The Fed is about to do something it has not done in two decades: Morning Summary

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Wednesday, May 4, 2022

In the face of rising inflation, the Federal Reserve is poised to do something it has not done in two decades: activate a king-sized pump at interest rates.

Prior to May 2000, things were very different (i.e. like razor scooters and became * NSYNC First Billboard charts). But as of today, worries about high inflation are building up on the road.

In the face of “inflationary fluctuations”, the central bank, led by Alan Greenspan Raised interest rates 0.50% to 6.5% target. This is the last time the Federal Reserve has raised interest rates by 0.25%.

Central Bank chairman Jerome Powell and his colleagues will break that mantra at the end of today’s meeting. Powell said a 0.50% increase on April 21 would be “on the table.”

Mary Daly, president of the San Francisco Fed, suggested that more serious moves could be on the table for future meetings.

“We will take a 50-point point increase in two meetings,” he said Yahoo Finance announced on April 21st.

Despite the historical significance of the 0.50% move, some have argued that more is needed to beat the fire against the rapid pace of price rises. In May 2000, inflation (personal consumption expenditure) prices were rising by 2.4% year-on-year. Is now at almost 7% speed.

For example, James Bullard, president of the St. Louis Fed, suggested that the idea be bigger: a 0.75% move.

Markets did not expect that huge increase in today’s meeting. Fed Fund Futures, the betting market for Fed moves, was priced at 99% chance of moving 0.50% until Tuesday afternoon.

With any move on interest rates, the central bank is expected to announce a strategy to thwart the trillions of property purchases it has made since the onset of the epidemic. Until March, the central bank had received US Treasury and agency mortgage securities as news of its support for the financial markets.

Initial discussions in March outlined an approximate plan to shrink its nearly $ 9 trillion balance sheet. Up to $ 95 billion a month is allowed In maturing assets.

The central bank’s decision will come to ET at 2 p.m. Powell’s press conference, the first live interview after the outbreak, will begin at 2:30 pm ET.

By today’s newsletter Brian Cheung, A presenter and correspondent covering the Central Bank, Economics and Banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

What to see today

Economy

7:00 am ET: MBA Mortgage Application, Week ending April 29 (8.3% in the previous week)
8:15 am ET: ADP Employment Change, April (385,000 expected, March 455,000)
8:30 ET: Trade balance, March (expected $ 86.7 billion, – $ 89.2 billion in February)
9:45 am ET: S&P Global US Services BMI, End of April (54.7 on previous axis)
9:45 am ET: S&P Global US Joint PMI, End of April (55.1 on previous axis)
2:00 PM ET: FOMC Monetary Policy Decision

Revenue

Front market

6:30 am ET: AmerisourceBergen (ABC) The adjusted earnings report is expected to be $ 2.93 per share for $ 57.28 billion
6:30 am ET: CVS Health (CVS) The adjusted earnings report is expected to be $ 2.15 per share of $ 75.39 billion
7:00 ET: Marriott International (March) It is expected to report adjusted returns of 92 cents per share on $ 4.17 billion in revenue
7:00 ET: Yes! Brands (YUM) It is expected to report $ 1.08 per share of $ 1.60 billion in revenue
7:30 ET: Vulcan Materials Co. (V.M.C.) It is expected to report adjusted returns of 62 cents per share on $ 1.43 billion in revenue
7:30 ET: Sinclair Broadcast Team (SPGI) The company is expected to report adjusted losses of $ 1.21 per share on $ 1.53 in revenue. Billion
7:30 ET: Wingstop (Wing) It is expected to report adjusted earnings of 36 cents per share on $ 86.22 million in revenue
Before the market opens: Modern (MRNA) It is expected to report $ 4.98 per share of $ 4.71 billion in revenue

After the market

4:00 pm ET: Booking Holdings (PKNG) It is expected to report adjusted returns of 71 cents per share on $ 2.54 billion in revenue
4:05 pm and கோடாடி (GDDY) It is expected to report adjusted earnings of 43 cents per share on revenue of $ 989.92 million
4:05 pm and Uber (UBER) It is expected to report an adjusted loss of 18 cents per share on $ 6.13 billion in revenue
4:05 pm and Twilio (TWLO) It is expected to report adjusted losses of 22 cents per share on revenue of $ 863.93 million
4:05 pm and Etsy (ETSY) It is expected to report adjusted earnings of 72 cents per share on revenue of $ 575.59 million
4:05 pm and Travel Consultant (Travel) It is expected to report an adjusted loss of 8 cents per share on revenue of $ 250.00 million
4:15 pm and Marathon oil (MRO) It is expected to report adjusted returns of 97 cents per share on $ 1.85 billion in revenue
After the market closes: Spirit Airlines (Save) It is expected to report adjusted losses of $ 1.57 per share on revenue of $ 957.50 million