And now bad news is good news? For a day
The U.S. bond market rallied from its deepest selloff in 17 months as traders moved away from a belief that the Federal Reserve would seek to head off an increase in inflation by raising interest rates. Today’s thinking is that the Iran war will produce an economic...
No interest rate move from the Fed today, but there was news
As expected, the Federal Reserve’s Open Market Committee left its benchmark short-term interest rate at 3.50% to 3.75%. But that doesn’t mean there wasn’t news from its Dot Plot projections for future GDP growth inflation, and interest rates. First, the Fed...
Will the Fed’s Wednesday Dot Plot move gold?
No secret. The big financial event of the week is the Wednesday, March 18, meeting of the Federal Reserve’s Open Market Committee. But the news out of that meeting will likely NOT be a decision on interest rates themselves. As of Friday, the CME FedWatch Tool was...
The financial markets shrug at the newest attack on the Federal Reserve
The yield on the 10-year U.S. Treasury bond soared 2 basis points to 4.18% Monday in response to news that Justice Department is conducting a criminal investigation into Fed chair Jerome Powell over his Congressional testimony on the Fed’s building project. Yep,...
Fed cuts interest rates again at Wednesday’s meeting but reveals no consensus on 2026
The Federal Reserve lowered interest rates by a quarter of a percentage point Wednesday. But revealed a huge disagreement on the course for 2026. The decision cut interest rates for a third meeting in a row, moving rates to a new range of 3.5% to 3.75%. It marked the...
Here are the stock market movers for the week ahead
Expect something macro and something micro. The macro? The September Jobs Report will be released on Friday morning before the financial markets open. . Economists expect a weak tally of 50,000 job additions and the unemployment rate to hold steady at 4.3%. With...
I expect BIG DRAMA behind the scenes at today’s Fed meeting
I expect big drama and suspense from the Federal Reserve on Wednesday, September 17. Oh, not from the Fed’s decision on interest rates. The Fed Funds Futures market is pricing in a 96% chance that the Fed’s Open Market Committee will cut the benchmark interest rate by...
Powell in Jackson Hole tells the financial markets what they wanted to hear
Federal Reserve Chair Jerome Powell carefully opened the door to an interest-rate cut in September, pointing to rising risks for the labor market even as worries over inflation remain. “The stability of the unemployment rate and other labor market measures allows us...
Wait, you mean there might not be a September interest rate cut?
Ahead of Federal Reserve chair Jerome Powell’s Friday speech at the central bankers’ conclave in Jackson Hole, four (and counting) Fed governors spoke up to cast doubt on the inevitability of a 25 basis point interest rate cut at the Fed’s September 17 meeting. Odds...
Rate cut hopes return to the market
Hope of multiple unrest rate cuts in 2025 is back. Today, June 24, money markets were again pricing in two Fed reductions by the end of the year and giving a 25% chance to a third cut. The reason for the return of rate cut optimism? A second Federal Reserve official,...
Good PCE inflation report; but tariff, spending uncertainty postpones any Fed rate cut
The Personal Consumption Expenditures Price Index, the inflation measure favored by the Federal Reserve, posted a lower-than-expected increase in April, rising 2.1% from year-ago levels. Economists had forecast that the PCE index would rise 2.2%. The core PCE, the...
Please watch my new YouTube video: No Powell Put…Yet
Today’s Video: No Powell Put…Yet. The market is betting on the Fed riding to the rescue with rate cuts, but I don’t see it happening anytime soon. The Fed’s job is controlling inflation and employment—not propping up stocks. Even with recent market jitters, the...
Please watch my new YouTube video: Why the Fed is almost certain to be wrong
Today’s video is Why the Fed is Almost Certain to be Wrong. Blame it in lags. Lags make economic forecasting really difficult at the best of times. How long does it take policies like tariffs and tax cuts to actually affect the economy and show up in the data?...
Bad inflation news is worse than expected
The Commerce Department reported this morning that the core Personal Consumption Expenditures price index, that is after stripping out volatile food and energy prices, climbed 2.8% in February from a year earlier. That was a faster pace than in January. On a monthly...
