Saturday, August 27, 2022

United states Fed funds rate

 

Reducing inflation is likely to require a sustained period of below-trend growth but failure to restore price stability would mean far greater pain, Fed Chair Powell said during his speech at the Jackson Hole symposium. Fed Chair also said that another unusually large increase could be appropriate at next meeting, but the decision for September will depend on the totality of the incoming data and the evolving outlook. He also added that at some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. The Federal Reserve raised the target range for the fed funds rate by 75bps to 2.25%-2.5% during its July 2022 meeting, the fourth consecutive rate hike, and pushing borrowing costs to the highest level since 2019. source: Federal Reserve



source: tradingeconomics.com

Friday, August 26, 2022

Linkedin profile: Gloria (Xiaolu) Zhang

Gloria (Xiaolu) Zhang

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Senior Data Scientist at Microsoft

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a steep sell-off Friday

Stock market live updates: Stocks tank after Powell's hawkish Jackson Hole message

·3 min read

 U.S. stocks plunged in a steep sell-off Friday after Federal Reserve Chair Jerome Powell reiterated the central bank's commitment to fight inflation in a hawkish speech at the Jackson Hole economic symposium.

The Nasdaq led losses, diving 3.9%, and the S&P 500 shed 3.3%, with both indexes logging their biggest one-day drops since June 13. The Dow Jones Industrial Average erased 1,000 points, or 3%. All three major averages settled at four-week lows.

"Restoring price stability will likely require maintaining a restrictive policy stance for some time," Powell said in his remarks at the gathering in Wyoming. "The historical record cautions strongly against prematurely loosening policy.”

In a note to clients following Friday's speech, Ian Shepherdson at Pantheon Macro wrote, "In one line: Nothing for doves."

"Chair Powell’s speech forcefully reiterated the Fed’s intention to tighten policy enough to bring inflation down to target and then keep it here," Shepherdson wrote.

Investors had been bracing for hawkish messaging from the U.S. central bank chief on the Fed's ambitions to tighten monetary conditions and restore price stability as inflation holds near a four-decade high.

Federal Reserve officials have asserted that imminent policy decisions will be guided by economic data on a meeting-by-meeting basis – and so far, many readings on economic activity have affirmed the central bank is likely to proceed with further tightening of monetary conditions.

On Friday, data from the Bureau of Economic Analysis showed consumer prices fell slightly last month. Headline PCE dropped 0.1% between June and July with a 4.8% decline in energy prices driving the index lower. On a year-over-year basis, headline PCE rose 6.3% in July.

Core PCE, the Fed's preferred measure of inflation, rose 0.1% month-on-month in July and 4.6% from the prior year, marking the lowest annual increase since October 2021. Economists had expected core PCE would rise 4.7% against the same month last year.

On Wednesday, Federal Reserve Bank of Kansas City President Esther George told Yahoo Finance in a sit-down interview that policymakers have “more work to do” on interest rate hikes, and the sharpest impacts from its recent moves have not yet been felt.

“We are trying to get back to 2% inflation as quickly as we can, without doing damage to the economy,” George said in Jackson Hole.

"So July looked like there was some easing in those price pressures, but certainly not enough that you would say, we're in the right direction," she added. "So I think we have more data to see. And I think we have more work to do, to begin to see that trend move down."

Inflation | Rates will rise

Fed Chair Powell: Rates will rise until 'job is done' bringing down inflation

·Anchor/Reporter

·3 min read 

Federal Reserve Chairman Jerome Powell on Friday said the central bank’s job on lowering inflation is not done, suggesting that the Fed will continue to aggressively raise interest rates to cool the economy.

“We will keep at it until we are confident the job is done,” Powell said in remarks delivered at the Fed’s annual conference in Jackson Hole, Wyoming.

“While the lower inflation readings for July are welcome, a single month’s improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down,” Powell said Friday.

Inflation data on Friday morning showed prices in America rose by 6.3% on a year-over-year basis in July, a notch down from the 6.8% pace measured in June. When stripping out food and energy, the Personal Consumption Expenditures Index showed prices rising by 4.6% compared to a year ago — still well above the Fed’s target of 2%.

The central bank has delivered four consecutive interest rate hikes over the last six months, moving in June and July to raise rates by 0.75%, the Fed's largest moves since 1994. By raising borrowing costs, the Fed hopes to dampen demand by making home buying, business loans, and other types of credit more expensive.

Short-term interest rates are now in a target range between 2.25% and 2.5%, which some Fed policymakers consider to be the so-called "neutral rate," or the level rates that is neither stimulative nor restrictive to economic activity.

Powell said more rate hikes will be needed, with “another unusually large” increase still on the table for the Fed’s next meeting in September. The Fed chair reiterated that “at some point,” the Fed will move to slow the pace of its price increases.

“In current circumstances, with inflation running far above 2 percent and the labor market extremely tight, estimates of longer-run neutral are not a place to stop or pause,” Powell said Friday.

The Fed chair said central banks need to move quickly, warning historical episodes of inflation have shown that delayed reactions from central banks tend to come with steeper job losses.

“Our aim is to avoid that outcome by acting with resolve now,” Powell said.

With unemployment at a historically low 3.5% in July, Powell said the labor market remains strong but suggested that the Fed’s campaign to hike rates could restrict economic activity and lead to a “softer” labor market.

Combined with the crunch of expensive credit, Powell warned households and businesses may feel some pain as interest rates increases continue.

“These are the unfortunate costs of reducing inflation,” Powell said. “But a failure to restore price stability would mean far greater pain.”

The Fed chair’s speech is a focal point of the annual Jackson Hole conference, and tends to be a longer speech with bigger picture takeaways. But concerns about financial market interpretations of recent Fed moves were likely a factor in Powell’s decision to deliver a shorter and “more direct” speech this year.

The Fed’s next policy-setting meeting is scheduled September 20 and 21.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

Linkedin profile: Data engineer | Zach Wilson

 

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Staff Data Engineer (commercial products)
Airbnb · Full-timeFeb 2021 - Present · 1 yr 7 mosSan Francisco Bay Area
    • Decreased the landing time of Airbnb's unit economics dataset from 3 days to 1 1/2 days. Built a long-term roadmap to further increase the quality of this critical dataset. Improved the quality of online systems at Airbnb to be easily compilable by Spark pipelines to compute metrics offline. Lead a team of 6 engineers to deliver on the MIDAS initiative to increase the data quality of the Commercial Products org. Upleveled smart pricing at Airbnb by improving the feature engineering and latency of the data used to train the smart pricing model.
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        • Built a machine learning feedback system that allowed security engineers to label corporate user behavior as risky or not risky. Built Asset Inventory - a graph database solution that is a map of all of Netflix's cloud infrastructure.
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        • I built a pipeline that measures the cloud infrastructure impact on AB tests, saving Netflix millions by allowing them to make smarter AB test rollout decisions.
Data Engineer
FacebookAug 2016 - May 2018 · 1 yr 10 mosMenlo Park, California
    • - Managed a 10 PB+ Hive data warehouse - Consolidated and conformed company-wide growth metrics (across WhatsApp, Instagram, Messenger, and Facebook) into a single, company-wide view. - Optimized machine learning feature set generation pipelines (200+ TB/day) from having a 4 day latency to having a 1 day latency. While also dropping compute costs for those pipelines 4x. - Reduced core notification data set latencies from 36 hours to < 8 hours. - Migrated 50% of notifications pipelines from using Hive to use Spark, Presto, or real-time streaming. - Cut compute cost from notifications pipelines by 40% over the course of 9 months.