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Yahoo
3 days ago
- Business
- Yahoo
Trump urges Fed's Powell to cut interest rates by full percentage point: 'Rocket Fuel!'
President Donald Trump on Friday called on Federal Reserve Chairman Jerome Powell to lower interest rates by a full percentage point. "'Too Late' at the Fed is a disaster!" Trump wrote in a post on Truth Social. "Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!" Trump's post came after the release of the Labor Department's May employment report, which showed the U.S. economy added 139,000 jobs in the month. The figure was stronger than the estimate of economists polled by LSEG, who projected a gain of 130,000 jobs, but cooler than the downwardly revised increase of 147,000 jobs added in April. Job Growth Continued To Slow In May Amid Economic Uncertainty The president's comments also follow the European Central Bank's (ECB) decision to cut interest rates on Thursday. The ECB has now lowered borrowing costs eight times, or by 2 percentage points, since last June, seeking to prop up a eurozone economy that was struggling even before erratic U.S. economic and trade policies dealt it further blows. Read On The Fox Business App With inflation now safely in line with its 2% target and the cut well-flagged, the focus has shifted to the ECB's message about the path ahead, especially since at 2%, rates are now in the "neutral" range where they neither stimulate nor slow growth. Ecb Cuts Rates As Bets Build On A Summer Pause The president, in a separate Truth Social post on Friday, said cutting interest rates would allow the U.S. to reduce short- and long-term interest rates on debt that is "coming due." "If 'Too Late' at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due," Trump wrote. "Biden went mostly short term. There is virtually no inflation (anymore), but if it should come back, RAISE "RATE" TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!" The market currently expects a near-zero chance of a rate cut after the Fed's next meeting on June 17-18, according to the CME FedWatch tool. Trump most recently demanded Powell to lower interest rates on Wednesday, after ADP reported companies in the private sector added just 37,000 jobs in May. The figure was the lowest since March 2023. Reuters contributed to this article source: Trump urges Fed's Powell to cut interest rates by full percentage point: 'Rocket Fuel!' 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


Forbes
29-05-2025
- Business
- Forbes
Fed 98% Likely To Leave Key Rate Intact After Latest Meeting Minutes
Tierney L. Cross/Bloomberg Federal Reserve officials are 98% likely to leave the benchmark federal funds rate unchanged at their next meeting in June after the central bank's latest monetary policy meeting minutes depicted economic conditions as highly uncertain. There is a 97.8% chance that Fed policymakers will decide to keep the target range for the fed funds rate, which has significant implications for broader borrowing costs, intact at their next policy meeting on June 18, according to data provided by the CME FedWatch Tool following the release of the latest policy minutes. The graphic below provides a screenshot of the aforementioned tool taken close to 8 p.m. EST: This tool shows the likelihood that Fed officials will keep the benchmark rate unchanged at their ... More next policy meeting. Such policy decisions can have implications for a wide range of risk assets like cryptocurrencies and stocks. Many of these assets do not make regular payments, and as long as the benchmark rate stays high, it will place upward pressure on the yields paid by many fixed-income financial instruments. This set of circumstances could potentially reduce demand for the aforementioned risk assets. The minutes of the central bank's latest policy meeting, which involved members of both the Board of Governors of the Federal Reserve System and the Federal Open Market Committee, emphasized that the financial institution's officials might encounter challenging circumstances that could complicate their ability to make policy decisions. 'Participants noted that the Committee might face difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken,' the minutes stated. 'Participants observed, however, that the ultimate extent of changes to government policy and their effects on the economy was highly uncertain.' At the same time, the policymakers did speak to strength in the job market, stating that 'Participants further noted that the unemployment rate had stabilized at a low level and that labor market conditions had remained solid in recent months.' 'In this context, and amid a further increase in uncertainty about the economic outlook and a rise in the risks of both higher unemployment and higher inflation, all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent,' the minutes continued.

Business Insider
13-05-2025
- Business
- Business Insider
Inflation unexpectedly cooled in April despite Trump's big tariffs announcement
Inflation unexpectedly slowed in April to 2.3% over the year, progressing toward the Federal Reserve's 2% target and the smallest increase since February 2021. Price growth was expected to stay flat at 2.4%, but now inflation has cooled for three consecutive months. A recent UBS note predicted that April data would mark the start of the impacts of Trump's implemented tariffs, and that May through October would show larger impacts if the trade policies stand. Last week, the Federal Open Market Committee members decided to hold interest rates steady, as they wait for more certainty around tariffs' impacts. CME FedWatch, which shows what traders think will happen to interest rates, showed a 92% chance before the inflation report that rates will be unchanged at the FOMC's next scheduled meeting in June. Trump announced what he called "reciprocal" tariffs on countries around the world on April 2, before quickly pausing many of them for 90 days. A baseline of 10% has been in effect, along with a 145% tariff on most imports from China and 25% tariffs on autos, steel, and aluminum. On Monday, the Trump administration announced a trade deal with China, a key trade partner for the US. Both countries will cut rates by 115 percentage points for 90 days. Last week, Trump said the US and UK reached a trade deal. The 10% tariff is still in effect, but the two countries negotiated agreements on vehicles, steel, and aluminum from the UK. Karoline Leavitt, the White House press secretary, said on Friday that Trump "is committed to the 10% baseline tariff, not just for the United Kingdom but for his trade negotiations with all other countries as well." BeiChen Lin, senior investment strategist at Russell Investments, said that businesses likely stocked up before Trump's 10% tariffs, which could be delaying their impact on inflation figures. "If the broad 10% universal tariff doesn't get negotiated away, then eventually we will likely see a one-time boost to price levels, which would also translate into a temporary boost to the inflation rate," Lin said. Tariffs could also affect overall economic growth and the job market. "If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment," Federal Reserve Chair Jerome Powell said in a May 7 press conference. Powell said at the press conference that the economy is resilient, with a solid job market and inflation just above the Fed's target of 2%. Real gross domestic product shrank in the first quarter of 2025, the first time since 2022, but a large rise in imports that subtracts from growth contributed to that contraction. Job growth was better than expected in April, but still indicated a tougher job market for unemployed Americans. Powell said the Fed's policy is "100 basis points less restrictive than it was last fall. And so, we think that leaves us in a good place to wait and see." This is a developing story. Please check back for updates.


