“Markets are never wrong – opinions often are.” — Jesse Livermore

1. Fed Approves Fourth 0.75-Point Rate Rise, Hints at Smaller Hikes — the Federal Reserve lifted interest rates by 0.75 percentage point to combat inflation and signaled plans to keep raising them, though possibly in smaller increments. Fed officials in the latest policy statement acknowledged it could take time for rapid increases this year to be reflected in the economy. “The committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” they said at the conclusion of a two-day meeting. Officials are boosting interest rates at the fastest pace since the early 1980s to reduce inflation that is running near a 40-year high. They have raised rates by 0.75 point at four consecutive meetings, with the latest one taking the central bank’s benchmark federal-funds rate to a range between 3.75% and 4%.
2. Bank of England Raises Key Interest Rate by 0.75 Point — the Bank of England raised its key interest rate by 0.75 percentage point on Thursday, the largest increase since 1989, in an effort to tame surging inflation but which, by the bank’s own estimates, will help drive the U.K. economy into a recession lasting over a year.
The central bank lifted its benchmark lending rate for the eighth consecutive meeting to 3% from 2.25%, taking it to the highest level since November 2008. Higher borrowing costs will hurt an already weak economy as consumers brace for a difficult winter of falling real incomes and rising prices.
3. Surge in Pediatric Respiratory Viruses, Including RSV, Strains Children’s Hospitals — physicians are reporting unseasonably high numbers of respiratory illnesses in children, straining many children’s hospitals before the typically busier winter months. RSV is an easily transmissible virus that infects the respiratory tract. The virus spreads through droplets from coughing and sneezing and on surfaces. Positive tests for RSV have been on the rise across the U.S., according to the Centers for Disease Control and Prevention. The increase in cases has come ahead of the typical winter peak for such illnesses, hospital officials said. For most people, RSV amounts to a cold, and nearly all children come in contact with the virus by the age of two, health authorities said. But it can be severe for some infants and older adults, especially for those who have pre-existing health conditions.
4. Jobs Report Shows Payrolls Grew 261,000 in October — Employers added a seasonally adjusted 261,000 jobs in October, a robust number but the fewest since December 2020, and the unemployment rate rose to 3.7%, the Labor Department said Friday. Wage gains in October ticked up from the previous month. On an annual basis, however, wage increases have eased, a possible sign of loosening in the labor market. The report points to an economy that is gradually losing momentum following a torrid stretch of growth last year and earlier this year. Over the past three months, employers added an average 289,000 jobs a month, down from 539,000 during the same period a year ago. But that is still far more than before the pandemic. In 2019, job gains averaged 164,000 a month.

The week ahead — Economic data from Econoday.com:

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