Federal Reserve officials' deliberations this week over how much more to raise interest rates will hinge on how much they expect the economy to slow this year.
Key to those discussions at their two-day policy meeting will be estimating how much their previous rate increases will cool growth and inflation over time, or what Nobel Laureate Milton Friedman called the "long and variable" lags of monetary policy.
Investors Who Bet on Bitcoin Fund in Retirement Accounts Pay the Price
For many years, individual investors used the Grayscale Bitcoin Trust as a way to bet on bitcoin in their retirement accounts. Now they are paying the price.
The $14.6 billion trust, known by its ticker GBTC, was one of the few options for individual investors to get exposure to bitcoin without having to purchase the cryptocurrency directly.
The Fed and the stock market are set for a showdown this week. What's at stake.
Let's get ready to rumble.
The Federal Reserve and investors appear to be locked in what one veteran market watcher has described as an epic game of "chicken." What Fed Chair Jerome Powell says Wednesday could determine the winner.
Short Sellers Feel the Pain in Stock Market's 2023 Rally
The market's comeback in 2023 has been very bad news for one group: short sellers.
Short sellers profit from stock declines by borrowing shares of companies that they believe are overvalued, selling them, and then buying them back at a lower price later. They made huge gains in 2022, when markets around the world tumbled.
Fed Debates Whether Wages or Low Unemployment Will Drive Inflation
Stubbornly high inflation is finally easing as supply chain disruptions fade and interest rates at 15-year highs put the brakes on demand. Now, Federal Reserve officials have voiced unease that prices could reaccelerate because labor markets are so tight.
At issue is what's the right way to forecast inflation: a bottoms-up analysis of recent readings on prices and wages that puts more weight on pandemic-driven idiosyncrasies-or a traditional top-down analysis of how far the economy is operating above or below its normal capacity.
Germany Economy Fell in 4Q on Energy-Price Shock
The German economy contracted slightly in 2022's fourth quarter, defying expectations of a deep recession only a few month ago, as mild winter weather and government stimulus cushioned the hit from a surge in energy prices.
Germany's gross domestic product fell 0.2% from October to December compared with the previous quarter, according to preliminary data from the country's statistics office released Monday, swinging from an upwardly revised 0.5% expansion recorded in the third quarter.
Startup Valuation Resets to Kick-Start Stalled M&A
The merger-and-acquisition market for venture-backed startups is expected to see a rebound in deal making this year as entrepreneurs and their investors resign themselves to accepting lower prices for their companies.
Startups flush with capital from the recent bull market in venture funding have been holding out for better prices for months, despite calls for discounts from prospective buyers anticipating a souring economy. Many startups, however, may soon give in if they continue struggling to raise capital and face lower private-market valuations.
Pension Investments in Private Credit Hit Eight-Year High
North American pension-fund investment in private-market loans reached an eight-year high in 2022, even as banks pulled back on lending and default rates inched upward.
The average share of these retirement funds parked in the illiquid, typically unrated debt has crept up steadily to 3.8%, the highest on record, according to analytics company Preqin. Though a fraction of the overall portfolio, private credit now amounts to more than $100 billion in the retirement savings of U.S. and Canadian teachers, police and other public workers, according to a Wall Street Journal estimate based on Federal Reserve data and pension financial reports. And the pensions are planning to add more: Their average target allocation is 5.9%.
The Jobless Rate Is at a Half-Century Low. In These States, It's Even Lower.
The labor market broadly improved across the U.S. last year, with every state adding jobs in 2022, but the pace of gains varied widely.
The national unemployment rate fell to a seasonally adjusted 3.5% in December, matching the lowest reading in a half century. Some states had significantly lower rates. Utah had the nation's lowest rate at 2.2% last month, according to the Labor Department. Other states' rates were much higher, led by Nevada's at 5.2%.
Sharing Biden, Trump Documents Could Complicate Investigations, DOJ Says
WASHINGTON-The Justice Department told top Senate Intelligence Committee lawmakers that providing nonpublic information to the panel about the classified material that ended up in the personal possession of two presidents could complicate the ongoing investigations into the incidents.
Members of the committee from both parties have been pressing the Biden administration to turn over the classified documents found at President Biden's private home and former office and former President Donald Trump's residence. Intelligence officials have so far declined to do so, citing the appointment of special counsels who are looking into the discoveries of the documents.
House Speaker Kevin McCarthy to Meet With Biden, Expected to Discuss Debt Ceiling
President Biden and House Speaker Kevin McCarthy plan to meet at the White House on Wednesday as Republican lawmakers push to tie spending cuts to an increase in the debt ceiling.
