How Economic News Can Help You Make Sense of Your Investments

economic news

Whether you want to find out about the economy and how it is doing, or if you want to know about the latest developments in the world of business, it’s a good idea to read economic news. There are many different kinds of economic news you can find out about, from the latest inflation to consumer spending. You can find out about the Federal Reserve, the OPEC oil cartel, and much more.

Inflation

Despite being a consumer driven economy, the United States has been stuck in a low inflation trend for over 40 years. Inflation is one of the most vexing problems for economists.

The main goal of most central bankers is to keep inflation at a relatively low level. When inflation gets out of hand, it can create a cycle of wage-price increases. Some workers may ask for bigger pay increases to make up for the climbing cost of living.

There are several ways to measure inflation. The Federal Reserve prefers the Personal Consumption Expenditures (PCE) price index, which measures price changes in the consumer market. The PCE includes information from businesses as well as feedback from consumers.

Consumer spending

Among the most important economic indicators, Consumer spending has a massive impact on the strength of the economy. With inflation near its highest level in four decades, Americans are focused on coping with the pain of a rising cost of living. The Federal Reserve is putting its hand in the ring to combat inflation.

Consumer spending in the United States has increased over the past month. The increase was driven by increases in purchases of food, clothing, motor vehicles and recreational goods. Lower-income households contributed one-fifth of the growth. Nevertheless, the increase was slower than the two straight monthly increases in September and October.

Interest rates

Despite the strong economy, interest rates remain at low levels. In fact, the current Federal Reserve interest rate is the highest since January 2008. The Fed is trying to control inflation. It also wants to slow the economy.

Interest rates are determined by the supply and demand of money. Inflation makes the cost of fuel, food and other goods go up. Inflation is a real risk, especially when the Fed is aggressively raising interest rates.

The Fed’s goal is to keep inflation at low levels and prevent an economic downturn. However, there has been some criticism that the Fed is overcorrecting with its aggressive interest rate hikes.

The Federal Reserve

During a moderated discussion on Wednesday, Federal Reserve Chair Jerome Powell stated that inflation may ease to levels that are still too high. However, he stressed that a more accurate gauge is the core PCE index, which excludes volatile food and energy categories.

Historically high inflation has slowed to 7.7% according to the latest Consumer Price Index. Meanwhile, the Fed has continued to aggressively pursue efforts to lower inflation.

The Fed has held onto a nearly zero percent interest rate policy for two years. It has purchased trillions of dollars in assets to bolster financial markets and boost the economy. It has also initiated a quantitative easing program. In March 2020, the Fed injected $700 billion into the bond market.

OPEC oil cartel

OPEC oil cartel economic news is at a low, despite OPEC ministers’ decision to cut oil production by 2 million barrels a day. The move comes as OPEC and the United States try to encourage Saudi Arabia to increase oil production.

Oil prices have fallen since October, largely due to slower growth. Higher interest rates have caused lower demand. And the global economy is in decline. In addition, the European Union has imposed sanctions on Russia. These may affect oil imports.

The Organisation of Petroleum Exporting Countries is a group of 23 oil producing nations. Its headquarters are in Vienna, Austria. The group is sometimes referred to as the oil market’s central bank. It meets monthly to decide production targets. Several members are already pumping well below quotas.

India as a dedicated allocation in their investment portfolios

Considering the amount of money flowing into the country’s stock market, a dedicated allocation to India in your portfolio isn’t out of the question. The nation’s stock market is one of the most active in the world. For instance, demat accounts are growing at an annual rate of almost 10 per cent. This number is set to grow by leaps and bounds in the years to come. This is particularly true given that the country is also home to one of the most populous economies in the world. The country’s burgeoning middle class is a boon for a variety of sectors including banking and financial services, retail and manufacturing.