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The Fed hiked interest rates, Bank of England says the UK may already be in recession, Ray Dalio sees US recession, RBC energy guru says Americans should brace for higher oil prices, and more financial news.
The Federal Reserve raised interest rates another three-quarters of a percentage point on Wednesday. The central bank raised its federal funds rate up to arrange between 3%-3.25%, the highest it has been since early 2008. This marks the third consecutive 0.75 percentage point move by the Fed. Vowing to curb inflation, which is near its highest level since the early 1980s, the Fed said it will continue hikes until the funds level hits a “terminal rate,” or endpoint, of 4.6% in 2023. The pledge implies a quarter-point rate rise next year with no decreases, CNBC reported.
Mirroring a move by the Federal Reserve, the Bank of England raised interest rates 1/2 percentage point, from 1.75% to 2.25% – the highest level in 14 years, the BBC reported. The move marks the Bank’s seventh rate hike in a row as it tries to hold back inflation. Inflation in the UK is currently at its highest rate in nearly 40 years at 9.9%. The central bank warned the UK may already be in recession and believes the economy will shrink by 0.1%.
Bridgewater investor Ray Dalio told MarketWatch he sees the hallmark signs of a recession in the US and predicts that the economic picture for America could worsen in the next two years, Yahoo Finance reported. Dalio pointed to key red flags such as a contraction of the housing and automotive sectors, drawdowns in cash balances, and a rise in credit delinquency rates. “We are right now very close to a zero-percent growth,” Dalio said.
Helima Croft, head of world commodity technique at RBC Capital Markets, told MarketWatch she believes world oil and pure fuel prices may surge later this year, particularly as Russia escalates the battle in Ukraine, which will cause Western sanctions to take their full impact.
On Wednesday, Russian President Vladimir Putin called up reserves which could number as high as 300,000, officials said, PBS reported.
“We should be bracing for more disruption in the energy markets come December,” Croft said during a panel entitled ‘$8 a Gallon Gas?’
Croft highlighted December 5, when a sanctions waiver for energy-related funds made to Russia expires, and could be a potential inflection point, Pehal News reported.
