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☆ The yen carry trade unwind: A big complication for global markets
▼ + stars: | 2024-08-06 | by ( Bob Pisani | ) www.cnbc.com time to read: +4 min

In its simplest form, the yen carry trade has investors borrowing cheap yen to invest in higher yielding assets, often currencies. For example, because there is not a central source to track currency trades, we have no idea how big the yen carry trade is. The yen is rising, and that is making the yen carry trade less profitable. If the yen goes from 155 to 145, which is where it traded Monday, it will take $68,965 to repay that 10 million yen (10 million yen divided by 145 = $68,965). One positive sign: the ETF to watch is the Invesco Japanese Yen ETF (FXY), which tracks the price of the Japanese yen, had volume six times normal yesterday.

Persons: That's, Nicholas Colas Organizations: Nikkei, Street Journal, Federal Reserve, Bank of Japan, U.S, U.S ., Yen ETF Locations: U.S, Japan

☆ Stifel strategist who called this summer pullback sees correction getting to at least double digits
▼ + stars: | 2024-08-05 | by ( Pia Singh | In | ) www.cnbc.com time to read: +2 min

Stifel Financial's Barry Bannister thinks the S & P 500 will see a steep pullback over the next couple of months. Bannister said Stifel's year-end target of 5,000 for the S & P 500 "seems appropriate right now" given the July jobs data and delayed Federal Reserve interest rate cuts. In early June, Bannister said the S & P 500 could drop to approximately 4,750 before the end of the third quarter of this year. The S & P 500 ended last week at 5,346.56. .SPX YTD mountain S & P 500 this year.

Persons: Stifel Financial's Barry Bannister, Bannister, Stifel's, Stifel, we've Organizations: CNBC, Traders

☆ Traders Wonder if the Fed Could Make an Emergency Rate Cut as Markets Tumble
▼ + stars: | 2024-08-05 | by ( Jeanna Smialek | More About Jeanna Smialek | ) www.nytimes.com time to read: +1 min

As turmoil swept through global financial markets on Monday, fueled by concerns that the economy is headed for a hard landing, investors began to speculate that the Federal Reserve could jump in to cushion the fallout with an emergency interest rate cut. The Fed considers emergency cuts — ones that occur outside of its regularly scheduled meetings — for extreme situations. Joblessness rarely rises sharply outside of an economic downturn. The data fueled serious concerns that Fed officials have fallen behind on adjusting their policy stance. The risk is that Fed policymakers might have choked off demand too much for too long, causing a slowdown in the labor market that will begin to snowball into wider economic pain.

Organizations: Federal Reserve, Fed Locations: United States

Last week, 30-year mortgage rates averaged 6.28%, and they're even lower today, according to Zillow data. What does this mean for mortgage rates? See more mortgage rates on Zillow Real Estate on ZillowMortgage Refinance Rates TodayMortgage type Average rate today This information has been provided by Zillow. See more mortgage rates on Zillow Real Estate on ZillowMortgage CalculatorUse our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments. As inflation slows and the Federal Reserve is able to start cutting the federal funds rate, mortgage rates are expected to trend down as well.

Persons: Jerome Powell, Fannie Mae Organizations: Federal, Zillow, Federal Reserve, Mortgage, Association, ARM Locations: Chevron

☆ The Fed's long-awaited rate cuts will open up the job market — but it could take a while
▼ + stars: | 2024-08-03 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +6 min

Read previewThe US job market has certainly seen better days. AdvertisementThose rate cuts will help pull the job market out of its slowdown — but likely not before the unemployment rate climbs higher, says Oliver Allen, a senior US economist at Pantheon Macroeconomics. And even then, it could take time for the effects of rate cuts to fully work their way across the job market, said Mark Hamrick, a senior economic analyst at Bankrate. AdvertisementSlowdown in the pipelineUntil rate cuts kick in, Allen thinks the joblessness rate has even more room to climb. AdvertisementForward-looking indicators of job market strength have also been flashing signs of incoming weakness.

