Fmr. Cleveland Fed President Loretta Mester: The economy has been resilient amid uncertainty
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
2 hours ago
- CNBC
CCTV Script 13/08/2025
The market has largely viewed the latest overnight release of the Consumer Price Index (CPI) inflation report in a positive light. The nominal CPI rose by 2.7% year-on-year, slightly below the expected 2.8%. The report also indicated stronger-than-expected inflation in service, while goods inflation came in lower than anticipated. These figures have reinforced market expectations for a rate cut and boosted the performance of U.S. stocks overnight. Specifically: All three major U.S. stock indices rose by more than 1% overnight, with the S&P 500 and the tech-heavy Nasdaq Composite both closing at record highs. According to CME FedWatch, the market's probability of a 25-basis-point rate cut by the Federal Reserve in September has increased from 85.86% the previous day to 94.93%. Although the market widely expects a rate cut in September, the focus among those supporting the move varies. Some are paying attention to inflation trends, while others are closely monitoring employment data. First, regarding the impact of Trump's tariff policies on inflation, expert opinions are divided. One camp argues that the effect of tariffs on U.S. inflation is actually quite limited. "Now you have six months of evidence, I don't really think tariffs cause inflation. Taxes don't cause inflation. And so what you're seeing in the data is very muted effects that are one time increases in the price level." It's worth noting that James Bullard is currently considered a top candidate for the next Federal Reserve Chair. In an interview with CNBC overnight, he also stated that he expects the Fed to cut rates by a total of 100 basis points over the next year. Meanwhile, another camp in the market warns that the impact of tariffs on inflation may gradually become more apparent in the future. Experts caution that, in addition to nominal CPI, it's crucial to monitor the trajectory of core CPI. "We are seeing a little bit of an uptick in the sequential core inflation and underlying inflation data. And I think a large part of that is the moderate impact we're seeing of tariff pass through that that is likely to grow in the months ahead." Additional analysis points out that while businesses may absorb costs in the short term, they will ultimately pass them on to consumers, particularly in industries with already narrow profit margins. "For instance, groceries, I mean, there's very little margin there. They're going to, you know, your tomato prices are going to go up because of because they can't really absorb, you know, those prices. It's just a matter of time that this, that the tariff related inflation starts to show up in the data." Finally, it's noteworthy that no consensus has yet been reached within the Federal Reserve regarding the pace of future rate cuts. Currently among Fed officials, Michelle Bowman and Christopher Waller represent the dovish camp advocating for . However, Jeffrey Schmid, President of the Kansas City Fed struck a hawkish tone overnight, arguing for . With moderate voices further complicating the divide, analysts suggest that even if the Fed initiates a cut in September, the pace may remain measured due to persistent internal disagreements.
Yahoo
4 hours ago
- Yahoo
Rate Cut on the Cards: Jun Bei Liu
A potential US rate cut is likely in light of recent economic data, according to Ten Cap Co-Founder and Lead Portfolio Manager Jun Bei Lu. She speaks ahead of the annual Economic Policy Symposium in Jackson Hole, Wyoming where chair Jerome Powell is expected to unveil the Fed's new policy framework. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Yahoo
Geopolitics dominates, before Fed takes the stage
A look at the day ahead in European and global markets from Wayne Cole. You know it's crazy times, when speculation Putin sent his body double to Alaska doesn't sound so outlandish. What does seem clear is that President Trump has shifted back to echoing Moscow's line, tweeting Kremlin talking points about Crimea and Zelenskiy. Putin's position seems to be that Ukraine should give up all the land Russia has taken, and much that it has failed to take in more than three years of fighting. This has been repeatedly ruled out by Zelenskiy and European leaders, and it's notable they will be by his side in Washington when he meets Trump later today. Markets have judged there is a diminished threat of further U.S. sanctions or tariffs on Russian oil exports, and oil prices are down modestly with Brent off 0.3%. Share markets are mostly firmer as Japan and Taiwan make more records, and Chinese blue chips scale a 10-month top. European stock futures are up 0.2% or so, as are Wall St futures. Valuations have been underpinned by a solid earnings season as Goldman notes S&P 500 EPS grew 11% on the year and 58% of companies raised their full-year guidance. This week's results will provide some colour on the health of consumer spending with Home Depot, Target, Lowe's and Walmart all reporting. For monetary policy the main event will be the Federal Reserve's Jackson Hole jamboree where Chair Powell speaks on the economic outlook and the Fed's policy framework on Friday, though there doesn't seem to be a Q&A as yet. ECB President Christine Lagarde and Bank of England Governor Andrew Bailey are on panel discussions. Futures are about 85% priced for a Fed rate cut in September so anything less than dovish from Powell would be a setback for debt markets. While Fed expectations are anchoring short-term yields, the long end continues to fret about inflation, budget deficit and the politicisation of monetary policy, so steepening the yield curve. European bond yields have also been on the rise, perhaps in part on a realisation of how much governments are going to have to borrow to cover increased defence spending. Key developments that could influence markets on Monday: - EU trade figures for June, US NAHB housing survey (By Wayne Cole; Editing by Jacqueline Wong) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
