close video What to expect from the Federal Reserve’s rate hike decision Wednesday
Financial expert Elizabeth Evans gives an economic outlook and discusses futures market pricing before the Federal Reserve’s expected rate hike Wednesday on ‘Making Money with Charles Payne.’
The Federal Reserve is on track to raise interest rates for the 10th straight time Wednesday, but the end may finally be in sight for the fastest tightening campaign since the 1980s.
The U.S. central bank is widely expected to lift the federal funds rate by a quarter-percentage point at the conclusion of its two-day meeting then hint at a long-awaited pause in rate hikes.
The move would set the federal funds rate between 5% to 5.25%, further restricting economic activity as the borrowing costs for homes, cars and other items march higher. It would mark the highest rate since 2007.
FUND MANAGERS WORRY SYSTEMIC CREDIT CRUNCH COULD CRASH US MARKETS
Policymakers projected a peak rate of 5.1% during their March meeting.
But Wall Street is even more focused on Chairman Jerome Powell's press conference at 2:30 p.m. ET for additional clues about what comes next in the Fed's inflation fight. Powell may signal that rate hikes could soon stop, but many economists anticipate he will try to a strike a more ambiguous tone that neither rules out nor sets up another increase down the road.
"While the committee and Powell in his post statement press conference will eschew any idea that a pause is a foregone conclusion, the language put forward in both the statement and the presser will likely set the stage for a one-month period where the hawks and doves will duke it out over the June policy decision," said Joe Brusuelas, RSM chief economist. "We believe that a rate hike at the June meeting remains a distinct possibility."
JAMIE DIMON WARNS BANKING CRISIS HAS RAISED ODDS OF RECESSION
Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., March 22, 2023. (Al Drago/Bloomberg via Getty Images / Getty Images)
The meeting comes in the shadow of continued volatility within the financial sector, after the third implosion of a U.S. bank on Monday. First Republic, a San Francisco-based bank that catered to the wealthy, was seized by federal regulators and sold to JPMorgan Chase Monday.
Despite concerns that the banking turmoil could severely tighten credit for U.S. households and small businesses, the Fed is expected to forge ahead with its inflation fight Wednesday.
During a credit crunch, banks significantly raise their lending standards, making it difficult to get a loan. Borrowers may have to agree to more stringent terms like high interest rates as banks try to reduce the financial risk on their end. Fewer loans, in turn, lead to less big-ticket spending by consumers and businesses.
Pedestrians near the U.S. Treasury building in Washington, D.C., Dec. 30, 2022. (Ting Shen/Bloomberg via Getty Images / Getty Images)
While that could help the Fed in its fight to tamp down stubbornly high inflation, it also raises the risk of a recession this year.
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"The major question for the Fed isn’t whether it should pause its tightening cycle but whether it will," said Gregory Daco, EY chief economist. "And legacy may be the defining factor. Fed Chair Powell and most policymakers do not want their legacy to be a failure to bring inflation down to the 2% target."
Inflation showed welcome signs of cooling in March, according to Labor Department data released last month. But core prices pointed to strong underlying price pressures that are still bubbling beneath the surface. The consumer price index remains about three times higher than the pre-pandemic average, underscoring the persistent financial burden high prices have placed on millions of U.S. households.
Harry Parker was just 14 years old when he was hit and killed by a car on his way to school in Swindon.
“He was a lovely lad, full of life. A football fanatic,” said Harry’s dad, Adam. “He would always make people smile and just have a good time. He was my right hand man. Daddy’s boy.”
His mum Kelly says the memory of what happened that day in November 2022 is seared into her mind.
“I can remember walking into that room now, he was in resus, lying on a trolley. He was just absolutely lifeless. I pushed all the doctors away, I pushed everyone out the way and just went to him and said ‘Harry, please, come on son, you’ve got me. We can do this together’.
“But half an hour later, the doctors came through and told us the devastating news that there was nothing anybody could do for him. As a nurse I’m at the hospital every day, helping people. I love that, that’s my job. But I couldn’t help my son. Nobody could.
“The hardest part was when we had to say goodbye to him. We had to make the decision to turn the life support machine off. Harry was in the middle, me and his dad lay on each side of him, holding him so tight and feeling his heart beat, until we felt the very last beat.”
The driver of the car didn’t have a licence, insurance, or stop at the scene.
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But two years after Harry’s death the Crown Prosecution Service told his parents that they were dropping the charges.
They said: “We examined this case in great detail – including obtaining the advice of a forensic collision expert – and it has become clear that there is not enough evidence to demonstrate that this collision could reasonably have been avoided, and therefore that the driving was careless.”
For Adam and Kelly it was a huge blow.
“I was enraged, angry,” said Adam. “I just wanted to lash out. But there’s no point in doing that. The only way to win this fight is to go through the legal procedures and do this properly. I can’t believe that the law is so lenient on people who haven’t got a licence.”
There is no current national data on the number of unlicensed drivers, though past research by the Department for Transport estimated they commit 9.3% – or nearly 1 in 10 – of all motoring offences. It was thought there could be as many as 470,000 on the roads.
