Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

<ul class="summary-list"><li>The stock market faces pullback of up to 10%, Verdence's CIO told Yahoo Finance.</li><li>Key data prints are hovering in recession territory, Megan Horneman said.</li></ul>Investors are too quick to embrace soft-landing projections and are ignoring economic points of distress, Verdence's Megan Horneman said.This over-enthusiasm could cost the market heavily, pushing stocks toward a 7% to 10% drop, the chief investment officer said."I think investors got a little ahead of themselves as far as the what strength there is in the economy," she told <a target="_blank" href="https://www.youtube.com/watch?v=MX0i_FfJ0zs">Yahoo Finance</a>. "If you look at every other economic indicator, aside from the actual GDP number, all of these things are looking like they're in a recession territory."Horneman's cited examples included the Leading Economic Indicators index and manufacturing. This week's service index is also worth monitoring, she said.To her point, the LEI gauge has persistently signaled headwinds ahead. Between February and August, it dropped 2.3%. According to the <a target="_blank" href="https://www.conference-board.org/topics/us-leading-indicators/press/us-lei-sept-2024#:~:text=August's%20decline%20in%20the%20US,is%20likely%20imminent%20or%20underway.">Conference Board</a>, the decline in the six-month growth rate was enough to trigger a recession in August.Meanwhile, manufacturing can't seem to break out of its downturn. This week, September's Manufacturing PMI print remained stuck at 47.2 — any reading below 50 signals a contraction. This has been the case for six consecutive months and for <a target="_blank" href="https://www.prnewswire.com/news-releases/manufacturing-pmi-at-47-2-september-2024-manufacturing-ism-report-on-business-302263093.html">22 out of the past 23 months</a>."Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy — which the US Federal Reserve addressed by the time of this report — and election uncertainty," Tim Fiore, chair of the ISM manufacturing business survey committee, said in a <a target="_blank" href="https://www.prnewswire.com/news-releases/manufacturing-pmi-at-47-2-september-2024-manufacturing-ism-report-on-business-302263093.html">report</a>.Still, these data prints have taken a backseat to labor data, which holds the spotlight on Wall Street. Since rising job market deterioration played a key role in the Federal Reserve's decision to cut interest rates, investors are on the watch for any further weakness.The market is keen to see strength in September's jobs report, scheduled for release on Friday.Investors should prepare for a sell-off if unemployment jumps above 4.3% and non-farm payrolls slip under 100,000, according to <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/best-case-scenario-for-stock-market-outlook-fourth-quarter-ms-2024-9?_gl=1*jge94d*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTcyNzg5MjE0OC42ODAuMC4xNzI3ODkyMTUzLjU1LjAuMA..">Morgan Stanley</a>.Horneman also noted waning consumer sentiment to drive home her point. With credit card debt on the rise, she questioned how spending is supposed to keep up."If you look at some surveys, most Americans actually think are already in a recession. That's how poorly they feel," she said. "So I just don't see the strength in the consumer that's going to be able to last much longer."According to a survey from July, <a target="_blank" class="" href="https://www.businessinsider.com/us-recession-outlook-inflation-costs-consumer-spending-affirm-soft-landing-2024-7">three in five Americans</a> believe the US is in a recession. Top reasons included inflation and rising costs of living.

Stocks face a 10% drop with key economic data mired in recession territory, investment chief says

