In a closed-door meeting at a Manhattan mansion, executives outlined changes to controversial software that was implicated in two crashes.Aerospace & Defenseread more
The one-to-eight stock split would mean the current number of ordinary shares — which stands at 4 billion — will increase to 32 billion. It comes ahead of a reported Hong Kong...Asia Marketsread more
Current and former Tesla employees working in the company's open-air "tent" factory say they felt pressure to take shortcuts to hit aggressive Model 3 production goals,...Technologyread more
Minutes from the Reserve Bank of Australia's monetary policy meeting in July showed the central bank was ready to adjust interest rates if required.Asia Marketsread more
The findings by McKinsey and Company come amid a year-long tariff fight between the U.S. and China, which has spilled into areas such as technology and security.China Economyread more
President Donald Trump and the RNC are picking up key supporters in the business community who did not back him as a candidate in 2016.2020 Electionsread more
Amazon workers in Minnesota and Germany are striking as Prime Day kicks off, in a stand against working conditions and wage practices. The action in Minnesota represents the...Retailread more
Treasury Secretary Steven Mnuchin is raising red flags ahead of Facebook's proposed cryptocurrency launch.Marketsread more
Beto O'Rourke's campaign for the 2020 election raised just $3.6 million in the second quarter of this year, putting him in the lower tier of candidates who have struggled to...2020 Electionsread more
Epstein is accused of sexually exploiting dozens of underage girls from 2002 through 2005 at his New York and Florida residences. He is a former friend of Presidents Donald...Politicsread more
When you think of Prime Day, you might be thinking about deals on Instant Pots and Amazon Echo devices — not half-off dresses and designer heels. But the market for apparel...Retailread more
Goldman Sachs economists say Federal Reserve policy has reduced the risk of a recession over the next year to just 10% from a previous 20% at the end of the fourth quarter.
The economists concluded that the improvement in financial conditions since the beginning of the year is in large part due to the abrupt policy shift by the Fed, after it raised interest rates by a quarter point in December.
But the Fed's success in fighting off a recession may actually make it reconsider its policy of holding off interest rate hikes, as the central bank itself has noted, the economists wrote.
"The Fed's dovish shift was likely designed to decrease downside risks, and our findings suggest that this has largely worked as planned. As the lingering effects of the Q4 tightening gradually fade away, the Fed may eventually be willing to revisit the need for patience, as indicated in the January minutes," they wrote.
The Fed was expected to release the minutes Wednesday of the Federal Open Market Committee's March meeting, when it held rates steady. The central bank, after that meeting, released revised economic and interest rate forecasts that showed expectations for a weaker economy and no rate increases this year, reinforcing the "patient" stance officials had been discussing.
"Financial conditions have eased significantly in 2019, with the FCI [financial conditions index] now reversing roughly 80% of the tightening in 2018Q4," the economists wrote, adding growth has also picked up. Financial conditions include such things as the stock market's performance and interest rate levels.
Economists have been ratcheting up expectations for first-quarter growth and now many of them see it tracking closer to 2% than 1%, as it had previously. The yield curve is no longer inverted between the 10-year note yield and the 3-month bill yield, as it had been several weeks ago. A yield curve inversion is seen as a reliable recession signal.
Treasury yields have also risen, from the lowest levels in more than a year. On Wednesday, the 10-year yield was at 2.47% in late morning, after touching 2.51% earlier in the day.
The economists said the easing of financial conditions was by far the biggest influence on the reduction of downside risks.
"Our analysis also suggests that downside risk will likely be contained in the near-term, barring another large tightening in the FCI. In addition to the reversal of much of the Q4 FCI tightening, US growth momentum has improved and global growth appears to be stabilizing," they wrote.
Correction: On Wednesday the 10-year yield was at 2.47% in late morning, after touching 2.51% earlier in the day. An earlier version misstated the day.