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☆ US stocks drop as Fed officials reinforce Powell's hawkish tone
▼ + stars: | 2023-02-08 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

US stocks closed lower on Wednesday, extending losses from the previous session. Investors were focused on hawkish rhetoric from Fed chair Jerome Powell and other officials. Powell cautioned that rates could extend higher than previously thought at a speech on Tuesday. Yesterday, Federal Reserve chair Jerome Powell said he foresaw benchmark interest rates climbing higher than previously thought in his first remarks since the scorching jobs report on Friday. Fundstrat predicts tech stocks are in for a resurgent year after a turbulent 2022.

☆ Morning Bid: Powell confesses 'This time it's different'
▼ + stars: | 2023-02-08 | by ( ) www.reuters.com time to read: +5 min

Any fear of a radical Fed rethink on the back of the jobs numbers seemed wide of the mark. "This cycle is different from other cycles...it has just confounded all sorts of attempts to predict," Powell admitted. And many think last week's jobs report should similarly be treated with care. They included a minimum tax for billionaires and a quadrupling of the tax on corporate stock buybacks. Brands, Eaton Corp, etcUS terminal rateReuters GraphicsReuters GraphicsReuters GraphicsBy Mike Dolan, Editing by Raissa Kasolowsky <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

"But I'm not seeing signals of ... quick decline in the economic data, and I am prepared for a longer fight," Waller said. Though wage growth has slowed, the decline is "not enough," Waller said. Waller did not say in his prepared remarks how much higher the Fed may need to raise its benchmark overnight interest rate to reach a level adequate to return inflation to the Fed's 2% target. As of December, the Fed's preferred measure of inflation was increasing at a 5% annual rate. "Though we have made progress reducing inflation, I want to be clear today that the job is not done," Waller said.

☆ Fed Governor Christopher Waller warns that interest rates could go higher than expectations
▼ + stars: | 2023-02-08 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Federal Reserve Governor Christopher Waller on Wednesday talked tough on inflation, warning that the fight is not over and could result in higher interest rates than markets are anticipating. Consequently, he said the Fed needs to maintain its current plan of action, which has seen eight interest rate hikes since March 2022. "And, it might be a long fight, with interest rates higher for longer than some are currently expecting. But Waller said he sees inflation still too high while he expects just moderate economic growth this year. He did note that wage data is "moving in the right direction," but not enough for the Fed to lower rates.

☆ Treasury yields decline as investors assess monetary policy outlook
▼ + stars: | 2023-02-08 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +1 min

One basis points is equivalent to 0.01%. ET, the 10-year Treasury yield was trading at 3.6490% after falling by more than two basis points. The yield on the 2-year Treasury was down by close to four basis points to 4.4334%. U.S. Treasury yields fell on Wednesday as investors assessed the monetary policy outlook after Federal Reserve Chairman Jerome Powell's latest comments. The central bank has been implementing monetary policy measures including rate hikes in an effort to slow the economy and cool inflation.

☆ Earnings and Fed Chair Powell will again drive markets in the week ahead
▼ + stars: | 2023-02-03 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

With few economic releases and the earnings season starting to wind down, an appearance by Federal Reserve Chairman Jerome Powell Tuesday could be among the newsiest events for markets in the week ahead. The Fed chair is speaking at the Economic Club of Washington D.C. at midday Tuesday. If he wanted to walk back anything, he could have done it then," said Art Hogan, chief market strategist at B. Riley. Economists said Friday's surprisingly strong jobs report should encourage the Fed to push forward with planned rate hikes. Earnings, earnings, earnings But there continues to be earnings news.

☆ Why the case is growing for a Federal Reserve interest rate cut before year end
▼ + stars: | 2023-01-31 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +11 min

The Fed will get to 5%, but quickly start to retreat so that the year-end rate is going to be 4.6%, according to the Fed Survey. The Fed interest rate policy path is pretty clear for the next few months of Federal Reserve FOMC meetings. Fear of recession dipped in the latest Fed Survey, but it's still elevated, with 51% of respondents expecting a recession. The Fed Survey doesn't have a positive outlook on growth for 2023, but isn't forecasting negative growth either. But one consumer CFO did say that the way price increases are "pushed through" is becoming more strategic as opposed to across-the-board.

