Fed's Bostic Urges Patience Amid Uncertainty, Resilient Economy
NYC Commutes Resume After Midtown Bus Terminal Crash Chaos
Struggling Downtowns Are Looking to Lure New Crowds
Massachusetts to Follow NYC in Making Landlords Pay Broker Fees
Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals
What Gothenburg Got Out of Congestion Pricing
'I believe a period characterized by such widespread uncertainty is no time for significant shifts in monetary policy,' Bostic said Thursday at an event in Frankfurt. 'That is especially the case against the backdrop of a still resilient macroeconomy, which offers space for patience.'
Fed officials have held rates steady this year while they wait to see how President Donald Trump's tariffs, along with changes to immigration, taxes and regulation, will affect the economy. Projections released after last month's meeting show a divide over how much officials expect to reduce borrowing costs this year. While 10 policymakers expect to lower rates at least two times in 2025, seven see the Fed holding rates steady all year.
The Atlanta Fed chief said earlier this week that the impact of tariff-induced price increases may be incremental, instead of amounting to a one-time jump, which could lead to more persistent inflation.
He reiterated that concern on Thursday, saying tariff-related price bumps may be implemented over the course of the next year or more, causing a slow trickle of price increases that could lift inflation expectations.
'If I'm right, then the US economy will likely experience a longer period of elevated inflation readings,' Bostic said.
Job Market
A stronger-than-forecast jobs report for June, released earlier Thursday by the Bureau of Labor Statistics, lowered market expectations for a July cut.
Bostic said Thursday there are signs the labor market is softening, including a slowdown in hiring, but he said the jobs market is not yet deteriorating.
'I believe the committee must await more clarity rather than move in a policy direction that it might need to quickly reverse,' he said, referring to the Federal Open Market Committee.
Responding to questions following his remarks, Bostic said higher US government debt levels could eventually have implications for policymakers. He said debt servicing costs could 'crowd out' other activities, which could later affect prices and employment in 'material' ways.
Republicans in Congress appear close on Thursday to passing Trump's tax and spending bill. The version that passed the Senate would add nearly $3.3 trillion to US deficits over a decade, according to a new estimate from the nonpartisan Congressional Budget Office.
Bostic also said the size of the federal debt could affect monetary policy by moving interest rates.
'To the extent that those things are perceived in financial markets as risk elevators, you could see interest rates move to some extent independent of things that we do,' Bostic said. 'That would be really something that we'd have to think hard about.'
--With assistance from Jana Randow.
(Updates with additional Bostic comments starting in 10th paragraph.)
SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too
America's Top Consumer-Sentiment Economist Is Worried
How to Steal a House
China's Homegrown Jewelry Superstar
Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate
©2025 Bloomberg L.P.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
6 minutes ago
- Yahoo
Billionaire Ong to plead guilty in Singapore political gift scandal
By Low De Wei and Yoojung Lee (Bloomberg) – A billionaire best known for bringing Formula One night racing to Singapore is set to plead guilty in relation to a scandal to supply one of the city-state's most senior politicians with luxury gifts. On Monday, 79-year-old Ong Beng Seng will enter his plea after facing two charges related to offering S. Iswaran in 2022 a trip on his private jet to Doha, a stay at the Four Seasons there, a return business class ticket worth S$5,700 ($4,422.3) and subsequently abetting the politician to obstruct the course of justice. The former transport minister was then the chairman of a steering committee for the F1 night race. Ong could be sentenced by a Singapore court as soon as Monday or at a later date. He faces up to several years in jail, including a possible fine, if he pleads guilty to both charges. Singapore's worst graft scandal in decades has gripped the city-state, which has sought to build a global reputation for zero-tolerance for corruption. How the Malaysia-born tycoon is sentenced will also weigh on his control of a business empire that extends from the Southeast Asian financial hub to a luxury development in central London and resorts in the Maldives. Ong has a net worth of $1.5 billion, according to the Bloomberg Billionaires Index. In 2024, Iswaran was sentenced to one year in jail for obtaining gifts from Ong, which also included items like a Brompton bicycle and race tickets. More stories like this are available on ©2025 Bloomberg L.P.
