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.

The Fed’s benchmark borrowing rate is currently set at 4.25% to 4.5%, remaining unchanged since January. The future rate cuts are expected to amount to half a percentage point, bringing the rate to 3.75% to 4% range for the first time since November 2022.

The officials also shared their views on economic growth and inflation in the wake of recent tariff policy changes. They now expect slower economic growth and expect inflation to spike up to 2.7% compared to the current level of 2.5%.

Speaking at a press conference after the meeting, Federal Reserve Chair Jerome Powell indicated that the Fed’s stance on rates will continue to be based on the economic indicators.  

“If the economy remains strong, and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer,” Powell said. “If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

The stock market reacted positively to the news, with Dow Jones Industrial Average futures jumping by 0.2%. S&P 500 futures ticked up by 0.3% as did futures attached to Nasdaq Composite.

The post Federal Reserve Keeps Interest Rates Intact, But Still Predicts Two Cuts in 2025 appeared first on theprimarymarket.com.

The Federal Open Market Committee (FOMC) unanimously voted to pause further rate cuts at the conclusion of its two-day meeting in Washington, D.C. The move was somewhat expected, as policymakers previously indicated the intention to take a patient approach to interest rate changes in 2025.

In a statement released following the meeting, FOMC said that the economic activity in the country continued to expand “solid pace,” while adding that the unemployment rate remains at a low level and that the labor market conditions are “solid.” It also described the inflation as “somewhat elevated.”

“The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run,” FOMC noted. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”

Additionally, Fed chair Jerome Powell said that the U.S. central bank will have to see “real progress on inflation or some weakness in the labor market” before considering further rate adjustments.

The Fed’s decision to keep the interest rates unchanged caused a brief slide in the stock market that was diminished in the following hours. Benchmark S&P 500 was down by 0.72% at one point before closing down by 24.57 points or 0.41%.

The post Fed Unanimously Decides to Keep Its Interest Rates Intact appeared first on theprimarymarket.com.

The CPI increased by 0.4% on a seasonally adjusted basis in the last month of 2024 compared to a 0.3% jump in November while putting the 12-month inflation at 2.9%. Economists predicted a 0.3% jump and 12-month inflation of 2.9%.

However, the core CPI, which excludes volatile prices of food and gas and is the Federal Reserve’s preferred measure of inflation, has been favorable and came below expectations. It saw a jump of 0.2% and came at an annual rate of 3.2%, while economists expected a 0.3% increase and an annual rate of 3.3%.

The CPI report had a positive effect on the stock market, which rebounded following a sluggish start of the week. Benchmark S&P 500 improved by 107 points or 1.83% to close at 5,949.91, blue-chip Dow Jones Industrial Average experienced 703.27 points or 1.65% to close at 43,221.55, while the tech-heavy Nasdaq soared by 2.45% or 466.84  for a 19,511.23 points close. 

Experts believe that the CPI numbers won’t change the Fed’s intention to pause with rate cuts but should calm any concerns about interest rates going up.

“Today’s CPI may help the Fed feel a little more dovish. It won’t change expectations for a pause later this month, but it should curb some of the talk about the Fed potentially raising rates,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, told CNBC. “And judging by the market’s initial response, investors appeared to feel a sense of relief after a few months of stickier inflation readings.”

The post Consumer Price Index Rises in December, But Shows Encouraging Trend 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.

The benchmark S&P 500 gained 1.09% or 63.77 points to close at 5,930.85, while the tech-heavy Nasdaq Composite closed at 19,572.60 following a 1.03% or 199.83 points jump. The blue-chip Dow Jones Industrial Average was up by 498.02 points or 1.18% for a close of 42,840.26.

Despite the rally, the major indexes failed to mitigate the losses they took earlier in the week. Dow Jones ended the week down 2.25%, while the S&P 500 and Nasdaq notched losses of 2.19% and 2.22%, respectively.

The U.S. stock market being in the red for this week was a result of a major sell-off on Wednesday amid the Federal Reserve’s decision to cut its borrowing rates by 25 basis points. This followed a projection of fewer rate cuts in 2025 compared to previous expectations. The traders previously expected at least four rate cuts next year while the officials forecast just two.

