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Los Angeles Times
an hour ago
- Los Angeles Times
Bessent says he's not pushing Fed cuts, just touting models
U.S. Treasury Secretary Scott Bessent said he isn't calling for a series of interest-rate cuts from the Federal Reserve, just pointing out that models suggest a 'neutral' rate would be about 1.5 percentage points lower. 'I didn't tell the Fed what to do,' Bessent said Thursday in an interview on Fox Business, referring to his comments a day before about how the central bank 'could go into a series of rate cuts here.' Bessent said Thursday that 'what I said was that to get to a neutral rate on interest, that that would be approximately a 150-basis-point cut.' The so-called neutral rate is the level at which policy neither stimulates nor restricts the economy. Fed Chair Jerome Powell said July 30 that there are 'a range of views of what the neutral rate is at this moment for our economy' and that his own estimate was that the current setting was 'modestly restrictive.' 'I believe that there is room, if one believes in the neutral rate,' for a series of rate cuts, Bessent said. 'I'm not calling for one. I didn't call for one. I just said that a model of a neutral rate is approximately 150 basis points lower.' The Fed last month kept its target range for the benchmark rate at 4.25% to 4.5%. The median estimate of the neutral rate among Fed officials over the long run is 3%. Powell and many of his colleagues have for months argued that more time was needed to assess any impact on inflation and inflation expectations from President Donald Trump's tariff hikes. Trump has regularly criticized Powell for holding rates. Bessent, after taking the Treasury's helm, said he would only address past Fed actions, not future ones, but later weighed in on what he thought markets were expecting monetary policymakers to do. This week, he has taken to referring to economic models, and has repeatedly suggested a 50-basis-point rate cut is possible at the Fed's September meeting. 'It's not really the role of the Treasury secretary to opine' on the neutral rate, said Julia Coronado, founder of the research firm MacroPolicy Perspectives and a former Fed economist. 'The fact that the most senior economic official in the administration is saying these things publicly is direct, public pressure on what he wants the Fed to do.' Former Treasury Secretary Lawrence Summers, who served under Democratic President Bill Clinton, said he was 'surprised' to see Bessent's remarks on Wednesday. 'Usually that kind of judgment is not made by administration officials, and I'm not sure it's helpful for the administration to be publicly prescribing on monetary policy,' Summers said on Bloomberg Television's Wall Street Week with David Westin. Summers, a paid contributor to Bloomberg TV, also suggested that a measure of the neutral rate should incorporate the effects of large budget deficits and elevated demand for funds to pay for data centers — along with higher asset prices that reduce the flow of funds into savings. Against that backdrop, 'you wouldn't be prescribing a 175 basis point cut in rates unless we see a recession.' Interest-rate futures as of Thursday morning reflect bets that the Fed will cut rates by less than a cumulative 150 basis points by the end of next year. They also show slightly less confidence in a 25-basis-point reduction at the September meeting. The retreat came after a release on US wholesale inflation showed those prices climbed by the most in three years. Speaking to Bloomberg Television on Wednesday, Bessent said 'if you look at any model' it suggests that 'we should probably be 150, 175 basis points lower' on the Fed's benchmark. He also said that officials might have cut rates if they'd been aware of the revised data on the labor market that came out a couple of days after the latest meeting. 'I suspect we could have had rate cuts in June and July,' Bessent said. 'I don't know what model he's talking about,' said Jim Bianco, president of Bianco Research and a longtime Fed and Treasury watcher. 'There is no model I'm aware of that says it should be that low,' he said of the Fed's benchmark. Other gauges of where the Fed should be, such as the Taylor rule, also aren't arguing that the main rate should be 150 to 175 basis points lower than it is, Bianco said. He added that there have been many instances over the decades of 'cajoling Fed chairs,' and they're 'welcome to offer their opinion,' but it shouldn't change the central bank leader's opinion. Bessent repeated on Thursday that, given the context of the weaker jobs figures and not having cut rates the past couple of months, 'perhaps a 50-basis-point cut in September was warranted.' Two Fed district bank presidents said they're not backing such a move at this point. San Francisco Fed President Mary Daly said in a Wall Street Journal interview Wednesday, 'I just don't see that. I don't see the need to catch up.' St. Louis President Alberto Musalem said on CNBC Thursday, that a 50 basis-point cut would be 'unsupported by the current state of the economy and the outlook for the economy.' Flatley writes for Bloomberg.