Miami Herald
7 minutes ago
- Miami Herald
Major Wall Street analyst revamps S&P 500 target amid tumble
The stock market has notched big gains since spring, with the S&P 500 and Nasdaq rallying over 25% and about 40% from April 8 through last week's highs. The major indexes' gains have come in mostly a straight line; however, disappointing economic data, renewed tariff concerns, and ongoing Fed interest rate uncertainty did dent the rally late in the week. The S&P 500 and Nasdaq tumbled 2.9% and 3.8% from their highs to close at about 6238 and 20650 on Friday after the Fed kept interest rates unchanged on Wednesday, and inflation and jobs data on Thursday and Friday disappointed. The dips may not be too surprising giving August is historically a seasonally weak month for stock market returns. Nevertheless, investors are likely wondering what could happen to stocks next following last week's swoon. Image source: Michael M. Santiago/Getty Images The S&P 500 was arguably in rarified air, given that it had reached all-time highs and its forward price to earnings ratio, a key valuation measure calculated by dividing price by earnings, was 22.4, according to FactSet-a level last seen when the S&P 500 peaked in February before a 19% tariff-fueled drubbing. Few expect a repeat of that nearly bear market reckoning. Still, August has a dubious track record for lackluster returns, ranking 11th out of 12 months since 1950, with an average loss of 1.2% in post-Presidential election years, according to the Stock Trader's Almanac. The poor seasonality and emerging headwinds, including lackluster jobs data, concerning inflation, and newly installed tariffs, aren't lost on BTIG Chief Market Technician Jonathan Krinsky. In a research note delivered to clients this weekend, Krinsky pointed to a potential return of volatility through early October, when seasonal headwinds shift to tailwinds. A key reason behind Krinsky's short-term concern is that the S&P 500 breached its 20-day moving average on Friday. Many technical analysts use either the 20-day, or 21-day, moving average as a key short-term indicator. When the market is trading above it, gains often beget gains. When it's below it, it can mean trouble ahead. More Wall Street Analysts: Veteran analyst drops surprise call on Tesla ahead of earningsBest Buy analyst, focused on earnings growth, reworks stock price targetVeteran trader posts a major warning for the stock market Krinsky thinks the S&P 500 could retreat to 6,100, which may happen more quickly than many expect. He pointed to last year, when the S&P 500 sold off by about 8% from high to low in the first few days of August. "History doesn't repeat, but it often rhymes," said Krinsky. "A quick move back to 6,100 would be -5% from the highs and would likely be buyable initially." Krinsky isn't alone in pointing out that the time of year isn't great for equities. "Post-election years tend to peak right about now and bottom in late October," wrote Carson Investment Research analyst Ryan Detrick on X. "No, this doesn't mean it has to happen this time, but some seasonal turbulence would be perfectly normal." In addition to the seasonal weakness, Krinsky noted that utilities, considered a defensive stock market sector, have been rallying, recently notching 52-week highs. He also sees a potential opportunity for software stocks, which have underperformed semiconductor stocks, to close the gap, given they tend to have done better than semis in August, outpacing them in 9 of the past 13 years. Stocks initially headed higher early last week on the heels of better-than-expected earnings results from technology bellwethers Microsoft and Meta Platforms. However, optimism faded on Wednesday, when the Federal Reserve chose to keep interest rates unchanged at 4.25% to 4.50%, disappointing many, including President Trump, who has been arguing for big cuts all year. Related: Jobs report shocker resets Fed interest rate cut bets Adding to investors' concerns, the Personal Consumption Expenditures index showed that inflation accelerated to 2.6% in June from 2.4% in May and 2.2% in April. Many expect tariffs instituted in the spring are only now causing inflation to rise. It may worsen in the coming months following newly announced tariffs after the reciprocal tariff pause ended on August 1. President Trump announced a slate of tariffs ranging from 10% to 41%, including a 35% tariff on Canada, one of our top three trading partners. Jobs data last week also suggests the economy is wobbling. The latest report from the Bureau of Labor Statistics showed just 73,000 jobs created in July, below the 100,000 expected. Worse, the BLS had previously said the US economy created 147,000 jobs in June. It revised that figure down to 14,000. May's job numbers were similarly lowered to 19,000 from 144,000. The significant revisions drew the ire of President Trump, who fired BLS Commissioner Erika McEntarfer after the report, saying the numbers were "RIGGED in order to make the Republicans, and ME, look bad." Related: Apple CEO drops bombshell about its future The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
20 minutes ago
- Miami Herald
Bonus for the economy: lower oil, gas prices ahead
