Collins told reporters that although inflation data is showing a positive outlook, however, the Fed remains bearish due to the knowledge that this outlook can turn. Earlier this month, the Fed decided to leave interest rates within the 5.25% to 5.5% range; a 22-year high.

On Tuesday, the latest Consumer Price Index (CPI) data showed that US inflation broadly slowed in October, which increased investors’ bets that the Fed is done with its rate-hiking agenda. While Collins acknowledges that goods prices have lowered significantly, she revealed that price slowdowns for some core services including housing have not been as extensive as she has hoped.

The post Boston Fed President Warns That Further Rates Hikes Possible appeared first on theprimarymarket.com.

Japan’s yen reacted strongly to the Fed’s policy decision, hitting 148.255 per dollar after reaching a 10-month low of 48.465 earlier on Thursday. The dollar remained strong against the euro, priced at $1.0658 per euro after previously touching a six-month low of $1.0617.

As investors braced themselves for the Bank of England’s interest rate decision later in the day, the pound stood at $1.2316, just above a four-month low. With the UK’s inflation rate unexpectedly slowing in August, traders are unsure as to how the Bank of England will respond to this development.

The post Dollar Holds Gains Following Fed Rate Decision appeared first on theprimarymarket.com.

At around midday in New York City, the S&P 500 edged slightly higher by 0.32%, while the tech-heavy Nasdaq Composite index was up 0.38%. In contrast, the Dow Jones Industrial Average fell by 0.29%.

Oil futures were down, with US benchmark West Texas Intermediate crude falling 0.7% to $68.90 per barrel. Global benchmark Brent crude declined by 0.8% to $73.63 per barrel.

Market analysts are expecting an interest rate pause to have a positive impact on stocks going forward, with Julian Emanuel, who leads Evercore ISI’s Equity and Portfolio strategy mentioning how “pauses have historically been good for equities.”

Typically, the S&P 500 outperforms following rate hike pauses. Over the past 30 years, the S&P 500 was up 5% in the 3 months following a pause, rising as much as 16% in the 12 months that follow.

The post U.S. Stocks Mixed as Fed Decision Countdown Gets Underway appeared first on theprimarymarket.com.

With the market largely betting that the Fed will cut rates soon, the main debate among traders at present is whether a rate cut is more likely in June or July. To date, the Fed has been adamant that it is not yet the time to expect rate cuts, resulting in many observers expecting not more than a single decrease.

Although an economic slowdown would likely reduce borrowing costs, Meghan Swiber, rates strategist at Bank of America Corp., believes that an economic slowdown may not be on the agenda.

“The market is positioned for a rally in long duration,” Swiber claimed, adding, “and the ultimate thing that underpins that view is that the Fed is done with the hiking cycle.”

The post Bond Traders Brace Themselves for Upcoming Fed Meeting appeared first on theprimarymarket.com.

Ahead of the latest Fed policy meeting, investors will be anxiously awaiting the Fed’s quarterly dot plot in its Summary of Economic Projections. This report is expected to show a 5.1% police benchmark rate at the end of 2023.

“Discord on the FOMC is mounting,” Bloomberg Economics commented. “Those who prefer to skip a hike in June want to wait and see—given the long and variable lags of monetary policy—how 500 basis points of rate hikes to date are cooling the economy. More hawkish members are convinced rates aren’t yet restrictive enough, and the Fed shouldn’t risk falling behind the curve. We see a ‘hawkish skip’ as a way to maintain unanimity on the committee.”

With Fed Chair Jerome Powell scheduled to hold a press conference after Wednesday’s meeting, many are expecting that any potential pause this month will not be the last.

The post Fed Expected to Pause and Reflect on Rate Hikes in June appeared first on theprimarymarket.com.

“I don’t really see a compelling reason to pause,” Mester stated in an interview with the Financial Times. “I would see more of a compelling case for bringing the rates up and then holding for a while until you get less uncertain about where the economy is going.”

