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Issues ranging from differences in the nature and availability of data in India and an uncertain global and domestic economic outlook loom as hurdles in the Reserve Bank of India (RBI) adopting a Federal Reserve -style “dot plot,” economists say. The dot plot is a chart that records each Fed official’s projection for the US central bank’s key short-term interest rate. The dots reflect what each thinks will be the appropriate midpoint of the Fed Funds Rate at the end of each calendar year three years into the future should the economy behave as they expect. "The dot plot is a good policy guidance to the market on what lies ahead and hence helps in minimising volatility,” Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said. “However, in this highly uncertain environment when sources of inflation are mostly idiosyncratic and supply-led, a Fed-like guidance of three-to-four years does not seem feasible.” The debate on whether India should adopt a dot plot-like … [Read more...] about Can India adopt a Fed-style dot plot for interest rates? Not yet, say experts

Share to Twitter Share to Linkedin Topline Home prices, which have been shooting up since last year, grew at a slower pace in April, showing signs of a potential cool down in the red-hot housing market, according to new data from S&P Case-Shiller on Tuesday. Key Facts Home-price growth slowed in April, rising 20.4% compared to last year but down from a 20.6% growth rate in the previous month, according to the S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major cities. For the first time in five months, most of the 20 cities in the index saw a monthly decline in price gains, while metropolitan areas in the South such as Atlanta, Charlotte, Dallas, Miami and Tampa saw the biggest increases since March. The Case-Shiller Index reports on a two-month delay and constitutes a three-month moving average of repeat-sales data: Since then, median existing-home prices spiked 15% in May, topping … [Read more...] about Home Prices Finally Cooling Off? Market Slows In April, But Demand Remains High Despite Rising Mortgage Rates

A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here . You can listen to an audio version of the newsletter by clicking the same link. London (CNN Business) This week, Russia defaulted on its foreign debt for the first time since the Bolshevik revolution after it failed to pay interest on two bonds during a 30-day grace period that expired Sunday. But to put the event in context, we don't need to go as far back as 1918. Instead, we can look to 1998 . That's the year Russia defaulted on ruble-denominated bonds, triggering a "Moscow meltdown" that infected markets around the globe. Quick rewind: In August 1998 , following years of upheaval after the fall of the Soviet Union, the Russian government defaulted on its local debt and devalued the ruble. The move sparked chaos in Russia, driving up inflation, causing an economic contraction and triggering bank … [Read more...] about Russia’s last default sparked a crisis. This time is different

Share to Twitter Share to Linkedin Topline Economists at S&P Global Ratings on Monday warned the likelihood of a recession over the next year is increasing as the Federal Reserve continues its most aggressive economic tightening cycle in decades—becoming the latest experts warning about the potential implications of rising interest rates, which help ease prices at the expense of economic growth. Key Facts In a research note published Monday, a team of economists led by S&P’s Beth Ann Bovino said aggressive Fed policy spurred by ongoing price spikes will usher in low economic growth this year and potentially risk a recession, defined as two consecutive quarters of negative gross domestic product. S&P forecasts that U.S. GDP will grow at an annual rate of 2.4% this year and 1.6% next year—down from forecasts last month calling for growth of 2.4% and 2%, respectively. Even the labor market, which has posted a remarkably strong … [Read more...] about Unemployment Will Rise And ‘Extreme’ Price Pressures Continue As Fed Hikes Risk Recession, S&P Warns

- A + A WASHINGTON (June 28): US consumer confidence dropped to a 16-month low in June, as worries about high inflation left consumers to anticipate that the economy would slow significantly or even slide into recession in the second half of the year. Despite the gloomy outlook, consumers showed little sign of cutting back on spending, with buying plans for motor vehicles and other big ticket items like refrigerators and washing machines increasing, the survey from the Conference Board on Tuesday showed. But fewer consumers compared to April intended to go away on vacation at home or abroad, reflecting record high gasoline prices and expensive airfares. The economy is on recession watch as the Federal Reserve aggressively tightens monetary policy to tackle inflation. For now, it continues to grow, with other data on Tuesday showing the goods trade deficit again narrowing significantly in May as exports hit a record high. "Right now we are at an inflection point in … [Read more...] about Inflation saps US consumer confidence; house prices remain elevated

