Former Fed vice chair Alan Blinder: Quarter-to-quarter GDP is going to be very difficult for awhile
Alan Blinder, Princeton University professor and former vice chair of the Federal Reserve, joins CNBC's 'Squawk on the Street' to discuss macro outlooks, expectations for the Fed, and more.
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Yahoo
27 minutes ago
- Yahoo
Jamie Dimon says ‘don't put a good foot forward, put the truth forward' and reveals what would get him into public service
CEO Jamie Dimon was asked about leadership lessons at the end of a wide-ranging interview during the Reagan National Economic Forum on Friday. He talked about getting out, listening to people, observing, providing honest assessments, and having humility. He also explained what would lure him from the private sector to the public sector. Wall Street's longest-tenured CEO said it's better to give an honest assessment than to make the boss feel good. At the end of a wide-ranging interview during the Reagan National Economic Forum on Friday, CNBC's Morgan Brennan asked JPMorgan Chase CEO Jamie Dimon about leadership lessons. The first thing he said was, 'get out, get out, get out, get out, talk to people, talk to clients. I talk to everybody.' Noting that President Dwight Eisenhower, a Republican, regularly met with Democratic leaders, Dimon also discussed the importance of hearing opposing views as well as listening to complaints and learning about rivals. 'Observe, observe, observe, and have all your people do it,' he added. 'And it's a never-ending process. Because we have competitors from around the world, and they're smart, and they're tough, and they're coming.' Then he turned to what makes companies that were once pace-setters in their respective industries fail. Dimon pointed to arrogance, greed, complacency, and bureaucracy. Companies can 'bull—t' themselves about how they're earning money and why, while executives may feel pressure to make the boss feel good and avoid embarrassing someone, he explained. 'When people say to me, put a good foot forward, I always say, don't put a good foot forward, put the truth forward, 100% the truth,' Dimon said. 'Tell us, and we will deal with it. It's OK. So a deep, honest assessment.' He also put humility and curiosity on the list of traits leaders should have, saying 'people don't want to work for jerks' and don't want to work for bosses who blame others. Meanwhile, CEO succession at the world's biggest bank by market cap has been an ongoing parlor game on Wall Street, and Dimon recently reaffirmed that he is stepping down sometime in the next two to four years. But at the still relatively young age of 69, there has been widespread speculation that he might have a second act in the government, either in elected office or an appointed role. Earlier this year, he even admitted that he considered running for president of the United States, but decided against it because didn't want to spend so much time away from his family. And while running for re-election last summer, Donald Trump suggested he might consider Dimon for Treasury secretary, though he later ruled him out. On Friday, Dimon was asked what it would take for him to enter public service. His answer hinted at some humility. 'Alright, ready? I'll tell you: if I thought I could really win, which I don't think I could,' he said. This story was originally featured on 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
Miami Herald
an hour ago
- Miami Herald
JPMorgan updates Fed interest rate cut outlook
President Donald Trump has repeatedly expressed frustration with Federal Reserve Chair Jerome Powell, at times even suggesting he should be removed from his post. And most recently, the director of the Federal Housing Finance Agency joined the chorus, urging the Fed to resume rate cuts. But despite growing political pressure, don't expect Powell or the central bank to act anytime soon, said J.P. Morgan Chief Global Strategist David Kelly. Speaking this week at FPA NorCal's 53rd annual conference, Kelly underscored a key point: the Fed's priority remains squarely focused on inflation – not politics. The Fed operates under a dual mandate from Congress: to promote maximum employment and maintain price stability, generally interpreted as 2% inflation. This framework is designed to insulate monetary policy from political interference, ensuring decisions are based on economic data rather than partisan demands. Don't miss the move: Subscribe to TheStreet's free daily newsletter As of March 2025, the U.S. unemployment rate stood at 4.2%, and inflation – as measured by the core personal consumption expenditures (PCE) index – was 2.5% in April. Kelly noted that Powell has been "crystal clear" in recent press conferences: when inflation and employment goals diverge, the Fed weighs how far each metric is from its target and how quickly it's expected to move back into range. "They want full employment, and they want 2% inflation," Kelly said. "But what if they're missing both?" In that case, the Fed doesn't pick one goal over the other. Instead, it assesses the relative miss – and right now, inflation is the bigger problem. Kelly expects unemployment to tick up to 4.5% by year's end – just slightly above the Fed's target. But inflation could climb to 3.5%, well above the Fed's 2% goal. "They're missing more on inflation than they are on unemployment," Kelly said, suggesting the Fed won't cut rates in June or September. Related: Secretary Bessent hints Social Security income tax changes are coming Kelly said one symbolic cut late in the year – "a holiday present to the administration" – is possible. But beyond that, the Fed is likely to wait until there's "real evidence" inflation is on track to hit 2% before easing further. Kelly laid out three key reasons why interest rates are likely to remain elevated: Inflation is still too high: Unemployment is near the Fed's long-run target, but inflation isn't. The Fed is far more off-target on price stability, which makes a case for holding rates steady. Unless inflation shows clear and sustained progress, rate cuts will remain off the table. Global debt is pushing up long-term rates: Massive borrowing needs in the U.S., Europe, and Japan are contributing to higher long-term interest rates. Even if the Fed wanted to cut short-term rates more aggressively, market forces may blunt their impact. "Whatever rates we have right now, that's kind of it," Kelly said. The Fed's credibility is on the line: Maintaining the Fed's independence is crucial for market confidence and the stability of the U.S. dollar. If investors begin to suspect the central bank is responding to political pressure rather than economic fundamentals, long-term borrowing costs could rise even further. Kelly's outlook suggests that investors – and the advisers who serve them – should plan for interest rates to stay higher for longer. He expects fixed income returns to average about 5% over the next five years, reflecting this new rate environment. Related: How the IRS taxes Social Security income in retirement And while the Trump administration is pushing for policies designed to juice the economy - including what Kelly referred to as "fiscal fudge" to stimulate growth through 2028 - the Fed's job is to look past short-term fiscal stimulus and stick to its dual mandate. The takeaway? Rate cuts may come – but not before the data supports them. Got questions about retirement, email Practial Strategies for Building Wealth The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Politico
