Bets Emerge That End to Powell's Term Means More Fed Rate Cuts
The prospect of a shift in US monetary policy when President Donald Trump replaces Jerome Powell at the end of his term as Federal Reserve chair in May 2026 has interest-rate traders looking for pay dirt.
That was evident this week in Secured Overnight Financing Rate futures — a principal way for traders to wager on changes in the Fed's policy rate. The combination of high-volume selling of the March 2026 contract and buying of the June 2026 contract amounts to a bet that the central bank will cut interest rates in the interim.
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32 minutes ago
- Yahoo
The attacks in the Middle East could make it harder for the Fed to cut rates
President Donald Trump has repeatedly demanded the Federal Reserve slash interest rates. But Fed officials have stood pat, waiting to see how his administration's sweeping policy changes affect the economy first. Now there's another factor that could delay a rate cut: the conflict between Israel and Iran. On Friday, Israel struck at Iran's nuclear and military sites in an unprecedented attack that sent global oil prices surging. Investors and analysts fretted that a spiraling conflict could send inflation rising across the world, including in the United States. And that could give the Fed further pause at a two-day policy meeting next week. 'If this situation were to deepen further and oil prices were to stay durably higher, it would just add to the challenges that the Fed is already facing with the potential for tariffs to push up inflation,' Robert Sockin, senior global economist at Citigroup, told CNN. 'Fed officials have emphasized that they're not in a rush to cut rates because they don't know how the tariffs will exactly play through into the economy, but if you have even more upside risks to inflation, you're probably looking at an end-of-year rate cut only,' he added. Trump's policy shifts on everything from trade to immigration could all raise unemployment and jack up prices. And his frenetic back-and-forth on tariffs has made it complicated for forecasters to estimate with any confidence what the economy could look like in the future. Fed rate-setters have already said they want to see how Trump's changes pan out in the economy. With renewed Middle East tensions, that makes even more sense, experts told CNN. 'Monetary policy is not well-suited to deal with geopolitical shocks, but all this does mean that the Fed will be even more cautious,' said John Velis, Americas macro strategist at BNY Mellon. The Fed, for now, has time to wait before cutting rates again for one key reason: the resilience of the US labor market. In May, employers added a better-than-expected 139,000 jobs as the unemployment rate held steady at a low 4.2%, according to the Labor Department. First-time claims for unemployment benefits remain relatively low and job openings unexpectedly increased at the end of April, government figures show. In other words, Americans still have jobs — and the Fed can afford to wait. Instead, the Fed could cut if it sees the economy crumbling, even if oil prices are still high — what investors call a 'bad news' rate cut. 'We'll see how long oil prices remain elevated, which could lead to inflation at the headline level moving up if the conflict widens across the Middle East,' Jay Bryson, chief economist at Wells Fargo, said in an interview with CNN. 'But by the end of the summer, you'll likely see weaker job growth, and we know that there's going to be a number of federal employees who took a buyout rolling off payrolls by November, so you could even get a negative number by then,' he said. Investors are betting on a rate cut in October, according to futures. They'll get the Fed's own view soon enough: Officials will release a new set of projections next week. 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
34 minutes ago
- Yahoo
Why a 'love story' with Mark Carney is François Legault's only hope
OTTAWA — Quebec Premier François Legault was on fire last weekend. The man who is clearly and unequivocally the most unpopular premier in Canada, according to the latest Angus Reid poll, stood before the future of his party, the members of the youth wing of the Coalition Avenir Québec, smiling and ready to fight. 'I want to fight more than ever! For a third term, to finish the job!' he roared. 'I need you to continue building Quebec for future generations,' he added. But the polls suggest that the fight seems lost for Legault, known for years as the country's most beloved premier. And for the man who has made a punching bag of the federal Liberal government, it's a cruel twist of fate that Prime Minister Mark Carney may be the only person who can save the Quebec premier. With nearly a year to go until the election, the man who won one of the largest majorities in Quebec's history, with 90 out of 125 seats, is facing a massacre. According to the latest Angus Reid report, only a quarter of Quebecers approve of his performance. In March 2020, at the start of the pandemic, his approval rating was 77 per cent. 'Honestly, I wouldn't be surprised if the CAQ wins zero seat in next year's election,' said a CAQ insider that was granted anonymity to speak more freely out of fear of repercussions. The man behind the poll aggregator Philippe J. Fournier, is almost convinced that if there were an election today, the CAQ would not have party status. 'Currently, Mr. Legault is in a situation that is similar or even perhaps a little worse than (then prime minister) Justin Trudeau in December,' he told National Post. His government has faced numerous controversies over the past two and a half years. Right now, he is being hit on all fronts for his government mismanagement in the health, energy, transport and finances files. The public, it seems, has simply had enough of this government and no longer trusts it. Legault sees things differently and presents himself as the nationalist and economic candidate. But the road ahead isn't smooth. On the one hand, the separatist Parti Québécois has comfortably taken the lead and is garnering all the attention with a leader who remains perfectly clear about his intentions during the first mandate of a PQ government. Yes, this is a referendum on Quebec independence. With a popular leader leading the way among francophones, with a similar margin to that of federal Conservative Leader Pierre Poilievre a year ago, the PQ has now brought the separatists back home after a decade of desertion. On the other hand, Legault will have to deal with a new leader of the Quebec Liberal Party starting Saturday, when the party chooses its candidate to become Quebec's next premier. The QLP has been in dormancy since the 2022 election debacle and is dreaming of a massive comeback with a new leader. 