Norway Holds Key Rate, Keeps Prospect of More Easing in 2025
Norges Bank kept the key deposit rate at 4.25% on Thursday — matching the forecast of all economists surveyed by Bloomberg.
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Yahoo
an hour ago
- Yahoo
3 reasons the Fed hasn't cut rates yet this year
Wall Street has priced in a 94.2% probability of the Federal Reserve cutting interest rates in September. JPMorgan Asset Management's fixed income portfolio manager, Kelsey Berro, joins Yahoo Finance Senior Reporter Allie Canal on Market Domination to explain the three reasons the Fed still hasn't cut rates this year despite macro conditions being comparable to last year's. To watch more expert insights and analysis on the latest market action, check out more Market Domination. Wall Street is pricing in a 94% chance of a 25 basis point rate cut in September after July CPI came in better than expected, albeit with an increase to the core reading. My next guest agrees with that assessment and says the Fed is likely more worried about a slowdown in the labor market versus an optic and inflation. Joining me now is Kelsey Barro, JP Morgan Asset Management fixed income portfolio manager. So Kelsey, like we just said, you're in that camp of 25 basis point cuts and you say it's a similar environment to one we saw one year ago. Maybe's a little bit different. So set the scene for us. What's similar, what's different, and what are the lessons learned? Right. So if we compare ourselves to September of last year, the Fed was right about to cut 50 basis points and to cut 100 basis points by the end of the year. That brought us from five and 3/8s to four and 3/8s today on the Fed funds rate. Now, where are we? Well, if you just look at the deceleration in payrolls growth in the last three months, it would suggest that the Fed should absolutely be cutting rates again. So the three-month moving average on payroll's growth is at 35,000. The six-month moving average is at 80,000. That's about the same if not weaker than it was when the Fed was looking at cutting 50 basis points. But it is not the same world as it was a year ago. So what is different now? Well, one, the Fed funds rate is 100 basis points lower. So we're already at a less restrictive spot to start with. Second of all, the unemployment rate isn't moving higher. And that's the thing that Chair Powell has been emphasizing, which is that if labor demand is falling, but labor supply is also falling and the unemployment rate stays the same, it's not necessarily going to set off the same alarm bells as it did last year when the unemployment rate was rising from 3.5% to around where we are today, which is 4.2%. And then of course, the other big difference is that while there are mixed signals about how much tariff inflation the US economy is going to have to withstand and consumers are going to have to withstand, how much is going to be passed through, we do know that in the short term, we're not likely to see a lot of further progress towards the Fed's inflation goal of 2%, at least in the short term. And that's the reason why I don't think that a 50 basis point rate cut is on the table, but we do think that the Fed is sensitive to downside risks to growth and inflation is going to deliver that cut in September. Related Videos Retail trading trends: Top names investors are buying How Trump's pressure on Fed Chair Powell could backfire Stocks close mixed, the Dow ends the week higher Berro and Jones on Consumer Sentiment, Labor Market, Rate Cuts Sign in to access your portfolio
Yahoo
2 hours ago
- Yahoo
CEO Says AI Is Taking On 'Soul-Crushing Jobs' With Agents That Work 24/7, Never Eat, And Never Need Benefits
Artificial intelligence is rapidly reshaping how major companies run their operations, with some executives saying it's already transforming the workforce. ServiceNow Inc. (NYSE:NOW) CEO Bill McDermott says AI agents are taking over repetitive, draining work—and doing it without lunch breaks or healthcare benefits. AI Steps Into Support Roles "We're slowing down the hiring in jobs that are, quite frankly, soul-crushing jobs," McDermott said in a recent interview with Bloomberg, pointing to IT support as an example. He said 97% of standard software is now generated by AI, and 80% of customer inquiries are fully managed by AI agents. Security and risk management tasks, patchwork, and change management are also handled by these systems. Don't Miss: The same firms that backed Uber, Venmo and eBay are investing in this pre-IPO company disrupting a $1.8T market — Bill Gates Warned About Water Scarcity. "They work hard 24 by seven. You don't have to pay them and they don't need any lunch and they don't have any health care benefits," McDermott said. "AI is affordable and complements our workforce." While ServiceNow is still hiring, it's adding fewer people to these support roles. McDermott predicts other well-run companies will follow the same path, reorganizing around AI and moving away from traditional 20th-century corporate structures. Industry-Wide Shift Salesforce (NYSE:CRM) CEO Marc Benioff told Bloomberg in June that AI now accounts for 30% to 50% of his company's workload, calling the trend a "digital labor revolution." The company has restructured around AI and cut more than 1,000 jobs this year. Benioff says Salesforce's AI