In 2006 the Labourgovernment introduced a new offence of causing death while driving without a licence or insurance, punishable by up to two years in prison.
But in 2013 the Supreme Court ruled that, due to the way the legislation was worded, prosecutors still had to prove the driving was at fault – thus rendering the new law fairly redundant, as a driver could then be charged by careless or dangerous driving.
The judges were concerned about faultless drivers being charged if a drunk pedestrian fell into the road in front of them, or if someone attempted suicide by jumping out into the road.
The Parkers’ local MP, Will Stone, believes the law needs to be changed to reflect the spirit and intention of the 2006 legislation.
He has a Ten Minute Rule Bill today – a motion to seek MPs’ permission to introduce a bill to make the case for a new law.
Labour MP Mr Stone is hoping the government will adopt the bill as part of their forthcoming road safety strategy.
“What we’re specifically looking to do with the Harry Parker Bill, is that if a driver without a licence crashes into somebody and it results in death, it would automatically be deemed careless,” he said.
“There is clearly a loophole in the rules. You need a driving licence to drive. Therefore, choosing to go without one is careless by default. You shouldn’t be on the road because you don’t have the requirements to operate a car, and I think that is a safety risk.“
The Department of Transport said: “Every death on our roads is a tragedy and our thoughts remain with the family and friends of Harry Parker.
“The government takes road safety seriously, and we are committed to reducing the number of those killed and injured on our roads.”
Adam Parker now spends every morning on the road outside Harry’s school, making sure all the pupils get across safety. He and Kelly are campaigning to raise awareness of road safety, hoping that Harry’s legacy will be to protect other children.
“You shouldn’t send your child off to school, planning what you’re going to cook them that evening, planning what they’re going to have for their birthday in five days time, but it doesn’t happen because someone just hits him,” said Kelly. “We don’t want any other parents to have to go through this.”
The US solar manufacturing industry just hit a historic milestone: Domestic solar module production capacity has surpassed 50 gigawatts (GW). If all these factories ran at full capacity, they could produce enough modules to meet the country’s entire solar demand.
This achievement signals a shift in the US solar industry, which has historically depended on imports for key components.
According to the Solar Energy Industries Association’s (SEIA) Supply Chain Dashboard, companies have announced plans for 56 GW of new solar cell production in the US, 24 GW of wafer production, and 13 GW of ingots. Meanwhile, domestic solar tracker manufacturing capacity has now topped 80 GW.
SEIA president and CEO Abigail Ross Hopper said:
Reaching 50 GW of domestic solar manufacturing capacity is a testament to what we can achieve with smart, business-friendly public policies in place.
The US is now the third-largest module producer in the world because of these policy actions.
This milestone marks progress for the solar industry and reinforces the essential role energy policies play in building up the domestic manufacturing industry that American workers and their families rely on.
SEIA first set a goal in 2020 to reach 50 GW of US solar module production capacity by 2030 – enough power output to match 27 Hoover Dams. That goal spans the entire solar supply chain, from modules and cells to ingots, wafers, polysilicon, trackers, and inverters.
At the time, the US had only 7 GW of domestic module production and no manufacturing for critical upstream components like ingots and wafers. Fast forward to today, and the industry looks a lot different. Two new US solar cell factories – one in Georgia and another in South Carolina – have already come online in the past few months, helping to fill in the gaps.
SEIA’s strategy has focused on building out domestic module production first to create demand for upstream components. Thanks to policy incentives that SEIA helped advocate for such as the advanced manufacturing production tax credit, companies are now investing in every part of the solar supply chain.
Another win came when SEIA pushed for solar ingot and wafer production to qualify for a 25% investment tax credit under the CHIPS and Science Act of 2022. That move is helping build out the US solar supply chain even further. Since the passage of key federal energy policies, US solar module manufacturing has grown five-fold.
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Gains were broad-based across tech stocks in Japan, South Korea and Hong Kong, and came as their counterparts in the U.S. cut their losses on Monday, following tariff announcements that came late in the day.
Japanese Semiconductor players Advantest and Lasertec led gains among the country’s tech stocks, rising 5% and 4.81%, respectively.
Taiwanese chip company TSMC and manufacturer Foxconn rose 2.8% and
Tech stocks in Asia had come under pressure after Chinese startup DeepSeek launched a free, open-source language model that challenged the supremacy of the U.S.-led AI ecosystem. These stocks subsequently rebounded last week, but the rally mostly got stalled Monday over tariff worries.
South Korean tech stocks were also trading higher on Tuesday, with Samsung Electronics gaining 4.13% and SK Hynix rising marginally, up 0.63%.
Chinese tech major Tencent’s shares rose 3.07% in HongKong, while shopping platform Meituan’s stock advanced 5.06%, electronic vehicle maker BYD rose 4.22%, Xpeng was trading 14.46% higher and Li Auto gained 9.35%.
The gains in Chinese companies come even as U.S. tariffs on CnaChina are set to kick in. Trump will reportedly speak with President Xi Jinping this week, signaling the intent to avoid a broader tariff war between the world’s top two economies.
Correction: The story has been updated to reflect that the U.S. has paused tariffs on Canada and Mexico.