Fed's Waller and Bowman Cite Labor Market for Dissents
Waller and Bowman dissented against the Fed's decision this week to hold its benchmark interest rate steady for a fifth consecutive time. Both preferred a quarter-point reduction. In separate statements released Friday, the two explained their rationales for dissenting, with both emphasizing signs of growing labor-market weakness.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
a few seconds ago
- CNBC
How this week's avalanche of news from Washington to Wall Street kept investors guessing
It was a dizzying week on Wall Street. The S & P 500 closed this past Monday at a record high and then went on a four-session losing streak. Friday was particularly unsettling as terrible jobs data slammed the market and triggered President Donald Trump . Trump started the day by slamming Federal Reserve Chairman Jerome Powell for not cutting interest rates on Wednesday. He accused the Fed of cutting rates at the end of last year to help elect Kamala Harris. Later in the day , the president used similar reasoning when firing the head of the Bureau of Labor Statistics, which puts out the employment report. Trump accused BLS Commissioner Erika McEntarfer, a Biden appointee, of negatively manipulating the numbers during his presidency and inflating them before Election Day to help Harris. Also on Friday afternoon, Fed Governor Adriana Kugler resigned . The Biden appointee didn't give a reason. As if all that were not enough, just before his self-imposed Aug. 1 deadline, Trump set new "reciprocal" tariff rates to go into effect on Aug. 7. The president also on Friday ordered two nuclear submarines "to be positioned in the appropriate regions" after a warning to the U.S. from Russian official Dmitry Medvedev. On Monday, Medvedev said that "each new ultimatum" about the Ukraine conflict is a "threat and a step towards war" between Russia and the U.S. .SPX .IXIC 5D mountain S & P 500 and Nasdaq performance this week It was no wonder the S & P 500 lost more than 1.5% on Friday, in a session even further pressured by a drop in tech stocks following Amazon 's post-earnings stock decline of more than 8%. For the week, the broad market index lost nearly 1%, ending a two-week win streak. The tech-heavy Nasdaq was the big loser Friday, dropping more than 2.2% on the session and more than 2% for the week. It, too, snapped two straight weekly gains. As bad as the calendar page turn to August was on Friday, the S & P 500 and the Nasdaq wrapped July on Thursday with gains of 2.2% and 3.7%, respectively. The S & P 500 completed a three-month winning streak, while the Nasdaq extended its monthly run to four straight. It was certainly a busy week, jam-packed with macroeconomic updates, trade negotiations, a Fed rate decision — and, of course, an earnings onslaught, with four of the Magnificent Seven reporting. Trump trade The week started out with the U.S. on Sunday striking a trade deal with the European Union. South Korea slipped in under the wire before the president's Friday deadline. Both trade partners are now subject to a 15% tariff on exports to the U.S., down from the respective 30% and 25% rates in place prior to the agreements. The deal with the EU will also see the trading bloc purchase $750 billion in U.S. energy, while investing an additional $600 billion into the U.S. The deal with South Korea included an agreement for $350 billion in U.S. investments. Negotiations with China remain ongoing, with the tariff deadline being pushed to Aug. 12. Mexico was granted a 90-day extension of current 25% rates following a discussion with Mexican President Claudia Sheinbaum. Canada, however, was slapped with a 35% tariff rate . As for the trade partners that have yet to strike a deal, new rates were announced last Thursday evening and are set to take effect this coming Thursday. Weak jobs Just hours after the new tariff rates were announced, the Friday jobs report was released. The July nonfarm payroll growth of 73,000 positions fell way short of the 100,000 additions economists had expected. Worse yet, the June and May readings were both revised significantly lower for a combined 258,000 less jobs than originally reported for those two months. All of that, besides setting Trump off, put a September rate cut back on the table, according to the CME FedWatch tool. The market odds of a cut flipped from about 38% on Thursday to nearly 83% on Friday. Shortly after the weak jobs report, Jim Cramer said that while he has been a big backer of Powell, this number says: "You didn't need to wait" to cut rates. Warmer inflation The day after the Fed held rates steady, the central bank's preferred measure of inflation — the personal consumption expenditure (PCE) price index — was released Thursday morning. Both the headline PCE reading, as well as the core rate excluding food and energy prices, came in one-tenth hotter than expected on a year over year basis, seemingly supportive of the Fed's decision to leave rates unchanged. However, the negative jobs data clouds the picture a bit and will force the Fed to weigh the importance of both parts of its dual mandate — maintaining price stability, around their target 2% inflation rate, and fostering maximum employment. The former currently requires more restrictive or higher rates, given that inflation remains above target, while the latter points to less restrictive or lower rates, because central bankers don't want to see any material increases in joblessness. Economic growth Part of the rationale for holding rates steady came from a strong advance second quarter reading on the economy, which was released Wednesday morning just hours before the Fed's July meeting wrapped up. The seasonally adjusted annual GDP growth rate of 3% was much better than the 2.3% advance that was expected. While the economy managed to chug