Fed’s Ability To Maintain Stable Prices In Doubt; JPMorgan Chase CEO Expresses Doubt; Wells Fargo Lays Off 500 Mortgage Bankers; Domino’s Stock Dips; Ozy Media CEO Arrested for Fraud
By The Federal Reserve's ability to maintain stable prices depends on the public's trust in their ability to deliver.[0] After more than a year of interest rate hikes and attempts to cool the economy, prices are still rising at a pace well above the Fed's 2% goal and the public is becoming increasingly weary.[0] The Job Openings and Labor Turnover Survey (JOLTS), a monthly data set closely watched by the Fed, has seen its response rate fall sharply since the pandemic — now at just under 31%. The response rate to the Employment Cost Index, a pay measure also watched by the Fed, has dropped from around 75% in 2012 to under 50%, according to Bureau of Labor Statistics data. Market movements have become increasingly disconnected from the Fed's messaging, as recent data has shown that inflation is still hot, and that the economy is rip-roaring.[0] Jamie Dimon, CEO of JPMorgan Chase, expressed his skepticism about the Federal Reserve's ability to manage inflation on Thursday.[1]
Given this, Fed officials will be desperately hoping for any sign that their disinflationary policies are working when the January Personal Consumption Expenditures report is published on Friday.[0] This is the Fed's preferred measure, and if it comes in higher than expected it could increase the likelihood of a larger rate hike of a half percentage point in March.[1]
Bloomberg reported this week that Wells Fargo has laid off over 500 mortgage bankers due to the current real estate slump.[2] The layoffs were announced Tuesday and included a few bankers who surpassed $100 million in loan volumes last year.[1]
On Thursday, Domino's stocks fell by almost 12% after the pizza chain confessed to experiencing some delivery problems.[1] CEO Russell Weiner wrote in a statement discussing fourth quarter results Thursday that they experienced significant pressure on their US delivery business in 2022, and deliveries at stores open at least a year fell 6.6% compared to the same period last year.[2]
This week, Carlos Watson, the founder and CEO of the beleaguered Ozy Media, was taken into custody and accused of fraud, as per federal court documents.[1] The allegations claimed that Watson perpetrated the fraud by making inaccurate statements and intentionally withholding information regarding Ozy Media, such as its financial situation, investors, business associates, agreements, and possible takeovers.[2]
According to new data from Fidelity Investments, one of the largest providers of workplace retirement plans, which in total represent $2.[1]
0. “Morning context: Why today's report on inflation could make or break the US economy” WRAL TechWire, 24 Feb. 2023, https://wraltechwire.com/2023/02/24/morning-context-why-todays-report-on-inflation-could-make-or-break-the-us-economy
1. “Why today's inflation report is so important” WICZ, 24 Feb. 2023, https://www.wicz.com/story/48444249/why-todays-inflation-report-is-so-important
2. “Why today's inflation report is so important” KRDO, 24 Feb. 2023, https://krdo.com/news/2023/02/24/why-todays-inflation-report-is-so-important/
