Federal Reserve Chair Jerome Powell stuck to his guns on Wednesday following a two-day policy meeting of the Federal Open Market Committee, repeating a message that has become all too familiar for market-watchers: The Fed will keep interest rates near zero and continue asset-purchases "until the recovery is complete," he said.
For interest rates specifically, that means reaching full-employment and an inflation rate of roughly 2 percent over time before tinkering with the current formula.
"With inflation running persistently below 2 percent, we will aim to achieve moderately above 2 percent for some, so that inflation averages 2 percent over time and longer-term inflation expectations remain well-anchored at 2 percent," Powell said.
Fears of inflation amid massive federal stimulus have led some to question the Fed's steadfast commitment to low interest rates, but the chairman stressed during the press conference that a "transitory rise above 2 percent this year" was not a concern.
The chairman emphasized that this current outlook is not likely to change until maximum employment is achieved.
"It seems unlikely, frankly that we would see inflation moving up in a persistent way that would actually move inflation expectations up while there's still significant slack in the labor market," he said. "I won't say it's impossible, but it seems unlikely."
As for asset purchases, Powell said the Fed plans to maintain its current level of buying until the economy sees "substantial further progress."
He added that the Fed does not have an independent standard related to the status of the virus, but that progress combatting the pandemic will likely "coexist" with broader economic improvements.
China's largest ride-hailing company will no longer be listed on the world's largest stock exchange. Didi shareholders voted on Monday to delist from the New York Stock Exchange, less than a year after launching a $4.4 billion IPO with the most significant U.S. share offering by a Chinese company since Alibaba debuted in 2014. Since going public in June of last year, around $70 billion has been wiped from Didi's market value and shares of the company have dropped nearly 90%. Now, Didi is expected to begin preparations to list in Hong Kong. Kevin T. Carter, founder and Chief Investment Officer of EMQQ Global, joins Cheddar News' Closing Bell to discuss.
Ahead of the Meta shareholder meeting, more than five hundred doctors have jointly sent a letter to investors to hold the Facebook parent accountable for the risks its platforms have posed to the public and mental health. Dr. Rob Davidson, a West Michigan ER physician and executive director of the Committee to Protect Health Care, joined Cheddar News to discuss how medical professionals are coming together to highlight the social media giant's spread of misinformation, especially during the pandemic. "We've seen the direct impacts of misinformation and disinformation that spreads like wildfire on the social media platforms," he said. "Our goal with this letter is to try to get the shareholders of Meta to convince leadership that they need to do a better job."
Snap downgraded its earnings and revenue expectations for the second quarter, saying the "macroeconomic environment" has deteriorated faster than the company anticipated. The warning sent shockwaves through the digital ad industry, dragging down a handful of other tech stocks, including Pinterest, Meta, and Twitter. Daniel Cobb, CEO and Chief Strategy Officer of Daniel Brian Advertising, joined Cheddar to discuss the reason behind this warning, and why it's bringing so many social media stocks down.
Pamela Rucker, CIO Advisor and Instructor for Harvard Professional Development, joins Cheddar to discuss how perceptions of Environmental, Social, and Governance–or ESG–changed over the past couple of years, and how using machine learning and artificial intelligence could pave the way to a more sustainable future.
Bob Lockett, Chief Diversity & Talent Officer, ADP, joins Cheddar to break down why offering more flexibility at work is a top way to retain talent at work, and how strong DEI policies help encourage employee loyalty.
