Vance Says Russia Wants Ukraine Territory, Fed's Cook: Won't Be Bullied
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Business Insider
37 minutes ago
- Business Insider
3 scenarios for Jerome Powell's Jackson Hole speech — and how markets could react to each
Our long national wait is nearly over: Fed Chair Jerome Powell will take the mic on Friday and let everyone know what the central bank is thinking about interest rates. In the world of markets, it doesn't really get bigger than this. A spate of big-box retail earnings came and went this week, as did minutes for the July FOMC meeting, with barely a rumble from investors. They instead remained laser-focused on the prospect of an interest-rate cut in September — which has been priced in with near-certainty for weeks — and also on what Powell seems prepared to do through year-end. It will come amid a confusing landscape. The labor market is in dire straits, but GDP has been fine. Inflation has been kept relatively in check, at least for consumers. Wholesale producers? Not so much. Detailed below are three possible outcomes for Powell's address on Friday, as well as what markets are likely to do in each instance. Scenario 1: More hawkish than expected The dreaded outcome: Powell signals a rate path that's more conservative than what people expect. As it stands now, the likeliest outcome being priced in by investors is two rate cuts by year-end (47%). Bullish investors are banking on a lower cost of capital boosting future earnings growth, which has historically been the primary driver of stock gains. How stocks could react: Despite some selling this past week — especially in AI and chip names — the market is still largely priced to perfection, and within shouting distance of record highs. That leaves it vulnerable to any recalibration in rate-cut expectations. If investors see companies getting less access to capital they can then use to reinvest, make acquisitions, and generally boost bottom lines, they could trim positioning and send the market tumbling. Scenario 2: More dovish than expected The best-case scenario: Powell signals a rate path that's even more accommodative than what people expect. How stocks could react: This would mean further jet fuel for the future earnings growth of major companies, an unabashedly bullish prospect that would likely push stocks higher. Unfortunately, this is probably the lowest-likelihood outcome. One additional caveat is that — while more rate cuts would be positive — there could be some rotation under the surface of the stock market. With the field for stronger earnings revisions leveled by easier access to capital, it's possible that the mega-cap tech names that have led market gains could fall out of favor. It's something we saw earlier this week when the tech-heavy Nasdaq 100 absorbed disproportionate losses, relative to the rest of the market. Scenario 3: Powell meets expectations The boring scenario: Powell does exactly what everyone expects him to. As it stands now, that would mean confirming a rate cut in September, and then another one by year-end. How stocks could react: Such a reaction could range from tepid to negative. In theory, if everything goes according to plan, stocks stock be relatively unchanged. But it's possible investors will "sell the news," implying that such an outcome was already properly priced in.
The Hill
an hour ago
- The Hill
Pence calls for secondary sanctions on Russia
Former Vice President Pence urged the Senate on Thursday to pass a major sanctions bill against Russia, arguing that the hefty tariffs, along with continued military aid to Ukraine, provide the best 'pathway' to reaching peace in Eastern Europe. 'He's fully capable of doing the diplomatic thing and being friendly and shaking hands and at the same time saying, here's the economic consequences that are going to happen, unless you step forward,' Pence said of President Trump during his appearance on NewsNation's show 'The Hill.' 'If we pass those secondary sanctions, Vladimir Putin will understand that we could literally break their economy and by providing continued military support for Ukraine, that combination of efforts, I think, is the best pathway to peace,' the former vice president told host Blake Burman. The sanctions bill, which has been pushed by Sens. Lindsey Graham (R-S.C.) and Richard Blumenthal (D-Conn.), would impose 500 percent tariffs on countries purchasing Russian oil and gas. The measure has over 85 co-sponsors in the upper chamber, but the Senate left for recess before advancing the bill, deferring to Trump to give the green light. 'We propose in our bill 500 percent. If it's 250 percent, I could live with it. Even if it's 100 percent, possibly. But you ought to impose bone-crushing sanctions that will stop them from fueling Russia's war machine,' Blumenthal said earlier this month. Senate Majority Leader John Thune (R-S.D.) said on Monday that Trump should be 'commended' for his efforts to end the Russia-Ukraine war and signaled the Senate is 'ready' to provide the president 'any economic leverage needed to keep Russia at the table to negotiate a just and lasting peace in Ukraine.' Trump has pushed to end the three-and-a-half-year war, meeting with Russian President Vladimir Putin on Friday and Ukrainian President Volodymyr Zelensky, along with seven European leaders, on Monday at the White House. Since then, Russian officials have expressed doubt about the possibilities of a speedy peace deal with Ukraine, including agreeing on security guarantees for Kyiv and scheduling a bilateral meeting between Putin and Zelensky, for which the president has advocated for some time. Russian Foreign Minister Sergey Lavrov questioned Zelensky's legitimacy on Thursday and stated the security guarantees under ongoing talks are 'hopeless.' Lavrov claimed that Putin is ready to meet with the Ukrainian president with the 'understanding that all issues that require consideration at the highest level will be well worked out.' Trump said Thursday that 'interesting times [are] ahead' and slammed his predecessor, former President Biden, over his administration's policy of barring Ukraine from using U.S. long-range weapons to strike deep inside Russia. 'It is very hard, if not impossible, to win a war without attacking an invaders country. It's like a great team in sports that has a fantastic defense, but is not allowed to play offense. There is no chance of winning! It is like that with Ukraine and Russia,' the president said on Truth Social. Pence, in the interview with NewsNation, argued that one of the reasons why Putin did not invade Ukraine during Trump's first White House term is that the Trump-Pence administration 'had the credible threat of the use of force.' 'He saw us take action, unleashing our military to take down the ISIS caliphate,' Pence said on Thursday. 'Send cruise missiles into Syria to take down Qasem Soleimani, the Iranian Revolutionary Guard leader.'
