October 20, 2022
Fed Says Economy Grew Modestly But Recession Worry Dims Outlook
The Federal Reserve sounded a note of caution on the US economy, which expanded “modestly” through early October with slowing activity raising recession concerns amid some indications of easing inflationary pressure.
“Outlooks grew more pessimistic amidst growing concerns about weakening demand,” the Fed said Wednesday in its Beige Book report, published two weeks before each meeting of the policy-setting Federal Open Market Committee. “Several Districts reported a cooling in labor demand, with some noting that businesses were hesitant to add to payrolls amid increased concerns of an economic downturn.”
BOE’s Broadbent Says UK Rates May Not Rise as Much as Market Expects
Bank of England Deputy Governor Ben Broadbent said it’s not clear that UK interest rates need to rise as much as investors expect and warned about a hit to the economy if markets bets come to pass.
While “the justification for tighter policy is clear” in the face of soaring inflation, demand will slow to some extent anyway along with higher prices, Broadbent said in the text of a speech on Thursday. If rates follow the current path, it could cause a 5% hit to GDP, he said.
Oil Extends Gains as China Debates Quarantine Cuts for Travelers
Oil advanced as Chinese officials debate easing some Covid rules, a policy that has weighed on its economy and energy demand.
Brent rose much as 1.8% to trade near $94 a barrel, adding to Wednesday’s gain. China’s bureaucrats are debating whether to reduce the amount of time people coming into the country must spend in mandatory quarantine, according to people familiar with the talks.
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