New Board Member Hints at Possible Raising of BOJ Price Outlook
'Inflation for rice and food-related items has been stronger than expected,' Junko Koeda said Monday in her first media interview since joining the board in March. 'I'm closely watching potential secondary effects on underlying inflation from rice, which is a staple food.'
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Yahoo
31 minutes ago
- Yahoo
Jobs report shocker resets Fed interest rate cut bets
Jobs report shocker resets Fed interest rate cut bets originally appeared on TheStreet. The Federal Reserve hasn't had an easy job in 2025. The central bank is governed by a dual mandate to set rates at levels that encourage low unemployment and inflation—two often contradictory goals. When the Fed increases its Fed Funds Rate, it can lower inflation by slowing economic activity, which also causes job losses. When it cuts rates, economic activity picks up, reducing unemployment but increasing inflation. Most want Fed Chairman Jerome Powell to cut rates this year, but doing so may fuel inflation further, given that tariffs may already be causing it to climb. Consequently, deciding what to do with interest rates this year is particularly challenging, particularly after the latest jobs report showed serious cracks forming in the job market. Jobs data causes major shift to Fed interest rate cut chances in September The Fed watches the unemployment rate very closely because of the dual mandate. Last year, the fact that unemployment had climbed above 4% from 3.4% in 2023, while inflation retreated, allowed the Fed to cut interest rates by 1% before the year's end. This year, the Fed has remained sidelined on rates, awaiting clarity into whether unemployment or inflation first significant signs of job weakness may have emerged in July. According to the Bureau of Labor Statistics, the US economy created only 73,000 jobs. Wall Street economists expected 100,000 jobs, which would have still marked a retreat from May, when 147,000 jobs were created. There were also significant downward revisions to jobs previously reported to have been created in June and May. "Those revisions point to just 33,000 jobs created during those two months, far less than the 272,000 previously cited," wrote portfolio manager Chris Versace on TheStreet Pro. As a result, the unemployment rate increased to 4.2% from 4.1% in May. More specifically, it climbed to 4.248%. That's concerning because it narrowly avoided being rounded to 4.3%, which would have marked the highest unemployment rate since 2021. Since unemployment was higher than expected and is potentially nearing a cycle high, the CME FedWatch tool reported that bets for a Fed interest rate cut in September improved to 87% on August 1 from 38% on July 31. The Fed risks falling behind the curve as officials disagree The Fed held interest rates unchanged at a range of 4.25% to 4.50% on July 30, but not every voting member agreed. Michelle W. Bowman, Vice Chair for Supervision, and Christopher J. Waller, a Fed Governor, dissented, favoring a quarter-percentage-point cut to rates. Additionally, absent and not voting at the meeting was Adriana D. Kugler. Bowman said in a statement released August 1 that her dissent was based upon "increasing signs of fragility" in the labor market and tame inflation. Waller echoed those sentiments in his statement, suggesting that rates are currently too restrictive, and a 3% Fed Funds Rate would be more appropriate. A hesitancy to cut rates could result in the Fed falling behind the curve, requiring it to make more extreme rate cuts in the future. These cuts could prove more dangerous to inflation than more measured cuts this year. Tariff inflation impact keeps Fed on hold Bowman and Waller's opinion isn't shared by Fed Chair Powell, who struck a hawkish tone on monetary policy during his post-decision press conference this week. More Federal Reserve: GOP plan to remove Fed Chair Powell escalates Trump deflects reports on firing Fed Chair Powell 'soon' Former Federal Reserve official sends bold message on 'regime change' Powell reiterated that inflation remains above the Fed's 2% target rate and, while acknowledging that the impact of tariffs on inflation may be transitory, urged caution given that the US economy seemingly appears still on solid ground. The Fed's preferred inflation measure is the core Personal Consumption Expenditures Index, or PCE, which excludes volatile energy and food. PCE showed core inflation of 2.8% in June, up from 2.6% in April. Powell may also have a point regarding economic activity being in a good place, given the advance estimate placed gross domestic product, or GDP, at 3%, reversing a 0.5% contraction in the first quarter, and matching the level reported in the second quarter of 2024. Another reason supporting patience is that President Trump's pause on reciprocal tariffs ended on August 1, resulting in a slate of new tariffs that could increase inflation. The President's newly set tariffs range from 10% to 41%, including a 35% tariff on Canada. What this means for American consumers The Fed Funds Rate is the rate banks charge each other on overnight loans. If the Fed cuts rates in September, consumers should see a drop in borrowing rates, including credit card, auto loan, and mortgage rates. Mortgage rate relief would be particularly welcome, given that rising home prices and higher mortgage rates have discouraged many would-be home buyers. Banks typically set mortgage rates at 2% to 3% above the 10-year Treasury note yield. After the unemployment rate update, the 10-year Treasury yield slipped to 4.22%, its lowest level since April 30, when it was 4.17%.Jobs report shocker resets Fed interest rate cut bets first appeared on TheStreet on Aug 2, 2025 This story was originally reported by TheStreet on Aug 2, 2025, where it first appeared.
