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☆ US rate futures expect Fed pause in June in sharp turnaround from earlier
▼ + stars: | 2023-05-31 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +2 min

The big catalyst were comments from Fed Governor and vice chair nominee Philip Jefferson and Philadelphia Fed President Fed Harker who both touted skipping a June rate hike. That said, data due on Friday about the U.S. job market "may change my mind." The Job Openings and Labor Turnover Survey, or JOLTS report, also showed layoffs declined significantly last month. After the JOLTS report, rate futures had priced in a nearly 70% chance of a rate increase next month. Some things seem like a little bit loose and so if the Fed is going to be on pause, it's time.

Persons: Refinitiv's, Philip Jefferson, Fed Harker, Jefferson, Harker, Ellis Phifer, Raymond James, Gertrude Chavez, Dreyfuss, Diane Craft Organizations: YORK, Federal Reserve, Fed Governor, Philadelphia Fed, Labor Department, Labor, Survey, Thomson Locations: Memphis , Tennessee

The rate hike "skip" has now become jargon for an emerging compromise between concerns inflation is not yet controlled with fears the economy may slow sharply as banks pull back on credit. "I don't really see a compelling reason to pause," Cleveland Fed president Loretta Mester said in an interview published Wednesday in the Financial Times. Jefferson acknowledged inflation remains "too high" and that "by some measures progress has been decelerating recently." While Jefferson does not expect a recession, he noted that there are reasons to be careful after 15 months in which the policy rate was raised by 5 percentage points. Reporting by Howard Schneider; Editing by Paul Simao, Nick Zieminski and Daniel WallisOur Standards: The Thomson Reuters Trust Principles.

Persons: Philip Jefferson, Jefferson, Jerome, Powell, Krishna Guha, Patrick Harker, Harker, Loretta Mester, Michelle Bowman, Howard Schneider, Paul Simao, Nick Zieminski, Daniel Wallis Organizations: Federal Reserve, Fed, U.S . Senate, Philadelphia Fed, Cleveland Fed, Financial Times, Thomson Locations: U.S, Washington

The House Rules Committee late on Tuesday, in the first procedural vote on the contentious legislation, cleared the measure for debate in the full House on Wednesday. The solid Democratic opposition is not necessarily indicative of how the party would vote on the bill itself. "We are certainly punching above our weight," she told her fellow House Republicans. [1/4] U.S. House Speaker Kevin McCarthy (R-CA) returns to his office from the House floor at the U.S. Capitol ahead of an expected vote in the U.S. House of Representatives on a bill raising the federal government's $31.4 trillion debt ceiling, in Washington, U.S., May 31, 2023. White House Budget Director Shalanda Young, who was one of Biden's lead negotiators, urged Congress to pass the bill.

Persons: Kevin McCarthy's, Joe Biden's, McCarthy, Biden, Chip Roy, Roy, Erin Houchin, Kevin McCarthy, Julia Nikhinson, Republican Mitt Romney, Dick Durbin, Shalanda Young, Biden's, Young, White, David Morgan, Richard Cowan, Moira Warburton, Julio, Cesar Chavez, Scott Malone, Rosalba O'Brien, Alistair Bell Organizations: U.S . House, Kevin McCarthy's Republicans, Twitter, Democratic, Treasury, Republican, White, Senate, Republicans, Office, ., U.S, Capitol, REUTERS, Senators, National Institutes of Health, Internal Revenue Service, Thomson Locations: U.S, Washington , U.S, Washington

The House Rules Committee late on Tuesday, in the first procedural vote on the contentious legislation, cleared the measure for debate in the full House on Wednesday. The solid Democratic opposition is not necessarily indicative of how the party would vote on the bill itself. "We are certainly punching above our weight," she told her fellow House Republicans. A successful House vote would send the bill to the Senate, where debate and voting could stretch into the weekend, especially if any one of the 100 senators try to slow its passage. White House Budget Director Shalanda Young, who was one of Biden's lead negotiators, urged Congress to pass the bill.

