Barron’s (July 31)
“The Federal Reserve’s key inflation gauge,” which excludes food and energy “ran just slightly above expectations in June, raising additional doubts about how quickly the bank will be able to lower interest rates.” Rising 0.3% month on month and 2.8% year on year, the core personal consumption expenditures (PCE) price index surpassed consensus expectations. This week, Fed officials indicated the need before lowering rates for “more evidence that inflation is sustainably moving toward the bank’s 2% target,” but the PCE’s “stronger-than-expected result” appears to show the opposite.
Tags: 2% target, Consensus, Doubts, Energy, Evidence, Expectations, Fed, Food, Inflation, Inflation gauge, Interest rates, June, PCE
Fortune (July 1)
“Consumer spending is weakening. The job market is getting worse for workers. And U.S. stock investors are loving it. The S&P 500 rose 0.52% yesterday, hitting an all-time high for the second day in a row.” The surging market suggests “investors don’t anticipate anything dramatic like a mass selloff.” Their optimism seems to be pinned on hopes that “the deteriorating macro picture” will convince the Federal Reserve to “cut interest rates sooner rather than later. And cheap money is usually good for stocks.”
Tags: All-time high, Consumer spending, Fed, Investors, Job market, Mass selloff, Optimism, S&P 500, Stocks, Surging, U.S., Weakening, Workers
Wall Street Journal (June 20)
Federal Reserve Chair Jerome Powell “offered nothing to hint at a July rate reduction, and investors eyed September as the earliest possible resumption of rate cuts paused earlier this year. With most relevant data still to come, it made little sense for the Fed chair to commit to a specific course of action.” The Fed is waiting to see “the aftereffects” of Trump’s tariffs. “Most economists expect tariffs to lift prices over the coming months, and that is a worry for the Fed because officials still don’t feel as if they completely vanquished inflation after a three-year-long fight.”
Tags: Aftereffects, Data, Economists, Fed, Inflation, Investors, Powell, Prices, Rate cuts, September, Trump’s tariffs, Waiting
Reuters (June 19)
“Central banks are grappling with elevated uncertainty about economic growth and inflation, complicating decision-making, especially for those trying to calibrate policy as they near the end of their rate-cutting cycles.” The rate uncertainty is in turn “making life hard for investors.” For example, “Norway’s central bank on Thursday gave markets a shock by cutting interest rates, and even the U.S. Federal Reserve is warning not to put much weight on its policy projections.”
Tags: Calibrate, Central banks, Decision-making, Economic growth, Fed, Grappling, Inflation, Investors, Norway, Policy projections, Rate-cutting cycles, U.S., Uncertainty, Warning
The Economist (April 22)
“Monetary madness” continues in the U.S. as “Trump fires at the Fed.” After Trump took potshots, threatening to fire Fed Chair Jerome Powell, the American economy became “collateral damage…. When markets opened on April 21st, after a long Easter weekend, American stocks, Treasury bonds and the dollar all sharply declined—another example of the ‘sell America’ trade.”
Tags: Collateral damage, Declined, Dollar, Economy, Fed, Fire, Markets, Monetary madness, Potshots, Powell, Sell America, Stocks, Threatening, Treasury bonds, Trump, U.S.
Wall Street Journal (April 21)
“If the White House wanted a test of how firing Jerome Powell would go over in the markets, it succeeded on Monday. U.S. stocks and the dollar plunged while yields on long-term Treasurys climbed after President Trump renewed his attacks on the Federal Reserve Chairman.” The President “thinks he can bully everyone into submission, but he can’t bully Adam Smith, who deals in reality. Markets know tariffs are taxes, and taxes are anti-growth.” It is clear that the “Trump tariffs are the biggest economic policy mistake in decades.” What remains unclear is the President’s ability to see reality. “Markets are spooked because they don’t know if Mr. Trump listens to anyone but his own impulses.”
Tags: Adam Smith, Anti-growth, Attacks, Bully, Dollar, Fed, Firing, Markets, Mistake, Plunged, Powell, Reality, Spooked, Stocks, Submission, Tariffs, Taxes, Treasurys, Trump, U.S., White House, Yields
Market Watch (January 13)
“Last week, a batch of blockbuster U.S. economic data prompted traders to consider the possibility that the Federal Reserve may need to pause interest-rate cuts until summer. As a result, stocks got crushed, with the S&P 500 erasing most of its postelection gains and the Dow Jones Industrial Average posting its worst start to a year since 2016.”
Tags: 2016, Blockbuster, Crushed, Dow Jones, Economic data, Fed, Gains, Interest rate cuts, Postelection, S&P 500, Stocks, Summer, Traders, U.S.
Inc. (January 9)
“Everyone loves talking about the stock market, but the $28 trillion Treasury market is the fortuneteller of the pair—bonds are now flashing warnings of a Fed policy error, resurgent price pressures, and a ballooning debt pile.” Contrary to expectations, “bond yields have surged since the Fed began cutting interest rates.”
Tags: Ballooning debt, Bonds, Fed, Fortuneteller, Interest rates, Policy error, Price pressures, Stock market, Treasury market, Warnings, Yields
MSN (December 20)
“The smooth economy that Donald Trump was poised to inherit suddenly looks a bit rockier — with critics saying the president-elect is contributing to the uncertainty.” After 10 days of losses, the DJSI “essentially ended Thursday flat” and the Federal Reserve “has become cautious about further interest rate cuts planned for next year” amid persistent inflation.
Tags: Cautious, DJSI, Economy, Fed, Flat, Interest rate cuts, Losses, Persistent inflation, President-elect, Rockier, Smooth, Trump, Uncertainty
Barron’s (December 16)
“Investors betting on future interest rate moves expect the Fed to cut rates a quarter-point, ending 2024 with a federal-funds rate in the range of 4.25%-4.5%.” That not something bond investors like. They are increasingly “shunning long-term Treasuries,” with the yield on 10-year Treasuries moving beyond the “20-day moving average of 4.293% on Thursday,” before “topping 4.4% during intraday trading on Friday.”
Tags: 10-year Treasuries, 4, 4.293%, Bond investors, Fed, Federal-funds rate, Future, Interest rate, Intraday trading, Investors, Shunning, Yield
