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Yahoo
8 hours ago
- Business
- Yahoo
Trump calls for a jumbo Fed cut, but resilient jobs report makes that even less likely
President Trump on Friday suggested the Federal Reserve should lower rates by a full percentage point, but any slim chance of a June cut evaporated with a jobs report that showed continued resilience in the labor market. There were questions about the possibility of a June cut this week following a weak ADP National Employment Report released Wednesday, Wellington Management fixed income portfolio manager Brij Khurana said, but the new Labor Department report released Friday "is good enough that it takes away June." "The labor market is not cracking yet even though it is decelerating," he added. What the Labor Department said on Friday is that the US economy added 139,000 nonfarm payrolls in May, more than the 126,000 expected by economists. The unemployment rate held steady at 4.2%. Following the release Trump posted on social media that "AMERICA IS HOT" and said, in a reference to Fed Chair Jerome Powell, that "'Too Late' at the Fed is a disaster!" Trump has tried to brand Powell with the "Too Late" nickname repeatedly in 2025, arguing that the Fed chair didn't react quickly enough when inflation surged during the Covid-19 pandemic. The president on Friday also urged Powell and the Fed to make a jumbo rate cut of a "full point," referring to moves made by other central banks to ease monetary policy. "Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!" Later in the day Trump noted in a separate post that Powell is "is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!" Read more: How much control does the president have over the Fed and interest rates? But Friday's Labor Department report makes it even less likely the Fed will consider rate cuts in the near term, Fed watchers said, since it doesn't show that the jobs market is grinding to a halt. Investors are currently betting that there is virtually no chance of a cutout of the June 17-18 meeting and that the central bank won't ease its policy again until September at the earliest. The Fed has not altered its benchmark rates at all in 2025 after reducing them by a full percentage point at the end of 2024, citing uncertainties about Trump's policies. In fact, in recent days, several fed policymakers have made it clear they are more worried about inflation than employment and thus are content to be patient about any changes to the Fed's current stance. "I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain," Federal Reserve governor Adriana Kugler said Thursday in a speech at the Economic Club of New York. Read more: How jobs, inflation, and the Fed are all related Kansas City Fed president Jeff Schmid also said Thursday he is very focused on the risk for higher inflation from tariffs and that the Fed should "not let down our guard." "While the tariffs are likely to push up prices, the extent of the increase is not certain, and likely will not be fully apparent for some time," Schmid added. Schmid noted that "the extent of the drag on growth and employment is also unclear," but "I intend to remain focused on the importance of maintaining credibility on inflation." But there is certainly a divide emerging among some Fed policymakers about whether to hold rates steady or get more comfortable about cuts later this year. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Federal Reserve governor Chris Waller is now firmly in the first camp. Last Sunday, he made an argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. If 'Too Late' at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due. Biden went mostly short term. Trump in another post on Friday offered some advice to Powell if inflation should "come back." "RAISE 'RATE' TO COUNTER. Very Simple!!!" Trump posted. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
11 hours ago
- Business
- Yahoo
Trump calls again for a Fed cut but resilient jobs report makes that even less likely
