Weekly Market Update
FED CHAIRMAN POWELL NOW SEES CURRENT INTEREST RATE LEVEL 'JUST BELOW' NEUTRAL
Thursday, November 29, 2018
On Wednesday, in a speech at the Economic Club of New York, Federal Reserve Chairman Jay Powell stated that he believes current interest rates are "just below" neutral. Only a month earlier, Powell had suggested the Fed's view was "a long way from neutral," leading many investors to expect more aggressive interest rate hikes in the future. With the change in Powell's position, markets expect another quarter-point hike in the fed funds rate in December, the fourth hike this year. The rate is still at a historically low level of 2.2%, but economists estimate the "neutral" range for the rate to be between 2.5% and 3.5%.
In Other News
- Real Estate mogul George Marcus and his wife, Judy Marcus, announced a $26.8 million donation to San Francisco State University. This is the largest gift in the university's history and will be used to establish the George and Judy Marcus Funds for Excellence in Liberal Arts and an athletics scholarship fund.
- Michael Bloomberg donated $1.8 billion to Johns Hopkins University earlier this month in hopes of making Hopkins' admissions perpetually need-blind.
- Former students at Mount Ida College, a Massachusetts school that shut its doors this past spring, are filing suit against school officials for misleading students about the severity of the school's financial condition. Students claim the abrupt closing of the college has prevented them from attending other institutions or pursuing their intended degrees.
- Philadelphia Anchors for Growth and Equity (PAGE) is a new city-wide initiative that aims to increase local purchasing by 13 city universities and hospitals by at least $500 million over the next 8-10 years. Local universities include Drexel, University of Pennsylvania, and Temple University. The Economy League of Greater Philadelphia, the nonprofit leading the PAGE initiative, estimates the redirected purchasing could generate as many as 5,000 middle-skill jobs for Philadelphia residents.