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And yet, the unemployment rate continues to inch up, job openings continue to fall, and payroll data continue to underwhelm. But how long that enthusiasm can continue to outweigh declining labor market indicators remains to be seen. AdvertisementThe first is declining job openings, which are down to 7.6 million from 2022 highs above 12 million. BullAndBearProfits.comAnother sign Wolfenbarger shared showing the labor market is turning sour is the Kansas City Fed's Labor Market Conditions Index, which is a composite of 24 job market indicators. BullAndBearProfits.comFinally, in a September 2 note, Wolfenbarger shared a chart from Bank of America showing the decline in private job growth as a share of all job growth.
Persons: , Jon Wolfenbarger, Merrill Lynch, Wolfenbarger, there's, BullAndBearProfits.com, John, Hussman, Stocks Organizations: Service, JPMorgan, Business, Kansas City Fed's Labor, BullAndBearProfits.com, Bank of America Locations: Kansas
Now, as Fed policymakers note improvement on inflation and some cooling in the labor market, the risks are seen as more balanced and the choices more nuanced. The following chart offers a look at how officials currently stack up on their outlooks for Fed policy and how to balance their goals of stable prices and full employment. Note: Fed policymakers began raising interest rates in March 2022 to bring down high inflation. Their most recent policy rate hike, to a range of 5.25%-5.50%, was in July. Below is a Reuters count of policymakers in each category, heading into recent Fed meetings.
Persons: Jeff Schmid, Adriana Kugler, Louis Fed, James Bullard, Louis, Kathleen O'Neill Paese, Ann Saphir, Paul Simao Organizations: Federal, Federal Open Market, New York Fed, Kansas City Fed's, Fed's, Governors, Interim, Louis Fed, Thomson Locations: Kansas, St
Chicago Fed President Austan Goolsbee speaks as he heads into the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, U.S., August 24, 2023. A Labor Department report earlier on Tuesday showed the consumer price index rose 3.2% in October from a year earlier, down more than 3 percentage points from January. The Fed targets 2% inflation by a different measure, the personal consumption expenditures price index, which was 3.4% in September. Going forward, Goolsbee said he's focused on inflation data and sees overheating as a lesser risk than an external shock. "The key to further progress over the next few quarters will be what happens to housing inflation," he said.
Persons: Austan Goolsbee, Ann Saphir, Goolsbee, he's, Paul Simao Organizations: Chicago Fed, Kansas City, REUTERS, Chicago Federal, Detroit Economic, Labor Department, Fed, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S
Logan acknowledged progress in lowering inflation while still being unsure that price pressures are ebbing to the Fed's 2% target. She said a still-strong job market may need to weaken further to help the Fed achieve its inflation goals. "My focus is on price stability and what further tightening may be needed to achieve our mandate," Logan said. If tighter financial conditions are "persistent that could mitigate some of the need for further increases," Logan said. In her remarks Logan also took stock of the outlook for the Fed's balance sheet contraction policy.
Persons: Lorie Logan, Ann Saphir, Logan, Jerome Powell, Michael S, Sandra Maler, Leslie Adler Organizations: Reserve Bank, Dallas, Kansas City, REUTERS, Federal Reserve Bank, New York University, New, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S, New York
Federal Reserve Bank of Dallas President Lorie Logan walks to the opening dinner of the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, U.S., August 24, 2023. REUTERS/Ann Saphir/File Photo Acquire Licensing RightsNEW YORK, Oct 19 (Reuters) - Federal Reserve Bank of Dallas President Lorie Logan said on Thursday recent data and market shifts give the central bank space to deliberate on its next monetary policy move. "We have some time" before having to make the call whether to raise rates again or hold them steady, Logan said at a gathering of the Money Marketeers of New York University. Logan noted that a desirable tightening in financial conditions gives officials some space to watch incoming data, as she noted progress in lowering inflation while still being unsure price pressures are ebbing to the 2% target. Reporting by Michael S. Derby; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.
Persons: Lorie Logan, Ann Saphir, Logan, Michael S, Sandra Maler Organizations: Reserve Bank, Dallas, Kansas City, REUTERS, Federal Reserve Bank, New York University, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S
Fed's Goolsbee says fall in US inflation is not just a blip- FT
  + stars: | 2023-10-16 | by ( ) www.reuters.com   time to read: +1 min
Chicago Fed President Austan Goolsbee reacts as he heads into the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, U.S., August 24, 2023. "There is a lot saying that inflation is trending down compared with what it has been and that’s what we want," Goolsbee said in an interview with the Financial Times. It wasn’t a one-month blip... we have to hope and keep an eye out to make sure that continues," he said. The Chicago Fed president acknowledged a reversal in rental and other housing inflation after months of easing was a "negative surprise" meriting a "proper element of caution", according to the report. Reporting by Jose Joseph in Bengaluru; Editing by Toby ChopraOur Standards: The Thomson Reuters Trust Principles.