Persons: —, Oliver Allen, Allen, …, Mark Hamrick, Hamrick, David Rosenberg Organizations: Service, Business, Pantheon, Challenger, Gray &, Federal, National Federation of Independent Business

☆ Fed Will Scour Jobs Report for Signs of Weakness
▼ + stars: | 2024-08-02 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Federal Reserve officials held off on cutting interest rates this week because they want slightly more data to feel confident that inflation is truly coming under control. But while that approach is cautious when it comes to price increases, it could prove to be risky when it comes to the labor market. High Fed interest rates help to cool inflation by slowing demand in the economy. And as inflation comes down, Fed policymakers are increasingly attuned to the risk that they might overdo it, tipping the economy into a severe enough slowdown that it pushes unemployment higher and leaves Americans out of work. Those concerns were not enough to prod central bankers to cut interest rates at their meeting this week.

Organizations: Federal

For now, Fed officials think the ongoing slowdown in hiring and a recent tick up in joblessness suggest the labor market is returning to normal after a few years of booming hiring. But while that approach is cautious when it comes to price increases, it could prove to be risky when it comes to the labor market. But that chain reaction can come at a serious cost to the job market. For now, Fed officials think that the ongoing slowdown in hiring and a recent tick up in joblessness signal that labor market conditions are returning to normal after a few years of booming hiring. Fed rate moves take time to work, so if the central bank only starts to cut borrowing costs when the job market is showing serious signs of strain, it could be moving too late.

Persons: ” Jerome H, Powell, Mr, Neil Dutta, ” Mr, “, ” Organizations: Federal Reserve, Macro Locations: joblessness, “

☆ Why investors should buy the ongoing dip in stocks, Fundstrat says
▼ + stars: | 2024-08-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

Technical signals suggest downside is limitedThere isn't much evidence that poor-performing areas of the market, like small-cap stocks, have peaked, Newton said. Meanwhile, Treasury yields have fallen in recent months as traders anticipate Fed rate cuts, which is typically bullish for stocks, he added. Advertisement"Thus, looking to buy dips makes sense technically," he said, adding that small-cap stocks looked "certainly appealing" after their recent slide. Fed rate cuts will mark a turning point in the marketThat's because rate cuts are expected to ease borrowing costs across several sectors. Small-cap stocks are flashing bullish signalsThe Russell 2000 hit a 30-month high in July, something that's only happened nine times over the past 45 years.

Persons: Fundstrat's Tom Lee, Lee, —, Tom Lee, who's, Mark Newton, Newton, I'm, Russell, That's Organizations: Tech, Service, Fed, Wall Street Locations: Wall

Mortgage rates are often indirectly impacted by changes to the federal funds rate, and as the Fed starts lowering its benchmark rate, mortgage rates are expected to go down as well. This means that as long as inflation continues to ease, mortgage rates should drop further this year. See more mortgage rates on Zillow Real Estate on ZillowMortgage CalculatorUse our free mortgage calculator to see how today's interest rates will affect your monthly payments. 15-Year Fixed Mortgage RatesAverage 15-year mortgage rates fell to 6.07% last week, according to Freddie Mac data. Mortgage rates increased dramatically over the last two years, but they're expected to go down at some point this year.

Persons: Jerome Powell, Powell, you'll, Freddie Mac, it's Organizations: Zillow, Federal Reserve Locations: Chevron

☆ Everything you need to know about when a rate cut could happen
▼ + stars: | 2024-08-01 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

Now the central bank is mulling over when to do something it hasn’t done since the darkest days of the pandemic: cut interest rates. “A rate cut could be on the table in the September meeting,” Fed Chair Jerome Powell said on Wednesday, immediately jolting markets. When will the Fed cut rates? Rate cut probabilityThat said, investors are entirely convinced the Fed will cut rates at their September meeting, according to Fed funds futures data. Torsten Slok, Apollo Global’s chief economist, is maintaining his prior forecast that the Fed won’t cut rates at all this year.

Persons: Jerome Powell, we’re, It’s, Powell, ”, ” Powell, Torsten Slok, Apollo Organizations: New, New York CNN, Federal Reserve, Fed, European Central Bank, CNN Locations: New York, “

☆ What to Watch as the Fed Meets on Wednesday
▼ + stars: | 2024-07-31 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Economists and traders widely expect Fed officials to cut their policy rate at their next meeting, in September. Wall Street will closely watch for any hints about the future in both the Fed’s statement at 2 p.m. and a subsequent news conference with Jerome H. Powell, the chair of the central bank. And Mr. Powell is sure to face questions about how officials are thinking about the potential for moves after that. Watch the Fed’s statement for changes. The Fed’s statement, a slowly changing document that officials release after each two-day meeting, currently states that Fed policymakers expect to hold rates steady until they have “gained greater confidence that inflation is moving sustainably” down.