Persons: Kevin McCarthy's, Joe Biden's, McCarthy, Biden, Chip Roy, Roy, Erin Houchin, Republican Mitt Romney, Dick Durbin, Shalanda Young, Biden's, Young, White, David Morgan, Richard Cowan, Moira Warburton, Julio, Cesar Chavez, Scott Malone, Himani Sarkar, Rosalba O'Brien Organizations: U.S . House, Kevin McCarthy's Republicans, Twitter, Democratic, Treasury, Republican, White, Senate, Republicans, Office, Senators, National Institutes of Health, Internal Revenue Service, Thomson Locations: U.S, Washington

The solid Democratic opposition is not necessarily indicative of how the 213-member party caucus would vote on the bill itself. But reflecting party divisions, Representative Erin Houchin countered that despite Democratic control of the White House and Senate, the bill would achieve significant Republican spending cuts. "We are certainly punching above our weight," she told her fellow House Republicans. White House Budget Director Shalanda Young, who was one of Biden's lead negotiators, urged Congress to pass the bill. A successful House vote would send the bill to the Senate, where debate and voting could stretch into the weekend, especially if any one of the 100 senators try to slow its passage.

Persons: Kevin McCarthy's, Joe Biden's, Biden, Chip Roy, Roy, Erin Houchin, Republican Mitt Romney, McCarthy, Dick Durbin, Shalanda Young, Biden's, Young, White, Richard Cowan, Moira Warburton, David Morgan, Scott Malone, Himani Organizations: U.S . House, Kevin McCarthy's Republicans, Democratic, Treasury, Republican, White, Senate, Republicans, Office, National Institutes of Health, Internal Revenue Service, Thomson Locations: U.S, Washington

"The risks of doing too much or doing too little are becoming more balanced and our policy adjusted to reflect that," Powell said. Ahead of a June 13-14 policy meeting "we haven't made any decisions about the extent to which additional policy firming will be appropriate." U.S. policymakers remain on the fence about their upcoming rate decision, and Powell's appearance on Friday was a moment that could have provided clarity. But the central bank will still receive important jobs and inflation data in coming weeks that could sway the debate. If an actual U.S. debt default is the result, the central bank may even be pushed towards emergency steps to ease the burden on the economy.

☆ Federal Reserve officials are growing skeptical over suspending rate hikes
▼ + stars: | 2023-05-19 | by ( Bryan Mena | ) edition.cnn.com time to read: +7 min

Some officials are concerned inflation isn’t cooling fast enough, which could prompt an 11th consecutive rate hike when policymakers meet in June. Federal Reserve Board Chair Jerome Powell and former Federal Reserve Board Chair Ben Bernanke (R) participate in a discussion at the Federal Reserve Board building in Washington, DC, May 19, 2023. Saul Loeb/AFP/Getty ImagesEarlier this month, Fed officials voted unanimously to raise the benchmark lending rate by a quarter point to a range of 5-5.25%, while signaling a possible pause ahead. Of course, Fed officials’ thinking on monetary policy could drastically change if the United States defaults on its debt, which could happen as soon as June 1. Fed officials always mention that their views on interest rates largely depend on what economic indicators show, resisting taking an absolute stance on how they will vote.

INVESTMENT HELPSThe company based in Hove on Britain's south coast was one of 61 firms - most with 25 or fewer employees - to take part in the world's biggest four-day week trial last year. The experience of some companies in the first trial suggests that moving to a four-day week might help, if it prompts firms to spend more on equipment and training. It piloted a four-day week for its 80 New Zealand staff over 18 months, and has since extended it to 500 workers in Australia, a move it hopes will attract new talent. British recruitment agency Reed.co.uk said it had seen a rise in the number of job advertisements offering a four-day week since the start of the year. Allcap, a supplier of industrial components with 36 employees in western England, tried a four-day week after its staff had worked flat out during the pandemic to supply protective equipment and ventilator parts.