President Trump once again suggested the Federal Reserve should lower rates, but any slim chance of a June cut evaporated Friday with a jobs report that showed continued resilience in the labor market. There were questions about the possibility of a June cut this week following a weak ADP National Employment Report released Wednesday, said Wellington Management fixed income portfolio manager Brij Khurana, but the new Labor Department report released Friday "is good enough that it takes away June." "The labor market is not cracking yet even though it is decelerating," he added. What the Labor Department said Friday is that the US economy added 139,000 nonfarm payrolls in May, more than the 126,000 expected by economists. The unemployment rate held steady at 4.2%. Following the release, Trump posted on social media that 'AMERICA IS HOT' and said, in a reference to Fed Chair Jerome Powell, that ''Too Late' at the Fed is a disaster!' He also suggested more cuts were now necessary, referring to moves made by other central banks to ease monetary policy. 'Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!' That follows a similar post from the president Wednesday where he called Powell 'unbelievable!!!' and said "'Too Late' Powell must now LOWER THE RATE." But Friday's Labor Department report makes it even less likely the Fed will consider rate cuts in the near term, Fed watchers said, since it doesn't show that the jobs market is grinding to a halt. Investors currently are betting there is virtually no chance of a cut out of the June 17-18 meeting, and that the central bank won't ease its policy again until September at the earliest. The Fed has not altered its benchmark rates at all in 2025 after reducing them by a full percentage point at the end of 2024, citing uncertainties about Trump's policies. In fact, in recent days several fed policymakers have made it clear they are more worried about inflation than employment — and thus are content to be patient about any changes to the Fed's current stance. "I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain," Federal Reserve governor Adriana Kugler Kugler said Thursday in a speech at the Economic Club of New York. Kansas City Fed president Jeff Schmid also said Thursday he is very focused on the risk for higher inflation from tariffs and that the Fed should 'not let down our guard.' 'While the tariffs are likely to push up prices, the extent of the increase is not certain, and likely will not be fully apparent for some time,' Schmid added. Schmid noted that "the extent of the drag on growth and employment is also unclear but "I intend to remain focused on the importance of maintaining credibility on inflation." But there is certainly a divide emerging among some Fed policymakers about whether to hold rates steady or get more comfortable about cuts later this year. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Federal Reserve governor Chris Waller is now firmly in the first camp. Last Sunday, he made an argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Shafaq News
2 days ago
- Business
- Shafaq News
Gold firms as traders await US data; silver hits 13-year high
Shafaq News/ Gold held its ground on Thursday as investors looked forward to U.S. non-farm payrolls data due later this week to assess the U.S. interest rate path, while silver prices rose above the key $35 per ounce level for the first time since October 2012. Spot gold was up 0.3% at $3,383.79 an ounce, as of 0933 GMT. U.S. gold futures rose 0.3% to $3,407.80. "I would say that the path of least resistance remains to the upside, despite today's sort of flat mode for gold trading. But I think this is more due to traders being in wait-and-see mode ahead of non-farm payrolls," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. Wednesday's ADP National Employment Report revealed U.S. private payrolls increased far less than expected in May. U.S. President Donald Trump on Wednesday called for Fed Chair Jerome Powell to lower interest rates. "I think that a weakening in the US labor market will increase bets on a dovish Fed, so on the Fed cutting interest rates, (which) would be positive for gold," Evangelista added. Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment. Meanwhile, spot silver jumped 1.7% to $35.55 per ounce, its highest level since February 2012. Silver's "recent underperformance against gold because of economic concerns, given that 70% of silver usage is industrial, it looks that there could be some ratio trading going on now that it has dipped below the 100 level," StoneX analyst Rhona O'Connell said. The gold-silver ratio, denoting how many ounces of silver one ounce of gold can buy, is used by the market to gauge future trends as it indicates silver's current performance against its historical correlation with gold. Platinum rose 3.5% to $1,122.80, its highest level since April 2023, and palladium was up 2.4% at $1,025. "Tangible assets with limited supply such as gold, silver, platinum and copper should be part of a broad portfolio in order to mitigate any economic fallout from geopolitical events, government mismanagement of debt and rising inflation threat" said Ole Hansen, head of commodity strategy at Saxo Bank. Trump on Wednesday said the nation's debt ceiling should be eliminated, saying he agreed with Democratic Senator Elizabeth Warren's view on the subject.