<ul class="summary-list"><li>The presidential election has the potential to reshape the investment landscape.</li><li>Detailed below is what Wall Street is saying about investing implications across multiple asset classes.</li></ul>With the presidential election just over a week away, and the candidates in a dead heat in the polls, Americans are in suspense about how their lives will change under a new leader.Business Insider has prepared a five-part refresher for the final stretch that will unpack the potential impact that both Donald Trump and Kamala Harris presidencies will have on US consumers. Today's first installment is focused on the investment landscape.To date, Trump and Harris have outlined specific policy proposals that will impact different parts of the stock market. Their varying platforms will also be crucial in determining the future path of interest rates, which will shape the bond market.But they're not expected to have diametrically opposed impacts on everything, with both candidates seen as positive forces for crypto.Detailed below is the latest research and commentary from top Wall Street strategists, outlining how the market and investing landscape will shift under potential Trump or Harris administrations.The guide covers four specific asset classes, and is divided between the Trump and Harris impact on each.<h2 id="40896f3b-9c3a-42aa-82ae-49a1761381ac">Stocks</h2>From the perspective of equities, it's helpful to look at the potential impact on both the micro (specific sectors set to be impacted) and the macro (how the broader market will respond).<h3 id="24c47698-0ee7-4a48-bb04-abe2a4f630c2">Trump</h3><h4 id="51cc4655-bf14-43bc-b772-b54703215a1c">Sectors</h4>Much of the industry guidance for the stock market under Trump boils down to his proposed tax policies. Bank of America says his plan to cut the corporate tax rate to 15% from 21% will boost corporate earnings by 4%. How much it impacts each sector ultimately depends on sensitivity to changes in the tax rate.To that end, BofA says the consumer discretionary and communication services sectors — the areas most beholden to tax-rate changes — will benefit the most. On the flip side, less exposed areas like utilities, real estate, and energy will get the smallest boost.For energy specifically, Trump's pro-drilling stance — while supportive of industry activity — will likely lead to oversupply and lower oil prices, says BNY Wealth. That, in turn, will hurt corporate profitability in the sector and drag on stock prices.It's also worth noting that energy was the worst-performing sector during Trump's previous presidential tenure.Financials is another area of the stock market seen benefiting from a Trump win. <a target="_blank" rel=" nofollow" class="" href="https://www.reuters.com/markets/us/if-trump-wins-he-plans-free-wall-street-burdensome-regulations-2024-04-12/">Allies of the former president have said</a> he aims to unburden banks from many of the regulations that were imposed following the 2008 financial crisis, something that his first administration tried to do with limited success.Those looser regulations could could also ignite a fresh wave of mergers and acquisitions, which would increase advisory revenue for big banks and help drive up profits from dealmaking.<h4 id="08ac2f7c-0094-48df-8910-ca3b12ae746a">Broader market</h4>Zooming out and assessing the full equity-market landscape, views are divided, particularly along partisan lines. Trump's proposed tax and regulatory policies are seen by his supporters as pro-business, which would be good news for corporate profit growth and deal activity.But Trump critics argue that his proposal for universal tariffs and steeper levies on Chinese imports — as well as a crackdown on immigration — will be inflationary, which could hold back stock prices. The nonpartisan Tax Foundation says the tariff plan in particular could <a target="_blank" class="" href="https://taxfoundation.org/blog/trump-mckinley-tariffs-great-depression/">hurt profit margins and put pressure on consumer spending</a>.Bank of America estimates that 60% tariffs on China and 10% on other countries would lower S&amp;P 500 earnings per share by 3.1%. That would be a problem since earnings growth has long been the stock market's primary driver of gains."The conventional wisdom is wrong: Trump is not going to substantially cut taxes once in office; he is going to raise taxes by jacking up tariffs. To the extent that this dampens economic activity, it is bad news for stocks," BCA Research chief strategist Peter Berezin said.<h3 id="fe116c39-7eef-494d-b923-93e68c7490b4">Harris</h3><h4 id="82c14dd6-d54a-4af0-a6d6-b171c6d4ccd1">Sectors</h4>Just like with Trump, much of the guidance around the stock market under Harris involves her tax plan. Her proposal to hike the corporate tax rate to 28% from 21% would have an inverse effect on sectors.That means consumer discretionary and communication services — the top beneficiaries under Trump — would be hit the hardest under a Harris regime, BofA says."Consumer discretionary stocks have underperformed the S&amp;P 500 modestly since Harris' presidential candidacy was announced, perhaps reflecting concerns that a Democratic President could result in higher corporate taxes and employee wages," BNY Wealth said.Financial firms will also feel a negative impact of both higher taxes and Harris' proposed regulatory tightening.But there are bright spots too. A Harris victory would likely benefit homebuilder stocks because of her proposal to build 3 million houses. Renewable-energy stocks should also see gains due to the favorable view of wind and solar energy by Democrats.Both sectors have outperformed in recent months during periods when Harris saw positive momentum in election polls.<h4 id="27decf30-ab8c-4ed1-beaf-70dfe2073247">Broader market</h4>The stock market <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-today-sp500-hits-another-record-high-q3-earnings-2024-10">has soared to records</a> during Joe Biden's presidency, up more than 50% since he was inaugurated, and a Kamala Harris win would likely be a continuation of many of the same policies that have been supportive of the market.Those include infrastructure investments and tax incentives to bring manufacturing jobs back to the country, like in the semiconductor industry via the CHIPS and Science Act.But BofA says Harris' proposed tax hike would also put downward pressure on corporate profits, which estimates a 5% earnings hit. Beyond that, a quadrupling of the stock buyback tax to 4% would also take 1% off S&amp;P 500 profits, the firm said.With all of these cross-currents swirling, a neutral market outcome must also be assessed.<h3 id="cefe8193-23a0-4521-8119-4d27dde3396d">A potentially muted impact</h3>Capital Economics believes neither a Trump nor Harris win will mean all that much for stock prices because bigger trends — specifically AI — will shape the market's direction."Our upbeat projections for the stock market in 2024 and 2025 are predicated on a view that hype over AI will continue to fuel a stock market bubble," the research firm said. Capital Economics has a 2025 year-end price target of 7,000 for the S&amp;P 500, regardless of which candidate wins the election.Meanwhile, Bank of America said that as long as corporate profits continue to grow, the stock market will <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-election-impact-outlook-harris-trump-energy-tesla-biden-2024-10">rise regardless of who wins</a> the White House.<h2 id="7a7d474f-4301-46c7-a48c-d475d0abd0a4">Bonds</h2>The performance of the US bond market largely hinges on the direction of interest rates.As interest rates rise, bond prices generally fall, and vice versa. And since presidential actions usually impact rates, the bond market will be shaped by what either Trump or Harris end up doing.<h3 id="aa298578-a5d5-4e0a-ab3b-fcb78a88d8dc">Trump</h3>A Trump win would is seen ushering in higher interest rates, which would push bond prices lower. It ultimately boils down to inflation.Economists see Trump's double-whammy proposals of mass deportation and universal tariffs as inflationary. And since the Federal Reserve's primary tool for fighting inflation is raising interest rates, bond prices would suffer as yields rise."Our assessment is that a Trump win would lead to higher US yields," Capital Economics said.Estimates from the <a target="_blank" class="" href="https://www.crfb.org/papers/fiscal-impact-harris-and-trump-campaign-plans">Committee for a Responsible Federal Budget</a> — a non-profit think tank — say a wider deficit and an increasing pile of debt under a Trump presidency, compared to a Harris presidency, would also put upward pressure on interest rates. That would also hurt the performance of bonds.<h3 id="c267d16e-6b3a-4db4-8316-c599ab723494">Harris</h3>Capital Economics said it expects interest rates to fall under a Harris win, which would be good news for bonds, as she wouldn't pursue certain inflationary policies like tariffs or immigration deportations, which could fuel wage inflation.Harris' policies, considered to be less inflationary than Trump's, would also allow the Federal Reserve to continue on their path of cutting interest rates, which would boost bond prices.A Bloomberg survey of institutional investors last month found that 30% of investors would add to their bond exposure if Harris wins, while just 17% said they would buy more bonds if Trump wins.Additionally, 46% of respondents said they would reduce their bond exposure if Trump wins, compared to just 23% under a Harris win.<h2 id="648d1263-465a-44c9-b50e-97ea3cd444a7">Crypto</h2><h3 id="77a393b0-f8c1-49d8-b73b-e2f0119e53e1">Trump</h3>A Trump win is seen as bullish for bitcoin and the broader cryptocurrency industry, as former President Donald Trump has <a target="_blank" class="" href="https://www.businessinsider.com/trump-bitcoin-stance-2024-7?utm_medium=ingest&amp;utm_source=markets">firmly embraced digital assets</a> in recent years.According to Bernstein analyst Gautam Chhugani, <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/bitcoin-price-outlook-90000-target-if-trump-wins-november-election-2024-9">bitcoin could hit $90,000 by December</a> if Trump wins the election, representing potential upside of about 37% from current levels."Elections remain hard to call, but if you are long crypto here, you are likely taking a Trump trade," Chhugani said.<h3 id="58f9bbfb-d544-465f-8607-1b699202db17">Harris</h3>Harris <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-donald-trump-crypto-bitcoin-donors-young-men-2024-9">has also embraced the crypto industry</a> in recent months, though she's seen as slightly less bullish compared to Trump, given his public displays of support, including addressing crypto conferences and <a target="_blank" class="" href="https://www.businessinsider.com/trump-nfts-digital-cards-mahattan-trial-2024-5">launching his own NFTs</a>.Yet, Wall Street seems to think that a big case for bitcoin will remain intact no matter who wins. The US government debt pile is expected grow regardless of who controls the White House. That scenario is among bitcoin's biggest bull theses."I'm not sure if either President or other candidate would make a difference. I do believe the utilization of digital assets is going to become more and more of a reality worldwide," BlackRock CEO Larry Fink said during the company's third-quarter earnings call.<h2 id="bb5f6b7e-fd9d-459b-a7dd-22eebbb1993b">US dollar</h2><h3 id="0ae89f53-6e41-467c-8f2a-8aa885fcaf18">Trump</h3>Trump's tax plan and protectionist trade policies are expected to strengthen the dollar. It's <a target="_blank" class="" href="https://www.businessinsider.com/us-dollar-trump-presidential-election-weaker-usd-policy-intervention-trillions-2024-7">the opposite</a> of what the presidential hopeful has said he wants, since a weaker currency makes a nation's exports more competitive in global trade.These policies are expected to be inflationary, which would push interest rates higher and possibly prompt the Fed to tighten. Those climbing rates would then underpin dollar gains."Should he re-take the White House ... the dollar would probably rally sharply, at least in the near term, on expectations of higher US tariffs and interest rates," Capital Economics said in recent research.<h3 id="e5ae53de-b9c3-4069-a7a1-5fc244dc29c6">Harris</h3>A Harris presidency would continue the trends of a weaker dollar due to "policy continuity" of the Biden administration, Capital Economics said.Since Harris' overall platform is less expansionary, it's expected to drive less inflationary pressure, and therefore keep the coast clear for the Fed to cut rates and stimulate the economy as currently planned.That likelihood of lower interest would, in turn, push the dollar lower.