☆ Arrowstreet, Coatue Management among big hedge funds buying Meta in first quarter
▼ + stars: | 2023-05-15 | by ( David Randall | ) www.reuters.com time to read: +1 min

NEW YORK, May 15 (Reuters) - Prominent hedge funds including Arrowstreet Capital LLC, D1 Capital Partners and Coatue Management LLC were among the investors that bought shares of Meta Platforms Inc in the first quarter of the year, amid an eye-popping rebound in the Facebook-parent’s stock. Arrowstreet Capital added about 5 million shares during the quarter, brining its total position to slightly more than 7 million shares, while Coatue more than doubled its position in the company by buying 4.2 million shares. Winslow Capital Management, meanwhile, initiated a new position in the firm by buying about 927,000 shares, and D1 Capital Partners bought slightly more than 1 million shares. Norges Bank, the central bank of Norway, was the largest seller among all firms, unloading more than 35 million shares during the quarter. Two Sigma Investments sold its entire stake of about 569,000 shares, while Glenview Capital Management, run by billionaire Larry Robbins, sold its entire stake of about 526,000 shares, according to filings.

Reuters Graphics Reuters GraphicsReuters Graphics Reuters GraphicsInvestors and analysts took the Labor Department report on the whole as supporting the prospect that the Fed would pause its rate increases at the June 13-14 meeting. The PCE, which is the Fed's preferred gauge for its 2% inflation target, has been running at more than twice that level. Continued readings like the ones in April could weaken the case for pausing rate hikes. That's how increases in its policy rate influence economic activity. FEDSPEAK: OngoingThe Fed's internal communications rules set a "blackout" period around each policy meeting.

☆ Morning Bid: Inflation cloud obscures Fed peak
▼ + stars: | 2023-05-10 | by ( ) www.reuters.com time to read: +4 min

With markets edgy about the U.S. debt ceiling standoff and ongoing ripples from the March regional banking blow out, the running assumption is the Fed's campaign is over and disinflation underway. New York Fed chief John Williams said yesterday it's too soon to say the central bank is done and dusted. If consensus forecasts are correct, the April inflation readout later on Wednesday may well force the Fed to keep that equivocal line up for a bit longer. Futures markets show only a 15% chance of another Fed hike next month, with quarter point rate cut almost fully priced by September. Visibility is low in the fixed income market, however, due to the debt ceiling impasse.

☆ Premature for Fed to call end to rate hikes with inflation still high, Williams says
▼ + stars: | 2023-05-09 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

"We've made incredible progress" in taking action to lower overly high levels of inflation, but "if additional policy firming is appropriate, we'll do that," he said. The central bank also signaled that after just over a year of aggressive rate hikes, it may be done, or close to it, with the rate rises. I do not see in my baseline forecast any reason to cut interest rates this year," Williams said. Williams remains confident the Fed can achieve its objectives, adding "as always, I'll be monitoring the totality of the data and what it implies for the achievement of our goals. But for now, he said price pressures remain "too high," adding that the Fed remains committed to bringing inflation back to its 2% target.

☆ U.S. dollar struggles, pound hits one-year high
▼ + stars: | 2023-05-08 | by ( ) www.cnbc.com time to read: +2 min

The dollar index, which measures the currency against six rivals, was slightly higher at 101.41, a better showing than the one-year low of 100.78 reached last month. Fed funds futures traders are now pricing for the fed funds rate to reach 4.993 in July, and remain below that all year. Sterling hit a more than one-year peak against the dollar on Monday, with the pound trading as high as $1.2668, its highest since April 2022, but slipped slightly below that, and was last seen at $1.2614. The pound remains in focus this week ahead of an expected Bank of England rate increase on Thursday, and has also been firming versus the euro. Meanwhile, U.S. inflation data due on Wednesday, could indicate whether the Fed must do more to rein in inflation.

