Fed interest rate hikes predicted to slow down, Bob Iger takes over Disney for the second time, US mortgage payments soaring
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Summary:
- The Fed is expected to abandon its campaign of raising interest rates by 0.75%.
- It might be more difficult for Iger to avoid redos now.
- In October, affordability for homebuyers declined.
Federal reserve interest rate hikes expected to slow
The "substantial majority" of Fed officials predict that the present rate of rate increases will soon need to be slowed. The Federal Reserve is expected to abandon its campaign of raising interest rates by 0.75% at its policy meeting next month, according to minutes from the central bank's policy meeting earlier this month that were published on Wednesday.
The minutes revealed that, despite a potential slowdown in rate hikes, the Fed's ultimate target rate hike for this cycle has probably gone up recently. Persistent inflation, according to officials, indicates that rates will probably settle at amounts "somewhat higher than they had previously expected." On Wednesday afternoon, stocks increased after these minutes were made public.
Several participants thought that the risk of financial system instability or disruptions increased with continuing fast policy tightening. Many participants believed that there was a great deal of ambiguity over the final level of the federal funds rate required to bring inflation back down to 2%, even if the new focus is on how high the Fed will hike rates.
The remarks made by Fed Chair Powell at the press conference following the meeting at the beginning of the month were echoed in the minutes. At the central bank's most recent policy meeting, Fed Chair Powell laid the groundwork for beginning to slow down the pace of rate hikes, but stated that the question of when to moderate the size of increases is less significant than how high the central bank will ultimately raise rates to tame inflation.
Fed minutes show 'substantial majority' support slowing pace of rate hikes https://t.co/hydBdfZc2Z by @Jenniferisms
— Yahoo Finance (@YahooFinance) November 24, 2022
Disney: Bob Igers second chance
Last year, Walt Disney gave Bob Iger a $10 million contract to counsel Bob Chapek, despite the fact that the two media firm CEOs seldom ever speak to one another. Iger, who oversaw Disney for 15 years, shocked the entertainment industry last week when he announced that he would take over as CEO of the organization after his handpicked heir Chapek was overthrown in a coup. Iger's rehiring put an end to an 11-month period during which he worked for a company other than Disney but maintained a tenuous connection to it thanks to a "consulting services" contract.
It might be more difficult for Iger to avoid redos now that he has taken over as Disney's CEO for a second time after Bob Chapek was fired. Iger, who held the positions of chief until 2020 and chair until January, will review tactics that he is well-versed with. Disney's loss-making streaming division, which Iger announced with great hoopla in December 2020, will require a close examination from Iger. But unlike in the early phases of Disney's push into the industry, stockholders are no longer prepared to finance streaming expansion at any cost. Earlier this month, Disney stated that its quarterly operating losses had increased by $800 million to $1.5 billion as a result of the explosion of content.
Disney awarded Iger $10mn consultancy deal to advise CEO https://t.co/yga8DnhUrf
— Financial Times (@FT) November 24, 2022
Housing mortgage payments soaring
In October, affordability for homebuyers declined as increased mortgage rates caused monthly payments to reach all-time highs. According to the Mortgage Bankers Association (MBA), the national median monthly payment jumped 3.7% to $2,012 in October from $1,941 in September, setting a record for the study. The average monthly mortgage payment increased by $629 in the first 10 months of the year, which is also equal to a 45.5% year-over-year rise. The findings highlight the difficult circumstances that many prospective purchasers have encountered this year as increased rates, rising property prices, and inflation make homeownership unaffordable.
According to the MBA, the Federal Reserve's sharp rate increase, which was motivated by its aggressive fight against inflation, slashed homebuyer demand to its lowest level in 25 years in October, with purchase activity down 46% from a year earlier. For nine straight months, pre-owned home sales have decreased, with an October year-over-year decline of 28.4%.
Housing: Median mortgage payment reaches record high in October https://t.co/BpfpskEPoT by @__gabriellacruz
— Yahoo Finance (@YahooFinance) November 24, 2022
Sources: finance.yahoo.com, ft.com, twitter.com