Persons: Jerome H, Powell Organizations: Federal

☆ Fed holds rates steady and notes progress on inflation
▼ + stars: | 2024-07-31 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

watch nowWASHINGTON – Federal Reserve officials on Wednesday held short-term interest rates steady but indicated that inflation is getting closer to its target, which could open the door for future interest rate cuts. They also preserved a declaration that more progress is needed before rate reductions can happen. "In recent months, there has been some further progress toward the Committee's 2 percent inflation objective." Price pressures off 2022 peakEconomic data of late has indicated that price pressures are well off the boil from their peak in mid-2022, when inflation hit its highest level since the early 1980s. The Fed's preferred measure, the personal consumption expenditures price index, shows inflation around 2.5% annually, though other gauges indicate slightly higher readings.

Persons: Jerome Powell, Powell, Stocks, Price Organizations: WASHINGTON – Federal, Gross

☆ Stock market today: Nasdaq surges nearly 3% amid chip rally, dovish Fed comments
▼ + stars: | 2024-07-31 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Central bankers said they had more confidence inflation was back on track to 2%. Markets are pricing in a 100% chance of a rate cut in September, per the CME FedWatch tool. AdvertisementUS stocks surged on Wednesday, driven by a rally in the tech sector and dovish comments from the Federal Reserve. The second quarter's inflation readings have added to our confidence, and more good data would further strengthen that confidence," Fed Chair Powell said in prepared remarks. Markets are now pricing in with certainty that the Fed will cut rates in September, according to the CME FedWatch tool.

Persons: —, Powell, Philip Straehl, Morgan Stanley Organizations: Fed, Service, Federal Reserve, Nasdaq, Morningstar Wealth, AMD, Nvidia

☆ Politics Makes the Fed’s Job Trickier, but Doesn’t Drive Its Decisions
▼ + stars: | 2024-07-31 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

The Fed is expected to start cutting rates in mid-September, not long before voters in the United States head to the polls to elect a new president. Central bankers will meet about rates again on Nov. 6-7, just days after the election. If they lower interest rates before the vote, there is a risk that Republicans will cast it as a politicized move meant to help Democrats: Lower borrowing costs can bolster the economy and markets. Former President Donald J. Trump, the Republican nominee, has already said the Fed should not be cutting rates leading up to November. But central bankers have been clear that they plan to set interest rates with an eye on inflation and job market data, while trying to ignore the election entirely.

Persons: Donald J, Trump Organizations: Federal, Republican Locations: United States

☆ Powell says September rate cut 'on the table' if inflation data continues to cool
▼ + stars: | 2024-07-31 | by ( Jesse Pound | In Jesse-Pound | ) www.cnbc.com time to read: +1 min

Recent economic data has pointed toward inflation data falling back toward the central bank's 2% target, while the unemployment rates has crept up above 4%. Powell said Wednesday that central bankers would be "data dependent, but not data-point dependent" in determining when to cut rates. "I don't know think of the labor market in its current state as a likely source of significant inflationary pressures. So I would not like to see material further cooling in the labor market," Powell said. Powell said Wednesday a potential 50-basis point rate cut is "not something we're thinking about right now."

Persons: Jerome Powell, Powell Organizations: Federal, Fed

☆ Here's everything you need to know about the Fed decision coming Wednesday
▼ + stars: | 2024-07-30 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Market pricing currently indicates an absolute certainty that the Fed will approve its first reduction in more than four years — when it meets Sept. 17-18. They don't want investors to start pricing in a rate cut coming in September and there's literally nothing else that could possibly happen," he said. "Opening the door for that rate cut is probably the most appropriate thing for them at this point," Reynolds added. Expectations for easingGlenmede expects that starting in September, the Fed could cut at each of the three remaining meetings. The Fed will not provide an update on its quarterly summary of economic projections at this meeting.

