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Federal Reserve Chair Jerome Powell said that inflation is beginning to ease, though he expects it to be a long process & cautioned that interest rates could rise more than markets expect if the economic data doesn't cooperate. “The disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy,” he said during an event in DC, “But it has a long way to go. These are the very early stages.” Markets briefly turned positive as Powell spoke as investors are hoping the Fed soon will halt the aggressive interest rate hikes it began last year. However, the major averages later flipped back negative after Powell cautioned about strong economic data like last week's jobs report for Jan. Asked whether it would have influenced the Fed's rate call if it had the jobs report before the policy meeting, Powell said, “We don’t get to play it that way unfortunately.” The report showed that nonfarm payrolls rose by 517K in Jan, nearly triple the estimate. He said if the data shows that inflation is running hotter than the Fed expects, that will mean higher rates. “The reality is we’re going to react to the data,” he added. “So if we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have do more and raise rates more than is priced in.” Powell gave no indication of when the hikes will stop & said it probably will take into 2024 before inflation gets to a point where the Fed feels comfortable. The central bank targets 2% inflation & it's currently running well in excess of that by multiple measures. “We expect 2023 to be a year of significant declines in inflation. It’s actually our job to make sure that that’s the case,” he said. “My guess is it will take certainly into not just this year, but next year to get down close to 2%.” But the Fed has gotten even more granular than that, lately focusing on core services inflation minus housing, which Powell said remains elevated. “We need to be patient,” he added. “We think we’re going to need to keep rates at a restrictive level for a period of time before that comes down.” Powell's first mention of “disinflationary” trends was in his post-meeting news conference last Wed. Markets latched onto the term & briefly rallied before turning volatile over the last several sessions. Powell said he expects inflation will cool but at a gradual pace. “Our message [at the last meeting] was this process is likely to take quite a bit of time. It’s not going to be smooth,” he continued. “It’s probably going to be bumpy, and we think that we’re going to need to do further rate increases, as we said, and we think that we will need to hold policy at a restrictive level for a period of time.” “We need to be patient,” he said. Powell expects inflation will cool but at a gradual pace. “Our message [at the last meeting] was this process is likely to take quite a bit of time. It’s not going to be smooth,” he said. “It’s probably going to be bumpy, and we think that we’re going to need to do further rate increases, as we said, and we think that we will need to hold policy at a restrictive level for a period of time.”
Fed Chair Powell says inflation is starting to ease, but interest rates still likely to rise
Search teams and intl aid poured into Turkey & Syria as rescuers working in freezing temperatures & sometimes using their bare hands dug through the remains of buildings flattened by a powerful earthquake. The death toll soared above 6200 & was still expected to rise. But with the damage spread over a wide area, the massive relief operation often struggled to reach devastated towns & voices that had been crying out from the rubble fell silent. “We could hear their voices, they were calling for help,” said Ali Silo, whose & relatives could not be saved in the Turkish town of Nurdagi. In the end, it was left to Silo, a Syrian who arrived a decade ago, & other residents to recover the bodies & those of 2 other victims. The magnitude of the 7.8 quake & a cascade of strong aftershocks cut a swath of destruction that stretched hundreds of kilometers (miles) across southeastern Turkey & neighboring Syria. The shaking toppled thousands of buildings & heaped more misery on a region shaped by Syria’s 12-year civil war and refugee crisis. One temblor that followed the first registered at magnitude 7.5, powerful in its own right. Unstable piles of metal & concrete made the search efforts perilous, while freezing temperatures made them ever more urgent, as worries grew about how long trapped survivors could last in the cold. The scale of the suffering, & the accompanying rescue effort, were staggering. More than 8000 people have been pulled from the debris in Turkey alone & some 380K have taken refuge in gov shelters or hotels, said Turkish VP Fuat Oktay. They huddled in shopping malls, stadiums, mosques & community centers, while others spent the night outside in blankets gathering around fires. For the entire quake-hit area, that number could be as high as 23M people, according to Adelheid Marschang, a senior emergencies officer with the World Health Organization. “This is a crisis on top of multiple crises in the affected region,” Marschang said in Geneva.
Death toll tops 6,200 from earthquakes that struck Turkey and Syria
Rental car giant Hertz (HTZ) reported Q4 earnings that were better than expected, on renewed demand for travel as the Covid-19 pandemic eased in many parts of the world. The
company also benefited from improved operating performance, CEO Stephen
Scherr said, helping to boost earnings even as revenue came in
roughly in line with upbeat expectations. Key numbers from the Q4 earnings report, compared with estimates. Adjusted EPS was 50¢ vs 46¢ expected & revenue was $2.035B vs $2.033B expected. For
the full year, adjusted EPS was $3.74 on
revenue of $8.7B. That profit also beat estimates earnings of $3.67 on revenue of $8.7B. As of the end of 2022, HTZ had $2.5B of total liquidity available, including $943M in cash. Scherr said cost reductions were an important
part of the company's Q4 story. Technology improvements
helped lower cost, as did ongoing efforts to hire new
employees to replace the contractors who HTZ brought in as demand
surged last year. The stock rose 1.18.
If you would like to learn more about HTZ, click on this link:
club.ino.com/trend/analysis/stock/HTZ_aid=CD3289&a_bid=6ae5b6f7
Hertz fourth-quarter profit beats as costs come down and travel rebounds
Gold futures climbed, posting a 2nd straight session gain, with prices finding support from some weakness in the $ as Federal Reserve Chair Jerome Powell spoke at the Economic Club of DC. Powell said that the US jobs report released Fri shows that the Fed needs to keep raising interest rates, but he expects a “significant” slowdown in inflation. Near term, gold is likely to remain traders' markets, punctuated by spikes & troughs as consumers acclimatize to these higher levels & US data either confirm or refute hopes for a turnaround in Fed policy. Gold for Apr rose $5 to settle at $1884 llan ounce.
Gold futures ended higher, with the U.S. dollar lower in the wake of Powell's remarks
US oil futures finished at their highest in a week on bets for strength in energy demand from China & oil-supply concerns in the Middle East following a massive earthquake yesterday. US benchmark West Texas Intermediate crude for Mar rose $3.03 (4.1%) to settle at $77.14 a barrel. Front-month contract prices settled at their highest since Jan 31.
U.S. oil prices settle at their highest in a week
Dow started in the red before Powell's speech. When he spoke it jumped 300, followed by a plunge of over 400. In the last couple of hours buyers returned & the Dow rose to new highs. Investors are nervous & emotions are running high. More rate hikes are coming although they will probably be in 25 basis point increments. The Fed will be weighing strength in the economy & compare it to new inflation data. In unchartered waters, Fed officials want to move forward carefully, one step at a time.
Dow Jones Industrials
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