Five Things You Need to Know to Start Your Day: Europe
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Good morning. Investors re-assess the Fed’s rate path while looking ahead to the ECB’s move this week. Stocks fall as growth worries dominate. Luxury names look set for more pain. Here’s what people are talking about.
The Federal Reserve’s poised to reduce interest rates as inflation cools and the labor market slows. The big question now is whether a small rate cut will be enough to keep the US economy in expansion mode. The choice facing Fed officials — whether to start easing gradually or to front-load rate cuts — is bound to be contentious. Under Powell, the Fed made the mistake of moving too late to quash the worst bout of inflation since the early 1980s, undermining the buying power of American households. If they are too slow this time, they might drive up unemployment and tip the economy into recession. Bond investors in particular are very keen to guess right on how fast the Fed will go.