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Fed Governor Bowman says ‘similarly sized’ rate hikes on the table until inflation declines
Federal Reserve Governor Michelle Bowman on Saturday said she endorses the central bank’s recent big interest rate increases and added that “similarly sized increases should be on the table” until inflation declines in a consistent and lasting way.
Speaking in Colorado for the Kansas Bankers Association, Bowman said she will closely monitor upcoming inflation data before deciding how much she thinks rates should be increased. However, she is doubtful that inflation has peaked, given recent data.
“I have seen few, if any, concrete indications that support this expectation, and I will need to see unambiguous evidence of this decline before I incorporate an easing of inflation pressures into my outlook,” she said.
Bowman said she foresees “a significant risk of high inflation into next year for necessities including food, housing, fuel and vehicles.”
— Lee Ying Shan, Jeff Cox
S&P 500 is now 14% above its June low
The market rebound in the past few weeks have pushed major indices significantly off their lows in June.
- S&P 500 is 13.98% above its 52-week intraday low of 3,636.87 from June 17
- Dow is 10.6% above its 52-week low intraday low of 29,653.29 from June 17
- Nasdaq is 19.8% above its 52-week intraday low of 10,565.14 from June 16
Solid earnings so far
The second-quarter earnings season is moving to its tail-end with 432 S&P 500 companies having already reported results. Among those companies, 77.5% reported earnings per shares above analysts’ expectations, according to Refinitiv. Nearly 70% of companies posted quarterly revenue that topped analysts’ estimates, according to Refinitiv.
Berkshire Hathaway reported Saturday that its operating profits jumped 39% from a year ago in the second quarter despite fears of slowing growth. However, Warren Buffett’s conglomerate was not immune to the overall market turmoil with a whopping $53 billion loss on its investments during the quarter.
Investors will monitor Disney‘s quarterly numbers, which are slated or Wednesday. Palantir Technologies reports on Monday, while Ralph Lauren and Coinbase are set for Tuesday.
— Yun Li
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