How a Trump or Harris presidency could impact your investments

<ul class="summary-list"><li>Senate Democrats are about to spend millions in a bid to defeat Sens. Ted Cruz and Rick Scott.</li><li>It may be their last, best hope at maintaining Democratic control of the upper chamber.</li></ul>Vice President Kamala Harris has made a number of promises as part of her proposed domestic agenda.Consider Harris' <a target="_blank" class="" href="https://www.businessinsider.com/what-you-need-to-know-about-kamala-harris-opportunity-economy-2024-9">"opportunity economy" plan</a>, which includes, among other things, a $6,000 child tax credit, a <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-small-businesses-tax-breaks-cut-red-tape-2024-9">$50,000 tax deduction</a> for small businesses, and a <a target="_blank" class="" href="https://www.businessinsider.com/what-us-economy-would-look-like-with-trump-biden-presidency-2024-5#housing-4">$25,000 tax credit</a> for first-time home buyers.She's also pledged to sign a bill to restore abortion rights and supports <a target="_blank" class="" href="https://www.businessinsider.com/manchin-harris-senate-filibuster-roe-v-wade-abortion-rights-2024-9">eliminating</a> the Senate's 60-vote "filibuster" rule to do so.But all of that depends not just on Harris defeating former President Donald Trump, but also on her party winning control of the House and Senate. And the battle for the upper chamber is looking <a target="_blank" class="" href="https://www.businessinsider.com/us-senate-races-2024-election-landscape-democrats-republicans-2023-1">especially tough</a> for Democrats.With Sen. Joe Manchin's retirement, Republicans are essentially guaranteed to win at least one seat. But Democrats would be able to maintain at least a 50-50 balance of power — with Gov. Tim Walz serving as a tie-breaking vote as vice president — if two of their incumbents were to hold on: Sen. Sherrod Brown in Ohio, and Sen. Jon Tester in Montana.Brown has generally led <a target="_blank" class="" href="https://www.businessinsider.com/bernie-moreno-wins-ohio-senate-primary-trump-democrats-2024-3">his opponent</a> in polling, but in recent weeks, Tester has fallen behind <a target="_blank" class="" href="https://www.businessinsider.com/tim-sheehy-montana-gop-senate-gunshot-wound-ranger-afghanistan-2024-4">Republican candidate Tim Sheehy</a>.That's left Democrats with little choice than to go on offense and try to beat <a target="_blank" class="" href="https://www.businessinsider.com/ted-cruz-collin-allred-podcast-verdict-3-times-week-2023-5">Sen. Ted Cruz in Texas</a> and Sen. Rick Scott in Florida.On Thursday, the Democratic Senatorial Campaign Committee (DSCC) announced a "multi-million dollar" investment in TV ads in those two states. Sen. Gary Peters of Michigan, the chairman of the DSCC, said his party was "expanding the map and going on offense.""Democrats have strong candidates running effective campaigns in both states, and as we escalate our communications against Sens. Cruz and Scott we will crystallize the case against them," Peters said.In Texas, Cruz faces Democratic Rep. Colin Allred, who was <a target="_blank" class="" href="https://www.businessinsider.com/dick-cheney-vote-kamala-harris-liz-2024-9">recently endorsed</a> by former Republican Rep. Liz Cheney. In Florida, Scott's facing former <a target="_blank" class="" href="https://www.businessinsider.com/debbie-mucarsel-powell-rick-scott-florida-senate-2024-latino-voters-2023-8">Democratic Rep. Debbie Mucarsel-Powell.</a>Both races are seen as competitive but leaning toward Republicans. A source close to Scott signaled that the Florida senator isn't sweating it, telling Business Insider that "if national Democrats decide to spend in Florida, Rick Scott will spend more."One of the <a target="_blank" class="" href="https://www.businessinsider.com/wealthiest-members-congress-house-senate-finances-2021-12">richest members of Congress</a>, Scott spent more than $60 million on his own race in 2018.A Cruz campaign spokesperson hit Democrats for "coming in from their ivory towers in New York, DC, and California" to aid Allred.It remains unclear exactly how much money Senate Democrats plan to spend in either state. Peters declined to get into specifics on Thursday, <a target="_blank" class="" href="https://x.com/PatrickSvitek/status/1839294850937794840">telling reporters</a> that they're "not sharing that info right now for strategic purposes."Harris, whose campaign has raised hundreds of millions of dollars since she entered the race, recently <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-giving-25-million-other-campaigns-2024-9">gave $10 million</a> to the DSCC.

Kamala Harris' economic agenda may now depend on beating Ted Cruz or Rick Scott

The allegations of the US Short seller Hindenburg against <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">SEBI</keyword> Chairperson <keyword id="22743118" type="General" weightage="20" keywordseo="Madhabi-Buch" source="keywords">Madhabi Buch</keyword> and her husband have drawn sharp political reactions from the opposition parties. Reacting to the Hindenburg report, Samajwadi Party spokesperson Ghanshyam Tiwari on Sunday lashed out at the Modi government and said that the tenure of PM Modi will be known for 'Adani-waad'. "The whole world witnessed a different session with different ideologies but the term of PM Modi will be known as 'Adani-waad'. In this Adani-waad, they captured the whole economic system of India in such a way that Gautam Ad(<keyword id="19955648" type="General" weightage="20" keywordseo="Adani-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Adani Group" meta.hostid="83" meta.entityid="Adani Group">Adani Group</keyword>) could benefit, it looks like this is the only motive of PM Modi," he said. Referring to the Hindenburg Report alleging SEBI chief Madhabi Buch and her husband's stakes in "both the obscure offshore entities used in the Adani money siphoning scandal", Tiwari stated, "Hindenburg's report regarding the SEBI chief has triggered the integrity of the market regulator. Hindenburg alleged that SEBI is not investigating properly. Questions are being raised on the Adani Group continuously by the opposition. Anybody with a basic investigation can simply question how the Adani Group with different allegations of corruption, whether it is a coal scam or power, through the medium of offshoring, invested in the share markets. SEBI whose duty was to investigate and find out the criminals was deviating from the core issues." Aam Aadmi Party MP Sanjay Singh alleged that the Modi government is steeped in corruption and is trying to save "their friend Adani". Taking it to a social media post on X, Sanjay Singh wrote, "The Hindenburg revelations were hinted at 3 days before Modi ended the Parliament session. Modi Government is steeped in corruption from head to toe. To save his friend Adani, Modi Ji got the investigation done by the same SEBI Chairman who had committed the scam in connivance with Adani. SC should reconsider its decision." <keyword id="19895371" type="General" weightage="20" keywordseo="Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="Congress" meta.hostid="83" meta.entityid="Congress">Congress</keyword> MP Manish Tewari said that a JPC must be constituted to go into the entire Hindenburg saga. "There are certain revelations by the <keyword id="20016892" type="General" weightage="20" keywordseo="Hindenburg-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="Hindenburg Research" meta.hostid="83" meta.entityid="Hindenburg Research">Hindenburg Research</keyword> which have been put out in the public space. They require closer scrutiny...There seems to be some semblance of an alleged conflict of interest and so therefore under those circumstances there has been a demand in the public space for a while that the entire Hindenburg saga needs to be investigated properly by a <keyword id="21964200" type="General" weightage="20" keywordseo="Joint-Parliamentary-Committee" source="keywords" meta.keywordsubtype="org" meta.entityname="Joint Parliamentary Committee" meta.hostid="83" meta.entityid="Joint Parliamentary Committee">joint parliamentary committee</keyword>. It would be in the fitness of things if a joint parliamentary committee is constituted to go into all these issues at length," he said. Earlier in the day, shortly after US-based short seller Hindenburg Research on August 10 alleged that SEBI Chairperson Madhabi Buch and her husband had stakes in "both the obscure offshore entities used in the Adani money siphoning scandal," the SEBI Chairperson and her husband issued a joint statement rejecting the allegations. Madhabi Puri Buch and her husband accused Hindenburg Research, against whom SEBI has taken enforcement action, of character assassination. In the joint statement released to the media they said, "Our life and finances are an open book. All disclosures as required have already been furnished to SEBI over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them. It is unfortunate that Hindenburg Research against whom SEBI has taken an Enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same." Earlier on Saturday, US short seller Hindenburg had alleged, "We had previously noted Adani's total confidence in continuing to operate without the risk of serious regulatory intervention, suggesting that this may be explained through Adani's relationship with SEBI Chairperson, Madhabi Buch." "What we hadn't realized: the current SEBI Chairperson and her husband, Dhaval Buch, had hidden stakes in the exact same obscure offshore Bermuda and Mauritius funds, found in the same complex nested structure, used by Vinod Adani," the report by the US hedge firm said. Hindenburg Research said it has made the new allegations based on documents provided by a whistleblower and investigations carried out by other entities. In January 2023, Hindenburg published a report accusing the Adani Group of financial irregularities, leading to a significant drop in the company's stock price. The group at the time had rubbished these claims. The Hindenburg report alleged stock manipulation and fraud by the conglomerate. The case is related to the allegations (part of a report by Hindenburg Research) that Adani had inflated its share prices. After these allegations were published, there was a sharp fall in the shares of various Adani group companies' stocks. In January 2024, the Supreme Court refused to transfer the probe into the allegations of stock price manipulation by the Adani group to an SIT and had directed market regulator SEBI to complete its probe into two pending cases within three months. Earlier this year, the SC also dismissed a plea seeking to review the verdict that had sought investigation by the market watchdog SEBI in the Adani-Hindenburg case.