Shares of Morgan Stanley ( MS ) climbed after the bank announced plans for stock dividends and buybacks . Morgan Stanley shares rose over 3% after the company increased its dividend and announced a $20 billion stock buyback. Goldman Sachs, Bank of America, and Wells Fargo also boosted their dividends. Goldman had one of the largest dividend increases, with a 25% hike to $2.50 per share. Bank of America’s increase came to 5%, while Morgan Stanley raised its dividend by 20%. JPMorgan and Citigroup both held the line on their dividends, and said that increasingly stringent capital requirements forced the firms to keep them unchanged. JPMorgan did announce a new $30 billion stock buyback plan that began back in May. "It is notable that JPMorgan and Citi did not increase their dividends given that they are much more cautious about the health of U.S. consumers than other banks, and even though they have ample capital to sustain a downturn, they still think it is prudent to be … [Read more...] about Big Banks Announce Dividend Plans

- A + A CHICAGO (June 28): In a year that has seen widespread selling of technology stocks and long-time market leaders fall into bear territory, the woes of Netflix Inc stand alone. The video-streaming company has plummeted 69% this year, abandoned by both investors and analysts as back-to-back disappointing quarterly reports raised concerns about user trends in an industry that’s becoming more competitive and losing its pandemic-related tailwinds. The drop is the most of any Nasdaq 100 or S&P 500 component, and much worse than the former index’s 26% decline. The growth outlook has weakened to the point that Netflix has cut hundreds of jobs and changed its tune on two longstanding principles: it is cracking down on password sharing, and will introduce an ad-based subscriber tier to the platform. That’s on top of a backdrop where high inflation has pushed the Federal Reserve to hike rates sharply, sparking recession fuels and fueling a rotation out of tech. … [Read more...] about The number of Netflix bulls is dwindling

Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee during a hearing on the 2023 on Capitol Hill in Washington, Wednesday, June 8, 2022. [AP] U.S. Treasury Secretary Janet Yellen will be visiting Korea on July 19 and 20. According to the U.S. Treasury Department and the Korean Finance Ministry, Yellen will be stopping in Japan on July 12 and 13 and attending the G20 finance minister and central bank governor meeting in Bali July 15 and 16 before arriving in Korea. On Tuesday, the ministry said Yellen will be meeting with Korean Finance Minister Choo Kyung-ho, the first between the two. They are to discuss economic and financial cooperation and the strengthening of multilateral arrangements. Yellen's visit comes at a time of global economy uncertainties, which have been affecting local financial markets and the value of the won. Korea stocks are down almost 20 percent this year, and the currency is off almost 15 percent. A currency swap with … [Read more...] about U.S. Treasury Secretary Janet Yellen to visit Korea in July

- A + A NEW YORK/BENGALURU (June 28): Bank shares boosted the Dow Jones and the S&P 500 indexes on Tuesday, as the big four lenders raised dividends following a stress test, but a sharp drop in consumer confidence brought to fore the risks from rising inflation. Wall Street's main indexes started the week on soft footing on worries of rising prices and an aggressive Federal Reserve dominated sentiment. Economic data remains at the forefront of investors' focus amid few market moving catalysts till the start of earnings season in two weeks. The Conference Board said its consumer confidence index dropped 4.5 points to a reading of 98.7 this month, as worries about high inflation left consumers anticipating that economic growth would weaken significantly in the second half of the year. Investors are now looking at data to determine whether the economy can withstand large interest rate hikes by the US central bank to stamp out inflation. "People are coming into … [Read more...] about Dow, S&P boosted by banks; cautious on consumer confidence data

Share to Twitter Share to Linkedin Topline A leading indicator for housing market activity—pending home sales—unexpectedly jumped in May and reversed six straight months of declines, according to new data from the National Association of Realtors on Monday, though experts warn that higher mortgage rates will continue to weigh on demand. Key Facts Pending home sales, which measure signed contracts on previously owned and existing properties, unexpectedly rose slightly in May, up 0.7% compared to April and surprising analysts who were largely expecting a drop of up to 4%. Home sales were strongest in the Northeast (up roughly 15%), while other regions like the Midwest and West both saw declines of 1.7% and 5%, respectively. Pending home sales were still nearly 14% lower than they were a year ago—with year-over-year declines in all major regions as buyers have had to contend with rising mortgage rates in 2022. The average interest rate … [Read more...] about Pending Home Sales See Surprise Rebound In May, But Experts Warn Housing Market Is ‘Undergoing A Transition’