Markets being choppier at these levels makes sense, says Wells Fargo's Scott Wren
Scott Wren, Wells Fargo, joins 'Closing Bell' to discuss the day's market action following the latest CPI data, what to expect from stocks going forward and more.
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Yahoo
2 hours ago
- Yahoo
Powell is likely to delay rate cuts, fmr. Fed official explains
The Federal Reserve will hold its June meeting on Tuesday, where Fed Chair Jerome Powell will announce the central bank's latest interest rate decision. US President Trump has been vocal in his criticism of Powell for not cutting rates, recently calling him a "numbskull." Former Cleveland Fed president Loretta Mester joins Market Domination to discuss why the Fed will likely hold rates steady at its June meeting next week. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Well, investors shifting their focus back on the Federal Reserve ahead of the central bank's policy meeting next week. President Trump once again calling for Fed chair Powell to cut rates for more on the path ahead for the Fed and interest rates. Let's get now to Loretta Mester, University of Pennsylvania adjunct professor and former Cleveland Federal Reserve president. Uh Loretta, always good to see you. So let's start with that inflation report. We got today PPI tame Loretta benign, just like CPI yesterday. I'm very curious to get your take on that and also Loretta, how do you think the Fed views these last two inflation reports? Well, thanks for asking. Um, yeah, the inflation news those were good reports. They were very encouraging. I think what's still true is we don't know really how the second half of the year is going to play out. So if you look at the data on the employment part of the mandate, data on inflation, they look pretty good so far, right? Employment's holding up. We expected moderation this year. We're seeing some of that. Um, and inflation, you know, was pretty elevated at the start of the year, but the last couple of reports have looked pretty good. It's still above the Fed's goal, but at least it's coming down again and that's a good sign. But the real question is, what is going to happen in the second half of the year and will those trends continue? And that's where, um, the high level of uncertainty still is with us. And that I think is why the Fed is on hold, um, until some of that, we get a little more clarity about not only the magnitude of the tariffs and the breadth of the tariffs, but what effect they'll have on inflation and what effect the tariffs and other policies, including the the uh, budget bill will have on growth and employment. And so that's why, you know, when you think about the Fed managing its dual mandate, you know, part of what it wants to do is it wants to minimize the chance of any policy mistake. And that risk management also entails, you know, looking at, well, what would be the cost of a mistake. So right now, holding the Fed funds rate where it is, doesn't seem very costly. Um, and allowing sort of more clarity in the summer about, you know, we'll get perhaps more clarity on the tariffs. And we could end up being in a benign scenario so that by the September meeting or later in the year, right? It does look like inflation is continuing to come down. Perhaps it'll be higher for a time as higher prices from the tariffs, you know, feed through the economy, but it won't necessarily be persistent. And that's kind of what everyone hopes. Everyone hopes it's it's a more benign scenario so that we get some clarity on the level of tariffs, firms raise their prices, but as those prices stabilize, inflation moves back down. And there's not much harm on the growth side of the economy or the employment side of the economy. And that's kind of the hope, but that isn't assured. And that's why it makes sense to sort of be on hold for a while until you get more information.
Yahoo
2 hours ago
- Yahoo
Trump calls Powell a 'numbskull' for not cutting rates
-- U.S. President Donald Trump continues to press Jerome Powell and the Federal Reserve to cut interest rates, as inflation data remains subdued despite his aggressive tariff policy. While Trump continues to press for lower rates, he said he won't fire Powell. "We're going to spend $600 billion a year because of one numbskull that sits here," Trump said. "Cut your rates now, there's no inflation." Trump suggested the Fed cut interest rates by two full percentage points, which could save the U.S. up to $900 billion. This is larger than his past ask for a one percentage point cut from the Fed. The current Fed funds rate is at 4.25-4.5%. The comments from the president follow the release of CPI and PPI data this week, which were both lower than economists had expected. 'The fake news is saying, 'Oh, if you fired him, it would be so bad, it would be so bad.' I don't know why it would be so bad, but I'm not going to fire him,' Trump said at a bill signing at the White House on Thursday. 'We call him 'Too Late,' right?' Trump joked, referring to the nickname he has given Powell. Trump added that if inflation were to pick up in the future, he would have no problem with the Fed raising rates. 'Let's say there was inflation. In a year from now, raise your rates. I don't mind, raise your rates. I'm all for it. I'll be the one to be calling you,' Trump said. 'He'll be too late for that too.' Related articles Trump calls Powell a 'numbskull' for not cutting rates Canadian support for U.S. counter-tariffs fades as trade war drags - Bloomberg US Treasury sells $22B 30-Year Treasuries in solid auction as demand improves 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
Chicago Tribune
3 hours ago
- Chicago Tribune
Cost of President Trump's tariffs hits home, as several consumer goods and services surge to record highs