along during the April to June period, despite all the fear and uncertainty caused by trade disputes, it's already August. The GDP is a backwards looking data set. That's why more weight is put on the monthly updates noted above, relating to inflation and the labor market — and of course, the most real-time source of data we can get, earnings. Club earnings So, with that, let's take a look at how earnings went this week for the Club. We heard from Starbucks on Tuesday evening, Meta Platforms and Microsoft on Wednesday evening, Bristol Myers Squibb on Thursday morning, Amazon and Apple on Thursday evening, and Linde on Friday morning. Starbucks : Though the coffee giant reported mixed quarterly results, we heard enough positives to confirm that CEO Brian Niccol's turnaround remains firmly on track. Meta Platforms : The social media powerhouse delivered an absolute blow out quarter, with the only thing better than the results being the guidance. Bristol Myers : The drugmaker delivered a solid quarterly beat and outlook raise. However, with the Cobenfy narrative — at the core of our investment thesis— going from being pretty straightforward to a show-me story, investors aren't giving the company the benefit of the doubt. We trimmed our price target following the release. There are also the added questions marks around Trump push this week for lower prescription prices from Bristol and 16 other major drugmakers, including Club name Eli Lilly, which reports earnings next week. The threat of sector-specific pharma tariffs remains in play. Amazon : Overall the tech giant reported a solid quarter. However, shares sold off as investors took issue with Amazon Web Services (AWS) failing to deliver the same type of cloud revenue upside as rivals Microsoft Azure and Google Cloud. Operating income guidance for the current quarter was also a bit lower than expected, though that has historically proven conservative. Ultimately, we think the concerns are overblown and think the pullback represents a buying opportunity . Apple : The iPhone maker reported a very respectable quarter. However, when taking into account the price action of the stock this year alongside the reaction to the results, it's clear that investors are not ready to give management much credit until they deliver more clarity about the company's AI strategy. It was encouraging to hear CEO Tim Cook say he's open to M & A to help with that. Linde : The industrial gas stalwart delivered solid quarterly results in a difficult operating environment, demonstrating the company's resiliency no matter the backdrop. Moreover, management raised the low end of its full-year earnings guidance, despite noting that the high end of the range already assumes an economic contraction. It's another important week of corporate earnings ahead, with about a quarter of S & P 500 companies set to report. Six companies in the Club portfolio are on the docket: Coterra Energy , DuPont , Eaton , Disney , Eli Lilly , and Texas Roadhouse . Week in trades It was also a busy week of trades for the portfolio. Kicking off the week, we added to our positions in Cisco Systems and Honeywell . That was followed up by a small trim of Eaton as the stock hit new high. On Tuesday, we locked in a nice profit on Eli Lilly following disappointing news from Novo Nordisk , its main competitor in the GLP-1 market. We also trimmed our position in Wells Fargo as shares finally recovered from their post-earnings decline. On Wednesday, we added to our position in Dover and called out that we would also be adding to our stakes in Starbucks and Palo Alto Networks , we were not restricted. We'll be keeping a close eye on both in the week to come for an opportunity to step in. Palo Alto finished the week down nearly 15% on a four-session losing streak after reports of talks and its confirmation of a $25 billion deal to buy CyberArk were not well received by investors. We, however, feel that bundling CybarArk's identity security platform will accelerate Palo Alto's platformization strategy. Rounding out the week , on Thursday, we cut our position in Abbott , in line with prior commentary in which we highlighted our concerns about the company's exposure to China. We took the raised capital and redeployed it in Capital One Financial as the move we were seeing in the stock didn't reflect the fundamentals we saw when it reported second quarter earnings. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Yahoo
28 minutes ago
- Yahoo
He Walked Away From 10 Booming Properties At The Peak Of The Market. 'People Tell Me I'm An Idiot,' Says The Real Estate Investor
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Seth Jones spent nearly a decade building a 10-property real estate portfolio across Florida and South Carolina. He sold every one of them. The Rule Guided His Investments—And His Exit Jones, a former mortgage broker in Port Orange, Florida, followed a simple but strict rule: if a property couldn't rent for at least 1% of its purchase price each month, it wasn't worth buying. "It's very simple, back-of-the-napkin math," Jones, 36, told Business Insider. "On a $100,000 property, am I able to rent it out for $1,000 per month? On a $200,000 property, am I able to rent it out for $2,000 per month?" Shop Top Mortgage Rates A quicker path to financial freedom Your Path to Homeownership Personalized rates in minutes Don't Miss: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Accredited Investors: Grab Pre-IPO Shares of the AI Company Powering Hasbro, Sephora & MGM— He and his wife lived extremely frugally, relying solely on her teacher's salary while using all of his income to save for properties. "We hardly ever ate out and never went to bars," Jones said. After starting with two small homes in 2014, he gradually expanded. By 2019, he owned higher-quality properties in strong school