Fed's Waller Backs Rate Pause; U.S. Home Prices Still Rising; RBNZ Holds Rate Steady By James Christie

Good day. Federal Reserve governor Christopher Waller said the central bank should be able to extend a pause in its campaign of interest-rate increases at least into early next year. Waller said it was too early to conclusively say the Fed had done enough to bring inflation back to its 2% target, but he indicated the central bank could at least hold rates steady at its December meeting. Meanwhile, U.S. home prices notched a new record in September even as high interest rates made home purchases less affordable. Elsewhere, the Reserve Bank of New Zealand held its official cash rate at 5.5%, while noting it remains wary of inflationary pressures.

Now on to today's news and analysis.

Top News Fed's Waller Endorses Extending Pause in Interest-Rate Hikes

A Federal Reserve official who has been a leading advocate over the past two years for hiking rates to slow inflation said recent progress should allow the central bank to extend a pause in rate increases at least into early next year .

Fed governor Christopher Waller said the latest data on hiring, activity and inflation had made him "increasingly confident that policy is currently well-positioned to slow the economy and get inflation back to 2%."

New Zealand Central Bank Holds Rate Steady

The Reserve Bank of New Zealand has left its official cash rate steady as expected, but warned inflation remains too high and gave some indications that it thinks interest rates might need to be raised further.

New Zealand Government to End RBNZ's Dual Mandate Soon U.S. Economy Home Prices Hit Fresh Record in September

The S&P CoreLogic Case-Shiller National Home Price Index rose 3.9% from a year earlier in September, compared with a 2.5% annual increase the prior month. The September level was the highest since the index began in 1987.

Housing Costs Are So High That Divorced Couples Are Living Together Think Companies Are Struggling to Fill Offices? Look at Government

White House chief of staff Jeff Zients sent an email in August to cabinet agencies instructing them to "aggressively execute" a shift to more in-person work in the fall. But officials say their return-to-office goals still haven't been reached .

Tech's New Normal: Microcuts Over Growth at All Costs

The tech industry has largely recovered from the downturn, but Silicon Valley learned a long-lasting lesson: how to do more with less . Amazon, Google, Microsoft and Meta Platforms have been cutting dozens or a few hundred employees at a time as executives keep tight controls on costs, even as their businesses and stock prices have rebounded sharply.

Charlie Munger, Warren Buffett's Partner, Dies at 99

Warren Buffett's closest friend and consigliere for decades, Charlie Munger, the billionaire vice chairman of Berkshire Hathaway, died Tuesday at age 99 in a California hospital. A news release from Berkshire confirmed his death.

Key Developments Around the World Australia's Monthly Inflation Rate Undershoots Expectations

Australia's inflation indicator came in well below expectations in October, offering some assurance that price pressures are easing after a spike in the third quarter, while ruling out the prospect of further policy tightening until next year.

Thai Central Bank Keeps Rate at Decade High

Thailand's central bank kept its benchmark policy rate at its highest point in a decade , saying that the economy is recovering, while forecasting "more balanced" growth in the years to come.

Bank of Korea Likely to Stand Pat Thursday, Poll Shows

The Bank of Korea is likely to stand pat on Thursday with all 19 economists surveyed by The Wall Street Journal expecting it to keep its base rate unchanged at 3.5% for the year's final rate-decision meeting. The bank may signal that it will keep its hawkish stance, as inflation trends softer but remain higher than expected, the economists say. Some bet the bank may start cutting rates in the second quarter of 2024. (Dow Jones Newswires)

Financial Regulation Roundup Binance Begins Again With U.S. Oversight. Will It Survive?

Binance's second act starts now. A shake-up leaves the six-year-old firm in the hands of Richard Teng, who was a regulator in Abu Dhabi and Singapore before joining Binance in 2021. He has said he believes the firm is in good shape and is ready to move forward .

Investors Lose Legal Bid Against Exchange Over Nickel Blowup

The London Metal Exchange chalked up a big victory over investors when a court said it was within its rights to cancel trades during a high-profile blowup in the nickel market sparked by Russia's full-scale invasion of Ukraine.

Bank of America Fined $12 Million by CFPB

The Consumer Financial Protection Bureau fined Bank of America $12 million for allegedly submitting inaccurate mortgage lending information . The bank neither admitted nor denied the regulator's findings.