Mester’s comments come after several other Federal Reserve officials expressed an interest in at least considering a pause to interest rate hikes in June, at which point they would assess the progress that the Fed’s strict monetary policy has made in the battle against sustained inflation.

Since the start of the ongoing inflation crisis, the Federal Reserve has implemented ten consecutive monthly interest rate hikes. This agenda has managed to bring the U.S. policy rate to a 5.00%-5.25% range.

In Mester’s view, the recent U.S. debt ceiling agreement could also alleviate some financial pressure, thereby loosening the level of duty that falls on the shoulders of the central bank. The proposed legislation is set to put to a vote in the House of Representatives on Wednesday.

The post Not Enough Reason to Pause Rate Hikes, Fed Official Claims appeared first on theprimarymarket.com.

In addition to a slew of economic data due to be released in the coming week, traders are keeping a close eye on debt ceiling negotiations in Washington for guidance. Traders believe that a potential agreement to avoid an unprecedented default on the U.S. government’s loans will alter the course that the Fed takes with its monetary policy.

Still, Jack McIntyre, portfolio manager at Brandywine Global Investment Management, believes that the ongoing debt ceiling talks are not the central focus in bond traders’ minds.

“Markets are trying to look beyond the debt ceiling and to the economy, inflation, and how it influences the Fed,” McIntyre commented. “Is it a pause and then a hike again, or do they eventually cut? My bias is to wait it out, but there is a fine line between being patient and wrong.”

The post Bond Traders Lose Belief That Fed Rate Hikes are Nearing an End appeared first on theprimarymarket.com.

Fund provider VanEck projected that inflation would fall within the region of 3% to 5% for the next few years, regardless of whether the United States slips into a recession. Investment management firm Invesco believes that the market has been overly-optimistic in backing the Fed to reach its target. Citigroup Inc. echoed these sentiments, claiming that it’s near impossible for inflation to shrink while wage gains remain high.

The recent decline in asset managers’ confidence comes as they seek to avoid being blindsided as they were in 2022 when surging inflation first got underway.

“It’s going to come in peaks and troughs,” David Schassler, head of quantitative investment solutions at VanEck said of inflation trends going forward. “What happens once the economy recovers? We think inflation will rebound as it has in the past,” he continued, pinning this resurgence on rising energy prices.

The post Fed Unlikely to Reach 2% Inflation Target, Wall Street Analysts Claim appeared first on theprimarymarket.com.

Fed Governor Philip Jefferson believes that the central bank is doing what is required of it despite inflation remaining high. He expressed his view on the matter at a monetary policy conference at the Hoover Institution.

“Is inflation still too high? Yes,” Jefferson commented. “Has the current disinflation been uneven and slower than any of us would like? Yes. But my reading of this evidence is that we are ‘doing what is necessary or expected’ of us,” which is the dictionary definition, he said, of being “on track.”

St. Louis Fed President James Bullard agreed with Jefferson’s sentiment, expressing his view at the same event. “The prospects for continued disinflation are pretty good,” Bullard commented, explaining that his confidence is growing as inflation continues to be stabilized near the Fed’s 2% target.

The post Federal Reserve Policy on Right Track, Officials Say appeared first on theprimarymarket.com.

PacWest led the banking stock rally, gaining 4% while Western Alliance followed closely with a 2% rise. Zions, Comerica, and Key, all of which dropped on Tuesday, turned their fortunes around on Wednesday, and made moderate gains.

The latest round of banking volatility follows the announcement of JPMorgans’ purchase of the bulk of the assets of the struggling First Republic Bank; the most recent major U.S. bank to collapse.

A major concern for banks this year has been the mass shortage of deposits they have been faced with. Since mid-April 2022, banks have lost $960 billion in deposits – approximately 5.3%. Fed data suggests that this is the largest loss since the Fed began collecting this data in 1973.

Analysts expect the Federal Reserve to impose a 25 basis point hike before pausing its rate increasing agenda in the next policy meeting.

The post Regional Bank Stocks Rise as Investors Await Fed Decision appeared first on theprimarymarket.com.