Mr. McCarthy, who unveiled the timing of the previously announced meeting in an interview Sunday on CBS's "Face the Nation," said lawmakers should implement a plan to cut spending and lower the country's future debt load and not simply raise the existing $31.4 trillion borrowing limit.
China's Top Nuclear-Weapons Lab Used American Computer Chips Decades After Ban
SINGAPORE-China's top nuclear-weapons research institute has bought sophisticated U.S. computer chips at least a dozen times in the past two and a half years, circumventing decades-old American export restrictions meant to curb such sales.
A Wall Street Journal review of procurement documents found that the state-run China Academy of Engineering Physics has managed to obtain the semiconductors made by U.S. companies such as Intel Corp. and Nvidia Corp. since 2020 despite its placement on a U.S. export blacklist in 1997.
Russia Tightens Grip Around Bakhmut as Ukraine Awaits Western Tanks
BAKHMUT, Ukraine-Russia's invasion forces tightened the noose around this beleaguered city in eastern Ukraine, while Kyiv urged the West to provide longer-range firepower to counter Russia's missile barrages.
Ukrainian troops here described mounting difficulties in stopping the Russian advances around Bakhmut, the site of this winter's heaviest fighting in the 11-month-old war.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Flow Beverage 4Q
Economic Calendar:
None scheduled
Stocks to Watch
Expected Major Events for Monday
00:01/UK: Dec Zoopla House Price Index
00:01/UK: Jan CBI Growth Indicator Survey
00:01/UK: CBI Service Sector Survey monthly report
01:00/JPN: Dec Steel Imports & Exports Statistics
09:00/ITA: Dec Foreign Trade non-EU
09:00/GER: 4Q GDP - 1st release
10:00/ITA: Dec PPI
15:30/US: Jan Texas Manufacturing Outlook Survey
23:30/JPN: Dec Labour Force Survey
23:50/JPN: Dec Preliminary Retail Sales
23:50/JPN: Dec Preliminary Industrial Production
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Monday
1st Capital Bancorp (FISB) is expected to report for 4Q.
AGNC Investment Corp (AGNC) is expected to report $0.32 for 4Q.
Akoustis Technologies Inc (AKTS) is expected to report $-0.27 for 2Q.
Alexandria Real Estate Equities Inc (ARE) is expected to report $1.61 for 4Q.
Alliance Resource Partners LP (ARLP) is expected to report $1.42 for 4Q.
BankFinancial Corp (BFIN) is expected to report $0.31 for 4Q.
Cadence Bank (CADE) is expected to report for 4Q.
Capital Southwest Corp (CSWC) is expected to report $0.56 for 3Q.
Coda Octopus Group Inc (CODA) is expected to report for 4Q.
Coffee Holding Co (JVA) is expected to report for 4Q.
Dynex Capital (DX) is expected to report for 4Q.
Equity Lifestyle Properties Inc (ELS) is expected to report for 4Q.
FNCB Bancorp Inc (FNCB) is expected to report for 4Q.
Farmers & Merchants Bancorp Inc (FMAO) is expected to report for 4Q.
Financial Institutions (FISI) is expected to report for 4Q.
Five Star Bancorp (FSBC) is expected to report for 4Q.
Franklin Resources Inc (BEN) is expected to report $0.52 for 1Q.
Graco Inc (GGG) is expected to report for 4Q.
Harmonic (HLIT) is expected to report $0.09 for 4Q.
Heartland Financial USA Inc (HTLF) is expected to report $1.34 for 4Q.
Helmerich & Payne Inc (HP) is expected to report $0.81 for 1Q.
J & J Snack Foods Corp (JJSF) is expected to report $0.81 for 1Q.
Li-Cycle Holdings Corp (LICY) is expected to report for 4Q.
Merchants Bancorp (MBIN) is expected to report for 4Q.
Meridian Corp (MRBK) is expected to report $0.90 for 4Q.
Nicholas Financial (NICK) is expected to report for 3Q.
PotlatchDeltic Corp (PCH) is expected to report $0.21 for 4Q.
Principal Financial Group (PFG) is expected to report $1.48 for 4Q.
Quaint Oak Bancorp (QNTO) is expected to report for 4Q.
Sanmina Corp (SANM) is expected to report $1.25 for 1Q.
Sierra Bancorp (BSRR) is expected to report $0.71 for 4Q.
Sofi Technologies Inc (SOFI) is expected to report for 4Q.
Southern Copper Corp (SCCO,SCCO.VL) is expected to report $0.85 for 4Q.
Southern Missouri Bancorp Inc (SMBC) is expected to report $1.34 for 2Q.
Sterling Bancorp Inc (SBT) is expected to report for 4Q.
(MORE TO FOLLOW) Dow Jones Newswires
01-30-23 0624ET