President Donald Trump's trade war is affecting Americans from the grocery store to electric bills, with the cost of bananas, ground beef and electricity surging to all-time highs, according to the latest data from the Consumer Price Index. Major U.S. retailers have announced price hikes as a result of tariffs, and the cost of a handful of everyday goods and services has increased by 5% to 10% since Trump took office. But not all consumer products are trending up. Since December, the average nationwide cost of bread, milk and tomatoes has dropped, and the price of chicken and oranges has stayed much the same with the change of administrations. The Tribune is tracking 11 everyday costs for Americans — eggs, milk, bread, bananas, oranges, tomatoes, chicken, ground beef, gasoline, electricity and natural gas — and how they are changing, or not, during Trump's second term. This tracker is updated monthly using CPI data from the U.S. Bureau of Labor prices dropped for a second straight month in May, falling 57 cents from March's record high. According to the latest data, the average cost of a dozen large Grade A eggs is $4.55 nationwide — tumbling below the $5 mark for the first time since January. The decline in egg prices is likely due to a decrease in bird flu cases in commercial and backyard flocks since the start of the year. In the first two months of 2025, 12.6 to 23.2 million birds were affected by highly pathogenic avian influenza in the United States, according to the U.S. Department of Agriculture. In March, that number was 2.1 million, and as of April, the virus was detected in only 1 million U.S. birds. Though still significantly lower than the number reported in January and February, cases surged again in May, with 5.2 million birds affected — the vast majority concentrated in three commercial flocks in Arizona. This uptick in cases could indicate another small jump in prices during the summer months. Currently, the cost of eggs is about 9.6% higher than before Trump took office. It's not just poultry flocks and wild birds that have been affected by bird flu. According to the Centers for Disease Control and Prevention, the virus has been reported in dairy cows since March 2024, and just last month, there were 24 new confirmed cases at dairy farms in Idaho, Texas and Arizona. But while avian flu cases are ticking up again in poultry, they're declining in cattle, with the number of newly infected dairy cows just half of that reported in April. As a result, the cost of milk is down month-over-month, but a look at the year-over-year change is a bit different: Prices are up more than 4%. As of May, a gallon of fresh, fortified whole milk would set you back about $4.02. As of May, white bread cost $1.88 per pound. That price is slightly lower than it was when Trump started his second term and about 10 cents less than it was 12 months ago. Shoppers can expect to pay more for their next bunch of bananas. The staple fruit cost a record-breaking $0.66 per pound in May. The price jumped 2 cents compared with April — the single-biggest month-over-month increase going back to January 2021. This sudden spike is likely due to Trump's trade war, with tariffs levied against the country's top banana importers like Guatemala, Ecuador, Costa Rica, Honduras and Mexico. Orange prices are up 5% from the previous month. This change, however, likely has little to do with the current administration. Like many citrus fruits, the cost of oranges is heavily tied to the harvesting season. As we exit orange season, supplies will decrease, coinciding with an increase in demand, thus triggering higher prices. This is standard for the fruit market, with oranges cheapest in the winter months, then increasing in cost throughout the late spring and summer and eventually peaking in September or October each year. Currently, the average price per pound for navel oranges is $1.56 nationwide. Though perhaps not the first thing you think of when you hear the term 'staple food,' tomatoes are an essential ingredient in all kinds of dishes, from pasta and pizza, to soups, salads and BLT sandwiches. In May, the average price of field-grown tomatoes was approximately $1.71 per pound. That cost is about 8 cents lower than it was in April and down roughly 17% since Trump took power. This decrease, however, is largely due to the growing season. Like oranges, tomato prices vary depending on the time of year, rising in the fall, peaking in the early winter months and then plummeting in the spring. Still, prices are down a little more than 8% from this time last year. Chicken is another consumer product that's seen a price spike as a result of bird flu — though not nearly as drastically as eggs. One reason? Significantly more egg-laying hens have been culled than chickens raised for meat. The national average crested above $2 per pound for fresh, whole chicken for the first time last year and hit a record high of $2.08 in November. Since then, the average price has been roughly the same. According to May CPI figures, chicken is $2.06 per pound. Ground beef prices continue to trend up, up and up. For the fourth-consecutive month, the cost of beef hit an all-time high, with the average price of 100% ground beef chuck now $6.02 per pound. The rising cost can be attributed to a number of factors. In addition to several ground beef recalls reported in recent months, the U.S. cattle inventory is at a 25-year low, and severe drought in parts of the country has further reduced the feed supply, according to the U.S. Department of Agriculture. More recently, in trade talks with the U.S., the United Kingdom agreed to buy more American beef, a deal that the president says will lead to greater exports. But as China and the European Union's tariffs on beef and other U.S. farm exports remain, this may not be the last time we see record prices this year. Perhaps 2025 is the year to give vegetarianism a try? In May, the average price of electricity nationwide was 18 cents per kilowatt-hour. That average has held more or less the same since this time last year, with the typical month-over-month changes registering at less than a fraction of a cent. Even so, the current cost of electricity is the highest on record — going back more than 45 years. The price at the pump fell slightly month-over-month — dropping 2 cents from April to May. At $3.31 per gallon of regular unleaded, gasoline costs about 5% more than it did during the last month of the administration of President Joe Biden. Year-over-year, however, prices have declined by roughly 12%. In Chicago, gas is about 11 cents higher than the nationwide average, sitting at $3.42 per gallon, according to the U.S. Energy Information Administration. The cost of piped utility gas, or natural gas, saw no change month-over-month, averaging at $1.63 per therm. The price is holding at a two-year high and is up nearly 7% under the Trump administration.