Persons: Austan Goolsbee, Ann Saphir, Goolsbee, Jose Joseph, Toby Chopra Organizations: Chicago Fed, Kansas City, REUTERS, Financial Times, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S, Bengaluru
"If long-term interest rates remain elevated because of higher term premiums, there may be less need to raise the fed funds rate," Logan said. The Dallas Fed president said the economy has been stronger than she had expected, as has been the labor market, and that inflation was still too high despite progress in lowering it. But because Logan ran the New York Fed's bond portfolio for years before she took the top job at the Dallas Fed, her views on what's driving long-term rates higher could carry considerable weight as policymakers weigh their next moves. "The expectation of lower Federal Reserve asset holdings over time implies that other investors will need to hold more long-duration securities, which appears to be one factor among the many contributing to higher term premiums," Logan said. Figuring out how much of the higher long-term rates is due to higher term premiums is complex, she added.
Persons: Lorie Logan, Ann Saphir, Logan, Mary Daly, Julia Coronado, Lorie, she's, Krishna Guha, Guha, Paul Simao Organizations: Federal Reserve Bank, Dallas, Kansas City, REUTERS, Rights, Treasury, Federal Reserve, National Association for Business Economics, Market, San Francisco Fed, Evercore ISI, Dallas Fed, Fed, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S, York
Chicago Fed President Austan Goolsbee reacts as he heads into the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, U.S., August 24, 2023. "On the real side I feel like nothing has happened so far that is convincing evidence that we are off the golden path," Goolsbee said on Bloomberg's Odd Lots podcast, recorded on Tuesday and aired on Thursday. Their projections also showed they expect to end next year with only a slightly higher unemployment rate, of 4.1%, and a slightly lower policy rate, of 5.1%. Should the rise in long-term yields go so far as to trigger a surge in unemployment or sharp slowdown in economic activity, the Fed will adjust, Goolsbee said. "We absolutely monitor that and are thinking about that, and that could be a blow to either the financial or the real economy," Goolsbee said.
Persons: Austan Goolsbee, Ann Saphir, Goolsbee, it's, Chizu Organizations: Chicago Fed, Kansas City, REUTERS, Chicago Federal Reserve Bank, Fed, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S, Goolsbee
Fed doves, Fed hawks: US central bankers in their own words
  + stars: | 2023-09-29 | by ( ) www.reuters.com   time to read: +2 min
The following chart offers a stab at how officials stack up on their outlook for Fed policy and how to balance their goals of stable prices and full employment. Note: Fed policymakers began raising interest rates in March 2022 to bring down high inflation. Their most recent policy rate hike, to a range of 5.25%-5.5%, was in July. Neither Jeff Schmid, Kansas City Fed's president since August and a voter in 2025, nor Adriana Kugler, a permanent voter who was confirmed to the Fed Board in September, have yet made any substantive policy remarks. The St. Louis Fed has begun a search to succeed president, James Bullard, who took a job in academia; the new chief will be a 2025 voter.
Persons: Jeff Schmid, Adriana Kugler, Louis Fed, James Bullard, Ann Saphir, Andrea Ricci Organizations: Federal, Federal Open Market, New York Fed, Jeff Schmid , Kansas City Fed's, Fed, Thomson Locations: Jeff Schmid , Kansas, St
The U.S. seemed to be winning its battle against inflation, but the latest consumer price index data showed inflation rose more than expected. The University of Michigan's consumer sentiment August survey indicated consumers' one-year inflation expectations were at 3.3%, marking three consecutive months of stability. Inflation expectations, or the rate at which consumers expect prices to rise or fall in the future, can influence higher prices in the economy. Inflation expectations play a crucial role in the decisions made by the Federal Reserve. But consumer expectations of inflation are still above the Fed's 2% inflation rate target.
