Good news for investors – the US Federal Reserve is indicating it will let the economy ‘run hot’ for the foreseeable future to promote recovery.

In an anticipated keynote speech to the Jackson Hole symposium, US Federal Reserve chair Jerome Powell said the central bank would tolerate inflation that rises above 2 per cent for short periods.

Generally, policymakers believe that an acceptable inflation rate is around 2 per cent or a bit below.

But if inflation is too low the economy is in danger of falling into deflation. That means prices and wages are generally falling — a phenomenon associated with very weak economic conditions.

In other words, the Fed is happy to keep its extraordinary stimulus measures in place until the crippled economy has sufficiently recovered.

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US share markets mostly rose on Thursday in response.

This announcement largely just ‘codifies’ the extremely dovish policy strategy the Fed has already been following, Oxford Economics chief US financial economist Kathy Bostjancic says.

“However, it signals that the Fed will be willing to let the economy ‘run hot’ in order to promote broad and inclusive employment gains even if inflation temporarily and moderately rises above 2 per cent,” she says.

“We forecast it will take until mid-2024 before the unemployment rate is low enough and the inflation rate high enough to justify rate lift-off.”

 

WINNERS

Here are the best performing ASX small cap stocks at 12pm Friday August 28:

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CODE COMPANY PRICE CHANGE MARKET CAP
IAM Intiger Group 0.004 300.00% $7.7M
GGX Gas2grid 0.004 100.00% $5.5M
DDT DataDot Technology 0.007 87.50% $8.8M
WTL Wt Financial Group 0.053 76.67% $8.8M
PBH Pointsbet Holdings 11.85 58.00% $1.8B
MRD Mount Ridley Mines 0.003 50.00% $6.7M
MNB Minbos Resources 0.003 50.00% $17.0M
GWR GWR Group 0.105 40.00% $29.3M
WBE Whitebark Energy 0.004 33.33% $16.2M
SHH Shree Minerals 0.01 30.00% $9.9M
PRT Prime Media Group 0.115 26.37% $42.1M
CLZ Classic Minerals 0.003 25.00% $26.1M
LCY Legacy Iron Ore 0.005 25.00% $31.2M
BUD Buddy Platform 0.083 20.29% $215.4M
ROO Roots Sustainable Agriculture 0.029 26.09% $4.7M
HSN Hansen Tech 3.88 22.01% $763.2M
CVV Caravel Minerals 0.067 19.64% $16.6M
SMI Santana Minerals 0.0035 16.67% $8.1M
AAJ Aruma Resources 0.007 16.67% $8.0M
BCT Bluechiip 0.063 12.50% $36.8M
CBY Canterbury Resources 0.11 15.79% $10.1M
SHM Shriro Holdings 0.635 15.45% $59.9M

 

A restructure at financial advisor WT Financial Group (ASX:WTL) has delivered “return to operating profit and positive operating cashflow” despite the impact of COVID-19, the company says.

Junior iron ore developer GWR Group (ASX:GWR) has scored all-important mining approvals from the WA state government, paving the way for first production at its Wiluna West project.

Buddy Technologies’ (ASX:BUD) LIFX brand has announced the world’s first “disinfecting anti-bacterial smart light”, which it expects to be released to market in Q4.

 

LOSERS

Here are the worst performing ASX small cap stocks at 12pm Friday August 28:

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CODE COMPANY PRICE CHANGE MARKET CAP
ANW Aus Tin Mining 0.001 -33.33% $3.1M
CFO Cfoam 0.027 -25.00% $5.2M
RNE Renu Energy 0.02 -23.08% $2.4M
MCX Mariner Corporation 0.08 -20.00% $4.8M
MLS Metals Australia 0.002 -20.00% $8.0M
TSC Twenty Seven 0.005 -16.67% $7.4M
SBR Sabre Resources 0.005 -16.67% $6.3M
AO1 Assetowl 0.011 -15.38% $5.4M
MRQ MRG Metals 0.006 -14.29% $7.4M
LIT Lithium Australia 0.007 -12.50% $38.7M
PWN Parkway Minerals 0.007 -12.50% $12.0M
BCC Beam Com 0.215 -12.24% $25.7M
NXM Nexus Minerals 0.077 -11.49% $11.4M
INP Incentiapay 0.039 -11.36% $25.6M
AVE Avecho Bio 0.008 -11.11% $12.8M
BLG BluGlass 0.081 -10.99% $58.3M
LKE Lake Resources 0.034 -10.53% $22.8M
BOA Boadicea Resources 0.24 -9.43% $13.3M