CNN
34 minutes ago
- CNN
Trump Fires The Messenger After Weak Jobs Report - CNN NewsNight with Abby Phillip - Podcast on CNN Podcasts
Trump Fires The Messenger After Weak Jobs Report CNN NewsNight with Abby Phillip 45 mins In Donald Trump's economy, size apparently does matter. The bigger the tariff, the brighter the alarm about the cost of liberation. Plus, Jeffrey Epstein's accomplice is suddenly moved to a cushy new prison one week after meeting with Trump's DOJ. Also, MAGA mansplains manhood.
Yahoo
an hour ago
- Yahoo
Republicans slam Trump's firing of Bureau of Labor Statistics chief
Senior Republican lawmakers are condemning the decision of their party leader, Donald Trump, to fire the leading US labor market statistician after a report that showed the national economy added just 73,000 jobs – far fewer than expected – in July. The disappointing figures – coupled with a downward revision of the two previous months amounting to 258,000 fewer jobs and data showing that economic output and consumer spending slowed in the first half of the year – point to an overall economic deterioration in the US. Trump defended his decision to fire US Bureau of Labor Statistics (BLS) commissioner Erika McEntarfer. Without evidence to back his claims, the president wrote on social media that were numbers were 'RIGGED in order to make the Republicans, and ME, look bad' and the US economy was, in fact, 'BOOMING' on his watch. Related: Trump fires labor statistics chief hours after data showed jobs growth slowed But the firing of McEntarfer, who had been confirmed to her role in January 2024 during Joe Biden's presidency, has alarmed members of Trump's own party. 'If the president is firing the statistician because he doesn't like the numbers but they are accurate, then that's a problem,' said Wyoming Republican senator Cynthia Lummis. 'It's not the statistician's fault if the numbers are accurate and that they're not what the president had hoped for.' Lummis added that if the numbers are unreliable, the public should be told – but firing McEntarfer was 'kind of impetuous'. North Carolina senator Thom Tillis, a Republican, said: 'If she was just fired because the president or whoever decided to fire the director just … because they didn't like the numbers, they ought to grow up.' Kentucky senator Rand Paul, another Republican, questioned whether McEntarfer's firing was an effective way of improving the numbers. 'We have to look somewhere for objective statistics,' he said. 'When the people providing the statistics are fired, it makes it much harder to make judgments that you know, the statistics won't be politicized.' According to NBC News, Paul said his 'first impression' was that 'you can't really make the numbers different or better by firing the people doing the counting'. Tillis and Paul were both opponents of Trump's recent economic legislative package, which the president dubbed the 'big, beautiful bill'. But Alaska senator Lisa Murkowski, a Republican who supported the legislation after winning substantial economic support for her state, remarked that the jobs numbers could not be trusted – and 'that's the problem'. 'And when you fire people, then it makes people trust them even less,' she said. William Beach, a former BLS commissioner appointed by Trump in his first presidency, posted on X that McEntarfer's firing was 'totally groundless'. He added that the dismissal set a dangerous precedent and undermined the BLS's statistical mission. Beach also co-signed a letter by 'the Friends of the Bureau of Labor Statistics' that went further, accusing Trump of seeking to blame someone for bad news and calling the rationale for McEntarfer's firing 'without merit'. The letter asserted that the dismissal 'undermines the credibility of federal economic statistics that are a cornerstone of intelligent economic decision-making by businesses, families and policymakers'. The letter pointed out that the jobs tabulation process 'is decentralized by design to avoid opportunities for interference', adding that US official statistics 'are the gold standard globally'. 'When leaders of other nations have politicized economic data, it has destroyed public trust in all official statistics and in government science,' the letter said. Democrats have also hit out at Trump's decision. Vermont senator Bernie Sanders described it as 'the sign of an authoritarian type', and he said the decision would make it harder for the American people 'to believe the information that comes out of the government'. Paul Schroeder, executive director of the Council of Professional Associations on Federal Statistics, described the president's allegation against McEntarfer as 'very damaging and outrageous'. He said: 'Not only does it undermine the integrity of federal economic statistics, but it also politicizes data which need to remain independent and trustworthy. This action is a grave error by the administration and one that will have ramifications for years to come.'