Persons: Joanne Hsu, It's, Hsu, Claudia Sahm, Jerome Powell's, Powell, Barry Glassman Organizations: University of Michigan, The University of, Consumers, CNBC, Federal Reserve, Sahm Consulting, Federal, Kansas City, Wealth Services Locations: U.S, Jackson Hole , Wyoming
Federal Reserve Bank of Dallas President Lorie Logan walks to the opening dinner of the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, U.S., August 24, 2023. My base case, though, is that there is work left to do," she said in remarks prepared for delivery to the Dallas Business Club at Southern Methodist University. "After the unacceptably rapid price increases of the past several years, I’m not yet convinced that we’ve extinguished excess inflation." "Another skip could be appropriate when we meet later this month," Logan said, referring to the Fed's upcoming Sept. 19-20 meeting. "In coming months, further evaluation of the data and outlook could confirm that we need to do more to extinguish inflation."
Persons: Lorie Logan, Ann Saphir, I’m, Logan, Diane Craft Organizations: Reserve Bank, Dallas, Kansas City, REUTERS, Dallas Federal Reserve Bank, U.S, Dallas Business Club, Southern Methodist University, Fed, Thomson Locations: Kansas, Jackson Hole , Wyoming, U.S
Wall Street anticipates upside of 16%, based on the average price target. Skyworks Solutions , which pays a dividend yield of about 2.5%, is on Wolfe's list. About 44% of the analysts covering the stock rate it a buy or a strong buy, according to Refinitiv. About 74% of the analysts covering the stock rate it a buy or a strong buy, per Refinitiv. The average analyst price target calls for upside of 16%.
Persons: Wolfe, Jerome Powell, CenterPoint, Harsh Kumar, Piper Sandler, Skyworks, McDonald's, Chris O'Cull, — CNBC's Michael Bloom Organizations: Wolfe Research, Federal, Kansas City, Skyworks Locations: Jackson Hole , Wyoming, Refinitiv
U.S. Treasury yields fell on Monday as investors remained focused on remarks from Federal Reserve Chair Jerome Powell that signaled the possibility of more interest rate hikes to tackle inflation. The yield on the benchmark 10-year Treasury yield was down at 4.2217%. While Powell said the Fed could be flexible, he said it still has further to go to fight inflation. "Although inflation has moved down from its peak — a welcome development — it remains too high," Powell said in prepared remarks. The Treasury is expected to auction three-month and six-month bills as well as two-year and five-year notes.
Persons: Jerome Powell, Powell, Willem Sels, Sels, CNBC's, subindexes Organizations: Treasury, Federal, Traders, Federal Reserve, Kansas City, HSBC Private Banking, Wealth, Composite, U.S . Labor Department Locations: Jackson Hole , Wyoming, U.S
Treasury trading nearly ground to a halt, imperiling the functioning of global financial markets, until the Fed jumped in to buy hundreds of billions of dollars of bonds that helped to free up space on dealer balance sheets. "Backstopping the liquidity of this market with transparent official-sector purchase programs will further buttress market resilience." Future bouts of Treasury market illiquidity could also be made less likely with broader use of central clearing, Duffie wrote, as well as changing the way regulators assess bank capital levels. Financial authorities made such a change temporarily after March 2020, but allowed the so-called Supplementary Leverage Ratio exemption to sunset a year later. Other changes could include technical changes to market function to encourage direct buying and selling without dealer intermediation, Duffie wrote.
Persons: JACKSON, Darrell Duffie, Duffie, intermediation, Ann Saphir, Chizu Organizations: Treasury, Federal Reserve, Stanford University, Kansas City, Fed, Thomson Locations: , Wyoming, Jackson Hole , Wyoming
Market reactions to Powell speech
  + stars: | 2023-08-25 | by ( ) www.reuters.com   time to read: +8 min
"It is the Fed's job to bring inflation down to our 2% goal, and we will do so," Powell said. "August has been a difficult month for the market, so it is hungry for news that will help reverse the trend. Investors are hanging on to every word, but the main takeaway is that Powell signaled that the Fed would raise rates if needed. Rather than last year's short but brutal speech, Powell opted for a longer and calmer speech. KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO"On balance, this is a modestly less hawkish speech than markets had feared.
