Speaking in front of the Economic Club of Chicago, Powell said that the Fed is well-positioned to “wait for greater clarity” before deciding on interest rate changes. 

“For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance,” Powell stated.

The two main goals of the Fed are to keep the prices stable while maximizing employment. It makes changes to its policy based on which goal it needs to achieve. However, the tariffs could jeopardize both goals at the same time, causing inflation to surge while slowing economic growth.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell added. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

The markets didn’t react positively to Powell’s remarks. The benchmarks S&P 500 slid by 120.93 points or 2.24% while tech-heavy Nasdaq Composite lost 516.01 points or 3.07%. The blue-chip Dow Jones Industrial Average went down by 700 points or 1.73%.

The post Fed to “Wait for Greater Clarity” Before Making Policy Adjustment Says Chair Jerome Powell appeared first on theprimarymarket.com.

In a recent interview with Bloomberg News, Collins said that she believes the latest employment data and lingering inflation call will result in fewer rate cuts than previously expected.

“Over time, it will be appropriate for some more easing, but perhaps somewhat less than I might have thought back in September,” Collins said. “Taking the time to really patiently assess the data holistically — to be analytic and patient — seems to me very likely to be appropriate as we think about policy going into 2025.”

Collins explained that the Fed officials might adopt a faster pace in case inflation shows further signs of cooling down. But if the data is inconclusive, the Fed will likely elect to stand pat.

However, she is optimistic about the labor market, where the data is more favorable.

 “On the labor market side, there were more concerns for me earlier about potential fragilities. Those concerns have eased,” she added.

The Fed slashed its benchmark rate to 4.25% to 4.5% during its December meeting. At the time, the officials said they would wait to see further improvement in inflation data before making their next move. Additionally, they forecasted just two rate cuts in 2025 compared to projections of four rate cuts from the September meeting.

The post Boston Fed President Susan Collins Supports Fewer Rate Cuts in 2025 appeared first on theprimarymarket.com.

With inflation data for September coming in hotter than expected, traders are now anticipating the Federal Reserve’s next move, especially after introducing a half-percentage point cut in September. “The Fed said the last mile getting toward their inflation target is going to be tough, and that is what we are seeing,” David Donabedian from CIBC Private Wealth US observed.

Markets are pricing in an 80% chance that the Fed will cut interest rates by another 25 basis points at its November policy meeting. Despite hotter-than-expected September inflation figures, Fed policymakers, including Austan Goolsbee and John Williams, insist that interest rate cuts may still be able to continue despite an unexpected inflation rise.

The post Stocks Hold Steady as Traders Await Earnings Data and Fed Policy appeared first on theprimarymarket.com.

The Federal Open Market Committee (FOMC) was widely expected to make cuts on Wednesday, with the traders being split on whether the rate will be lowered by 25 basis points or 50 basis points. Both moves had their pros and cons according to experts, with lower cuts threatening to increase the risk of recession while deeper cuts possibly contributed to higher inflation.

In the end, the monetary policymakers opted for a more aggressive approach, bringing the rate to the 4.75%-5% range, although the decision wasn’t unanimous. Fed governor Michelle Bowman dissented, arguing that a 25 basis points cut would be more appropriate.

“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Fed said in a statement released after the meeting.

The Fed also shared a so-called dot plot, which indicates that another 50 basis points cut is coming by the end of the year, further full percentage points of cuts in 2025, and a half percentage point cut in 2026. This would bring the interest rate to 2.9%.

Still, it isn’t guaranteed that this will be the approach that the Federal Reserve ends up taking.

“I think we’re going to go carefully meeting by meeting, and make our decisions as we go,” Fed chair Jerome Powell said during press conference after the meeting.

The post Fed Lowers Rates By 50 Basis Points, Signals 2 More Cuts in 2024 appeared first on theprimarymarket.com.

Among the guests who are set to make an appearance at Powell’s speech are Bank of England Governor Andrew Bailey and European Central Bank chief economist Philip Lane, the latter of whom will speak the following day.

