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Fed chair Jerome Powell leaves after a news conference in Washington, DC.

REUTERS/Evelyn Hockstein

The Fed's last rate hike of 2023?

On Wednesday, the US Federal Reserve will announce whether it'll further raise interest rates to tamp down inflation, which has eased in recent months yet remained at 5% in March, well above the 2% level that economists like. It's likely that the Fed will go for another 0.25 percentage point hike — taking interest rates to between 5% and 5.25%, the highest level in 16 years.

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Traders react to Fed rate announcement on the floor of the NYSE in New York.


US economy’s slowing growth

The US economy grew by just 1.1% year-on-year in the first quarter of 2023, suggesting that the Federal Reserve’s tightening of monetary policy to stamp out inflation is indeed slowing down the biggest economy in the world.

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Larry Summers explains the banking crisis | GZERO World

Larry Summers explains the banking crisis

On GZERO World, Ian Bremmer and former US Treasury Secretary Larry Summers discuss a range of topics, including the global banking system, the impact of AI on the labor market, and a controversial solution for rebuilding Ukraine.

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Getty Images/Chip Somodevilla

Podcast: Larry Summers breaks down the banking crisis

Listen: On the GZERO World podcast, Ian Bremmer and former US Treasury Secretary Larry Summers discuss the recent bank failures that are disrupting global markets and worrying investors worldwide. They discuss whether the current situation constitutes a banking crisis and explore the role of inflation in contributing to the problems. As an inflation expert, Summers provides valuable insights and predictions on the duration of the financial turmoil.


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Federal Reserve Chairman Jerome Powell arrives to testify before the US Senate.

Tom Williams via REUTERS

What We're Watching: US Fed's next move, China's stimulus, Chile's president needs a win

All eyes on Powell at Jackson Hole

Updated Aug. 26:Heard of Jackson Hole, Wyoming? That's where all the economic bigwigs from around the world are gathering for an annual three-day event focused on the state of the global economy. In a stark departure from his position throughout much of the pandemic that inflation would be “transitory,” US Federal Reserve Chair Jerome Powell said in a keynote address Friday that there would be “some pain” for households and businesses in the months ahead, noting that inflation continues to soar. Powell also said it’s likely that we’ll see a “softening of labor market conditions,” suggesting that record low unemployment – the current silver lining of the economy – could tick upwards. Indeed, the Fed chair sought to defend his track record to economists and central bankers, many of whom have been critical of him for waiting too long to raise interest rates. Many observers took Powell’s address as a sign that the Fed will continue to tighten monetary policy in the months ahead as inflation tops 8% over the previous year. What's more, some economists say the Fed could soon raise rates as high as 4% (its current target rate is 2.25-2.5%), sparking fears of a sharp recession. Still, inflation is mild in the US compared to parts of Europe, particularly the UK, where inflation is estimated to hit a whopping 18.6% early next year.

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Biden Sticks With Powell As Fed Chair Amid Rising Inflation | US Politics In :60 | GZERO Media

Biden sticks with Powell as Fed Chair amid rising inflation

Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

Why did President Biden renominate Jay Powell to be the chairman of the Fed, and who's his No.2, Lael Brainard?

Well, Powell by all accounts has done a pretty good job of managing the Fed through the coronavirus pandemic. He dusted off the playbook, first pioneered by Chairman Bernanke during the financial crisis, and he's largely continued the relatively easy monetary policy of his predecessor at the Fed, now Treasury Secretary, Janet Yellen. With inflation growing the way it has over the last several months, Biden now owns the policies of the Fed and is essentially endorsing what Powell has been doing and giving Powell the political cover to continue to keep rates low for longer, or as many people expect, raise them slightly over the next 12 months in order to fight inflation.

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What We're Watching: Chinese tennis star reappears, Bulgarian president re-elected, US Fed chief renominated

Is Peng Shuai really safe? The Women's Tennis Association has said that Chinese tennis star Peng Shuai's video call with the International Olympic Committee (IOC) on Sunday does not sufficiently address concerns about her safety and whereabouts. Peng disappeared from public life several weeks ago after accusing former Chinese Vice-Premier Zhang Gaoli of sexually assaulting her. Over the weekend, Chinese state media published photos of her at a restaurant and a tennis tournament, and she held a half-hour call with the IOC in which she said she was fine and asked for privacy. But no one can be sure that Peng wasn't coerced into making those statements. The WTA, which has threatened to pull tournaments out of China, continues to call for a full investigation into Peng's allegations, and the story is adding fresh impetus to calls for nations around the world to boycott the upcoming Beijing Winter Olympics.

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