Persons: Jerome Powell, Powell, CHRISTOPHER HODGE, MICHAEL GREEN, ANDRE BAKHOS, CARSTEN BRZESKI, Ann Saphir, Christine, Lagarde, ” JOSEPH LAVORGNA, , ” STUART COLE, ” QUINCY KROSBY, there's, DAVID WAGNER, Jackson, BRIAN JACOBSEN, patting, KARL SCHAMOTTA, Bernanke, Draghi Organizations: U.S . Federal, Federal, NFP, Fed, ING, Kansas City, REUTERS, CHIEF, CPI, Global Finance, Markets, Thomson Locations: U.S, JERSEY, FRANKFURT, Kansas, Jackson Hole , Wyoming, NIKKO, LONDON, CHARLOTTE, NORTH CAROLINA, CINCINNATI , OHIO, WISCONSIN, TORONTO
Stocks - which have wobbled in August as rising bond yields threatened to dull the allure of equities - were little changed with the S&P 500 up 0.22%. REVIVING RECESSION WORRIESSome investors were worried that higher rates could weigh on growth and increase the chances of a recession next year. Such a scenario, in theory, would force the Fed to cut rates, pulling bond yields lower. But while risks remained that long-term bond yields could move higher, he was looking to extend the duration of his portfolio. Reporting by Davide Barbuscia and David Randall; Editing by Ira Iosebashvili and Andrea RicciOur Standards: The Thomson Reuters Trust Principles.
Persons: Jerome Powell, John Williams, Ann Saphir, Powell, , Cindy Beaulieu, Jackson, “ Powell, Anders Persson, Mike Sewell, Rowe Price, Josh Emanuel, Davide Barbuscia, David Randall, Ira Iosebashvili, Andrea Ricci Organizations: New York Fed, Kansas, Fed, REUTERS, Kansas City, Financial, Treasury, Investors, Futures, Thomson Locations: Jackson Hole , Wyoming, U.S
watch nowFederal Reserve Chair Jerome Powell on Friday called for more vigilance in the fight against inflation, warning that additional interest rate increases could be yet to come. Regardless, Powell indicated it's too soon to declare victory, even with data this summer running largely in the Fed's favor. A need to 'proceed carefully'Powell's remarks follow a series of 11 interest rate hikes that have pushed the Fed's key interest rate to a target range of 5.25%-5.5%, the highest level in more than 22 years. He noted progress on all three, but said nonhousing is the most difficult to gauge as it is the least sensitive to interest rate adjustments. Inflation measured over the past three and six months has declined, however, which is encouraging," Powell said.
Persons: Jerome Powell, Powell, Jackson, it's, Ryan Detrick, Jack McIntyre, nonhousing Organizations: Kansas City, Fed, Bureau of Labor Statistics, Dow Jones, Carson Group, Federal, Market, Brandywine, Commerce Department, Labor Locations: Jackson Hole , Wyoming, policymaking
How to keep the next 'dash for cash' from crashing bond market
  + stars: | 2023-08-25 | by ( ) www.reuters.com   time to read: +2 min
Treasury trading nearly ground to a halt, imperiling the functioning of global financial markets, until the Fed jumped in to buy hundreds of billions of dollars of bonds that helped to free up space on dealer balance sheets. "Backstopping the liquidity of this market with transparent official-sector purchase programs will further buttress market resilience." Future bouts of Treasury market illiquidity could also be made less likely with broader use of central clearing, Duffie wrote, as well as changing the way regulators assess bank capital levels. Financial authorities made such a change temporarily after March 2020, but allowed the so-called Supplementary Leverage Ratio exemption to sunset a year later. Other changes could include technical changes to market function to encourage direct buying and selling without dealer intermediation, Duffie wrote.
Persons: JACKSON, Darrell Duffie, Duffie, intermediation, Ann Saphir, Chizu Organizations: Treasury, Federal Reserve, Stanford University, Kansas City, Fed, Thomson Locations: , Wyoming, Jackson Hole , Wyoming
[1/2] Federal Reserve Bank of Boston President Susan Collins stands behind the Jackson Lake Lodge in Jackson Hole, where the Kansas City Fed holds its annual economic symposium, in Wyoming, U.S., August 24, 2023. REUTERS/Ann Saphir Acquire Licensing RightsNEW YORK, Aug 24 (Reuters) - Federal Reserve Bank of Boston President Susan Collins said Thursday the central bank may be in a place where it doesn't need to raise rates again, while keeping open the option for more action. "We may be near, we could even be at a place where we would hold" and not raise rates further, Collins said in an interview on Yahoo Finance's video channel. Collins spoke on the sidelines of the Kansas City Fed's annual research conference in Jackson Hole, Wyo. Reporting by Michael S. DerbyOur Standards: The Thomson Reuters Trust Principles.