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Business Standard
2 days ago
- Business
- Business Standard
Gold holds as traders await US payrolls data, silver hits 13-year high
Gold held its ground on Thursday as investors looked forward to US non-farm payrolls data due later this week to assess the US interest rate path, while silver prices rose above the key $35 per ounce level for the first time since October 2012. Spot gold was up 0.3 per cent at $3,383.79 an ounce, as of 0933 GMT. US gold futures rose 0.3 per cent to $3,407.80. "I would say that the path of least resistance remains to the upside, despite today's sort of flat mode for gold trading. But I think this is more due to traders being in wait-and-see mode ahead of non-farm payrolls," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. Wednesday's ADP National Employment Report revealed US private payrolls increased far less than expected in May. US President Donald Trump on Wednesday called for Fed Chair Jerome Powell to lower interest rates. "I think that a weakening in the US labor market will increase bets on a dovish Fed, so on the Fed cutting interest rates, (which) would be positive for gold," Evangelista added. Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment. Meanwhile, spot silver jumped 1.7 per cent to $35.55 per ounce, its highest level since February 2012. Silver's "recent underperformance against gold because of economic concerns, given that 70 per cent of silver usage is industrial, it looks that there could be some ratio trading going on now that it has dipped below the 100 level," StoneX analyst Rhona O'Connell said. The gold-silver ratio, denoting how many ounces of silver one ounce of gold can buy, is used by the market to gauge future trends as it indicates silver's current performance against its historical correlation with gold. Platinum rose 3.5 per cent to $1,122.80, its highest level since April 2023, and palladium was up 2.4 per cent at $1,025. "Tangible assets with limited supply such as gold, silver, platinum and copper should be part of a broad portfolio in order to mitigate any economic fallout from geopolitical events, government mismanagement of debt and rising inflation threat" said Ole Hansen, head of commodity strategy at Saxo Bank. Trump on Wednesday said the nation's debt ceiling should be eliminated, saying he agreed with Democratic Senator Elizabeth Warren's view on the subject.
Yahoo
2 days ago
- Business
- Yahoo
Trump calls Powell 'unbelievable!!!' as he renews call for lower rates
President Trump renewed his call for Federal Reserve Chair Jerome Powell to lower interest rates as a new report showed weakness in the job market. "'Too Late' Powell must now LOWER THE RATE," Trump posted Wednesday on Truth Social. "He is unbelievable!!!" Trump in his post referenced the new ADP National Employment Report out Wednesday showing private-sector hiring growth fell sharply last month. Just 37,000 jobs were created in May, according to the report, the smallest increase in private payrolls since March 2023. That's far fewer than the 114,000 expected by economists and below the 60,000 new jobs added in April. The new ADP weakness comes ahead of the Labor Department's jobs report due out Friday. Economists estimate that report will show that 130,000 jobs were created last month — down from 177,000 in April — with the unemployment rate holding steady at 4.2%. Powell this year has repeatedly urged caution and patience on rates, saying he expects Trump's tariffs to push inflation higher and drag down growth, putting the Fed in a challenging spot. Read more: How jobs, inflation, and the Fed are all related Last month, the central bank elected to keep its benchmark interest rate unchanged at a range of 4.25% to 4.5%. Its next policy meeting is June 17-18, and investors don't expect any change at that gathering. Powell met with Trump in person last Thursday. The White House said the president told the central bank boss that he is making a mistake by not lowering rates. The face-to-face encounter follows months of criticism of Powell from Trump, who has called Powell a "major loser" and a "fool" who "doesn't have a clue." Read more: How much control does the president have over the Fed and interest rates? A divide is emerging among Powell's fellow policymakers about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. The patient approach by the US central bank contrasts with foreign central banks like the European Central Bank, which has cut rates seven times in a little more than a year and is set to cut rates again on Thursday. Investors expect Thursday's cut to be among the last in this string unless the eurozone economy faces recession. "Europe has lowered nine times," Trump posted Wednesday. While tariffs are thought to have an inflationary impact in the US, in Europe they are expected to be more deflationary. Swiss consumer prices were in deflationary territory in May, raising the prospect that the Swiss National Bank will cut interest rates further later this month. Click here for in-depth analysis of the latest stock market news and events moving stock prices 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
