Jumbo rate hike in play as Powell sticks to hawkish view
Federal Reserve Chair Jerome Powell said officials won't flinch in the battle to curb inflation, hardening expectations that they'll deliver a third straight jumbo rate hike later this month.
“We need to act now, forthrightly, strongly as we have been doing,” Powell said Thursday in remarks at the Cato Institute's monetary policy conference in Washington. “My colleagues and I are strongly committed to this project and will keep at it.” He spoke with a moderator in a virtual question-and-answer session.
U.S. central bankers are raising interest rates rapidly to curb the hottest inflation in four decades. They next meet Sept. 2021, and Powell has kept the option open for another 75 basis-point move — following increases of that size in June and July — or a half-point increase. He's said the decision depends on the “totality” of the incoming data.
Officials will get an important update Tuesday with the release of consumer prices for August. Economists surveyed by Bloomberg forecast an 8.1% rise for the 12-month period, versus 8.5% in July.
“The Fed has and accepts responsibility for price stability,” Powell said, noting that history cautions against prematurely loosening policy. That reiterates a warning he issued Aug. 26 at the Fed's annual retreat in Jackson Hole, Wyoming.
Fewer Americans apply for jobless aid last week
The number of Americans filing for unemployment benefits last week fell to its lowest level since May despite repeated attempts by the Federal Reserve to cool the economy and bring inflation under control.
Applications for jobless aid for the week ending Sept. 3 fell by 6,000 to 222,000, the Labor Department reported Thursday. First-time applications generally reflect layoffs.
The four-week average for claims, which smooths out some of the weekly ups and downs, declined by 7,500 to 233,000.
The number of Americans collecting traditional unemployment benefits rose by 36,000 the week that ended Aug. 27, to 1.47 million.
Hiring in the U.S. in 2022 has been remarkably strong even as the country faces rising interest rates and weak economic growth. The Federal Reserve has aggressively raised interest rates in an effort to bring down inflation, which generally also slows job growth.
Apple will maintain prices for new iPhones despite inflation
Apple's latest lineup of iPhones will boast better cameras, faster processors and a longer lasting battery — all at the same prices as last year's models, despite inflationary pressure that has driven up the cost of many other everyday items.
That pricing decision, revealed Wednesday during Apple's first in-person product event in three years, came as a mild surprise. Many analysts predicted Apple would ask its devout fans to pay as much as 15% more to help offset rising costs for many components.
For several years, Apple's new iPhones have mostly featured incremental upgrades to cameras and battery life, and this year's models were no exception. Pricing for the standard iPhone 14 will start at $799; the deluxe iPhone 14 Pro Max will start at $1099.