Federal Reserve & US Economy
The Federal Reserve has maintained steady interest rates but hinted at another rate hike to combat inflation. Fed Chair Jerome Powell emphasizes a "soft landing" and cautious approach. Negotiations between United Auto Workers (UAW) and automakers, such as GM, remain stalled. Bank of America raises its minimum hourly wage, while Uber Eats accepts food stamps. Klaviyo's successful trading debut and FedEx's exceeded profit estimates are noted. Furthermore, more young Americans are living with their parents, and robots are taking over service jobs in Las Vegas due to a worker shortage.
Financial Markets & Fed Policies
Fed Chair Jerome Powell's acknowledgment of economic uncertainty enhances his credibility. The Federal Reserve's "hawkish pause" strategy affects bond yields and stock prices. However, markets are skeptical about the Fed's commitment to high rates, leading to rising U.S. rates impacting the Japanese yen.
British Pound & Bank of England
A surprising fall in UK inflation creates uncertainty regarding the Bank of England's rate decision. Specifically regarding the British pound and the Bank of England, the British pound has reached a five-month low against the US dollar, driven by expectations of lower UK interest rate hikes. The Bank of England faces uncertainty following the unexpected drop in UK inflation. Analysts are divided on whether the Bank of England will proceed with another rate hike. Meanwhile, the US Federal Reserve's decision impacts the US dollar's strength against the pound, and ten central banks, including the UK, are making interest rate decisions on the same day.
Works Cited on Thursday, September 21, 2023: Bloomberg L.P. and John Authers and Isabelle Lee, Bloomberg Opinion columnist. The Guardian News & Media Limited, a member of Guardian Media Group PLC. Daily Shot Research authored by Lev Borodovsky ©. ChatGPT, an AI software developed by OpenAI for summarizing articles.