Home » Fed chair Jerome Powell acknowledged that high inflation and economic weakness abroad could hamper his efforts to stave off a recession
Major US Highlights May 13, 2022:
UoM Preliminary estimates of consumer sentiment.
Powell: “Soft landing” is not underFed’s control.
Philadelphia Fed Review: Weak outlook, persistent inflation.
Bond yields are rising.
Elon Musk: Twitter deal put on hold.
US stocks soar.
Terra restarts blockchain.
Let’s look at today’s hot events.
UoM Preliminary estimates of consumer sentiment
Based on data released on Friday, the University of Michigan (UoM) consumer sentiment index for May declined to 59.1 after declining to 64.0 from 65.2 in April, the lowest level since August 2011. According to UoM’s Consumer Expectations Index, Consumer Expectations dropped from 63.0 in April to 56.3, more than expected to fall to 62.5. In addition, the Current Conditions Index dropped from 69.4 to 63.6, a slight increase from 70.5%, the lowest level since March 2009.
Powell: “Soft landing” is not underFed’s control
In his first public statement since winning a second term, Fed chair Jerome Powell acknowledged that high inflation and economic weakness abroad could hamper his efforts to stave off a recession. For weeks, Powell has argued that the Fed’s efforts to raise interest rates are consistent with a “soft landing” for the economy that curbs inflation without triggering a recession.
Philadelphia Fed Review: Weak outlook, persistent inflation
According to a survey by the Federal Reserve Bank of Philadelphia of professional economic forecasters on Friday, Inflation will remain higher than previously projected. In the third quarter, the real GDP is expected to grow by 2.3% y/y, a decrease of 1.9 percentage points from the last survey three months ago. The annual rate is forecast to rise to 2.3% next year and to 2.0% in 2024, a decrease of 0.9% from the last estimate.
Bond yields are rising
A volatile week for Treasuries is causing the yield to try and recover. The 10-year bond yield briefly reached over 3.2% on Monday but fell back. It fell Thursday as falling stocks stimulated buying from investors looking for safe havens, but it recovered early Friday.
Musk announced that his $44 billion acquisition of Twitter is “temporarily on hold” after Twitter said that fewer than 5% of its users are spam or fake accounts. Tesla’s CEO tweeted on Friday that the deal was on hold, pending more details about the Twitter approval.
In an announcement accompanied by a link to a Reuters piece published on May 2, Musk mentioned a filing by Twitter with the US Financial Services Commission. Twitter claimed that fake and spam accounts made up less than 5% of its daily average.
US stocks soar
At the end of a week marred by fears of a worsening economic growth outlook, Wall Street’s main indexes rebounded on Friday as growth stocks led Wall Street main indexes. Twitter, however, fell after Elon Musk suspended his Twitter partnership. Nevertheless, it was a positive start for all 11 major S&P sectors, with technology stocks and consumer discretionary up 2.7% and 3.3%.
Terra restarts blockchain
Terra has restarted its blockchain. Meanwhile, LUNA has reached $0. The token had been suspended on most crypto exchanges after triggering its meltdown.