Integrity of SEBI questioned, JPC probe into Hindenburg a must: INDIA bloc targets govt on Hindenburg allegations

<ul><li><keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword> is the second largest trade partner of <keyword id="50996" type="General" weightage="100" keywordseo="saudi-arabia" source="Orion">Saudi Arabia</keyword> and Saudi Arabia is India's fourth largest trade partner.</li><li>India's imports from Saudi Arabia stood at $34 billion in 2021-22, while exports are aggregated at $8.8 billion.</li><li>Meeting set between Commerce and Industry Minister <keyword id="6355222" type="General" weightage="50" keywordseo="piyush-goyal" source="Orion">Piyush Goyal</keyword> and Minister of Energy of Saudi Arabia Prince <keyword id="5749322" type="General" weightage="50" keywordseo="abdul-aziz-bin-salman" source="Orion">Abdul Aziz Bin Salman</keyword> on September 18-19.</li></ul> India and Saudi Arabia are expected to formulate a plan of action for strengthening bilateral cooperation in different areas and projects, including the <keyword id="44875" type="General" weightage="50" keywordseo="west-coast" source="Orion">west coast</keyword> refinery project, an official statement said on Saturday. The issue will come up during the meeting between Commerce and Industry Minister Piyush Goyal and Minister of Energy of Saudi Arabia Prince Abdul Aziz Bin Salman on September 18-19. They would co-chair the inaugural ministerial meeting of the <keyword id="15013219" type="General" weightage="50" keywordseo="economic-and-investments-committee" source="Orion">Economic and Investments Committee</keyword>. The two ministers are expected to discuss the progress made under the various joint working groups of the economic and investment committee, the <keyword id="6365809" type="General" weightage="50" keywordseo="commerce-ministry" source="Orion">commerce ministry</keyword> said. "Both sides are expected to formulate plan of action for further strengthening bilateral cooperation in an array of priority areas and projects, including the West Coast Refinery Project, Trans-ocean grid connectivity, Green Hydrogen, Food security, energy security and pharmaceuticals," it said. They may also accelerate progress on the announcement made by Crown Prince <keyword id="2785815" type="General" weightage="50" keywordseo="mohammad-bin-salman" source="Orion">Mohammad Bin Salman</keyword>, during his visit to India in February 2019, of investments worth $100 billion in India, it added. This committee, it said, is one of the two ministerial verticals established under the framework of the India-Saudi Arabia Strategic Partnership Council, which is headed at the highest level by the Prime Minister of India and the Crown Prince of the Kingdom of Saudi Arabia. India is the second largest trade partner of Saudi Arabia and Saudi Arabia is India's fourth largest trade partner. India's imports from Saudi Arabia stood at $34 billion in 2021-22, while exports are aggregated at $8.8 billion. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/gross-direct-tax-collections-rise-30/articleshow/94281181.cms">Gross direct tax collections rise 30%</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/chinas-chip-output-shrinks-as-india-us-ramp-up-local-manufacturing/articleshow/94281093.cms">China's chip output shrinks as India, US ramp up local manufacturing</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/idbi-trustee-asks-rcap-administrator-to-withdraw-allegations-of-breach-of-confidentiality/articleshow/94280808.cms">IDBI Trustee asks RCap administrator to withdraw allegations of breach of confidentiality</a>

Goyal to visit Saudi Arabia for ministerial meet of economic, investments committee

<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<ul class="summary-list"><li>It may be too late for the Fed to stop a recession now, according to Northwestern Mutual.</li><li>The firm flagged the risk of a coming downturn, despite the Fed being set to cut rates in September.</li></ul>The Federal Reserve's efforts to boost the economy may be coming too late, according to Northwestern Mutual.The financial services firm flagged the risk of a potential recession, even as the Fed looks poised to cut rates to keep the economy stimulated. Markets are pricing in with certainty that the Fed will begin easing monetary policy in September, according to the CME FedWatch tool— but that may not prevent a recession, given the weakness in the economy, according to Brent Schutte, the firm's chief investment officer."I think we all think because the Fed is cutting rates, that's the magic elixir that's going to allow us to avoid a recession," Schutte said in an interview with <a target="_blank" class="" href="https://www.cnbc.com/video/2024/08/27/fed-rate-cuts-may-not-help-economy-avoid-recession-says-northwestern-mutuals-schutte.html">CNBC</a> on Tuesday, pegging the probability of a downturn at over 50%. "If you look at the past four recessions, the Fed has actually cut before the recession and still had one."Other strategists have noted that Fed rate cuts have typically <a target="_blank" class="" href="https://www.businessinsider.com/rate-cuts-recession-economy-labor-market-federal-reserve-bca-research-2024-8">preceded a recession</a>. That's because central bankers tend to ease policy when they see a significant weakening in the economy — but it's difficult to <a target="_blank" class="" href="https://www.businessinsider.com/us-job-market-unemployment-rising-federal-reserve-interest-rate-cut-2024-7">stop economic conditions from weakening</a> once a downward path starts, experts have said.In a recent note, Schutte pointed to weakness in the US labor market, with hiring conditions looking significantly weaker than they did several years ago. The <a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-july-labor-market-economic-data-2024-7">unemployment rate spiked to 4.3%</a> in July — the highest level recorded since the pandemic. Meanwhile, the US government significantly downgraded job gains in the year leading up to the end of the first quarter, with the <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/economy-added-818000-fewer-jobs-ed-yardeni-says-dont-worry-2024-8">economy having added 818,000 fewer jobs</a> in that timeframe than previously thought."Given that labor data is a lagging indicator, it raises the question of whether the Fed is already too late in drawing its line in the sand of maintaining the current employment picture," Schutte wrote. "The Federal Open Markets Committee may be hamstrung when it comes to how far it can go in supporting the labor market," he later added, pointing to ongoing signs of weakening, like cooling demand for labor in manufacturing.An economic slowdown now looks more likely than a soft landing, Schutte said, though he noted that there were still some attractive areas in the market for investors."We believe these asset classes offer what we view as attractive risk-reward profiles whether the Fed is able to pull off the difficult feat of a soft landing or, as we believe is a more likely outcome, the economy eventually sinks under the cumulative weight of the Fed's previous rate hikes," he wrote.Investors have been watching for signs of a potential recession for more than a year. In July, the <a target="_blank" class="" href="https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf">economy had a 56% chance of tipping into a recession</a> within the next 12 months, according to the latest projection from the New York Fed.

