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.

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.

This was the Fed’s third consecutive rate cut in 2024 and brought the benchmark interest rate to a range of 4.25% to 4.5%. The Federal Open Market Committee made the cut with a split vote with Cleveland Fed president Beth Hammack objecting to the decision.

Hammack’s objection was the second dissent in the current rate-cutting cycle. Governor Michelle Bowman previously voted no for the 50 basis points cut in September, arguing for a  25 basis points cut at the time.

“Today was a closer call, but we decided it was the right call,” Federal Reserve Chair Jerome Powell said at a press conference on Wednesday. “It was the best decision to foster achievement of both of our goals, maximum employment and price stability. “

According to Powell, the Fed is “still on track” to make cuts in 2025 but noted that the officials will need to see further inflation cooling for that to be the case. He added that he doesn’t see any rate hikes happening next year.

The Federal Open Market Committee’s so-called “dot plot,” which provides insights into individual members’ future rate expectations, has shown that only two quarter percentage cuts are likely to happen in 2025. Back in September, the “dot plot” indicated expectations of four rate cuts.

The post Fed Cuts Interest Rates by 25 Basis Points, Projects Slower Pace in 2025 appeared first on theprimarymarket.com.

The benchmark S&P 500 fell by 78.55 or 1.32% to close at 5,870.62 points after going as low as 5,854.58. It ended the week down by 2.30%.

Blue-chip Dow Jones is down by 1.39% for the week after closing at 43,444.99. It lost 305.87 points or 0.70% on Friday.

Tech-heavy Nasdaq had the steepest fall, losing 502.54 or 2.40% to close at 20,394.13. The index is now down 3.67% for the week.

The stocks have been on a rally since the US presidential elections, reaching all-time heights several times. However, this surge was largely fueled by expectations that the Fed would deliver another rate cut in December.

Speaking with reporters on Thursday, Powell indicated that lowering borrowing rates isn’t guaranteed due to recent economic data. 

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

The post Stocks End Week With Loses After Fed Signals it Won’t “Hurry” With Rate Cuts appeared first on theprimarymarket.com.

The quarter percentage point cut brings the Fed’s benchmark rate in the range of 4.50% to 4.75%. The move follows a 50 basis points deduction from September.

According to Fed Chairman Jerome Powell, policymakers will continue to monitor the economic data in order to determine future moves. However, he reiterated that he is content with the way the U.S. economy is looking at the moment.

“This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move toward a more neutral stance over time,” Fed chairman Jerome Powell said. “We think that the economy, and we think our policies, are both in a very good place, a very good place.”

Economists have mostly expected the Fed to further slash the interest rate at their latest meeting despite the aggressive move in September. They also predict that another cut will be made in December before a likely pause in January to get a better sense of the economic landscape.

The post Federal Reserve Cuts Interest Rates By Another 25 Basis Points appeared first on theprimarymarket.com.

 During a speech at the Forum on American Enterprise in Jackson, Mississippi, Bostic argued that the aim should be to reach the neutral rate, perceived to be between 3% and 3.5%, by the end of 2025. This policy path would get inflation to the Fed’s target of 2% while ensuring the growth of the economy.

“I’m not in a rush to get to neutral,” Bostic said. “We must get inflation back to our 2% target; I don’t want us to get to a place where inflation stalls out because we haven’t been restrictive for long enough, so I’m going to be patient.”

The traders are betting on two more rate cuts by the end of 2024, with each one being projected at 25 basis points. Further cuts are expected to take place in 2025.

Bostic is also in favor of further cuts if there are positive economic indicators to justify them.

“If the economy continues to evolve as it does — if inflation continues to fall, labor markets remain robust, and we still see positive production — we will be able to continue on the path back to neutral,” he added.

The post Atlanta Fed President Raphael Bostic Argues for Patient Approach to Rate Cuts 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.

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.

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.

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.

This was the Fed’s third consecutive rate cut in 2024 and brought the benchmark interest rate to a range of 4.25% to 4.5%. The Federal Open Market Committee made the cut with a split vote with Cleveland Fed president Beth Hammack objecting to the decision.

Hammack’s objection was the second dissent in the current rate-cutting cycle. Governor Michelle Bowman previously voted no for the 50 basis points cut in September, arguing for a  25 basis points cut at the time.

“Today was a closer call, but we decided it was the right call,” Federal Reserve Chair Jerome Powell said at a press conference on Wednesday. “It was the best decision to foster achievement of both of our goals, maximum employment and price stability. “

According to Powell, the Fed is “still on track” to make cuts in 2025 but noted that the officials will need to see further inflation cooling for that to be the case. He added that he doesn’t see any rate hikes happening next year.

The Federal Open Market Committee’s so-called “dot plot,” which provides insights into individual members’ future rate expectations, has shown that only two quarter percentage cuts are likely to happen in 2025. Back in September, the “dot plot” indicated expectations of four rate cuts.

The post Fed Cuts Interest Rates by 25 Basis Points, Projects Slower Pace in 2025 appeared first on theprimarymarket.com.

The benchmark S&P 500 fell by 78.55 or 1.32% to close at 5,870.62 points after going as low as 5,854.58. It ended the week down by 2.30%.

Blue-chip Dow Jones is down by 1.39% for the week after closing at 43,444.99. It lost 305.87 points or 0.70% on Friday.

Tech-heavy Nasdaq had the steepest fall, losing 502.54 or 2.40% to close at 20,394.13. The index is now down 3.67% for the week.

The stocks have been on a rally since the US presidential elections, reaching all-time heights several times. However, this surge was largely fueled by expectations that the Fed would deliver another rate cut in December.

Speaking with reporters on Thursday, Powell indicated that lowering borrowing rates isn’t guaranteed due to recent economic data. 

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

The post Stocks End Week With Loses After Fed Signals it Won’t “Hurry” With Rate Cuts appeared first on theprimarymarket.com.

The quarter percentage point cut brings the Fed’s benchmark rate in the range of 4.50% to 4.75%. The move follows a 50 basis points deduction from September.

According to Fed Chairman Jerome Powell, policymakers will continue to monitor the economic data in order to determine future moves. However, he reiterated that he is content with the way the U.S. economy is looking at the moment.

“This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move toward a more neutral stance over time,” Fed chairman Jerome Powell said. “We think that the economy, and we think our policies, are both in a very good place, a very good place.”

Economists have mostly expected the Fed to further slash the interest rate at their latest meeting despite the aggressive move in September. They also predict that another cut will be made in December before a likely pause in January to get a better sense of the economic landscape.

The post Federal Reserve Cuts Interest Rates By Another 25 Basis Points appeared first on theprimarymarket.com.

 During a speech at the Forum on American Enterprise in Jackson, Mississippi, Bostic argued that the aim should be to reach the neutral rate, perceived to be between 3% and 3.5%, by the end of 2025. This policy path would get inflation to the Fed’s target of 2% while ensuring the growth of the economy.

“I’m not in a rush to get to neutral,” Bostic said. “We must get inflation back to our 2% target; I don’t want us to get to a place where inflation stalls out because we haven’t been restrictive for long enough, so I’m going to be patient.”

The traders are betting on two more rate cuts by the end of 2024, with each one being projected at 25 basis points. Further cuts are expected to take place in 2025.

Bostic is also in favor of further cuts if there are positive economic indicators to justify them.

“If the economy continues to evolve as it does — if inflation continues to fall, labor markets remain robust, and we still see positive production — we will be able to continue on the path back to neutral,” he added.

The post Atlanta Fed President Raphael Bostic Argues for Patient Approach to Rate Cuts 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.

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.