“It’s highly likely Powell will use his Jackson Hole address to declare it will soon be the ‘appropriate’ time to cut rates,” Bloomberg Economics observed. This comes after the latest weekly jobless claims report and data on US housing demand pointed to cooling inflation which is heading towards the Fed’s 2% mark. On Thursday, the National Association of Realtors is set to release its latest data on previously-owned home sales, thereby enhancing the Fed’s outlook ahead of its policy decision in September.

The post Focus Turns to Federal Reserve Ahead of Its Jackson Hole Symposium appeared first on theprimarymarket.com.

On Tuesday, the monthly Producer Price Index was released. Lower than economists’ expectations, the PPI report suggested that inflation is continuing to cool, thereby raising bets of an impending rate cut. Still, further insights are expected to be drawn from the upcoming Consumer Price Index (CPI) report, due later on Wednesday.

Fed Bank of Atlanta President Raphael Bostic revealed that, despite the positive economic data to date, he is looking to reflect on more data before throwing his support behind a rate cut. Rhona O’Connell, an analyst from StoneX, observed that the central bank, “has the benefit of a second set of numbers in the first half of September, so the August numbers will set the scene, but will not be pivotal.”

The post Gold Races to Record High With Inflation Data Looming appeared first on theprimarymarket.com.

Still, there are promising signs that a rate cut is coming sooner rather than later. In a statement shared with the media, the Fed said that the “risks to achieving its employment and inflation goals continue to move into better balance” while calling the inflation levels “somewhat elevated.”

“Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee’s 2 percent inflation objective,” the statement said.

The wording of the statement indicates that the Fed is more comfortable with the inflation levels compared to its June meeting. Back then, inflation was simply characterized as “elevated,” with the officials saying there was “modest further progress” in reaching the inflation objective.

Speaking with the media after the meeting, Fed chairman Jerome Powell further fueled the optimism about rate cuts. Powell said that if the economic data continue to show cooling inflation, an interest rate cut will follow during the next meeting in September.

“If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September,” Powell said.

The post Fed Keeps Rates Intact, Hints at Future Cuts appeared first on theprimarymarket.com.

The Fed’s rate remained steady for almost a full year at 5.25% to 5.5%, the highest mark in the past 23 years. Prior to that, the Fed raised interest rates 11 times in attempts to cool down the surging inflation and discourage borrowing and spending. 

The Consumer Price Index report, which was released on Wednesday, showed promising numbers with the core inflation, which excludes prices of energy and food, coming at 3.4% compared to 3.6% expected. However, while the Fed sees the report as progress, it still doesn’t warrant a more relaxed policy.

“What we’ve been getting is good progress on inflation, with growth at a good level and with a strong labor market,” Fed Chair Jerome Powell told reporters. “Ultimately, we think rates will have to come down to continue to support that. But so far, they haven’t had to.”

Powell added that while the Fed officials collectively predict just one rate cut in 2024, there is still a chance for two cuts to take place by the end of the year. Economic experts also believe that two cuts are a more likely option, with the first one expected to come in September.

The post Federal Reserve Project One Rate Cut in 2024 appeared first on theprimarymarket.com.

The benchmark S&P 500 edged 0.1% higher, while the tech-heavy Nasdaq Composite rose by about 0.2%. The Dow Jones Industrial Average slipped lower by 0.1%.

Powell spoke at Stanford University on Wednesday, explaining that while inflation is on a “bumpy” pathway toward the Fed’s 2% target, the central bank is nevertheless set to introduce rate cuts. While stocks enjoyed a rampant rally to start the year, they entered the red last week following a dent in consumer confidence. The S&P 500 has gained almost 10% for the year to date.

The post Stocks Edge Higher as Fed Chair Confirms Rate Cuts Ahead appeared first on theprimarymarket.com.

Core prices rose by 0.3% from January to February, thereby falling in line with expectations and decreasing from the 0.5% rise in January compared to the previous month. While Fed Governor Chris Waller stated that a few more months of positive data will be needed to convince the Fed to cut its rates, some economists are confident that the central bank will introduce rate cuts if data continues down this path.

“By the time the Fed meets in June, the data should be convincing enough for them to commence its rate normalization process. But where we sit today, markets need to have the same patience the Fed is exhibiting.” LPL Financial chief economist Jeffrey Roach reflected.

The post PCE Report Could Convince Federal Reserve to Cut Rates in June appeared first on theprimarymarket.com.