Collins told reporters that although inflation data is showing a positive outlook, however, the Fed remains bearish due to the knowledge that this outlook can turn. Earlier this month, the Fed decided to leave interest rates within the 5.25% to 5.5% range; a 22-year high.

On Tuesday, the latest Consumer Price Index (CPI) data showed that US inflation broadly slowed in October, which increased investors’ bets that the Fed is done with its rate-hiking agenda. While Collins acknowledges that goods prices have lowered significantly, she revealed that price slowdowns for some core services including housing have not been as extensive as she has hoped.

The post Boston Fed President Warns That Further Rates Hikes Possible appeared first on theprimarymarket.com.

Japan’s yen reacted strongly to the Fed’s policy decision, hitting 148.255 per dollar after reaching a 10-month low of 48.465 earlier on Thursday. The dollar remained strong against the euro, priced at $1.0658 per euro after previously touching a six-month low of $1.0617.

As investors braced themselves for the Bank of England’s interest rate decision later in the day, the pound stood at $1.2316, just above a four-month low. With the UK’s inflation rate unexpectedly slowing in August, traders are unsure as to how the Bank of England will respond to this development.

The post Dollar Holds Gains Following Fed Rate Decision appeared first on theprimarymarket.com.

At around midday in New York City, the S&P 500 edged slightly higher by 0.32%, while the tech-heavy Nasdaq Composite index was up 0.38%. In contrast, the Dow Jones Industrial Average fell by 0.29%.

Oil futures were down, with US benchmark West Texas Intermediate crude falling 0.7% to $68.90 per barrel. Global benchmark Brent crude declined by 0.8% to $73.63 per barrel.

Market analysts are expecting an interest rate pause to have a positive impact on stocks going forward, with Julian Emanuel, who leads Evercore ISI’s Equity and Portfolio strategy mentioning how “pauses have historically been good for equities.”

Typically, the S&P 500 outperforms following rate hike pauses. Over the past 30 years, the S&P 500 was up 5% in the 3 months following a pause, rising as much as 16% in the 12 months that follow.

The post U.S. Stocks Mixed as Fed Decision Countdown Gets Underway appeared first on theprimarymarket.com.

With the market largely betting that the Fed will cut rates soon, the main debate among traders at present is whether a rate cut is more likely in June or July. To date, the Fed has been adamant that it is not yet the time to expect rate cuts, resulting in many observers expecting not more than a single decrease.

Although an economic slowdown would likely reduce borrowing costs, Meghan Swiber, rates strategist at Bank of America Corp., believes that an economic slowdown may not be on the agenda.

“The market is positioned for a rally in long duration,” Swiber claimed, adding, “and the ultimate thing that underpins that view is that the Fed is done with the hiking cycle.”

The post Bond Traders Brace Themselves for Upcoming Fed Meeting appeared first on theprimarymarket.com.

Ahead of the latest Fed policy meeting, investors will be anxiously awaiting the Fed’s quarterly dot plot in its Summary of Economic Projections. This report is expected to show a 5.1% police benchmark rate at the end of 2023.

“Discord on the FOMC is mounting,” Bloomberg Economics commented. “Those who prefer to skip a hike in June want to wait and see—given the long and variable lags of monetary policy—how 500 basis points of rate hikes to date are cooling the economy. More hawkish members are convinced rates aren’t yet restrictive enough, and the Fed shouldn’t risk falling behind the curve. We see a ‘hawkish skip’ as a way to maintain unanimity on the committee.”

With Fed Chair Jerome Powell scheduled to hold a press conference after Wednesday’s meeting, many are expecting that any potential pause this month will not be the last.

The post Fed Expected to Pause and Reflect on Rate Hikes in June appeared first on theprimarymarket.com.

“I don’t really see a compelling reason to pause,” Mester stated in an interview with the Financial Times. “I would see more of a compelling case for bringing the rates up and then holding for a while until you get less uncertain about where the economy is going.”