an hour ago
- Politico
Trump administration prepares to ease big bank rules
The Trump administration is gearing up to deliver a major win to Wall Street banks: Easing rules imposed on megabanks in response to the 2008 financial crisis. Trump-appointed regulators are nearing completion of a proposal that would relax rules on how much of a capital cushion the nation's largest banks must have to absorb potential losses and remain solvent during periods of economic stress. The plan — being developed jointly by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation — could be released in the coming months, according to two people familiar with the discussions who were granted anonymity to discuss plans that aren't yet public. Treasury Secretary Scott Bessent, who is coordinating the administration's financial regulatory agenda, said earlier this month that reducing capital requirements is a 'top priority' for federal banking agencies. And he said he's expecting action on the issue 'over the summer.' 'The 2024 election ushered in the largest turnover among federal financial regulators in the history of our country, and that's starting to bear fruit,' said Ed Mills, a Washington policy analyst at Raymond James. Big banks, he said, are 'back in the driver's seat.' The forthcoming proposal would represent the latest policy win for the banking industry, which has been closely scrutinized and regulated since the 2008 global financial meltdown. The move would be the first major banking regulation that Trump-appointed regulators take up as they advance policies they say will lead to greater economic growth. It would also signal a major shift from last year when Biden-era regulators were pushing a plan, detested by the industry, to go in the opposite direction by proposing that large banks increase the size of their capital cushions. The capital rule under consideration would alter what is known as the supplementary leverage ratio — an additional safeguard that requires banks to maintain a minimum level of capital based on the total size of their assets. Bank industry groups and Republican lawmakers have argued that the requirement has constrained bank activity, particularly by discouraging the buying and selling of government debt in the form of U.S. Treasuries. The complex rule was designed as a backstop to make sure banks are equipped to absorb unexpected losses on any asset, not just ones that regulators deem riskier. The policy requires banks to hold the same amount of capital against risky loans and safe assets like U.S. Treasuries. Bessent and Republican proponents say it will be a boon for the Treasury market because it will allow banks to better facilitate the buying and selling of government debt. Treasury markets have swooned in recent months amid Trump's trade war and concerns about spending and tax policies. 'We are pushing to have this supplementary leverage ratio either reduced or removed, and it will allow banks to buy more Treasuries,' Bessent said in a radio interview with Roger Stone last week, adding that it will help deliver on his goal of lowering interest rates. He said easing the rule could reduce Treasury yields by 0.3 to 0.6 percentage points 'over time.' Travis Hill, the acting chair of the Federal Deposit Insurance Corporation, said this past week he expected a joint proposal with other regulators 'in the relatively near future.' The goal, he said, was to 'right size' the requirement so that it less frequently was the binding constraint on some of the largest banks. A similar effort to loosen the supplementary leverage ratio in 2018 during the first Trump administration never came to fruition amid disagreements among regulators. And during the Biden administration banks were successful at fending off a proposal by regulators that called for significantly increasing capital requirements. In 2020, regulators temporarily adjusted the leverage ratio during the Covid-19 pandemic, excluding Treasuries and central bank reserves from the calculation. The goal was to allow banks to more easily buy up government debt. That relief expired in March 2021, though Fed officials said at the time they were open to longer-term changes. Fed Chair Jerome Powell has in recent months expressed support for revisiting the rule. Regulators are now debating, according to the people familiar with the discussions, whether to lower the capital requirement for megabanks by readjusting the formula or reinstating a permanent version of the pandemic-era relief that excludes Treasuries and other safe assets from the calculation. The Fed, OCC and FDIC declined to comment on the proposal. Wall Street critics and progressives are pushing back on the plan as a giveaway to big banks at the expense of dialing up the risks to the financial system. Phillip Basil, director of economic growth and financial stability at Better Markets, said that weakening the minimum level of capital requirements on big banks will increase financial stability risks. He said the bank industry was using recent turmoil in the Treasury markets as a 'pretense' to win an easing of a regulation that they've long lobbied against. 'We can't, on one hand, say that we need to do something about turmoil in the Treasury markets, and on the other hand, say that there's no risk in Treasuries,' he said. 'It's an absurd argument to make.' It's not yet clear precisely how much capital levels for the big banks will fall under either scenario that regulators are considering. And it's also not clear the extent to which regulatory relief for big banks will translate into the Treasury market moves that the Trump administration wants to see. The changes will 'slightly boost the demand for Treasuries' but likely won't be on the magnitude that the administration is hoping, said Gennadiy Goldberg, head of U.S. rates strategy for TD Securities. Easing the capital rule, he said, 'will help at the margin, but I don't think it will be enough on its own to push back against the narrative that U.S. deficits are going up too quickly, and push back against worries that foreign investors are no longer the buyers that they once were.'