Speaking in front of the Economic Club of Chicago, Powell said that the Fed is well-positioned to “wait for greater clarity” before deciding on interest rate changes. 

“For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance,” Powell stated.

The two main goals of the Fed are to keep the prices stable while maximizing employment. It makes changes to its policy based on which goal it needs to achieve. However, the tariffs could jeopardize both goals at the same time, causing inflation to surge while slowing economic growth.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell added. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

The markets didn’t react positively to Powell’s remarks. The benchmarks S&P 500 slid by 120.93 points or 2.24% while tech-heavy Nasdaq Composite lost 516.01 points or 3.07%. The blue-chip Dow Jones Industrial Average went down by 700 points or 1.73%.

The post Fed to “Wait for Greater Clarity” Before Making Policy Adjustment Says Chair Jerome Powell appeared first on theprimarymarket.com.

In a recent interview with Bloomberg News, Collins said that she believes the latest employment data and lingering inflation call will result in fewer rate cuts than previously expected.

“Over time, it will be appropriate for some more easing, but perhaps somewhat less than I might have thought back in September,” Collins said. “Taking the time to really patiently assess the data holistically — to be analytic and patient — seems to me very likely to be appropriate as we think about policy going into 2025.”

Collins explained that the Fed officials might adopt a faster pace in case inflation shows further signs of cooling down. But if the data is inconclusive, the Fed will likely elect to stand pat.

However, she is optimistic about the labor market, where the data is more favorable.

 “On the labor market side, there were more concerns for me earlier about potential fragilities. Those concerns have eased,” she added.

The Fed slashed its benchmark rate to 4.25% to 4.5% during its December meeting. At the time, the officials said they would wait to see further improvement in inflation data before making their next move. Additionally, they forecasted just two rate cuts in 2025 compared to projections of four rate cuts from the September meeting.

The post Boston Fed President Susan Collins Supports Fewer Rate Cuts in 2025 appeared first on theprimarymarket.com.

With inflation data for September coming in hotter than expected, traders are now anticipating the Federal Reserve’s next move, especially after introducing a half-percentage point cut in September. “The Fed said the last mile getting toward their inflation target is going to be tough, and that is what we are seeing,” David Donabedian from CIBC Private Wealth US observed.

Markets are pricing in an 80% chance that the Fed will cut interest rates by another 25 basis points at its November policy meeting. Despite hotter-than-expected September inflation figures, Fed policymakers, including Austan Goolsbee and John Williams, insist that interest rate cuts may still be able to continue despite an unexpected inflation rise.

The post Stocks Hold Steady as Traders Await Earnings Data and Fed Policy appeared first on theprimarymarket.com.

The Federal Open Market Committee (FOMC) was widely expected to make cuts on Wednesday, with the traders being split on whether the rate will be lowered by 25 basis points or 50 basis points. Both moves had their pros and cons according to experts, with lower cuts threatening to increase the risk of recession while deeper cuts possibly contributed to higher inflation.

In the end, the monetary policymakers opted for a more aggressive approach, bringing the rate to the 4.75%-5% range, although the decision wasn’t unanimous. Fed governor Michelle Bowman dissented, arguing that a 25 basis points cut would be more appropriate.

“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Fed said in a statement released after the meeting.

The Fed also shared a so-called dot plot, which indicates that another 50 basis points cut is coming by the end of the year, further full percentage points of cuts in 2025, and a half percentage point cut in 2026. This would bring the interest rate to 2.9%.

Still, it isn’t guaranteed that this will be the approach that the Federal Reserve ends up taking.

“I think we’re going to go carefully meeting by meeting, and make our decisions as we go,” Fed chair Jerome Powell said during press conference after the meeting.

The post Fed Lowers Rates By 50 Basis Points, Signals 2 More Cuts in 2024 appeared first on theprimarymarket.com.

Among the guests who are set to make an appearance at Powell’s speech are Bank of England Governor Andrew Bailey and European Central Bank chief economist Philip Lane, the latter of whom will speak the following day.