Yahoo
an hour ago
- Yahoo
AstraZeneca (LSE:AZN) Launches FluMist Home For At-Home Influenza Vaccination
AstraZeneca recently launched "FluMist Home," an at-home flu vaccine delivery service, marking an important milestone for easier access to vaccinations in 34 U.S. states. This initiative likely contributed to its stock price increase of 12% last quarter, as it aligns with AstraZeneca's push towards innovative healthcare solutions. Despite this positive development, the overall market also experienced an upward trend, with the Dow hitting record highs and the market up 1% over the last week. AstraZeneca's performance seems to have been buoyed by both its strategic product launches and the broader market gains. Every company has risks, and we've spotted 2 possible red flags for AstraZeneca you should know about. The end of cancer? These 26 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The launch of AstraZeneca's "FluMist Home" aligns well with the company's focus on innovative healthcare solutions, potentially impacting the narrative around its future growth. This new service might enhance revenue streams by tapping into the demand for convenient medical solutions. Over the last five years, AstraZeneca's total shareholder returns, including both share price and dividends, have risen by 54.08%. This growth provides a broader context to the company's performance, indicating resilience and strong returns for investors. Over the past year, AstraZeneca's share price movement has been in line with the performance of the UK Pharmaceuticals industry, which returned 10.3%. Looking at the potential impact on revenue and earnings forecasts, the initiative could bolster AstraZeneca's earnings as analysts anticipate a growth to $13.9 billion by 2028, up from $8.3 billion today. The recent stock price increase narrows the gap to the consensus analyst price target of £137.89, reflecting a potential 18.95% discount from the current share price of £115.92. This price movement suggests optimism among investors regarding the company's ability to meet future expectations. Our comprehensive valuation report raises the possibility that AstraZeneca is priced lower than what may be justified by its financials. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:AZN. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ 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
2 hours ago
- Yahoo
Jim Cramer Says Don't Quit Market When It's Frothy: 'Is Widespread Irrationality a Reason To Sell Down in Perfectly Rational Stocks? Absolutely Not'
In the face of a frothy market, financial expert Jim Cramer encourages investors to stay the course, highlighting numerous positive stock narratives that counterbalance the market's irrationality. What Happened: Cramer made a case last week, asserting that the current market conditions are far removed from the dotcom bubble burst of the late 90s. He emphasized that despite the froth, today's market is more rational. Cramer drew attention to the irrationality in recent IPOs like Circle, Figma, and Bullish, which have witnessed significant gains since their launch. On CNBC, he also noted Oklo Inc., a firm with ambitions to construct a compact nuclear reactor powered by nuclear waste, whose stock has surged 247% year-to-date. 'Flying cars, supercharged crypto ETFs, secretive companies that consult in magical ways, all irrational. I could go on and on,' Cramer said. 'Is the widespread irrationality a reason to sell down your positions in perfectly rational stocks? Absolutely not.' Also Read: Jim Cramer Has Blunt Message for Fed Chair Powell After July Job Numbers Tanked On the other hand, Cramer pointed to Amazon Inc. (NASDAQ:AMZN) and Eli Lilly and Company (NYSE:LLY) as instances of rationality. Amazon's stock climbed by 3% after the introduction of same-day fresh food delivery in over 1,000 U.S. cities and towns. Eli Lilly's stock also experienced a boost when a team from the pharmaceutical company's management and board of directors purchased stock on the open market. 'Sure, there's froth, but there are also perfectly legitimate moves in the stocks of great companies. I am calling this the year of magical thinking, but the truth is you can't get the runs in the good ones without the runs in the bad ones,' Cramer added. Read Next Short Seller Slams Jim Cramer Over Palantir, Accuses Him Of Hyping 'High-Multiple, Hype-Driven Narrative' Image: Shutterstock/katz 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? (AMZN): Free Stock Analysis Report ELI LILLY (LLY): Free Stock Analysis Report This article Jim Cramer Says Don't Quit Market When It's Frothy: 'Is Widespread Irrationality a Reason To Sell Down in Perfectly Rational Stocks? Absolutely Not' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