Persons: Susan Collins, Ann Saphir, Collins, Michael S Organizations: Federal Reserve Bank of Boston, Kansas City Fed, REUTERS, Yahoo, Kansas City, Market Committee, Derby, Thomson Locations: Jackson, Wyoming, U.S, Kansas
All eyes will be trained on the central bank leader when he makes his annual address Friday in Jackson Hole, Wyoming. "Powell will need to choose whether to accept or push back against the 'higher-for-longer' narrative at Jackson Hole on Friday." Bond yields are a helpful guide to inflation as they represent a measure of where markets think growth, policy and prices are heading. That has come with one quarter-point Fed rate increase along with rising expectations that the economy may be able to avoid a much-predicted recession. This year's Jackson Hole symposium topic is "Structural Shifts in the Global Economy."
Persons: Jerome Powell, Powell, Andrew Hollenhorst, Jackson, Hollenhorst, Steven Blitz Organizations: Federal, Kansas City, Citigroup, Fed, TS Lombard Locations: Jackson Hole , Wyoming, Kansas
ORLANDO, Florida, Aug 16 (Reuters) - Investors are hoping policymakers gathering at the Kansas City Fed's annual Jackson Hole Symposium later this month will shed light on one of the murkiest - yet fundamentally most important - tenets of monetary policy: R-star. Even the New York Fed's two most renowned R-star indicators, the Laubach-Williams model and the Holston-Laubach-Williams model, are, metaphorically speaking, miles apart. Martínez-García's estimate of short-term R-star is negative, while the New York Fed staffers' models suggest it has "increased considerably over the past year". The Fed is near the end of its tightening cycle having raised interest rates by 525 basis points to the highest since 2007. Longer-dated real bond yields have shot up to their highest level since 2009 even as market expectations for inflation and Fed rates have held steady.
Persons: Treasuries, Gennadiy Goldberg, Goldberg, Williams, Enrique Martínez, García, Goldman Sachs, JP Morgan, David Mericle, Jackson, John Williams reckons, Jamie McGeever Organizations: Kansas City Fed's, Fed, New, Dallas Fed, TD Securities, York, Dallas and New York Fed, New York Fed, Citi, Reuters, New York Times, Atlanta, Thomson Locations: ORLANDO, Florida, New York, U.S, Dallas
Morning Bid: Central banks try to see through stress
  + stars: | 2023-03-23 | by ( ) www.reuters.com   time to read: +4 min
A look at the day ahead in U.S. and global markets from Mike DolanEven with a nod to greater banking stress, the major central banks all seem determined to tighten the monetary screw another notch. With Treasury Secretary Janet Yellen's pushback against suggestions of a blanket insurance of all U.S. banking deposits unnerving investors again after the Fed decision, few believe the financial stress has fully dissipated. Even though stock markets swooned after the Yellen comments on Wednesday, S&P500 futures were back up smartly ahead of Thursday's open. European bourses and banking stocks were only a touch lower in the face of the latest European rate rises. The dollar hit its lowest since early February but regained its footing ahead of the U.S. open and BoE decision.
The biggest question in world finance right now is whether the eye-watering rebound in borrowing rates we've seen over the past month is just another overshoot - or the new reality. G7 2-year yields soarFed, ECB and BoE 'terminal rates' riseWorld economy surprising in 2023LOSING THE PLOTSince the middle of last year, futures markets have consistently priced peak Fed rates below where Fed officials themselves were guiding. But for at least six of the past nine months, futures markets priced a lower terminal rate than the central Fed view. Five-year equivalents have risen sharply too, while long-term euro zone inflation swaps are pricing the highest rates in more than a decade. The outcome is "strongly bimodal", they said, and either a recession hits and rates are cut, or it doesn't and rates go to 6.5%.
Morning Bid: Chipped
  + stars: | 2023-01-27 | by ( ) www.reuters.com   time to read: +5 min
A surge of 'soft landing' hopes for the U.S. economy on Thursday got sideswiped overnight after a dire industry readout from chipmaking giant Intel decimated its stock price after the bell. "We expect some of the largest inventory corrections literally that we've ever seen in the industry," he told Reuters later. Annual 'core' PCE inflation is expected to have slowed to 4.4% last month, the lowest in more than a year, from 4.7% in November. U.S. bonds of Adani firms also fell after Hindenburg Research flagged concerns in a Jan. 24 report about debt levels and the use of tax havens. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Many Black Americans have invested in cryptocurrency in recent years. Closing the wealth gap is among the reasons some Black investors turned to crypto in the first place. As of September 2021, 18% of Black Americans overall had invested in, traded, or used a cryptocurrency, compared to 13% of white Americans, according to a Pew Research poll of over 10,000 US adults. First, some Black investors may see crypto as a way to close the racial wealth gap. An April Ariel and Charles Schwab survey found 28% of Black Americans distrust banks, compared to 18% of white Americans.
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