However, the market reacted positively to the latest Personal Consumption Expenditures (PCE) index release. In November, the core PCE, which excludes volatile food and energy prices, increased by 0.1%, coming below the projected 0.2% and showing deceleration from October’s 0.3% increase.

The post U.S. Stock Bounce Back on New Inflation Data appeared first on theprimarymarket.com.

While the Federal Reserve cut its interest rate by 50 basis points at its latest policy meeting, US inflation reports on Thursday showed that inflation rose more than expected, thereby drawing concerns over whether the central bank cut the rate prematurely. In addition, the latest US jobs report showed that applications for unemployment benefits rose to a one-year high. Despite the latest incoming data, Fed policymakers John Williams, Austan Goolsbee, and Thomas Barkin all appear unconcerned, indicating that the Fed can continue cutting rates at its next meeting.

Markets are betting on a 25 basis point cut in November, with the price of gold expected to be lifted further as interest rates drop. Gold prices have risen by over 25% since the start of the year.

The post Gold Rebounds Following Mixed Inflation Data appeared first on theprimarymarket.com.

In the aftermath of the US jobs report shared on Friday, which exceeded expectations by a large margin, former US Treasury Secretary Larry Summers branded the September’s 50 basis points cut as a “mistake.  Still, he doesn’t believe that the decision will have significant consequences.

“Today’s employment report confirms suspicions that we are in a high neutral rate environment where responsible monetary policy requires caution in rate cutting,” Summers said in a post on X (former Twitter). “With the benefit of hindsight, the 50 basis point cut in September was a mistake, though not one of great consequence.”

With inflation coming closer to the Fed’s target level of 2%, policymakers opted to be aggressive on rate cuts in order to strengthen the labor market that showed weakness in months prior to the cut.

Fed officials also hinted that more rate cuts will follow before the end of the year. However, experts believe policymakers will have a moderate approach this time around and opt for 25 basis points cut. The next Fed meeting is scheduled for November. 

The post Fed’s 50 Basis Points Rate Cut Was a “Mistake” Says Former Treasury Secretary Lawrence Summers appeared first on theprimarymarket.com.

The all-items Personal Consumption Expenditures index jumped by 0.1% compared to July, marking a 2.2% increase on a year-over-year basis. It is down from a 2.5% year-over-year increase from the month prior and largely in line with analysts’ expectations, who forecasted a 0.1% monthly jump and a 12-month inflation rate of 2.3%.

The PCE index rate of 2.2% has been at its lowest since February 2021 but is still above the Fed’s target of 2%.

Core PCE, which excludes volatile food and energy prices and is more closely followed by the Fed, increased by 0.1% in August while being 2.7% up from a year ago. The analysts expected core PCE to jump by 0.2% and predicted a 2.7% year-over-year increase.

The experts are divided about what the PCE data will mean for the Fed’s borrowing policy. The Fed lowered its interest rate in September by 50 basis points and is expected to make another cut in November. While some believe another larger cut would be appropriate, others predict that the data is promising enough that the Fed feels comfortable going with a lower 25 basis points cut.

The post Core PCE, Fed’s Preferred Inflation Gauge, Lower Than Expected in August appeared first on theprimarymarket.com.

Blue-chip Dow Jones Industrial Average managed to reach another record close at 42,313.00 points after 0.33% or 137.89 points gain. The index finished the week with 0.60% or 252.60 points gain.

On the other hand, the benchmark S&P 500 and tech-heavy Nasdaq Composite were both in the red on Friday. S&P 500 lost 0.13% or 7.20 points to close at 5,738.17, although it was coming from an all-time record on Thursday and is 0.46% up for the week.

Nasdaq was down to 18,119.59 close after sliding 0.4% or 70.70 points on Friday, a result of weak performance by ship stocks. Still, it recorded the highest weekly gain of all three major indexes, finishing the week up 0.69%.

The winning week for stocks was likely prompted by the increased confidence in the economy after the latest data showed an annualized growth of 3% in the second quarter, which was above analysts’ expectations.

Additionally, 218,000 unemployment claims were filed last week compared to an estimated 223,000, while the Customer Department’s recent report showed that the inflation is on the path of further cooldown.

The post U.S. Stocks Wrap Up the Week With Gains Despite Mixed Trading on Friday 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.

