On Wednesday, Federal Reserve Chairman Jerome Powell confirmed that his central bank is lowering the rate hike rate from 0.75 to 0.50 percent per meeting. Immediately afterwards, prices shot up and Bitcoin even went over $ 17,000. We are now dangling just below it again. Another important macro news comes out today.
Important macro news
The number of new workers in the United States is expected to increase by 200,000 in November. At least, that’s according to the answers of the economists surveyed by FactSet. This would mean that the number of new workers fell sharply compared to October and that there is a downward trend. In October, 261,000 new people were hired.
This represents the lowest increase in two years. While slower job market growth is in principle a signal that Federal Reserve policy is succeeding, it is probably not enough. Powell reminded us in his speech on Wednesday that there are currently 1.7 jobs for every job seeker.
“So far we have only seen some weak signals for falling demand for labour. Salary increases are also well above the level the Fed wants. To be clear, strong salary growth is a good thing, but to make it sustainable, salary growth needs to match inflation at 2 percent,” said Powell.
When will interest rates go down?
The big question is when the Federal Reserve changes course and sends interest rates back down. So far that is still extremely unclear. While most heads of local Federal Reserve branches say that interest rates must remain high for months to come, there are economists who do not believe that.
They feel that it is not possible for the Federal Reserve to keep interest rates at a higher level for a long time, partly because of the enormous mountain of debt in the United States. If they have to refinance part of it and the interest rate is still at this level, it can cost enormously in that area.