☆ The dollar's bad run will continue as the Fed gears up to pause its rate-hiking campaign, UBS says
▼ + stars: | 2023-05-05 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

The dollar's weakening trend that started in late September is likely to continue, according to UBS. The prospect of Federal Reserve halting interest-rate increases will likely weigh on the greenback, strategists said. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. Its miserable run will likely continue as the Federal Reserve looks set to halt its interest-rate increases and given the risk of a banking crisis, according to UBS. UBS warned that a slowdown in US economic growth is also likely to weigh on the buck.

☆ Shares rise, dollar weakens on bank sector fears
▼ + stars: | 2023-05-05 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

SINGAPORE, May 5 (Reuters) - Asian stocks rose, the dollar eased and gold hovered around its record highs on Friday, as jittery investors remained nervous about the U.S. banking sector following another rout in shares of regional lenders. Wall Street ended lower on Thursday after Los Angeles-based PacWest Bancorp's (PACW.O) move to explore strategic options deepened fears about the health of U.S. lenders as pressure grows on regulators to take more steps to shore up the country's banking sector. Shares of U.S. regional banks sank this week in the wake of the collapse of First Republic Bank over the weekend that has brought back fears of a financial sector crisis. The Federal Reserve on Wednesday raised interest rates by 25 basis points, but hinted that its marathon hiking cycle may be ending. China shares (.SSEC) rose 0.21%, while Hong Kong's Hang Seng index (.HSI) was up 0.6%, helping lift the region's shares.

The US Federal Reserve Building is seen in Washington, DC, May 3, 2023. However, the Fed did hint at a possible pause to hikes. In Australia, the S&P/ASX 200 fell 0.24%, ahead of the country's March trade data due later Wednesday. Futures for Hong Kong's Hang Seng index were also lower standing at 19,656, compared to its last close of 19,699.16. Mainland Chinese markets are set to reopen after the Labor Day holiday, while Japanese markets are closed for a holiday Thursday.

Top of mind: inflation and the impact of a credit tightening Fed officials feel is still evolving in the wake of both higher interest rates and a financial sector rattled by the recent failure of three U.S. banks. "The case of avoiding a recession is in my view more likely than that of having a recession," Powell said. The shift in the Fed's approach was reflected in U.S. interest rate futures, which showed broad expectations for no hikes at either of the central bank's next two policy meetings. U.S. stocks initially held onto gains after the release of the Fed statement, but fell later in the afternoon and closed lower. "With the word 'determining' in place of 'anticipating,' (it) is essentially telling the markets that the Fed is now on pause."

The unanimous decision lifted the Fed's benchmark overnight interest rate to the 5.00%-5.25% range, the tenth consecutive increase since March 2022. Because of that, Powell said it's too soon to say the rate hike cycle is over. Economic growth remains modest, but "recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation," the Fed said. The shift was reflected in U.S. interest rate futures prices, which showed broad expectations for no hikes at either of the Fed's next two meetings. "With the word 'determining' in place of 'anticipating' is essentially telling the markets that the Fed is now on pause."

☆ Fed Chair Jerome Powell: Assessments on more policy firming will be ongoing
▼ + stars: | 2023-05-03 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFed Chair Jerome Powell: Assessments on more policy firming will be ongoingFed Chair Jerome Powell answers questions from reporters after the central bank announced it was raising interest rates another 25 basis points.

☆ FOMC: Takeaways from the Federal Reserve's May meeting
▼ + stars: | 2023-05-03 | by ( Alicia Wallace | ) edition.cnn.com time to read: +7 min

This time around, the central bank’s meeting occurred two days after First Republic Bank failed. “Conditions in the sector have broadly improved since early March, and the US banking system is sound and resilient,” he said. “These tighter credit conditions are likely to weigh on economic activity, hiring and inflation,” Powell said. “The extent of these effects remains uncertain.”A key federal report on lending conditions, the Senior Loan Officer Opinion Survey, will come out on May 8, Powell said. “So we’ll be driven by incoming data, meeting by meeting, and we’ll approach that question at the June meeting.”A complicating element in that evaluation will be the amount of credit tightening and to what extent that acts as another interest rate hike, he said.