Forward Guidance Wednesday (all times ET)

8:30 a.m.: U.S. third-quarter gross domestic product, second estimate; U.S. advance economic indicators for October

1:45 p.m.: Cleveland Fed's Mester speaks on financial stability in Chicago

2 p.m.: Federal Reserve Beige Book


5 a.m.: Euro area flash inflation estimate for November

8:30 a.m.: Canada gross domestic product for November; U.S. weekly jobless claims; U.S. personal income and outlays, and personal consumption expenditures price index (PCE price index) for October

9 a.m.: Bank of England monthly Decision Maker Panel Survey

9:45 a.m.: Chicago Business Barometer

10 a.m.: U.S. pending home sales for October

11 a.m.: Bank of England's Greene speaks at University of Leeds

Research Futures Price Tighter Monetary Policy Than Fed Estimates

Markets are bracing for a long period of tight monetary conditions, Apollo chief economist Torsten Slok writes in a note. He looks at fed-funds futures and concludes that "the market is currently pricing a 'no landing' scenario where monetary policy will have to put downward pressure on GDP growth and inflation for the next five years." Slok writes that fed-funds futures indicate interest rates will bottom at around 4% and slowly rise again. That means markets are "extremely bullish" and believe the Federal Reserve will need to keep monetary policy restrictive to avoid overheating. That contrasts with Federal Open Market Committee predictions, which forecast fed-fund rates dropping to 2.5%, Slok writes.

-Paulo Trevisani

Commentary The Price Is Wrong for Housing

Take mortgage rates all the way down to 5%, versus September's 7.2%, and a Federal Reserve Bank of Atlanta measure shows that housing costs are still nearly 25% beyond affordable , Justin Lahart writes.

Basis Points S&P Global Ratings said in a report it expects the Federal Reserve to raise the federal-funds rate by another 25 basis points, likely in December, before rate cuts start in the middle of next year. (Dow Jones Newswires) U.S. consumer confidence rose in November for the first time in four months, as expectations for future business conditions improved somewhat, according to The Conference Board. The private research group said Tuesday its consumer-confidence index climbed from a downwardly revised 99.1 in October to 102.0 this month. Economists expected a 101.0 reading, according to a Wall Street Journal poll. (DJN) Manufacturing activity in the central U.S. contracted in November, ending the growth booked in previous months, according to the Federal Reserve Bank of Richmond. Its Fifth District Survey of Manufacturing Activity's index came in at minus five points, swinging negative from a reading of three points in October. Economists polled by The Wall Street Journal expected a reading of 2.5. (DJN) Brazil's IPCA 15 measure of inflation rose more than expected in the month through mid-November, but the process of slowing price increases remains on track, XP Investimentos analysts say. The country's statistics agency reported consumer prices rose 0.33% from October 16 through November 15 and 4.84% from a year earlier. (DJN) Feedback Loop

This newsletter is compiled by James Christie in San Francisco.

Send us your tips, suggestions and feedback. Write to:

James Christie , Nell Henderson , Nick Timiraos , Tom Fairless , Megumi Fujikawa , Perry Cleveland-Peck [mailto:perry.cleveland-peck@wsj.com], Nihad Ahmed , Michael Maloney , Paul Kiernan

Follow us on X:

@WSJCentralBanks [https://urldefense.com/v3/__https://twitter.com/WSJCentralBanks__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhcmIP7s7$ ], @NHendersonWSJ [https://urldefense.com/v3/__https://twitter.com/NHendersonWSJ__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhVOYzSYG$ ], @NickTimiraos [https://urldefense.com/v3/__https://twitter.com/NickTimiraos__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhczpBknk$ ], @PaulHannon29 [https://urldefense.com/v3/__https://twitter.com/PaulHannon29__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhdJXfVnI$ ], @TomFairless [https://urldefense.com/v3/__https://twitter.com/TomFairless__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhbnlBxtj$ ], @megumifujikawa [https://urldefense.com/v3/__https://twitter.com/megumifujikawa__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhQeXxfEN$ ], @pkwsj [https://urldefense.com/v3/__https://twitter.com/pkwsj__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhR2SIqOl$ ], @JamesGlynnWSJ [https://urldefense.com/v3/__https://twitter.com/JamesGlynnWSJ__;!!F0Stn7g!E2KHMW61c6-kCmpmyZxiE6VVZuMd257dEqETR9gJdW-E3NxG52Z3iIkcdW5qJ3O2wSiO4PiFeZDgXn_nFCXl_SAILM75xDKZhawlIJ56$ ], @cleveland_peck

(MORE TO FOLLOW) Dow Jones Newswires

11-29-23 0715ET