Persons: Jerome Powell, Chris Kleponis, they've, Michael Reynolds, Reynolds, there's, it'll, Powell, Goldman Sachs, David Mericle, Mericle, Bill English, We've Organizations: Banking, Housing, Urban, Capitol, AFP, Getty, Glenmede, Fed Locations: Washington ,, Yale, Jackson Hole , Wyoming

☆ Dollar, yen hold tight ranges ahead of BOJ, Fed
▼ + stars: | 2024-07-30 | by ( ) www.cnbc.com time to read: +3 min

The dollar and yen kept within close ranges on Tuesday as traders awaited a barrage of key central bank decisions, kicking off with midweek monetary policy meetings from the Bank of Japan and Federal Reserve. The dollar and yen kept within close ranges on Tuesday as traders awaited a barrage of key central bank decisions, kicking off with midweek monetary policy meetings from the Bank of Japan and Federal Reserve. The Japanese currency was taking a breather from its recent rally as the BOJ began its two-day meeting on Tuesday, having surged over 2% against the dollar last week. The Fed is widely expected to stand pat this week, but markets are betting the U.S. central bank will begin cutting rates at the following meeting in September. Investors will be listening for any hints that Fed Chair Jerome Powell may drop on how soon policymakers are prepared to cut rates at his press conference.

Persons: Matt Simpson, Jerome Powell, Powell, Jackson, Index's Simpson, Sterling, bitcoin Organizations: Bank of Japan, Federal Reserve, Index, Fed, Treasury, Bank of England's Locations: U.S

☆ Is the Labor Market About to Crack? It’s the Key Question for the Fed.
▼ + stars: | 2024-07-30 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

David Gurley Jr.’s bank account benefited from a hot pandemic labor market. Mr. Gurley, a video game programmer, switched jobs twice in quick succession, boosting his salary and nabbing a fully remote position. But when it comes to the outlook now, “it seems like things are more or less OK,” Mr. Gurley, 35, said. Mr. Gurley’s experience — a rip-roaring labor market, then a wobbly one and now some semblance of normality — is the kind of postpandemic roller-coaster ride that many Americans have encountered. Now economic officials are trying to figure out whether the labor market is settling into a new holding pattern or is poised to take a turn for the worse.

Persons: David Gurley Jr, Gurley, Mr Organizations: Federal Reserve

☆ It’s not the end of the world if the Fed doesn’t cut rates tomorrow
▼ + stars: | 2024-07-30 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

New York CNN —The Federal Reserve is all but certain to hold interest rates steady at its meeting this week. That’s why Torsten Slok, Apollo Global’s chief economist, is maintaining his prior forecast that the Fed won’t cut rates at all this year. “There are still two more CPI releases before the September 18 [Fed] meeting, so we have to wait and see if the downtrend in inflation continues,” he told CNN. Fed officials have signaled that September will be when they finally lower interest rates. The difference between a few months for that initial cut “really doesn’t matter unless there’s some big shock that hits the economy in that time,” Fed Governor Christopher Waller said earlier this month.

Persons: Alan Blinder, Paul Krugman —, Blinder, what’s, Brandon Bell, Torsten Slok, Apollo, ”, Sean Snaith, it’s, Christopher Waller, Waller Organizations: New, New York CNN, Federal, CNN, ” University of Central, ” Locations: New York, ” University of Central Florida, Iran, Israel

☆ S&P 500 futures are little changed as Wall Street awaits Fed decision: Live updates
▼ + stars: | 2024-07-30 | by ( Alex Harring | ) www.cnbc.com time to read: +3 min

S&P 500 futures are near flat Tuesday night as investors parsed the latest earnings reports and readied for the Federal Reserve monetary policy decision coming Wednesday afternoon. Futures tied to the broad index lost 0.1%, while Nasdaq 100 futures ticked higher by 0.2%. Fed funds futures are pricing in a strong likelihood that central bankers will keep rates steady at the 5.25% to 5.5% range, according to CME's FedWatch Tool. The S&P 500 and Nasdaq are tracking to end July down 0.4% and 3.3%, respectively. The Dow and Russell 2000 are slated to finish the month higher by more than 4% and 9%, respectively.