☆ Fed officials see lots of room to shed bonds from balance sheet
▼ + stars: | 2023-01-31 | by ( Michael S. Derby | ) www.reuters.com time to read: +6 min

It now aims to unload just shy of $100 billion per month, and so far that approach has taken nearly $420 billion of bonds off the Fed's balance sheet. Fed officials and outside observers don't expect that to happen again. "So I would expect, you know, the process of balance sheet reduction to continue as it is." When the Fed announced its run-off plans last year, "all the interest rate effects from balance sheet tightening happened right away. Still, Fed balance sheet cuts should "stay intact until early 2024," analysts with forecasting firm LH Meyer wrote.

☆ Fed's words in focus as markets bet rate hikes will soon end
▼ + stars: | 2023-01-30 | by ( Ann Saphir | ) www.reuters.com time to read: +6 min

The rate increase expected at the Federal Open Market Committee's Jan. 31-Feb. 1 meeting would bring the policy rate to the 4.5%-4.75% range. That's two quarter-point rate hikes short of the level most Fed policymakers in December thought would be "sufficiently restrictive" to bring inflation under control. At the same time, he said, "there's going to be some caution" about doing anything that could feed market expectations that a pause in rate hikes is imminent. Fed policymakers, as of December at least, all see no rate cuts until 2024. "The key question is how committed they are to further rate hikes."

☆ Some economists see a 'rolling recession' ahead. Here's what that means
▼ + stars: | 2023-01-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Termed "rolling recessions," the idea is that rather than contract broadly and all at once, the economy could see different sectors decline in succession, one after the other. I think we will see rolling recession in the future." Sonders is a proponent of the "rolling recession" theory and noted that stocks can perform well even in downturns. A traditional recession looms To be sure, there are detractors to the "rolling recession" theory. "Have we ever had a period where both housing and manufacturing were in recession at the same time and we didn't have a recession?"

☆ Asia-Pacific markets set to rise as trade resumes after Lunar New Year holidays
▼ + stars: | 2023-01-24 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

Federal Reserve officials next week are almost certain to approve another deceleration in interest rate hikes while also discussing when to stop the increases altogether, according to a Wall Street Journal report. The rate-setting Federal Open Market Committee is set to convene Jan. 31-Feb. 1, with markets pricing in almost a 100% chance of a quarter-point increase in the central bank's benchmark rate. Most prominently, Fed Governor Christopher Waller said Friday he sees a 0.25 percentage point increase as the preferred move for the upcoming meeting. A series of rate hikes begun in March 2022 has resulted in increases of 4.25 percentage points. Market pricing is currently indicating quarter-point hikes at the next two meetings, a period of no action, and then up to a half-point reduction by the end of 2023, according to CME Group data.

☆ Treasury yields hold steady as investors assess monetary policy outlook
▼ + stars: | 2023-01-23 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +1 min

ET, the yield on the benchmark 10-year Treasury was almost flat and was last trading at around 3.4804%. The 2-year Treasury yield was down by just over one basis point to 4.1701%. U.S. Treasury yields were little changed Monday as investors mulled the Federal Reserve's next interest rate decision and considered the outlook for the broader economy. In recent weeks Fed speakers have hinted that they would consider slowing rate increases to 25 basis points. The latter is one of the Fed's favored inflation gauges and could therefore inform the central bank's next policy moves.

ORLANDO, Fla., Jan 22 (Reuters) - A key part of the U.S. yield curve is the most inverted in decades and for hedge funds, enough is enough. It is the smallest net short since December 2021, and considering that short position exceeded 1 million contracts in early September, it is virtually neutral. Funds also increased their one-month SOFR net long position to over 67,000 contracts, the largest long since August. A short position is essentially a wager that an asset's price will fall, and a long position is a bet it will rise. Meanwhile, speculators increased their net short 10-year Treasuries futures position by 133,699 contracts, the biggest weekly shift since last October, to 545,000 contracts.

