Wall Street’s Profit Forecasts Are in ‘La-La’ Land. Stocks Need to Adjust.

Fed chief Jerome Powell, shown at a conference in Washington last month, has started to suggest a soft landing for the economy is unlikely. Someone needs to tell Wall Street. Kevin Dietsch/Getty Images Text size The micro picture doesn’t match the macro reality, meaning stock investors are likely in for more pain. Since the Federal … Read more

Central Bankers Talk Tough on Interest Rates. That Could Change if Markets and Economies Don’t Perk Up.

Text size European Central Bank chief Christine Lagarde doubts that “we are going back to that environment of low inflation” that existed prior to the Covid-19 pandemic. Ronald Wittek/Pool/EPA-EFE/Shutterstock Former Federal Reserve Chairman Ben Bernanke contends that monetary policy is 98% talk. Central bankers are supposed to communicate goals they want the public and markets … Read more

Stocks Had a Nasty 6 Months. The Second Half Could Be Ugly Too.

Text size Bond markets are pricing in significant additional interest-rate hikes this year, but some stock analysts’ earnings forecasts remain optimism. Michael Nagle/Bloomberg It was a first half destined to haunt investors. The past six months were historically bad for stocks, bonds, cryptocurrencies, and practically every other asset class outside of commodities. Despite its late … Read more

Central Bankers Talk Tough on Interest Rates. That Could Change if Markets and Economies Don’t Perk Up.

Text size European Central Bank chief Christine Lagarde doubts that “we are going back to that environment of low inflation” that existed prior to the Covid-19 pandemic. Ronald Wittek/Pool/EPA-EFE/Shutterstock Former Federal Reserve Chairman Ben Bernanke contends that monetary policy is 98% talk. Central bankers are supposed to communicate goals they want the public and markets … Read more

Stocks Are Crashing But History Shows This Bear Market Could Recover Faster Than Others

Topline Stocks have struggled for direction since falling into a bear market earlier this month amid looming recession fears, but history shows that the market’s rapid pace of decline this year could actually be a positive sign—with stocks set to rebound if the broader economy avoids a downturn . The current bear market is “light … Read more

Why the Fed Is Tightening More Than It Thinks

In February 2020, just before the brief COVID-19 recession, the Fed’s balance sheet stood at $4.2 trillion. After 26 months of asset purchases to push down longer-term interest rates, it had ballooned to $8.9 trillion—a $4.7 trillion rise. That increase far surpassed the Fed’s $3.6 trillion in purchases after the 2008 financial crisis. More on: … Read more

Stock Market Today: The Dow steadies, NIO Drops, Bed Bath & Beyond Slumps

Text size Fed chair Jerome Powell will deliver remarks at a central bank summit. Olivier Douliery/AFP via Getty Images Stocks were trying to find their footing Wednesday amid concerns about economic growth and whether central banks are raising interest rates too quickly. Dow Jones Industrial Average futures have risen 26 points, or 0.1%, while S&P … Read more

Fighting Global Inflation Could Lead Developing Countries Into Financial Crisis

Text size Shoppers browse eggs at an outdoor market in Rio de Janeiro, Brazil. Although Brazil’s central bank is months into an aggressive tightening campaign, the country’s inflation rate was still 11.3% in March. Maria Magdalena Arrellaga/Bloomberg About the authors: Indermit Gill is the World Bank’s vice president for Equitable Growth, Finance, and Institutions. M. … Read more

How a Recession Could Weaken the Work-From-Home Revolution

Sign up for Derek’s newsletter here. Sometimes, a trend that seems inevitable turns out to be a fragile creature of circumstance. For example, throughout the 2010s, a fleet of consumer-tech companies took a venture-capital money to provide subsidized services—including Uber and Lyft for ride-shares and DoorDash and Postmates for food delivery. As I wrote This … Read more

US recession this year is more likely than not: Nomura analysts

The US economy is more likely than not to sink into a recession This year as the Federal Reserve tightens monetary policy in its bid to cool decades-high inflation, economists warned Monday. “Disruptions in the energy and food sectors, coupled with declining consumer sentiment, are contributing to a looming economic slowdown in the US and … Read more