Persons: Dow, Russell, Jerome Powell, CME's, Powell, Bryce Doty Organizations: New York Stock Exchange, Federal Reserve, Nasdaq, Dow Jones, Microsoft, Sit Investment, Fed, Boeing, Albemarle, Qualcomm, Etsy

☆ Why Global Investors Are Watching What Japan Does Next
▼ + stars: | 2024-07-29 | by ( Joe Rennison | ) www.nytimes.com time to read: 1 min

Japan’s central bankers meet this week, and what they decide has the potential to move markets around the world. While policymakers in the United States and elsewhere either are preparing to cut interest rates or have already done so, the Bank of Japan is only just beginning to raise them. “Japan is in a different world,” said Kei Okamura, a portfolio manager based in Japan at the investment firm Neuberger Berman. The Bank of Japan cut interest rates below zero in 2016 and kept them there until March, when it announced the first rate increase in 17 years, as the economy showed signs of recovery from anemic growth and low inflation. Economists believe the central bank might raise rates again at its upcoming meeting, which concludes on Wednesday.

Persons: ”, Kei Okamura, Neuberger Berman Organizations: Bank of Japan, The Bank of Japan Locations: Japan, United States

☆ Stocks are approaching a 'watershed' moment as rate cuts unlock opportunity in unloved areas of the market, Wharton professor Jeremy Siegel says
▼ + stars: | 2024-07-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The stock market is about to see a major shift once the Fed cuts rates, Jeremy Siegel said. The top economist thinks value stocks could start outperforming growth stocks once the Fed eases policy. Cooling inflation data supports a Fed rate cut by September, Siegel predicted. The Wharton School finance professor pointed to opportunity lurking in value stocks, an unloved group of the market that's underperformed this year when compared to growth stocks. Growth stocks have outperformed partly due to Wall Street's AI craze, which has ignited investor fervor for growth stocks, like mega-cap tech firms.

Persons: Jeremy Siegel, Siegel, —, Powell Organizations: Service, Wharton School, CNBC

☆ It may already be too late for the Fed to stop a recession, former central bank president says
▼ + stars: | 2024-07-25 | by ( Filip De Mott | ) www.businessinsider.com time to read: +4 min

"Although it might already be too late to fend off a recession by cutting rates, dawdling now unnecessarily increases the risk," the former New York Federal Reserve President said. But to Dudley, even this is too late, and central bankers would do better to pivot rates at next week's policy meeting. AdvertisementAccording to Dudley, this slowdown points to fewer jobs down the road, and an uptick in unemployment could set off a near-certain recession indicator: the Sahm Rule. Despite this, Dudley suggested that the Fed might not be as concerned about breaching the Sahm Rule as it should be. According to Dudley, there are two other reasons the Fed may be waiting for September to cut rates.

Persons: —, Bill Dudley, dawdling, Dudley, Jerome Powell, Claudia Sahm, I'm Organizations: Service, Bloomberg, New York Federal, Business, Fed Locations: Dudley

☆ U.S. economy grew at a 2.8% pace in the second quarter, much more than expected
▼ + stars: | 2024-07-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Real gross domestic product , a measure of all the goods and services produced during the April-through-June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% increase in the first quarter. Economic activity in the U.S. was considerably stronger than expected during the second quarter, according to an initial estimate Thursday from the Commerce Department. The so-called chain-weighted price index, which takes into account changes in consumer behavior, increased 2.3% for the quarter, below the 2.6% estimate. There also is pressure in the housing market: Sales are declining while home prices continue to climb, putting pressure on first-time homebuyers.

Persons: Dow Jones Organizations: Commerce Department, Stock, Federal Reserve, Fed, Philadelphia Federal Locations: U.S

☆ The Fed is only going to cut rates once in 2024 as shelter inflation is too high and the job market is hot, Vanguard says
▼ + stars: | 2024-07-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

The Fed will only cut interest rates 25 basis-points this year, Vanguard predicted. Central bankers will be held back by high shelter costs and a strong job market, the firm said. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementThe Federal Reserve is likely to cut interest rates just once this year, as housing costs are too high and the job market is still too hot, Vanguard said. That's a lot less than more ambitious rate cut scenarios see for the rest of this year, with investors expecting as many as three rate cuts by December, according to the CME FedWatch tool.

Persons: — Organizations: Vanguard, Service, Business

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