☆ European markets head for higher open as investors weigh economic outlook
▼ + stars: | 2023-01-23 | by ( Holly Ellyatt | ) www.cnbc.com time to read: +1 min

European markets are looking to start the new trading week on a positive note Monday with investors gauging the economic outlook. Global markets have been weighing the possibility that the Fed is getting ready to slow the pace of its inflation-fighting rate hikes after economic data last week showed a decline in wholesale prices and retail sales. Christopher Waller said he favors just a quarter-point hike on Feb. 1, when the central bank gives its next interest rate policy update. Kristalina Georgieva, managing director of the IMF, said Friday at the World Economic Forum that the global economic outlook is not as bad as feared a couple of months ago — "but less bad doesn't quite yet mean good." "We have to be cautious," she told a closing panel at the World Economic Forum in Davos moderated by CNBC.

☆ Stock futures are flat as investors weigh the Fed's next policy move and await a busy earnings week
▼ + stars: | 2023-01-22 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +2 min

Stock futures were little changed Sunday evening as investors weighed a potential slowdown or pause in Federal Reserve interest rate hikes and looked ahead to a busy week of earnings. Futures tied to the Dow Jones Industrial Average were lower by 27 points, or 0.08. S&P 500 futures barely budged and Nasdaq 100 futures also sat near the flat line. On Friday, the major averages rallied to finish the week after briefly losing the momentum of the January rally. Markets have priced in a 99.7% chance of a 25-basis point hike, according to CME Group data, which would bring the interest rate to a targeted range of 4.5%-4.75%.

☆ Fed Official Favors Quarter-Point Rate Rise in February
▼ + stars: | 2023-01-20 | by ( Nick Timiraos | ) www.wsj.com time to read: 1 min

A Federal Reserve official said Friday he would support a slower pace of interest-rate increases at the central bank’s next meeting, cementing expectations of a quarter-percentage-point rate rise on Feb. 1. Fed governor Christopher Waller, who was an early supporter of rapid rate increases last year, said the economy and the outlook for inflation was evolving in a way that would allow the central bank to continue slowing the pace of rate rises. The Fed raised rates by 0.5 point at its last meeting, which marked a step down from four consecutive hikes of 0.75 point before that.

☆ Morning bid: Netflix flickers
▼ + stars: | 2023-01-20 | by ( ) www.reuters.com time to read: +4 min

With the macro picture turning foggy again, streaming giant Netflix (NFLX.O) generated a rare bright spark in an otherwise gloomy corporate earnings season. But it has bounced back more than 60% from the lows of last June and the leadership shakeup may not shape the road ahead. With aggregate S&P500 earnings tracking a year-on-year contraction of about 3% for the fourth quarter, the Netflix news was welcome. In wider markets, a dour Thursday showed some retreat of the early year optimism on peaking central bank interest rates. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ US stocks climb but end the week mixed as investors worry about a coming recession
▼ + stars: | 2023-01-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks rose on Friday, but had a mixed performance for the week as investors worry about an upcoming recession. The Nasdaq closed the week with a gain, though the Dow and the S&P 500 finished lower. Tech stocks rallied on the latest batch of corporate earnings and layoffs sweeping the sector. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. The Dow and S&P 500 notched weekly losses of 3% and 0.9%, respectively, while the Nasdaq gained 0.5% as tech stocks rallied on fresh corporate earnings and layoffs sweeping the sector.

☆ Fed Governor Waller backs quarter-point interest rate hike at next meeting
▼ + stars: | 2023-01-20 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Federal Reserve Governor Christopher Waller said Friday he favors a quarter percentage point interest rate increase at the next meeting, as he waits for more evidence that inflation is heading in the right direction. Other officials, such as Philadelphia Fed President Patrick Harker, have pointed to a 0.25 percentage point increase at the Jan. 31-Feb. 1 FOMC meeting, but Waller is the highest-ranking member to be that explicit. While the market and the Fed appear to be on the same page with where rates go in the short term, there is divergence further out. Waller said the divergence is largely about perception for where inflation is going to go. "The market has a a very optimistic view that inflation is just going to melt away.