'If the next election is about a possible PQ referendum, it becomes clear that we are the alternative. Nobody believes that Legault is a federalist,' said a Liberal source. In April, interim leader Marc Tanguay dropped a bombshell by publicly declaring that he had information that preparations for a CAQ leadership convention were underway. Last week, he claimed his information was still accurate. But Legault insisted he would seek a third term. After all, he doesn't have what Trudeau had a few months ago: Carney as a successor. And Carney may be the only person who can save Legault. For weeks now, the premier has been unusually nice to the federal Liberals, a party that he wanted defeated last fall when he asked the Parti Québécois leader to tell his 'comrade' at the Bloc Québécois to overthrow the Trudeau government. Now, Legault tells his own members that Quebec 'must work hand in hand with the federal government.' According to him, there is 'an exceptional opportunity' with Carney in Ottawa because he is a prime minister 'laser focused' on the economy. But also, because Carney's entourage is prominently from Quebec. François-Philippe Champagne is finance minister, Mélanie Joly is the minister of industry, Marc-André Blanchard will be Carney's chief of staff and now Michael Sabia, who was Legault's pick as CEO of Hydro-Québec, is the next clerk of the Privy Council. 'It's as if the stars were aligned… So, now is the time to take advantage of it,' Legault said in his speech. The PQ is now calling the Carney-Legault relationship a 'love story.' 'If he can seek economic opportunities at the federal level and then take credit for them, of course he will do so, so that is called a political opportunity,' said Emilie Foster, a former CAQ MNA and professor at Carleton University. During her term as a backbencher for Charlevoix–Côte-de-Beaupré in the National Assembly from 2018 to 2022, Foster said she never heard her premier utter the words 'military' and 'defence.' This week, as Carney announced massive military spending to meet NATO's two per cent target, Legault quickly announced millions of dollars to support Quebec's defence industry and visited three companies. In Ottawa, this sudden affection from Quebec City is more than welcome. Many Quebec Liberal MPs were all smiles this week. None of them were the most popular politician in Quebec. No, the most popular 'by far' noted Fournier, is Mark Carney. Now, Legault wants a piece of it and wants to show the electorate his record of economic success next year. So far, he's boasted of outperforming Ontario and Canada in per capita economic growth, wage growth and disposable income growth. Legault wants major projects. Like the Newfoundland-Quebec power line, with the help of Carney, who has introduced a bill to fast track major projects. It's his only chance of survival, according to Foster. Over the past few decades, he's pledged to be an 'economic man,' just like Carney. Yet the province has recorded the largest deficits in its history. But Legault is making the case that the PQ won't try to achieve success with the federal government because it wants to demonstrate that Canada isn't working. 'So this is not the time to have the PQ in power, this must be very clear, and it must be explained to Quebecers,' Legault said. He simply hopes that Quebecers will give the PQ the same treatment that Canadians gave the Conservatives. National Post atrepanier@ In Quebec, opposition mounts against a pipeline project that doesn't exist Quebec says it 'is open to interprovincial trade' after tabling new bill Get more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what's really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers Sign up here. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here.
Yahoo
37 minutes ago
- Yahoo
Protest safety 101: How to protect yourself when exercising your First Amendment rights
Donald Trump will be facing the largest protests of his second presidency this weekend — at least, the largest protests of his second presidency so far. Over 2,000 No Kings protests are scheduled for June 14 to voice opposition to the Trump Administration's illegal actions, which organizers say include "defying our courts, deporting Americans, disappearing people off the streets, attacking our civil rights, and slashing our services." The rallies will also overlap with Trump's 79th birthday celebration, which is set to feature a military parade. If Trump continues down his path, backlash will only continue to grow. Several protests against his administration have already taken place within the few months he's been in office, and several more are already scheduled through movements like No Kings and 50501. Here are some tips to help protect your safety and privacy if you plan on attending any upcoming demonstrations. It's best to leave your phone at home during protests so your location cannot be tracked. You can also leave it on while you're away so it shows your location as your residence. If you need to bring your phone with you to a protest, be sure to turn it off to stop your GPS from tracking you, and to have a password or pin. Also be sure to turn off your biometrics — face ID and fingerprint — so law enforcement can't force you to unlock your phone without a warrant. U.S. courts have previously ruled that using biometrics to unlock phones does not violate the Fifth Amendment's protection against self-incrimination. However, police can't compel you to unlock your phone with a password or pin without a warrant. It's best to wear plain clothes without distinguishable symbols or patterns so that you cannot be as easily identified by law enforcement or in videos and pictures. You should also consider covering your tattoos for similar reasons. It is important that you do not wear makeup or contacts, as physicians stress that they can further irritate or damage your eyes if you come into contact with tear gas. Goggles or glasses are the best forms of eye protection. Accessories like masks and sunglasses can also help conceal your identity if you do not wish to be identified by police or online. You should also blur the faces of other protestors if you take pictures or videos, out of both respect for their privacy and caution for their safety. While Trump claimed recently on Truth Social that "MASKS WILL NOT BE ALLOWED to be worn at protests," no such law currently exists at a federal level. Some states have mask bans over a century old that were enacted in response to the Ku Klux Klan, but courts have issued varying rulings regarding their constitutionality. For example, California Code, Section 185 makes it illegal to wear a mask in order to avoid being identified while breaking the law, but this does not apply to actions protected under the First Amendment, such as protests. Before you leave for a protest, you should find an attorney you can call if you get arrested and write their phone number on your body in sharpie. That way, you'll have the number even if your possessions are taken, and the permanent marker will not come off as easily due to water or sweat. The National Lawyers Guild has protest support hotlines for chapters located in 35 states plus Washington D.C.