The Fed’s benchmark borrowing rate is currently set at 4.25% to 4.5%, remaining unchanged since January. The future rate cuts are expected to amount to half a percentage point, bringing the rate to 3.75% to 4% range for the first time since November 2022.

The officials also shared their views on economic growth and inflation in the wake of recent tariff policy changes. They now expect slower economic growth and expect inflation to spike up to 2.7% compared to the current level of 2.5%.

Speaking at a press conference after the meeting, Federal Reserve Chair Jerome Powell indicated that the Fed’s stance on rates will continue to be based on the economic indicators.  

“If the economy remains strong, and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer,” Powell said. “If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

The stock market reacted positively to the news, with Dow Jones Industrial Average futures jumping by 0.2%. S&P 500 futures ticked up by 0.3% as did futures attached to Nasdaq Composite.

The post Federal Reserve Keeps Interest Rates Intact, But Still Predicts Two Cuts in 2025 appeared first on theprimarymarket.com.

The Federal Open Market Committee (FOMC) unanimously voted to pause further rate cuts at the conclusion of its two-day meeting in Washington, D.C. The move was somewhat expected, as policymakers previously indicated the intention to take a patient approach to interest rate changes in 2025.

In a statement released following the meeting, FOMC said that the economic activity in the country continued to expand “solid pace,” while adding that the unemployment rate remains at a low level and that the labor market conditions are “solid.” It also described the inflation as “somewhat elevated.”

“The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run,” FOMC noted. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”

Additionally, Fed chair Jerome Powell said that the U.S. central bank will have to see “real progress on inflation or some weakness in the labor market” before considering further rate adjustments.

The Fed’s decision to keep the interest rates unchanged caused a brief slide in the stock market that was diminished in the following hours. Benchmark S&P 500 was down by 0.72% at one point before closing down by 24.57 points or 0.41%.

The post Fed Unanimously Decides to Keep Its Interest Rates Intact appeared first on theprimarymarket.com.

The CPI increased by 0.4% on a seasonally adjusted basis in the last month of 2024 compared to a 0.3% jump in November while putting the 12-month inflation at 2.9%. Economists predicted a 0.3% jump and 12-month inflation of 2.9%.

However, the core CPI, which excludes volatile prices of food and gas and is the Federal Reserve’s preferred measure of inflation, has been favorable and came below expectations. It saw a jump of 0.2% and came at an annual rate of 3.2%, while economists expected a 0.3% increase and an annual rate of 3.3%.

The CPI report had a positive effect on the stock market, which rebounded following a sluggish start of the week. Benchmark S&P 500 improved by 107 points or 1.83% to close at 5,949.91, blue-chip Dow Jones Industrial Average experienced 703.27 points or 1.65% to close at 43,221.55, while the tech-heavy Nasdaq soared by 2.45% or 466.84  for a 19,511.23 points close. 

Experts believe that the CPI numbers won’t change the Fed’s intention to pause with rate cuts but should calm any concerns about interest rates going up.

“Today’s CPI may help the Fed feel a little more dovish. It won’t change expectations for a pause later this month, but it should curb some of the talk about the Fed potentially raising rates,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, told CNBC. “And judging by the market’s initial response, investors appeared to feel a sense of relief after a few months of stickier inflation readings.”

The post Consumer Price Index Rises in December, But Shows Encouraging Trend 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.

The benchmark S&P 500 gained 1.09% or 63.77 points to close at 5,930.85, while the tech-heavy Nasdaq Composite closed at 19,572.60 following a 1.03% or 199.83 points jump. The blue-chip Dow Jones Industrial Average was up by 498.02 points or 1.18% for a close of 42,840.26.

Despite the rally, the major indexes failed to mitigate the losses they took earlier in the week. Dow Jones ended the week down 2.25%, while the S&P 500 and Nasdaq notched losses of 2.19% and 2.22%, respectively.

The U.S. stock market being in the red for this week was a result of a major sell-off on Wednesday amid the Federal Reserve’s decision to cut its borrowing rates by 25 basis points. This followed a projection of fewer rate cuts in 2025 compared to previous expectations. The traders previously expected at least four rate cuts next year while the officials forecast just two.