an hour ago
Trump suggests Ukraine 'play offensive' as Russia downplays prospect of Putin-Zelenskyy summit
Amid Russian resistance to his peacemaking efforts, President Donald Trump on Thursday appeared to suggest Ukraine go on the offensive militarily. In a post to his social media platform, Trump criticized former President Joe Biden's approach to the conflict, claiming Biden "would not let Ukraine FIGHT BACK, only DEFEND." "It is very hard, if not impossible, to win a war without attacking an invaders country. It's like a great team in sports that has a fantastic defense, but is not allowed to play offensive. There is no chance of winning!" Trump wrote. Biden last year reversed a long-standing policy and authorized Ukraine to use American-supplied ATACM long-range missiles to strike inside of Russia, but before that the administration had blocked strikes inside of Russia, only allowing the Ukrainian military to use shorter-range missiles to strike in Ukrainian territory seized by Russia. Trump long opposed allowing Ukraine to strike Russia, heavily criticizing Biden for authorizing it and as President he has appeared to discourage it as escalatory. But Trump has recently taken an interest in the possibility of Ukrainian strikes deep into Russia. has taken interest in the possibility of Ukrainian strikes deep into Russia. The White House confirmed July reports that Trump discussed with Zelenskyy whether Ukraine would be able to strike St. Petersburg and Moscow with U.S.-supplied weapons. But the White House insisted that Trump was "asking a question, not encouraging further killing." It is unclear whether Trump is hinting at any policy change on U.S. support for Ukraine with his post on Thursday, though he did write at the end: "Interesting times ahead!!!" Trump's post came as Russia's foreign minister, Sergey Lavrov, downplays the prospect of a summit between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy in the coming weeks. The White House said this week Putin "promised" to sit-down with Zelenskyy, but Russia has not confirmed. In remarks on Thursday, Lavrov said a meeting between the two leaders could only take place once all major components of a peace agreement are worked out. 'Our president has repeatedly said that he is ready to meet, including with Mr. Zelenskyy, on the understanding that all issues requiring consideration at the highest level will be thoroughly worked out and experts and ministers will prepare appropriate recommendations," Lavrov said. Such conditions appeared to make a meeting in the near future very Putin, Lavrov sought to cast Zelenskyy as an illegitimate leader, saying when "it comes to signing future agreements, the question of the legitimacy of the person signing these agreements on the Ukrainian side will be resolved." Putin has taken to not mentioning Zelenskyy by name, instead giving his government the moniker "Kyiv regime." Lavrov also continued to insist Russia have a role in any security guarantees for Ukraine post-war. He rejected the European-led discussions as "futile." While Trump projected optimism on Monday on peace talks, he's now saying he'll know whether a deal can be made in "two weeks." "Well, I'll let you know in about, I would say within two weeks, we're going to know one way or the other. After that, we'll have to maybe take a different tack, but we'll see, but we'll know pretty soon," Trump said during an interview with radio host Todd Starnes. Meanwhile, Zelenskyy is accusing Russia of trying to "wriggle out" of a meeting. "Right now, the signals coming from Russia are, to be honest, simply indecent. They are trying to wriggle out of the need to hold a meeting. They do not want to end this war. They continue massive attacks against Ukraine and extremely intense assaults on the front line. And on top of that, they are launching missiles at an American enterprise -- just like they do at many of our other completely civilian targets." Zelenskyy said he will continue diplomatic discussions with partners and encouraged greater pressure on Russia to end the war, which began when Putin's forces invaded Ukraine in Feb. 2022. "Each day now adds more shape to the future security architecture for Ukraine: weapons, funding, cooperation with our partners, forces on land, in the air, and at sea," Zelenskyy said on Thursday.