Why the Fed may be too late to stop a recession with its rate cuts, according to Northwestern Mutual investment chief

The <keyword id="6354335" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>), on Friday, left the key policy rate unchanged at 6.5 per cent in its monetary policy review for the seventh consecutive time, with the aim of keeping <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword> in check and ensuring that the economy moves on a stable growth path. <keyword id="64190" type="General" weightage="20" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword> said that the decision was made with five of the six members of the <keyword id="6375120" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="Orion">Monetary Policy Committee</keyword> (MPC) favouring no change in the <keyword id="43352" type="General" weightage="100" keywordseo="repo-rate" source="Orion">repo rate</keyword>. Das said the MPC decided to continue with the "withdrawal of accommodation" stance to control inflation. The RBI would continue with its disinflationary policy to ensure a stable growth path for the economy, he added. Das said that <keyword id="120452" type="General" weightage="20" keywordseo="food-price-inflation" source="Orion">food price inflation</keyword> continues to weigh on the trajectory going ahead. The Central bank last changed rates in February 2023, when the repo rate was hiked to 6.5 per cent. The RBI had in fact raised rates by 2.5 per cent between May 2022 and February 2023, after which they have been kept on hold to support economic growth despite inflationary pressures in the past. Repo rate is the interest rate at which the RBI gives short-term loans to banks to enable them to meet their liquidity requirements. Inflation has now come down to around 5 per cent and is well below the RBI's upper tolerance limit of 6 per cent, but the Central bank is determined to bring it down to its medium-term target of 4 per cent, which it considers ideal for stable growth in the economy. RBI Governor Shaktikanta Das has stated several times that although inflation has been moderating, unless it falls to 4 per cent on a durable basis, the Central bank will not think of changing its policy focus. Prime Minister Narendra Modi said at an RBI event on Monday that the Central bank must give top priority to growth but at the same time, focus on trust and stability. With India continuing to clock the fastest GDP growth among the major economies, the RBI has ample headroom to keep interest rates on hold in the near term without hurting growth. The Indian economy had thrown up a surprise 8.6 per cent growth in the October-December quarter driven by government expenditure on big-ticket infrastructure projects and strong domestic demand. The macroeconomic fundamentals of the economy have turned stronger with the fiscal deficit well in control following robust tax collections. The lower fiscal deficit will help control inflation as well as leave more money in the banking system for corporates to take loans for investments as the government needs to borrow less. Economic indicators for the January-March quarter have also been encouraging with exports growing at a decent pace despite the disruption in ship movement due to the Houthi attacks in the Red Sea region. This has led to a decline in the current account deficit reflecting a stronger external balance of payments position.

RBI leaves key repo rate unchanged, focus on keeping inflation in check

<ul class="summary-list"><li>Despite wide public support against the practice, members of Congress invest in the stock market.</li><li>People have invested at least $55 million in two years mimicking members of Congress' portfolios.</li></ul>An app allowing its users to trade like members of Congress and leading investors just broke $100 million in total investments. Despite its success, the app's cofounders adamantly say they hope it leads Congress to ban themselves from trading.Released in January 2023, Autopilot pulls trading data filed by members of Congress and allows users to copy their trades. Since the passage of the <a target="_blank" href="https://www.businessinsider.com/congress-stocks-stock-act-violations-lawmakers-finances-disclosure-2022-12">Stop Trading on Congressional Knowledge (STOCK) Act</a> in 2012, members of Congress are required to report each of their and their immediate family's investments within 45 days or face financial penalties.The app also allows its users to mimic investments made by prominent hedge fund managers like Michael Burry, the subject of the 2015 movie "The Big Short," via their federally required 13F filings.Chris Josephs, a cofounder of the platform who runs the popular "<a target="_blank" href="https://twitter.com/PelosiTracker_">Nancy Pelosi Stock Tracker</a>" on X, told Business Insider the app breezed past the $100 million trading milestone on Monday, with more than $55 million copied from trades that copied congressionally filed ones.The app doesn't allow its users to mimic every member of Congress. Instead, it provides four legislators to copy — Rep. Nancy Pelosi, Rep. Dan Crenshaw, Rep. Debbie Wasserman Schultz, and Rep. Dan Goldman, plus an amalgam of stocks from "the top 10 politician traders based on their 2022 performance."Josephs said the portfolios of Crenshaw and Pelosi, which the congresswoman has said are made by her husband, <a target="_blank" href="https://www.businessinsider.com/nancy-pelosi-stock-trades-congress-investments-2022-7">Paul Pelosi</a>, are the two most popular to mirror.Statistics within the app show that Pelosi's reported trades increased 45% in value in 2023. Crenshaw's increased in value by 41%.Asked for comment on the matter, Corry Schiermeyer, spokesperson for Crenshaw's office, told Business Insider their boss is "not a millionaire and barely has anything invested in the market."Representatives from Pelosi's office declined Business Insider's request for comment.<h2>The fight against congressional stock trading</h2><div type="image" title="large bronze statue of bull in running stance in a brick plaza" height="1500" width="2250" msid="108687731" hostid="261"></div>At the end of 2021, Pelosi — then-speaker of the House — said that she was against banning members of Congress and their families from trading stocks, leading to massive public outcry and her to flip her position on the matter.Several members of Congress — both Republicans and Democrats — tried to ban the practice in 2022 to <a target="_blank" href="https://www.businessinsider.com/lawmakers-unlikely-banned-trading-stocks-for-now-2022-12">no avail</a>. Next congressional session, in 2023, a group of <a target="_blank" href="https://www.businessinsider.com/democratic-senators-reintroduce-bill-to-ban-stock-trading-by-lawmakers-2023-4">Democratic senators introduced a similar bill</a>, though it remains stuck in committee."That's why we're doing this," Josephs, the Autopilot spokesperson, said. "Honestly, it's partly to continue holding their feet to the fire. We're not going away."Donald Sherman, deputy director for the Citizens for Responsibility and Ethics in Washington, said he thinks the app is a "clever idea." He's not surprised to hear that many legislators have trading portfolios that are more successful than the average investor's."If I take the most generous perspective, their entire job lends itself to the kind of careful study of market trends, economic factors, and experience with what moves the market that I think most traders need and would envy," he said.As Autopilot's Josephs <a target="_blank" href="https://twitter.com/Chrisjjosephs/status/1742568215530594626">has put it</a>: If you can't beat 'em, join 'em.