However, the market reacted positively to the latest Personal Consumption Expenditures (PCE) index release. In November, the core PCE, which excludes volatile food and energy prices, increased by 0.1%, coming below the projected 0.2% and showing deceleration from October’s 0.3% increase.

The post U.S. Stock Bounce Back on New Inflation Data appeared first on theprimarymarket.com.

While the Federal Reserve cut its interest rate by 50 basis points at its latest policy meeting, US inflation reports on Thursday showed that inflation rose more than expected, thereby drawing concerns over whether the central bank cut the rate prematurely. In addition, the latest US jobs report showed that applications for unemployment benefits rose to a one-year high. Despite the latest incoming data, Fed policymakers John Williams, Austan Goolsbee, and Thomas Barkin all appear unconcerned, indicating that the Fed can continue cutting rates at its next meeting.

Markets are betting on a 25 basis point cut in November, with the price of gold expected to be lifted further as interest rates drop. Gold prices have risen by over 25% since the start of the year.

The post Gold Rebounds Following Mixed Inflation Data appeared first on theprimarymarket.com.

In the aftermath of the US jobs report shared on Friday, which exceeded expectations by a large margin, former US Treasury Secretary Larry Summers branded the September’s 50 basis points cut as a “mistake.  Still, he doesn’t believe that the decision will have significant consequences.

“Today’s employment report confirms suspicions that we are in a high neutral rate environment where responsible monetary policy requires caution in rate cutting,” Summers said in a post on X (former Twitter). “With the benefit of hindsight, the 50 basis point cut in September was a mistake, though not one of great consequence.”

With inflation coming closer to the Fed’s target level of 2%, policymakers opted to be aggressive on rate cuts in order to strengthen the labor market that showed weakness in months prior to the cut.

Fed officials also hinted that more rate cuts will follow before the end of the year. However, experts believe policymakers will have a moderate approach this time around and opt for 25 basis points cut. The next Fed meeting is scheduled for November. 

The post Fed’s 50 Basis Points Rate Cut Was a “Mistake” Says Former Treasury Secretary Lawrence Summers appeared first on theprimarymarket.com.

The all-items Personal Consumption Expenditures index jumped by 0.1% compared to July, marking a 2.2% increase on a year-over-year basis. It is down from a 2.5% year-over-year increase from the month prior and largely in line with analysts’ expectations, who forecasted a 0.1% monthly jump and a 12-month inflation rate of 2.3%.

The PCE index rate of 2.2% has been at its lowest since February 2021 but is still above the Fed’s target of 2%.

Core PCE, which excludes volatile food and energy prices and is more closely followed by the Fed, increased by 0.1% in August while being 2.7% up from a year ago. The analysts expected core PCE to jump by 0.2% and predicted a 2.7% year-over-year increase.

The experts are divided about what the PCE data will mean for the Fed’s borrowing policy. The Fed lowered its interest rate in September by 50 basis points and is expected to make another cut in November. While some believe another larger cut would be appropriate, others predict that the data is promising enough that the Fed feels comfortable going with a lower 25 basis points cut.

The post Core PCE, Fed’s Preferred Inflation Gauge, Lower Than Expected in August appeared first on theprimarymarket.com.

Blue-chip Dow Jones Industrial Average managed to reach another record close at 42,313.00 points after 0.33% or 137.89 points gain. The index finished the week with 0.60% or 252.60 points gain.

On the other hand, the benchmark S&P 500 and tech-heavy Nasdaq Composite were both in the red on Friday. S&P 500 lost 0.13% or 7.20 points to close at 5,738.17, although it was coming from an all-time record on Thursday and is 0.46% up for the week.

Nasdaq was down to 18,119.59 close after sliding 0.4% or 70.70 points on Friday, a result of weak performance by ship stocks. Still, it recorded the highest weekly gain of all three major indexes, finishing the week up 0.69%.

The winning week for stocks was likely prompted by the increased confidence in the economy after the latest data showed an annualized growth of 3% in the second quarter, which was above analysts’ expectations.

Additionally, 218,000 unemployment claims were filed last week compared to an estimated 223,000, while the Customer Department’s recent report showed that the inflation is on the path of further cooldown.

The post U.S. Stocks Wrap Up the Week With Gains Despite Mixed Trading on Friday appeared first on theprimarymarket.com.