districts, including one out-of-state investment in Lexington, South Carolina, purchased for $138,000. But as the COVID-era housing boom began, Jones started to feel uneasy. "I watched things take off," he told Business Insider. "The fundamentals started to change." He noticed the industry shift away from cash flow toward speculation and appreciation. That didn't sit right with him. "That's just never how I've looked at underwriting deals," he said. Trending: $100k+ in investable assets? – no cost, no obligation. From Landlord To ETF Investor Between 2019 and 2023, Jones sold all 10 properties. One of them, purchased for $190,000, sold for $500,000. Instead of buying more real estate, he moved everything into a diversified exchange-traded-fund portfolio that includes stocks, gold, and both short- and long-term treasuries. "I have no regrets," Jones said. "I think I'll be vindicated once we have some type of correction." Not everyone agrees with his decision. "I have people who tell me I'm an idiot for selling off my properties," he told Business Insider. "They think they could've made 10 times what I did." Even so, Jones said the relief has been worth it. 'From a liability perspective, I have no external worries. No one's going to get hurt. I'm not dealing with late-night phone calls.' He added that while there is still stress in stock investing, life is 'way simpler' now. , The 1% Rule Still Has Value The 1% rule isn't perfect, but it's a common starting point for real estate investors. If monthly rent meets or exceeds 1% of a property's purchase plus rehab cost, it's often seen as having the potential for positive cash flow. For example, if a home costs $170,000 total, an investor should be able to rent it for at least $1,700 per month to meet the rule. While easy to calculate, it doesn't account for factors like mortgage rates, homeowners association fees, or maintenance costs. Other methods, like the 2% rule or the 50% rule, which reserves half of rental income for expenses, offer different perspectives. But for Jones, the 1% rule offered the clarity and discipline he needed to make confident decisions. Read Next: With Point, you can This article He Walked Away From 10 Booming Properties At The Peak Of The Market. 'People Tell Me I'm An Idiot,' Says The Real Estate Investor originally appeared on 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
28 minutes ago
- Yahoo
'I Don't Do Anything Other Than Working,' Says Perplexity CEO Aravind Srinivas As His $14 Billion AI Startup Challenges Tech Giants
Perplexity Chief Executive Officer Aravind Srinivas says speed and urgency are nonnegotiable as his artificial intelligence startup races tech giants. "I don't do anything other than working," Aravind Srinivas admitted in a Reddit Ask Me Anything in May, emphasizing the intense focus needed to stay ahead in the AI race. Srinivas leads a $14 billion search engine challenge to Alphabet (NASDAQ:GOOG, GOOGL)), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL). Speaking at Y Combinator's AI Startup School in mid-June, he warned that bigger firms will inevitably copy successful ideas. Investors crave speed, rivals borrow ideas, and users expect quick answers. Srinivas's strategy is clear: move faster than fear and keep building. His advice to founders is to treat urgency as a protective moat until the tech giants catch up. Don't Miss: Accredited Investors: Grab Pre-IPO Shares of the AI Company Powering Hasbro, Sephora & MGM— 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can Embracing Fear As Strategy "Live with that fear. You have to embrace it," Srinivas told the students, explaining that founders must remember "your moat comes from moving fast and building your own identity." He added a broader warning: "You should assume that if you have a big hit... a model company will copy it." Perplexity shocked Silicon Valley with a $14 billion valuation after its Series C funding round in May. Bloomberg reported in June that Apple executives even discussed acquiring the startup to strengthen Safari's search abilities. Google and Microsoft responded by adding AI summaries to their search results. Srinivas simply shrugs, insisting that speed outpaces scale. Work-Life Trade-Offs Get Real Srinivas doesn't downplay the personal strain of running an AI startup. In the same Reddit AMA, he admitted to working nonstop, squeezing in audiobooks and podcasts whenever he could—even if sleep had to wait. He urges individuals to ditch doom‑scrolling on Instagram and focus on mastering AI instead, warning that adaptability and grit—not comfort—will determine who thrives as the field accelerates. Trending: $100k+ in investable assets? – no cost, no obligation. AI Gold Rush Raises Stakes OpenAI CEO Sam Altman predicted a "one-person billion-dollar company" while chatting with Reddit co-founder Alexis Ohanian last year. Meanwhile, former "Shark Tank" investor Mark Cuban went further in June, telling the 'High Performance" podcast that AI may mint the first "trillionaire... just one dude in a basement." Those forecasts intensify the spotlight on Perplexity and the broader AI field. But with that spotlight comes pressure. Perplexity's head of communications, Jesse Dwyer, told Business Insider that Big Tech companies "not only copy your features but they also try to drown your voice," highlighting the uphill communication battle startups face when competing with dominant platforms. Read Next: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Can you guess how many retire with a $5,000,000 nest egg? . Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article 'I Don't Do Anything Other Than Working,' Says Perplexity CEO Aravind Srinivas As His $14 Billion AI Startup Challenges Tech Giants originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. 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