Traders have invested $55 million using an app that helps them copy congressional stock portfolios

<ul class="summary-list"><li><keyword id="11930325" type="UNKNOWN" weightage="60" keywordseo="monetary-policy" source="Orion">Monetary policy</keyword> consists of actions taken by a nation's central bank to achieve and maintain economic growth and stability by controlling the amount of money available to banks, businesses, and consumers.</li><li>The Federal Open Market Committee (FOMC), the steering arm of the Federal Reserve, meets eight times a year to set US monetary policy.</li><li>Monetary policy is either contractionary (designed to slow down a hot <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> and curb inflation) or expansionary (designed to speed up a cold economy and stimulate growth).</li></ul>Monetary policy is the framework established by a nation's central bank to maintain economic growth and stability through the use of various tools designed to control the amount of money available to banks, businesses, and consumers."Monetary policy primarily controls inflation rates, especially if you look at the impact of the policy over a longer time span of several years," says Linda M. Hooks, head of the Department of Economics at Washington and Lee University in Lexington, Virginia. "In the shorter term of a year or two, monetary policy can help the economy to recover from a recession or slowdown. Monetary policy also has an impact on exchange rates, banks, and financial markets, and sets the foundation for sustained economic growth in the US economy."In the US, the <a href="https://www.businessinsider.com/what-is-the-federal-reserve" target="_blank" rel="noopener">Federal Reserve System</a> is the country's central bank and is responsible for setting and adjusting monetary policy. The Federal Reserve system was created by the US Congress with passage of the <a href="https://fraser.stlouisfed.org/title/federal-reserve-act-966/fulltext" target="_blank" rel="noopener">Federal Reserve Act of 1913</a>. This act also granted authority to the Federal Reserve to set monetary policy. Although Congress has amended the Federal Reserve Act several times, the <a href="https://www.federalreserve.gov/aboutthefed.htm" target="_blank" rel="noopener">primary mandates</a> of the Federal Reserve remain the same: "to promote maximum employment, stable prices, and moderate long-term interest rates in the US economy."<h2>Understanding how monetary policy works </h2>In the US, monetary policy refers to the policies that the Federal Reserve makes to support a strong economy. The Federal Reserve's main tools are changing the quantity of money and influencing interest rates. At a more technical level, these policies usually involve buying and selling Treasury or other <a href="https://www.businessinsider.com/what-is-a-bond" target="_blank" rel="noopener">bonds</a>. The Federal Reserve determines monetary policy when its Federal Open Market Committee (FOMC) meets and deliberates to "review economic and financial conditions, determine the appropriate stance of monetary policy, and assess the risks to its long-run goals of price stability and sustainable economic growth," according to the Federal Reserve's site. Most countries around the world have a similar structure. An economy that is out of balance is either too hot (resulting in high inflation) or too cold (resulting in high unemployment). To rebalance the economy, the Federal Reserve - commonly referred to as the Fed - uses a variety of tools to control the supply of money.When <a href="https://www.businessinsider.com/what-is-inflation" target="_blank" rel="noopener">inflation</a> - or the rising cost of goods and services - gets too high, the Fed may sell bonds, thereby decreasing the supply of money in the economy. Less money in the economy results in higher interest rates including the interest rate banks charge each other (<a href="https://www.businessinsider.com/what-is-the-federal-funds-rate" target="_blank" rel="noopener">federal funds rate</a>). The Fed may also raise its <a href="https://www.federalreserve.gov/monetarypolicy/discountrate.htm" target="_blank" rel="noopener">discount rate</a> or the interest it charges on funds loaned directly to banks. These moves also cause financial institutions to raise the interest rates they charge businesses and consumers, resulting in less borrowing, a slowing down of the economy, and ultimately lower inflation.Conversely, when the economy has cooled down so much that unemployment is unacceptably high, the central bank may buy bonds and other securities, increasing the money supply and lowering the Fed funds rate. It may also lower its discount rate, thereby encouraging businesses and consumers to borrow, putting more money into the economy, increasing hiring, and lowering unemployment.<h3>Traditional tools used by the Fed to balance the economy</h3>"The Federal Reserve's main goals," says Hooks, "involve changing the quantity of money and influencing interest rates." To accomplish this, the Fed has four main tools at its disposal.<ul><li><a href="https://www.federalreserve.gov/monetarypolicy/openmarket.htm" target="_blank" rel="noopener">Open market operations (OMO)</a>, through which the Fed traditionally buys and sells securities (bonds) in the open market to keep the federal funds rate at or near the target established by the <a href="https://www.federalreserve.gov/monetarypolicy/fomc.htm" target="_blank" rel="noopener">Federal Open Market Committee</a> (FOMC). A form of open market operations, known as Quantitative Easing (QE), used in times of crisis is discussed below.</li><li><a href="https://www.federalreserve.gov/monetarypolicy/discountrate.htm" target="_blank" rel="noopener">The discount rate</a>, or the interest rate the Fed charges commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank, can be raised to discourage borrowing and lowered to encourage it.</li><li><a href="https://www.federalreserve.gov/monetarypolicy/reservereq.htm" target="_blank" rel="noopener">Reserve requirements</a> refers to the dollar amount a depository institution is required to maintain by the Federal Reserve. Normally that amount is determined by applying the appropriate reserve requirement ratios specified in the Board's Regulation D (Reserve Requirements of Depository Institutions, 12 CFR Part 204) to an institution's reservable liabilities. </li><li><a href="https://www.federalreserve.gov/monetarypolicy/reserve-balances.htm" target="_blank" rel="noopener">Interest on reserve balances</a> was added to the Fed toolkit in 2008. This allows Federal Reserve Banks to pay interest on balances held by or on behalf of eligible institutions in Reserve Banks. The interest rate on reserve balances (IORB) is set and used by the Fed to conduct its monetary policy, especially as it pertains to the FOMC target range for the federal funds rate.</li></ul>Quick tip: On March 26, 2020, the Federal Reserve reduced reserve requirement ratios to zero percent. This action eliminates manipulation of reserve requirements as a tool to achieve economic balance.<h3>Non-traditional and crisis tools available to achieve monetary policy</h3>The Fed has other means at its disposal to achieve economic stability when conditions demand. These tools are not part of the Fed's normal toolkit and are utilized only when there is an economic crisis.<ul><li>Quantitative Easing (QE) occurs when the central bank buys long-term securities from the open market in order to increase the nation's money supply and encourage borrowing and investment. This is a form of OMO. QE can be dangerous since, without proper controls it can lead to high inflation without expected economic growth, a condition known as stagflation.</li><li><a href="https://www.frbsf.org/education/teacher-resources/what-is-the-fed/monetary-policy/" target="_blank" rel="noopener">Public service announcements</a> by the Fed provide "forward guidance" regarding policy actions and strategies the agency plans in the near future in order to help the economy through trying times. Forward guidance can be part of the Fed's normal operations as well, but often increases in times of crisis.</li><li><a href="https://www.newyorkfed.org/markets/rrp_faq.html" target="_blank" rel="noopener">Reverse Repurchase Agreements (RRPs)</a> provide a solution for financial institutions that are not allowed to earn interest on their reserves (see Interest on Reserve Balances above). Institutions affected include government-sponsored enterprise and Federal Home Loan Banks. RRPs allow the financial institution to buy securities from the Fed at one price and sell them back to the government at a higher price the next day. This is effectively an interest payment to the institution and, along with interest on reserve balances, helps control the Fed funds rate.</li><li>Use of the crisis era <a href="https://www.brookings.edu/research/fed-response-to-covid19/" target="_blank" rel="noopener">Term Asset Backed Securities Loan Facility (TALF)</a> program facilitates lending to securities firms, major employers, small businesses, non-profits, state and municipal governments, and even loans to individuals by the Fed.</li></ul>Quick tip: As of Sept. 7, 2021, <a href="https://www.statista.com/statistics/1121416/quantitative-easing-fed-balance-sheet-coronavirus/" target="_blank" rel="noopener">the Fed's balance sheet</a>, resulting from Quantitative Easing, was $8.36 trillion. For comparison, in March 2020, it was $4.31 trillion.<h3>The role of the Federal Open Market Committee</h3>The <a href="https://www.federalreserve.gov/monetarypolicy/fomc.htm" target="_blank" rel="noopener">FOMC</a>, made up of twelve members including the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, meets eight times a year to review economic and financial conditions.The role and importance of the FOMC cannot be understated. "When it meets and deliberates, the Fed's monetary policy is established," says Hooks. No wonder then that these meetings have the full, undivided attention of the entire financial world. Economists, financial analysts, and investors alike eagerly await not only the results of those discussions, but the discussions themselves, to pick up any clues they can as to which direction the Fed may move next.<h3>What influences policy decisions? </h3>Decisions made by the Fed, including the FOMC, aren't just pulled out of thin air. They are influenced by various macroeconomic factors including <a href="https://www.businessinsider.com/what-is-real-gdp" target="_blank" rel="noopener">gross domestic product (GDP)</a>, <a href="https://www.businessinsider.com/what-is-inflation" target="_blank" rel="noopener">inflation</a>, and the <a href="https://www.businessinsider.com/consumer-price-index" target="_blank" rel="noopener">consumer price index (CPI)</a>.Quick tip: Currently the Federal Reserve has a target inflation rate of 2%. If inflation consistently runs above 2%, the FOMC will raise interest rates. Conversely, when inflation falls below 2%, that may result in a lowering of interest rates.Geopolitical developments are also monitored including oil embargos, the imposition (or lifting) of trade tariffs, and conflicts around the world that may impact the U.S. economy. The central bank may also consider concerns raised by specific interest groups, industries, and businesses as well as input from other parts of the government.<h2>Types of monetary policies </h2>Ultimately monetary policy is all about controlling the money supply. Within that framework, there are two types - contractionary and expansionary.<h3>Contractionary monetary policy</h3>In basic terms, <a href="https://www.businessinsider.com/what-is-contractionary-monetary-policy" target="_blank" rel="noopener">contractionary monetary policy</a> contracts or decreases the money supply. The main purpose of contractionary policy is to slow down a heated economy and lower inflation.<h3>Expansionary monetary policy</h3><a href="https://www.businessinsider.com/what-is-expansionary-monetary-policy" target="_blank" rel="noopener">Expansionary monetary policy</a>, as might be expected, is the opposite. This type of policy is designed to expand or increase the supply of money in an economy. Increasing the money supply results in economic growth, more spending, and lower unemployment.Neither type of monetary policy is perfect, and either carried to extremes results in bad outcomes. It is the job of the Fed to balance the two.<h2>Monetary policy vs. fiscal policy </h2>Monetary policy involves manipulating interest rates as a primary means to control the money supply. This is done by <a href="https://www.federalreserve.gov/faqs/money_12855.htm" target="_blank" rel="noopener">the Federal Reserve</a>.Fiscal policy, on the other hand, addresses taxes and government spending. Fiscal policy is determined by the government through legislation.Together, monetary policy and fiscal policy help determine the state of the economy and the financial well-being of a country's citizens.<table style="border-collapse: collapse; width: 100%;" border="1"><tbody><tr><td style="width: 50%;">Monetary policy</td><td style="width: 50%;">Fiscal policy</td></tr><tr><td style="width: 50%;"><ul><li>Set by the Federal Reserve</li><li>Controls the money supply</li><li>Impacts individual finances</li></ul></td><td style="width: 50%;"><ul><li>Set by the government</li><li>Controls taxes and spending</li><li>Impacts individual finances</li></ul></td></tr></tbody></table><h2>The financial takeaway</h2>Monetary policy seeks to balance the economy, primarily by controlling the money supply. The Federal Reserve accomplishes this by manipulating interest rates to avoid both high inflation and high unemployment."Monetary policy affects each of us," says Hooks. "Even though its aim is broad - the whole economy - its impact shows up at an individual level. If you pay more for most items today than you did a month ago, then inflation has affected you individually."It's important to understand monetary policy and use that information to make financial decisions on an individual level. Cut back on spending during times of high inflation. Don't quit your job during times of high unemployment. At the same time, realize that actions taken by the Federal Reserve are designed to eventually right the ship. Be patient.<a data-type="5f91a3ba7be3a4107d2a46b2">What is real GDP? Understanding the tool economists and governments use to manage the economy</a><a data-type="6130f96f0d5b750e8a4ba772">What is hyperinflation? Understanding the rapid increase in the cost of goods and services over time</a><a data-type="613a80502864561673290c31">What to know about the main causes of inflation</a><a data-type="6143817b5b926a5dd93d7aa5">Purchase power is a measure of what your money can buy - here's how it can impact your finances</a>

