 Hours AgoCNBC.com

U.S. stocks closed near session lows on Thursday, off more than 2 percent, as investors weighed continued uncertainty about the timing of a rate hike and concerns about global growth headed by slowing in China.

The S&P 500 and Dow Jones industrial average both had their worst day since Feb. 3, 2014. ( Tweet This )

“I think the markets are overly pessimistic,” said Anthony Valeri, investment strategist at LPL Financial. “I think this sentiment is panicking over news from China, the Fed (and) oil at six-year lows.”

Weakening in emerging market currencies on the heels of China’s yuan devaluation last week added to worries of broad economic slowdown.

“I think the oil and the geopolitical problems are the real problems for the market because we’re looking at lower global economic growth, and lower global growth is going to weigh on the U.S. as well,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

The S&P 500 fell into the red for 2015 and closed down 1.1 percent for the year. Consumer discretionary led all 10 sectors lower with a decline of 2.8 percent for its worst daily performance since June 1, 2012. Energy is the greatest laggard for the year so far, down more than 18 percent.

https://www.cnbc.com/2015/08/20/us-stocks-open-lower-as-oil-slide-growth-concerns-weigh.html

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Fed holds off on interest rate hike, downgrades economic forecast

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By JIM PUZZANGHER

Federal Reserve policymakers on Wednesday kept the central bank’s benchmark short-term interest rate near zero, opting against the first increase since 2006 after determining the economy still isn’t strong enough to handle it.

Fed officials sharply downgraded their economic forecast for this year. They projected the economy would grow between 1.8% and 2% this year, well below the range of 2.3% to 2.7% in its last forecast in March.

If they’re correct, annual growth would be the worst since 2011 and would be far from the breakout performance some economists had hoped for this year.

In a statement after its two-day policymaking meeting, Fed officials said the economy “has been expanding moderately” after having improved little during the first quarter.

While the housing market “has shown some improvement,” central bank policymakers said exports and investments by businesses have been soft.

Central bank policymakers were less optimistic about improvements in the unemployment rate than they were three months ago, though they noted that the pace of job gains had improved.

https://www.latimes.com/business/la-fi-federal-reserve-interest-rate-20150617-story.html

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US Growth Forecast Chopped to Zero

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By Paul Ausick April 3, 2015 8:40 am EDT

The Federal Reserve Bank of Atlanta has reported that its forecast for U.S. gross domestic product (GDP) growth dropped to zero on April 1 and ticked back up to 0.1% on April 2. The bank uses a unique model called GDPNow to prepare its forecasts, and the model typically estimates growth well below the rate projected by the Bureau of Economic Analysis (BEA).

The GDPNow model aggregates the same 13 subcomponents used by BEA to construct its estimate, but when a data point is not available, the model uses “bridge equations” to fill the gap. Other forecasters use similar “nowcast” techniques, but the Atlanta Fed notes that other forecasts are not updated more than once a month or once a quarter. Also, they are not publicly available and do not include forecasts of the subcomponents that add color to the top-line number. The GDPNow model fills those voids.

On February 2, the GDPNow model forecast GDP growth of 1.9%. At that time the change in net exports was forecast to be down $15 billion. By March 12, that total had dropped to a $40 billion negative change. Nonresidential construction spending was initially forecast to drop by 1.5% and is now forecast to be down 22.5%.

Read more: US Growth Forecast Chopped to Zero – 24/7 Wall St. https://247wallst.com/economy/2015/04/03/us-growth-forecast-chopped-to-zero/#ixzz3WHNOSVjr

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Fed whistleblower quits Wall Street, weighs book

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Fed whistleblower quits Wall Street, weighs book
By Kevin Dugan
March 20, 2015 | 11:53am

Carmen Segarra, the Wall Street whistleblower who secretly recorded 46 hours of private conversations with her fellow regulators — casting a light on the sometimes too cozy relationship between the New York Fed and the banks it oversees — is considering writing a book, The Post has learned.

Segarra, a lawyer, left her job at Barclays in New York earlier this month after Federal Reserve Chair Janet Yellen, in a March 3 speech, appeared to refer to Segarra’s rocky relationship with her then-Fed colleagues.

“It is important that anyone serving the Fed feel safe speaking up when they have concerns,“ Yellen said in her speech in New York City before the Citizens Budget Commission.

“It’s been an ongoing drain [for Segarra],” a person familiar with Segarra told The Post, talking about the publicity following her going public with her New York Fed issues.

Segarra does not yet have a book deal or even an agent, according to one person familiar with her plans.

Segarra’s 2011-2012 tapes were made public in September when WBEZ’s “This American Life” aired a report on regulators at the Federal Reserve Bank of New York shrinking before bankers at Goldman Sachs over a “legal, but shady” deal.

https://nypost.com/2015/03/20/fed-whistleblower-quits-wall-street-weighs-book/

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Fed orders Bank of America to revise dividend, buyback plans

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bank-of-america_theridgewoodblog.net_

Fed orders Bank of America to revise dividend, buyback plans

MARCH 11, 2015    LAST UPDATED: WEDNESDAY, MARCH 11, 2015, 4:38 PM
THE ASSOCIATED PRESS |
WIRE SERVICE

WASHINGTON – The Federal Reserve is ordering Bank of America to revise its plans for increasing dividends or buying back stock, saying there are gaps in its risk planning.

The Fed announced the decision Wednesday as part of its “stress tests” – an annual check-up of the nation’s biggest financial institutions. This year, 31 banks were tested to determine if they have large enough capital buffers to keep lending through another financial crisis and severe economic downturn.

https://www.northjersey.com/news/business/fed-orders-bank-of-america-to-revise-dividend-buyback-plans-1.1286746

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The year of dollar danger for the world

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The year of dollar danger for the world

We are entering a new financial order where there is no longer an automatic “Fed Put” or a “Poliburo Put” to act as a safety net for asset markets

By Ambrose Evans-Pritchard, International Business Editor

12:00PM GMT 01 Jan 2015

America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015.

Tightening by the US Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity.

Yields on 2-year US Treasuries have surged from 0.31pc to 0.74pc since October, and this is the driver of currency markets.

Since the New Year ritual of predictions is a time to throw darts, here we go: the dollar will hit $1.08 against the euro before 2015 is out, and 100 on the dollar index (DXY).

Sterling will buckle to $1.30 as a hung Parliament prompts global funds to ask why they are lending so freely to a country with a current account deficit reaching 6pc of GDP.

https://www.telegraph.co.uk/finance/economics/11312671/The-year-of-dollar-danger-for-the-world.html

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‘Plunge protection’ behind market’s sudden recovery

Janet Yellen

‘Plunge protection’ behind market’s sudden recovery

By John Crudele

October 20, 2014 | 11:08pm

Mysterious forces were trying their best, but they couldn’t keep the stock market from swooning Wednesday.

They failed in the morning, despite massive purchases of stock index futures contracts. Within minutes of the market’s opening, the Dow Jones industrial average was down 350 points. Later in the day — after a lot of shocking ebb and flow — the Dow bottomed out with a decline of 460 points.

It was only in the last hour of trading that the market saviors managed to trim the Dow loss to just 173 points. And they succeeded only after Janet Yellen’s private, upbeat remarks about the economy were leaked.

Welcome to a new kind of stock market — one that the average investor should refuse to be invested in.

Anyone whose investments tightly track the major indices is now losing money since the beginning of 2014. The Dow is down 1.1 percent on the year, with the S&P and Nasdaq up 3 percent for 2014.

https://nypost.com/2014/10/20/plunge-protection-behind-markets-sudden-recovery/