operates at about 93% accuracy and is helping employees focus on higher-value tasks. Trending: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can Meanwhile, Goldman Sachs (NYSE:GS) has also warned that AI's effects on the job market are already being felt, especially by younger workers. The bank says unemployment for tech workers ages 20 to 30 has risen nearly 3 percentage points since early 2024. That's more than four times the increase in the overall jobless rate. According to Business Insider, Goldman Sachs Chief Economist Jan Hatzius estimates generative AI will eventually replace 6% to 7% of U.S. jobs within a decade, though many workers could find roles in other industries. McDermott praised the president's recent AI action plan, saying, "We need less regulation and more innovation." He said the government should run more efficiently and transparently, adding that ServiceNow has worked in the public sector for years to achieve those Over AI's Human Cost Still, the idea of replacing large numbers of human jobs with AI is deeply troubling to labor advocates, economists and even tech executives. They warn that corporate enthusiasm for machines that never tire, never demand raises, and never get sick could strip millions of people of their livelihoods. As former Google X executive Mo Gawdat put it in a podcast recently, "CEOs are celebrating that they can now get rid of people and have productivity gains and cost reductions because AI can do that job. The one thing they don't think of is AI will replace them, too." Read Next: In a $34 Trillion Debt Era, The Right AI Could Be Your Financial Advantage — UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article CEO Says AI Is Taking On 'Soul-Crushing Jobs' With Agents That Work 24/7, Never Eat, And Never Need Benefits originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Forbes
3 hours ago
- Forbes
Fed Expected To Cut Interest Rates, Though Inflation May Be Picking Up
WASHINGTON, DC - SEPTEMBER 18: Federal Reserve Chairman Jerome Powell speaks during a news conference following the September meeting of the Federal Open Market Committee at the William McChesney Martin Jr. Federal Reserve Board Building on September 18, 2024 in Washington, DC. The Federal Reserve announced today that they will cut the central bank's benchmark interest rate by 50 basis points to a new range of 4.75%-5%. (Photo by) Getty Images Fixed income markets fully expect that the Federal Open Market Committee will cut interest rates on September 17. However, economic data suggests that the FOMC may have to manage a monetary policy trade-off over the coming months. That's because the jobs market appears to have been weakening between May and July. That would typically call for lower rates. However, inflation may be picking up slightly on recent data. If that trend continues it might imply higher rates are needed. Of course, the FOMC only has a single policy tool, interest rates, so if unemployment rises and inflation picks up, then the FOMC's decision making may be made more complicated. The July Employment Situation Report saw 73,000 nonfarm payrolls added for July, which was itself a relatively slow pace of growth compared to prior months. However, figures for May and June were also revised down significantly to under 20,000 nonfarm payrolls added in both cases. In contrast, over 100,000 jobs had been added monthly over most of the prior 2 years. That said, the unemployment rate has been relatively stable since summer 2024, but if the recent slow pace of job creation continues, it may signal downside risk for the economy. The jobs report for August will be released on September 5, offering further data before the FOMC next meets. Recent data has shown some acceleration of inflation, too. July Producer Price Indexes showed a relatively pronounced rise in prices. In addition, there were some signs of rising prices in the July Consumer Price Index. For now, overall inflation remains relatively mild. For example, annual inflation is close to 3% to July depending on the metric used. However, the FOMC's annual target is 2% and inflation could accelerate further as the impact of tariffs, which in many cases have only been recently implemented, are felt. That said, some policymakers have said they are willing to look through any tariff-related inflation, believing it will be one-off in nature. If so, that makes it an easier decision to lower rates if there are concerns about a softening job market. At the last FOMC meeting in July both Christopher Waller and Michelle Bowman dissented, preferring to lower rates. That and the likely appointment of Stephen Miran to the FOMC before the September meeting, suggest added pressure for a rate cut. That's because President Trump is known to favor lower rates, and he likely proposed Miran with the belief that he would vote to lower rates. It seems likely that the FOMC will cut interest rates in September. There are still more economic reports to come before that meeting, but fixed income markets strongly predict a rate cut. That said, there are signs that inflation could be accelerating, that may not prevent a September cut, especially if signs of a soft labor market continue, but could present challenges for policy makers later in 2025 if they have to choose between restraining inflation and supporting the jobs market.