Monetary Policy: How the Federal Reserve attempts to control the US economy

<ul class="summary-list"><li>The Federal Reserve isn't fighting <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> hard enough, according to investment firm boss Richard Bernstein. </li><li>He compared the <keyword id="11894209" type="UNKNOWN" weightage="60" keywordseo="fed" source="Orion">Fed</keyword>'s approach to hunting <keyword id="11926662" type="UNKNOWN" weightage="60" keywordseo="elephants" source="Orion">elephants</keyword> with a peashooter in a CNBC interview. </li></ul>The Federal Reserve isn't fighting US inflation hard enough, according to investment management firm boss Richard Bernstein. <a href="https://www.cnbc.com/closing-bell-overtime/">In a Monday interview with CNBC</a>, Bernstein said the central bank's approach to monetary policy was ineffectual and likely to fall short of its goal of cooling down soaring consumer price pressures. "We think the Fed is hunting, but it's like hunting an elephant with a peashooter. They've got their pitch helmets on, they're out in the jungle, they've got their khakis, they look splendid and they're talking the game, but they're not really fighting," Bernstein added. What that leads to is prolonged inflation and a <keyword id="12460783" type="UNKNOWN" weightage="60" keywordseo="recession" source="Orion">recession</keyword> that doesn't hit until far out in the future as a result of their approach, he continued. "It's kind of a false dichotomy - hard landing, soft landing - it could be the Fed's not really fighting," Bernstein said.Last month, the Fed <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">raised its benchmark interest rate</a> by 0.5 percentage points to fight ballooning inflation that is pervading the US <keyword id="11893570" type="UNKNOWN" weightage="60" keywordseo="economy" source="Orion">economy</keyword>, a hike double the size of the central bank's typical quarter-point increases. Minutes from recent meetings of the Federal Open Market Committee suggest policy makers are in favor of further hikes of 50 basis points this month and next. Evidence of the Fed's thinking hasn't come as any <a href="https://markets.businessinsider.com/news/stocks/stock-market-news-today-us-stocks-rise-oil-gas-soar-2022-5">surprise to investors</a>, and Michael Hewson, chief strategist at CMC <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">Markets</keyword>, said investors are already completely prepared for a series of rapid rate rises."Markets have already become comfortable with the idea of further 50bps rate rises in June and July, with more rate rises to come, along with discussions about the prospect of moving rates beyond neutral to help constrain above-target inflation," he said in a daily note. Other leading market-watchers have also criticized the Fed's handling of inflation, including the <a href="https://www.businessinsider.com/economic-outlook-inflation-response-mistake-federal-reserve-ben-bernanke-stagflation-2022-5">former Fed chair Ben Bernanke</a>. He said the central bank was too late in tackling inflation, saying that policymakers' patience contributed to the problem. Now, in addition to raising rates more aggressively than they may have initially planned, members of the FOMC are keen to telegraph the central bank's intention to take a tough line on inflation. As a result, yields on the 10-year US Treasury have topped 3%, having almost doubled since January."They're jawboning like crazy but they're still very fearful of tightening too quickly," Bernstein said.

