Stocks and homes are still pricey because buyers think inflation will stay high

“ Fed Chairman Jerome Powell is essentially telling us that monetary policy may work its wonders if we are just patient.”

Moreover, the slow process of bringing down inflation risks that consumers’ and investors’ inflation expectations will remain well-above the Fed’s 2% target. It also limits the Fed’s flexibility for dealing with other challenges in the country’s banking and financial systems. Fed Chairman Jerome Powell told us inflation was transitory when prices began to surge in 2021 and delayed acting until President Joe Biden nominated him for a second term. Now Powell is essentially telling us that monetary policy may work its wonders if we are just patient.

Inflation expectations are hardening It’s no surprise inflation expectations are hardening. The year-ahead expected inflation among consumers surveyed by the Conference Board has barely budged over the past seven months, and is currently at 5.7%. More behavioral evidence can be found in the market for new homes — existing homes are not turning over because too many homeowners have low-interest mortgages they don’t want to give up. New home sales have been rising despite higher rates on mortgages. If you expect 4% or 5% inflation, those rates don’t seem so steep.

Singapore Singapore Latest News, Singapore Singapore Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Hong Kong stocks decline for third day as Japanese stocks dropSupported by world-class markets data from Dow Jones and FactSet, and partnering with Automated Insights, MarketWatch Automation brings you the latest, most pertinent content at record speed and with unparalleled accuracy.
Source: MarketWatch - 🏆 3. / 97 Read more »

Bitcoin price shrugs off bears, but mining stocks take a beating: ReportBitcoin’s relative resilience did not stabilize the industry as a whole, with crypto stocks hit with an even bigger correction than the S&P 500.
Source: Cointelegraph - 🏆 562. / 51 Read more »

U.S. stocks fall for 4th straight day as recent rise in Treasury yields pressures global marketsJoseph Adinolfi is a markets reporter at MarketWatch.
Source: MarketWatch - 🏆 3. / 97 Read more »

5% 10-Year Treasury Yield: A Compelling Case for Bonds Over Stocks?Market Overview Analysis by James Picerno covering: S&P 500, iShares Core S&P 500 ETF, SPDR® S&P 500, S&P 500 Futures. Read James Picerno's latest article on Investing.com
Source: Investingcom - 🏆 450. / 53 Read more »

Five Things to Know: Stocks slide, Powell speaks, American Express rings up record profitsStocks lower, oil prices rise, Wall Street reacts to Powell, American Express beats earnings call, and Schlumberger misses on revenue.
Source: startelegram - 🏆 248. / 63 Read more »

Dow's 168-point fall led by losses for American Express, Salesforce stocksSupported by world-class markets data from Dow Jones and FactSet, and partnering with Automated Insights, MarketWatch Automation brings you the latest, most pertinent content at record speed and with unparalleled accuracy.
Source: MarketWatch - 🏆 3. / 97 Read more »