“It’s highly likely Powell will use his Jackson Hole address to declare it will soon be the ‘appropriate’ time to cut rates,” Bloomberg Economics observed. This comes after the latest weekly jobless claims report and data on US housing demand pointed to cooling inflation which is heading towards the Fed’s 2% mark. On Thursday, the National Association of Realtors is set to release its latest data on previously-owned home sales, thereby enhancing the Fed’s outlook ahead of its policy decision in September.

The post Focus Turns to Federal Reserve Ahead of Its Jackson Hole Symposium appeared first on theprimarymarket.com.

On Tuesday, the monthly Producer Price Index was released. Lower than economists’ expectations, the PPI report suggested that inflation is continuing to cool, thereby raising bets of an impending rate cut. Still, further insights are expected to be drawn from the upcoming Consumer Price Index (CPI) report, due later on Wednesday.

Fed Bank of Atlanta President Raphael Bostic revealed that, despite the positive economic data to date, he is looking to reflect on more data before throwing his support behind a rate cut. Rhona O’Connell, an analyst from StoneX, observed that the central bank, “has the benefit of a second set of numbers in the first half of September, so the August numbers will set the scene, but will not be pivotal.”

The post Gold Races to Record High With Inflation Data Looming appeared first on theprimarymarket.com.

Still, there are promising signs that a rate cut is coming sooner rather than later. In a statement shared with the media, the Fed said that the “risks to achieving its employment and inflation goals continue to move into better balance” while calling the inflation levels “somewhat elevated.”

“Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee’s 2 percent inflation objective,” the statement said.

The wording of the statement indicates that the Fed is more comfortable with the inflation levels compared to its June meeting. Back then, inflation was simply characterized as “elevated,” with the officials saying there was “modest further progress” in reaching the inflation objective.

Speaking with the media after the meeting, Fed chairman Jerome Powell further fueled the optimism about rate cuts. Powell said that if the economic data continue to show cooling inflation, an interest rate cut will follow during the next meeting in September.

“If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September,” Powell said.

The post Fed Keeps Rates Intact, Hints at Future Cuts appeared first on theprimarymarket.com.

The Fed’s rate remained steady for almost a full year at 5.25% to 5.5%, the highest mark in the past 23 years. Prior to that, the Fed raised interest rates 11 times in attempts to cool down the surging inflation and discourage borrowing and spending. 

The Consumer Price Index report, which was released on Wednesday, showed promising numbers with the core inflation, which excludes prices of energy and food, coming at 3.4% compared to 3.6% expected. However, while the Fed sees the report as progress, it still doesn’t warrant a more relaxed policy.

“What we’ve been getting is good progress on inflation, with growth at a good level and with a strong labor market,” Fed Chair Jerome Powell told reporters. “Ultimately, we think rates will have to come down to continue to support that. But so far, they haven’t had to.”

Powell added that while the Fed officials collectively predict just one rate cut in 2024, there is still a chance for two cuts to take place by the end of the year. Economic experts also believe that two cuts are a more likely option, with the first one expected to come in September.

The post Federal Reserve Project One Rate Cut in 2024 appeared first on theprimarymarket.com.

The benchmark S&P 500 edged 0.1% higher, while the tech-heavy Nasdaq Composite rose by about 0.2%. The Dow Jones Industrial Average slipped lower by 0.1%.

Powell spoke at Stanford University on Wednesday, explaining that while inflation is on a “bumpy” pathway toward the Fed’s 2% target, the central bank is nevertheless set to introduce rate cuts. While stocks enjoyed a rampant rally to start the year, they entered the red last week following a dent in consumer confidence. The S&P 500 has gained almost 10% for the year to date.

The post Stocks Edge Higher as Fed Chair Confirms Rate Cuts Ahead appeared first on theprimarymarket.com.

Core prices rose by 0.3% from January to February, thereby falling in line with expectations and decreasing from the 0.5% rise in January compared to the previous month. While Fed Governor Chris Waller stated that a few more months of positive data will be needed to convince the Fed to cut its rates, some economists are confident that the central bank will introduce rate cuts if data continues down this path.

“By the time the Fed meets in June, the data should be convincing enough for them to commence its rate normalization process. But where we sit today, markets need to have the same patience the Fed is exhibiting.” LPL Financial chief economist Jeffrey Roach reflected.

The post PCE Report Could Convince Federal Reserve to Cut Rates in June appeared first on theprimarymarket.com.