The Fed is fighting inflation like it's hunting an elephant with a peashooter, investing chief Richard Bernstein says

<ul class="summary-list"><li>The Clayton <keyword id="11956286" type="UNKNOWN" weightage="60" keywordseo="antitrust" source="Orion">Antitrust</keyword> Act is one of several laws prohibiting anti-competitive business behavior in the US.</li><li>The Clayton Antitrust Act is meant to prevent conflicts of interest, price discrimination, and guarantees the right to sue for certain unethical business practices.</li><li>The Clayton Antitrust Act amended the Sherman Antitrust Act, which was passed in 1890.</li></ul>The Clayton Antitrust Act is one of several <a href="https://www.businessinsider.com/antitrust-laws" target="_blank" rel="noopener">antitrust laws</a> passed in the US. Its goal is to prevent anticompetitive behavior by businesses and protect consumers from monopolies - as well as the inflated prices monopolies can lead to. "Without the Clayton Act, businesses could engage in mergers until there was only a single monopolist left providing particular goods or services," says Marc Schildkraut, a partner and antitrust attorney at <a href="https://www.bakerlaw.com/" target="_blank" rel="noopener">BakerHostetler</a>. <h2>Understanding the Clayton Antitrust Act of 1914 </h2>Congress passed the Clayton Antitrust Act in 1914 in an attempt to strengthen the <a href="https://www.businessinsider.com/sherman-antitrust-act">Sherman Antitrust Act</a>, which was established in 1890. According to House documents, the original bill failed to effectively regulate corporations, leading to unfair competition. "The Sherman Antitrust Act was the first rule of its kind, so it was a little broad," says Christy Matzen, director of financial planning at <a href="https://zoefin.com/">Zoe Financial</a>. "As companies have searched for loopholes to get around it, a few more rules have come into play like the Clayton Antitrust Act and the Federal Trade Commission Act. The spirit of these rules are all the same - to promote business rivalry and keep markets competitive, but they just approach the topic from different angles."The Clayton Act does a few things, including banning price discrimination and anticompetitive mergers, which we'll go into more below. Labor unions, boycotts, and strikes are exempt under the law. Quick tip: The Library of Congress has the full text of all antitrust laws and bills. To view any of these, simply visit <a href="http://loc.gov" target="_blank" rel="noopener">LOC.gov</a>, and enter "antitrust" into the search bar. You can filter by legislation, year, and other details to zero in on the exact act you'd like to read.<h3>Provisions of the Clayton Antitrust Act</h3>There are several provisions - or sections - of the Clayton Antitrust Act. We'll go into the bigger ones in detail below. <ul><li>Price discrimination: The first provision is the Act's ban on price discrimination. This prevents businesses from charging different customers different prices for the exact same product or service. This was later amended by the Robinson-Patman Act in 1936.</li><li>Monopolies: Under Section 3, the Act bans companies from working together to fix prices, reduce competition, or create a monopoly around a certain good or service. </li><li>The right to sue: The Act also establishes the right to take legal action against companies that take part in anticompetitive business practices. Here's how it reads: "... any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue … and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."</li><li>Exemption for labor unions, agricultural organizations, and horticultural organizations: Labor unions and agricultural and horticultural organizations are not considered "a commodity or article of commerce" and are therefore exempt from antitrust laws, including the Clayton Act and the Sherman Act.</li><li>Mergers and acquisitions: One of the more detailed provisions prohibits companies from acquiring or merging with other similar businesses if it would significantly lessen competition in the marketplace.</li><li>Conflicts of interest: Under this provision, individuals cannot be directors, officers, or employees of more than one bank, banking association, or trust company with more than $5 million in assets.</li><li>Fraudulent activity: This provision says that company presidents, directors, officers, or managers of businesses engaged in commerce can be charged a felony for embezzling, stealing, abstracting, or willfully misapplying company funds.</li><li>Enforcement: Section 11 gives the Interstate Commerce Commission, the Federal Reserve Board, and the Federal Trade Commission the power to enforce various provisions of the act. It also establishes the process by which violations are investigated and penalized.</li></ul>Quick tip: If you believe you've been a victim of anticompetitive activity that violates the Clayton Antitrust Act, you can report the company to the <a href="https://www.justice.gov/doj/webform/your-message-department-justice" target="_blank" rel="noopener">US Department of Justice</a> or the FTC at <a href="http://reportfraud.ftc.gov" target="_blank" rel="noopener">ReportFraud.FTC.gov</a>.<h3>Amendments made to the Clayton Antitrust Act</h3>The Clayton Act has been amended a few times since its passage in 1918. The big amendments include the Robinson-Patman Act of 1936, the Celler-Kefauver Anti-Merger Act of 1950, and the Hart-Scott-Rodino Antitrust Improvements Act of 1976.Here's what each of those did:<ul><li><a href="https://www.businessinsider.com/robinson-patman-act">Robinson-Patman Act</a>: This amendment strengthened the original act's ban on price discrimination. It specifically aimed to protect small businesses from unfair pricing competition from larger retailers.</li><li>Celler-Kefauver Anti-merger Act: This act closed a loophole that allowed companies to acquire assets from other businesses in an effort to reduce market competition. It also broadened the law to include acquisitions that aren't direct competitors. </li><li>Hart-Scott-Rodino Antitrust Improvements Act: Under this act, companies must notify the FTC and the U.S. Justice Department in advance of any major mergers or acquisitions.</li></ul>A new bill, dubbed the Competition and Antitrust Law Enforcement Reform Act of 2021, also aims to amend the Clayton Act. According to the current text, it would modify the standards by which acquisitions are deemed anticompetitive and enhance enforcement abilities, among other efforts. It was introduced by Sen. Amy Klobuchar (D-Minn.) in February and has since been referred to the judiciary committee. <h2>The financial takeaway</h2>At the end of the day, Matzen says, the Clayton Act - and all other antitrust legislation - exists to "protect customers from businesses gaining too much power and using it against them." If you think a business may be violating the Clayton Antitrust Act or participating in anticompetitive behavior, report it to the Justice Department or the Federal Trade Commission immediately. The government will begin an investigation if warranted.<a data-type="61731124adb1a62a3d136b51">The Federal Trade Commission Act sets the guidelines underpinning the FTC's consumer-protection enforcement</a><a data-type="617049e864d7297c4107f879">Understanding fiscal policy: The use of government spending and taxation to manage the economy</a><a data-type="615e1ce04db97a72e9528be4">Monetary Policy: How the Federal Reserve attempts to control the US economy</a><a data-type="60e75ecd2311693ddc791744">What is the FDIC?</a>

You Searched For "economic and investments committee" and got 12 results

Stocks face a 10% drop with key economic data mired in recession territory, investment chief says

Filip De Mott

How a Trump or Harris presidency could impact your investments

Matthew Fox

Kamala Harris' economic agenda may now depend on beating Ted Cruz or Rick Scott

Bryan Metzger

Integrity of SEBI questioned, JPC probe into Hindenburg a must: INDIA bloc targets govt on Hindenburg allegations

ANI

Goyal to visit Saudi Arabia for ministerial meet of economic, investments committee

PTI

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

Ira Alok Puranik

Why the Fed may be too late to stop a recession with its rate cuts, according to Northwestern Mutual investment chief

Jennifer Sor

RBI leaves key repo rate unchanged, focus on keeping inflation in check

IANS

Traders have invested $55 million using an app that helps them copy congressional stock portfolios

Madison Hall

Monetary Policy: How the Federal Reserve attempts to control the US economy

Jim Probasco

The Fed is fighting inflation like it's hunting an elephant with a peashooter, investing chief Richard Bernstein says

Zahra Tayeb

The Clayton Antitrust Act: One of many laws that protects consumers from unfair business practices

Aly J. Yale

Popular Keywords

Buying Guides