Mester’s comments come after several other Federal Reserve officials expressed an interest in at least considering a pause to interest rate hikes in June, at which point they would assess the progress that the Fed’s strict monetary policy has made in the battle against sustained inflation.

Since the start of the ongoing inflation crisis, the Federal Reserve has implemented ten consecutive monthly interest rate hikes. This agenda has managed to bring the U.S. policy rate to a 5.00%-5.25% range.

In Mester’s view, the recent U.S. debt ceiling agreement could also alleviate some financial pressure, thereby loosening the level of duty that falls on the shoulders of the central bank. The proposed legislation is set to put to a vote in the House of Representatives on Wednesday.

The post Not Enough Reason to Pause Rate Hikes, Fed Official Claims appeared first on theprimarymarket.com.

In addition to a slew of economic data due to be released in the coming week, traders are keeping a close eye on debt ceiling negotiations in Washington for guidance. Traders believe that a potential agreement to avoid an unprecedented default on the U.S. government’s loans will alter the course that the Fed takes with its monetary policy.

Still, Jack McIntyre, portfolio manager at Brandywine Global Investment Management, believes that the ongoing debt ceiling talks are not the central focus in bond traders’ minds.

“Markets are trying to look beyond the debt ceiling and to the economy, inflation, and how it influences the Fed,” McIntyre commented. “Is it a pause and then a hike again, or do they eventually cut? My bias is to wait it out, but there is a fine line between being patient and wrong.”

The post Bond Traders Lose Belief That Fed Rate Hikes are Nearing an End appeared first on theprimarymarket.com.

Fund provider VanEck projected that inflation would fall within the region of 3% to 5% for the next few years, regardless of whether the United States slips into a recession. Investment management firm Invesco believes that the market has been overly-optimistic in backing the Fed to reach its target. Citigroup Inc. echoed these sentiments, claiming that it’s near impossible for inflation to shrink while wage gains remain high.

The recent decline in asset managers’ confidence comes as they seek to avoid being blindsided as they were in 2022 when surging inflation first got underway.

“It’s going to come in peaks and troughs,” David Schassler, head of quantitative investment solutions at VanEck said of inflation trends going forward. “What happens once the economy recovers? We think inflation will rebound as it has in the past,” he continued, pinning this resurgence on rising energy prices.

The post Fed Unlikely to Reach 2% Inflation Target, Wall Street Analysts Claim appeared first on theprimarymarket.com.

Fed Governor Philip Jefferson believes that the central bank is doing what is required of it despite inflation remaining high. He expressed his view on the matter at a monetary policy conference at the Hoover Institution.

“Is inflation still too high? Yes,” Jefferson commented. “Has the current disinflation been uneven and slower than any of us would like? Yes. But my reading of this evidence is that we are ‘doing what is necessary or expected’ of us,” which is the dictionary definition, he said, of being “on track.”

St. Louis Fed President James Bullard agreed with Jefferson’s sentiment, expressing his view at the same event. “The prospects for continued disinflation are pretty good,” Bullard commented, explaining that his confidence is growing as inflation continues to be stabilized near the Fed’s 2% target.

The post Federal Reserve Policy on Right Track, Officials Say appeared first on theprimarymarket.com.

PacWest led the banking stock rally, gaining 4% while Western Alliance followed closely with a 2% rise. Zions, Comerica, and Key, all of which dropped on Tuesday, turned their fortunes around on Wednesday, and made moderate gains.

The latest round of banking volatility follows the announcement of JPMorgans’ purchase of the bulk of the assets of the struggling First Republic Bank; the most recent major U.S. bank to collapse.

A major concern for banks this year has been the mass shortage of deposits they have been faced with. Since mid-April 2022, banks have lost $960 billion in deposits – approximately 5.3%. Fed data suggests that this is the largest loss since the Fed began collecting this data in 1973.

Analysts expect the Federal Reserve to impose a 25 basis point hike before pausing its rate increasing agenda in the next policy meeting.

The post Regional Bank Stocks Rise as Investors Await Fed Decision appeared first on theprimarymarket.com.