Fed is in 'wait and see' mode on rate cuts, says former Fed Vice Chair Richard Clarida
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Yahoo
10 minutes ago
- Yahoo
Asian shares choppy, dollar steady as traders await Powell speech
By Gregor Stuart Hunter SINGAPORE (Reuters) -Stocks in Asia edged higher in a shaky start on Friday as anxious traders awaited a speech from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium. Financial markets are looking out for Powell to provide clues about the likelihood of a September rate cut in the wake of recent signs of job market weakness and the near term outlook for policy. "Markets are on edge ahead of the all-important Jackson Hole speech," said Carol Kong, an economist and currency strategist at Commonwealth Bank of Australia in Sydney. S&P 500 futures added 0.1% after a five-day losing streak on Wall Street, which left the cash gauge of U.S. equities on track for its biggest one-week decline this month. It was a different story in the region, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.1%, extending gains to 1.5% so far this month. South Korea's Kospi index led the charge, rising 1.1%. The Nikkei 225 veered between gains and losses, and was last trading flat. The yen held steady at 148.45 against the U.S. dollar after data showed Japan's core consumer prices in July exceeded analysts' estimates and the Bank of Japan's inflation target. The U.S. dollar index, which tracks the greenback against a basket of currencies of major trading partners, was steady at 98.60 after four consecutive days of gains, as traders parsed speeches from Fed officials who appeared lukewarmto the idea of an interest rate cut next month. Traders had ramped up bets for a September cut following a surprisingly weak payrolls report at the start of this month, and after consumer price data showed limited upward pressure from tariffs. However, market pricing pulled back slightly following the release of minutes from the Fed's July meeting. Traders are now pricing in a 75% probability of a cut in September, down from 82.4% on Thursday, according to the CME Group's FedWatch tool. The most likely scenario is that Powell won't provide "any definitive clues" on what the Fed will do next ahead of critical non-farm payrolls and CPI data, Kong said. "Given where the current market is, the risk is a stronger U.S. dollar, especially if he challenges the current market pricing of a 25-basis-point cut." Traders are assessing signs that U.S. economic activity picked up pace in August, with PMI data from S&P Global showing the strongest growth in manufacturing orders in 18 months. But the labour market also highlighted pockets of weakness, as the number of Americans filing new applications for jobless benefits rose by the most in about three months last week and the number of people collecting unemployment relief in the prior week climbed to the highest level in nearly four years. The euro added 0.1% as the EU and the U.S. set out details of a framework trade deal struck in July. Oil prices edged lower, with Brent crude last trading at $67.64 per barrel, after strong gains on Thursday as Russia and Ukraine blamed each other for a stalled peace process, and U.S. data showed signs of strong demand in the top oil consuming nation. Gold was slightly lower, with spot bullion flat at $3335.41 per troy ounce. [GOL/] 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
Wall Street Journal
13 minutes ago
- Wall Street Journal
Fed's Powell Unlikely to Give Clear Signal
0021 GMT — Fed Chair Powell's looming speech at the annual Jackson Hole symposium will be the next catalyst for the U.S. dollar moves, says Joe Capurso, an economist at Commonwealth Bank of Australia CBA -0.52%decrease; red down pointing triangle. Still, don't expect Powell to give a clear signal in either direction. He is likely to keep his options open and wait for more data, Capurso says. But if Powell signals openness to an interest-rate cut, expect the market to more fully price a September cut and the USD to fall modestly. A September cut is currently priced at about 70% which sets a high bar for Powell to 'out‑dove' the market, he says. ( X @JamesGlynnWSJ)
Wall Street Journal
13 minutes ago
- Wall Street Journal
Powell Plans U-Turn on an Economic Strategy That Soured
Federal Reserve officials are preparing to quietly retreat from a signature policy innovation unveiled five years ago. In 2020, officials revamped their approach to setting rates, focusing on the risks brought on by near-zero interest rates and low prices. Today, officials are preparing to scrap that approach, now viewed as no longer relevant when facing the opposite problem of high and more volatile inflation.