☆ Instant View: Fed hikes another 25 basis points, hints it may be the last increase
▼ + stars: | 2023-05-03 | by ( ) www.reuters.com time to read: +7 min

TOM GARRETSON, STRATEGIST, RBC PORTFOLIO ADVISORY GROUP, MINNEAPOLIS, MINNESOTA"It was a pretty dovish rate hike today. The expectations were that it might be a bit more of a hawkish rate hike in terms of leaving the door open to further hikes if needed." "The updated language in the policy statement does suggest the bar is going to be quite high for further rate hikes. … The market is hoping or expecting the Fed to pause after this rate hike. From a consumer credit perspective, the impact of further rate hikes will likely continue to be felt by borrowers across a range of industries.

☆ The Federal Reserve just hiked interest rates for the 10th time in a row. It could be the last.
▼ + stars: | 2023-05-03 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The Federal Reserve raised interest rates by 25 basis points on Wednesday. On Wednesday, the Federal Open Market Committee (FOMC) announced it is raising interest rates by 25 basis points for the third time this year. Fed Chair Jerome Powell has indicated he wants to see wage growth cool off before considering a pause on interest rate hikes. Still, while the Fed didn't see the necessary data to pause interest rate hikes this time around, there's a possibility it could happen in June. "How much further will depend on incoming data on inflation, the real economy and the extent of tightening credit conditions."

Investors anticipate the U.S. central bank will follow through with a quarter-percentage-point rate hike at the end of its latest two-day policy meeting. The policy statement is due to be released at 2 p.m. EDT (1800 GMT), with Fed Chair Jerome Powell scheduled to speak to reporters half an hour later. But the new statement, and Powell's elaboration on it, will have to reconcile a set of risks that have grown more into conflict. Between that consensus and other problems that have intensified in the meantime, the Fed is likely to at least open the door to the prospect that this hike will be the last of the current tightening cycle, absent a future inflation surprise. Doing otherwise might hint that those projections had changed, a hawkish tilt towards more rate hikes that the Fed won't want to close off but also won't want to guarantee.

☆ Fed increases rates a quarter point and signals a potential end to hikes
▼ + stars: | 2023-05-03 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

In a unanimous decision widely expected by markets, the central bank's Federal Open Market Committee raised its benchmark borrowing rate by 0.25 percentage point. related investing news BlackRock’s Rieder highlights a fresh worry for investors beyond the Fed’s expected rate hike The increase takes the fed funds rate to a target range of 5%-5.25%, the highest since August 2007. The post-meeting statement had only offered some clarity on the future pace of rate hikes — and not by what it said but what it didn't say. Multiple officials have said rates probably will need to stay elevated even if the hikes are put on hold. Along with inflation, the Fed has had to deal with tumult in the banking industry that has seen three mid-size banks shuttered.

☆ Inflation is falling for Americans, but it's probably not enough to slow the Fed's next interest rate decision this week
▼ + stars: | 2023-05-02 | by ( Ayelet Sheffey | Madison Hoff | ) www.businessinsider.com time to read: +5 min

This week, the Federal Reserve will likely announce the third interest rate hike this year. But a pause on interest rate hikes could be in the cards in June. There was a massive slowdown in the year-over-year percent change in the Consumer Price Index from February to March — dropping from 6.0% to 5.0%. The personal consumption expenditures price index also suggests a cooldown but is still elevated, with the year-over-year rate falling from 5.1% in February to 4.2% in March. Following the March interest rate hike, Warren wrote on Twitter that "Powell made a mistake not pausing its extreme interest rate hikes."

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