When it comes to economic reports, that was some week last week. The Federal Reserve didn't cut its key interest rate. The jobs report was weak. Surveys suggested consumers weren't as freaked about the economy as they had been in April. Don't miss the move: Subscribe to TheStreet's free daily newsletter The president, however, imposed higher tariffs on goods imported from a number of countries. The stock market engaged in some wild gyrations, ending the week lower, but, at least, bond yields came down. In part because there aren't many big economic reports ahead this week, it's a good time to take stock of what's happening in and around the economy. Related: Stocks will try to recover their mojo this week Maybe you missed this one, but members of the OPEC + countries may boost crude oil production to boost revenue. The operative phrase is "may boost" production. It was clear Saturday but not as clear on Sunday. Brent crude, the global benchmark settled at $69.67 per barrel and has been slowly declining since peaking on Jan. 15 at about $82 a barrel. The 11 OPEC+ members include Russia, Mexico, Oman, Kazakhstan and Malaysia. Assuming output is boosted, global oil prices - and gasoline prices - should come down, just in time for autumn when summer vacations in the northern hemisphere end and drive less. And the result: Prices come down. AAA said Sunday the national average price of gasoline was $3.15 a gallon, off slightly from Saturday and down 9.4% from a year ago. More oil supply on the market won't do much for energy stocks. The Energy Select Sector SPDR exchange-traded fund (XLE ) is off 9.1% since peaking at $94.21 on April 2. Bloomberg/Getty Images Donald Trump may seethe every time he sees Jerome Powell speak on television, but he will soon be influencing a big chunk of the seven-member Federal Reserve Board of Governors. Fed governor Adriana Kugler announced Friday she's resigning Aug. 8 to return to a teaching job at Georgetown University after just two years as a Fed board member. So, the president gets to nominate someone more to his liking - that is, cut rates when he says cut. Related: Veteran trader posts a major warning for the stock market Trump appointed Christopher Waller and Michelle Bowman as Fed governors - as well as Powell. They dissented in the vote not to cut rates last week. Powell, a Republican, was a Barack Obama appointee to the Fed. Trump elevated him to chairman in 2018, replacing Janet Yellen. Joe Biden nominated Powell to a second four-year term in 2021. Powell's term as chairman ends in May. Trump would prefer to replace him sooner. Powell would not support the president's demand for deep cuts to the Fed's key federal funds rate, still at 4.25% to 4.5%. The rate forms the foundation of short-term U.S. interest rates. Potential successors include Kevin Warsh, a former Fed governor; Kevin Hassett, director of the National Economic Council, and, possibly, Treasury Secretary Scott Bessent. Bloomberg/Getty Images The furor over the firing of Erika McEntarfer as commissioner of the Bureau of Labor Statistics may take a little time to fade away. The president fired McEntarfer Friday because the BLS issued revisions to earlier jobs reports that drastically cut down how many jobs were created in May and June. The president said McEntarfer rigged the report to make him look bad, but offered no evidence. Related: Ford CEO predicts huge industry shift after latest tariff developments How the monthly jobs report is produced could use some clarification. The BLS works on a jobs report three times: when it's issued, and each of the next two months. The two revisions reflect that more data on a given month is collected, and the original numbers are revised. The reason for the revisions is the first report is, at best, a guestimate with data collected from 60,000 businesses and other employers and households by BLS staff by phone and, more lately, online. Go here for a description of the process. Response rates have been falling in recent years from as high as 90% in 2013 to 67% in July. There is a fourth revision in the next year once year-end state tax data is collected and matched up with BLS data. It takes so long to get all the data right because of staffing shortages and the time demands of many employers. And, of course, mistakes are made. McEntarfer was appointed to the job during the Biden Administration and easily won Senate confirmation. The next BLS commissioner will be a Trump loyalist. More Economic and market analysis: Tariffs cause August grocery price surge: Five foods hit hardestMassive Jerome Powell Error Roils the MarketFormer Federal Reserve official sends bold message on 'regime change'The market decline has not run its course The week after the jobs report sees relatively few economic reports. Here's a rundown of what's coming. Monday: Factory orders, with estimates projecting a decline. Tuesday: U.S. Trade deficit. The estimate is a $61 billion positive. Two reports on services ordered by purchasing managers will come from Standard & Poor's and the Institute for Supply Management. Both are expected to be slightly positive. Wednesday: None. But Fed governor Lisa Cook and Susan Collins, president of the Boston Federal Reserve Bank expected to speak in the afternoon. Thursday: The weekly report on initial jobless claims plus a report on productivity and unit labor costs. All from the BLS. The Federal Reserve's monthly Consumer Credit Outstanding. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