Trump criticizes the Fed’s decision to hold interest rates steady
That didn’t take long. Wednesday afternoon the Federal Reserve decided to keep its benchmark interest rate steady–no rate cut. Wednesday night President Donald Trump renewed his call for the Federal Reserve to lower interest rates as he criticized the central...Buckle those seat belts–it’s going to be a bumpy two weeks
I see the beginning of two weeks of extraordinary volatility. Look what’s on deck. On Tuesday, March 4, President Donald Trump will give his first joint address to Congress–it’s not officially a State of the Union address because newly elected presidents don’t...
Please watch my new YouTube video: The Fed is caught between a rock and a hard place
Today’s video: the Fed is between a rock and a hard place. Inflation has been stuck around 2.8% and the Fed would like to get it down to 2%. In January, the Fed paused on interest rates but Wall Street still hopes for two cuts in 2025. The March 19 meeting will...
Market is still looking for 2 rate cuts in 2025, CNBC survey says
We won’t get another update on the probable trajectory of Federal Reserve interest rate policy from the Fed itself until the central bank updates its Dot Plot projections at its March 19 meeting. But meanwhile, we have a survey from CNBC that shows a majority of...
Will there be any clues on the next rate cut from the Fed on Wednesday?
I expect Wednesday’s meeting of the Federal Reserve’s Open Market Committee to be the big event of the week. Not because the Fed will do anything unexpected on interest rates. It won’t change its benchmark policy rate now at 4.25% to 4.50%. But because the Fed might...
Paul Krugman puts some numbers on the effects of Trump’s tariffs
Assuming that conventional economics still has some validity and that economic history has some predictive value, Paul Krugman, who won his 2008 Nobel-prize in economics for his work on international trading patterns, has put some numbers on the likely effects of the...
Big market reaction on a tiny move in CPI inflation
As of noon New York time today, January 15, the Standard & Poor’s 500 was ahead 1.30%. The NASDAQ Composite and the small-cap Russell 2000 were both up 1.80% on the session. Today’s big moves come on relatively minor changes in inflation trends in this...
Fed signals fewer cuts, higher interest rates, higher inflation in 2025
In Wednesday’s quarterly update to its projections on economic growth, inflation, and interested rates in its Dot Plot survey of sentiment, Fed officials and governors forecast fewer rate cuts for next year than in their September projections, and they saw the fight...
It’s CPI inflation time again this week
All eyes will be on the Consumer Price Index inflation report for November due out on the morning of Wednesday, December 11. It’s the last big inflation data dump before the Federal Reserve meets on December 18. In October, the Consumer Price Index for All Urban...
Watch my new YouTube video: Fed one and done in December?
Today’s video is Fed One and Done in December? On November 13, the CPI inflation numbers showed inflation ticking up slightly, but the market still believes the Fed will cut rates again in December. On November 13, the CME FedWatch tool had it at 83% odds...
The Fed faces an impossible task in 2025
There’s no reason to believe that President-elect Donald Trump isn’t serious about pushing three of his biggest policy ideas through in the first 100 days of his administration in 2025. Susie Wiles, his pick for White House chief of staff, has said, “Get it done in...
CPI inflation creeps higher in October; market still forecasts December interest rate cut
Inflation ticked up slightly on an annual basis in October, the latest evidence that further reductions in inflation are getting hard to achieve. The Consumer Price Index climbed 2.6% from a year earlier, up from September’s 2.4% annual rate, the Bureau of Labor...
Wall Street and the bond market see fewer interest rate cuts in 2025 from the Fed
Look out for more volatility in the bond market. BlackRock, JPMorgan Chase, and TCW Group have all warned that the bumpy ride is likely far from over. But also expect that the big overall trend for 2024 of rising bond prices and falling yields on hopes for aggressive...
Fed sticks with a 25 basis point interest rate cut; but uncertainty seems to be a rising worry
The Federal Reserve lowered interest rates on Thursday by a quarter of a percentage point. The cut was the second this year, following on a larger than usual 50 basis point cut in September. The size of this cut was expected by the financial markets. Wall Street is...
Climb in yield on 2-year Treasury says bond market is rethinking rate-cut trajectory
As of Monday, October 21, Two-year Treasury yields have climbed 34 basis points since the Federal Reserve reduced interest rates on September 18 for the first time since 2020. Rising yields “reflect the reduced probability of recession risks,” Steven Zeng, an interest...Jim’s Daily Email Alerts:
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