☆ Watch the Federal Reserve's Waller speak live on the economy and interest rates
▼ + stars: | 2023-01-20 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

Please refresh the page if you do not see a player above at that time.] Federal Reserve Governor Christopher Waller is scheduled to speak Friday at 1 p.m. before the Council on Foreign Relations in New York. Waller's remarks are the last before Fed officials enter a blackout period prior to their Jan. 31-Feb. 1 policy meeting. Markets widely expect the rate-setting Federal Open Market Committee to raise its benchmark interest rate another quarter percentage point, taking it to a target range of 4.5%-4.75%. Other Fed officials in recent days have said they think rates still need to go higher, but in smaller increments than the hikes that boosted the fed funds rate by 4.25 percentage points in 2022.

Alphabet Inc (GOOGL.O) was the latest to join the list as it said it was cutting 12,000 jobs on Friday. "And we already have some insight into that because a lot of them have been coming out with massive layoffs." ET, Dow e-minis were down 10 points, or 0.03%, S&P 500 e-minis were up 9 points, or 0.23%, and Nasdaq 100 e-minis were up 77.25 points, or 0.68%. The S&P 500 (.SPX) has lost 2.5% so far in the week and the Nasdaq (.IXIC) is down more than 2%. Also on the radar are comments from Philadelphia Fed President Patrick Harker and Fed Governor Christopher Waller.

Waller said he remained "cautious" about the path of inflation and expected it would take "continued tightening of monetary policy" to return the rate of price increases to the Fed's 2% target. That process seems to be underway, Waller said, all while the unemployment rate remains, at least so far, at a half-century low of 3.5%. The Fed used a series of aggressive-three-quarter point rate increases last year to push the target federal funds rate from near zero to a range between 4.25% and 4.5%. At the Fed's last meeting in December, however, policymakers eased the pace and approved just a half-point increase. While supporting the use of quarter point hikes, Waller did not indicate in his prepared remarks how much further he feels rates need to rise from here.

☆ Fed can likely slow runoff as bank reserves near 10% to 11% of GDP
▼ + stars: | 2023-01-20 | by ( ) www.reuters.com time to read: +1 min

Jan 20 (Reuters) - The Federal Reserve can probably start to slow its balance sheet runoff once bank reserves fall to around 10% or 11% of gross domestic product, Fed Governor Christopher Waller said on Friday. "We'll start slowing as we approach maybe reserves being 10% to 11% of GDP," Waller said at a Council of Foreign Relations event in New York. Those reserves and repurchase agreements currently total just over $5.6 trillion, roughly around 22% of gross domestic product as of the third quarter of last year. The Fed is reducing its holdings of Treasuries by up to $60 billion a month, and its MBS holdings by up to $35 billion per month. That process will need to stop once the Fed determines the amount of reserves banks need to hold.

☆ In 2022 inflation data trumped Fed comments for moving markets, report says
▼ + stars: | 2023-01-18 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

In terms of market moves, “the sheer volatility around each CPI release is remarkable” and reflects the magnitude of inflation surprises last year and how those unexpected readings changed the outlook for Fed policy, they wrote. Last year was the year the Fed got caught flatfooted by the highest levels of inflation seen in 40 years. Rates will almost certainly go up further this year even as inflation pressures are showing some initial signs of cooling. Among policymakers, the report found that remarks by Fed Chair Jerome Powell, Vice-Chair Lael Brainard and New York Fed leader John Williams had notable market impacts. The report did not rank the market impact of the 11 remaining regional Fed leaders, who speak with much greater frequency than Board members and even the New York Fed leader.

☆ Corporate profit reports in the week ahead could show whether there's an 'earnings recession'
▼ + stars: | 2023-01-13 | by ( Patti Domm | In | ) www.cnbc.com time to read: +6 min

Investors in the week ahead will focus on how much inflation and the slowing economy have chiseled away at corporate profits, as companies including Goldman Sachs , Netflix and Procter & Gamble report earnings. "This is going to be the start of the clock ticking on an earnings recession," said Amanda Agati, chief investment officer of PNC Asset Management Group. Economic recession talk heats up "There's never been a recession without an earnings recession since World War II," Agati said. Art Hogan, chief market strategist at B. Riley Financial, said this coming earnings week could be an important step towards assessing the health of corporate balance sheets. Week ahead calendar Monday Martin Luther King Jr. Day Markets closed Tuesday Earnings: Goldman Sachs , Morgan Stanley , Citizens Financial, United Airlines, Interactive Brokers 8:30 a.m.

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