USA Today
07-05-2025
- Business
- USA Today
Did the Fed cut rates today? No, but here's when they might
Did the Fed cut rates today? No, but here's when they might The Federal Reserve held interest rates steady Wednesday between 4.25% and 4.5% – exactly as interest-rate traders' bets had predicted a month ago. The traders' bets are now predicting there's little chance the Fed will lower interest rates at the end of the next meeting on June 18. That means Americans won't see short-term interest rates – which are heavily influenced by the Fed's decisions – decline for at least another two months. As of Wednesday afternoon, there's only a 58% chance the Fed will cut its short-term interest rate at its late July meeting, according to the CME FedWatch tool. The FedWatch tool tracks the likelihood that the Fed will change the fed funds rate based on futures prices. When interest rates could fall in coming months Unable to view our graphics? Click here to see them. Will interest rates go down in 2025? President Donald Trump's tariff proposals have put the Fed in a difficult position: Inflation stemming from the pandemic continues to moderate, but it's unclear how much tariffs will increase prices in the coming months. Lower interest rates could encourage us to borrow more to pay for items made more expensive by tariffs, which could spark inflation again. The Fed tries to let inflation rise about 2% each year while keeping as many Americans employed as possible. The April jobs report released last week showed unemployment remained steady, and the economy added a 177,000 jobs. With other data points also suggesting the economy on a solid footing, it appears Fed chief Jerome Powell and other voting Fed members aren't as likely restart their rate cuts. On American Public Media's radio show "Marketplace" in April, Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta, compared the uncertainty surrounding tariffs to driving in fog. "When you're driving in the fog, you've just got to slow down," Bostic said. "When the fog gets thicker, you're going to pull over and wait. I think that's the wise thing to do. And I think for me, it's pretty clear, the fog has gotten quite a bit thicker in the last couple of weeks." Where interest rates stand on credit cards and car loans The Fed's three interest rate cuts in 2024 quickly translated into lower payments for short-term loans made on credit cards and for cars: Increases and decreases in credit card interest rates are closely linked to the prime rate, which is generally three percentage points higher than the fed funds rate. Auto loans also follow a similar pattern. All three remain well above where they were in early 2022 when Powell signaled the Fed planned to start raising interest rates to curb inflation. Higher mortgage interest rates add to housing troubles Mortgage rates are affected mostly by longer-term interest rates, but those rates can also be driven by short-term expectations about inflation or the direction of the economy. Mortgage rates are few percentage points higher than they were when the Fed starting cutting interest rates in late September. More importantly for home buyers, though, mortgage rates remain more than double what they were in 2021. In December 2021 with mortgage rates at 3.1%, a new homeowner would have paid $1,453 monthly in principal and interest for a $425,000 house with a 20% downpayment. At 6.8% last week, the same house with a new 30-year mortgage would cost $763 more per month.
Yahoo
02-05-2025
- Business
- Yahoo
Slight Bounce by the Dollar Despite Weaker GDP
It's been another active week so far for forex markets after American advance GDP came in significantly weaker than expected. There has been less focus on tariffs in the last few days amid a generally positive earnings season and in the runup to the NFP on 2 May. This article summarises recent events affecting the US dollar, especially GDP, then looks briefly at the charts of EURUSD and GBPUSD. There was an unexpected contraction by the American economy last quarter according to advance data released on 30 April: The decline of 0.3% came against the consensus of positive 0.3%, which is quite a large divergence. To some extent, it's not as surprising as it looks: with DOGE actively cutting, it was obvious that governmental spending would fall, and businesses would also obviously try to mitigate upcoming tariffs by stockpiling, increasing total imports. Growth in consumer spending slowed to 1.8%, the lowest for about 18 months but not necessarily a cause for concern. The upcoming NFP on Friday 2 May has a consensus of around 130,000, significantly weaker than last month's surprisingly positive 228,000. Neither advance GDP nor the NFP in themselves are likely to have much impact on monetary policy in the short term, but the overall tone of releases might impact the trajectory of rates from June onwards. The majority of participants according to CME FedWatch expects at least four single cuts from the Fed by the end of the year. Euro-dollar retreated further on 1 May in thin trading to retest $1.13. Trade wars are less in focus now with the rising possibility of deals between the USA and India, Japan and South Korea among others. Although American advance GDP for the first quarter was disappointing at negative 0.3%, the generally positive reaction by the dollar might suggest positive sentiment and that participants had been expecting a worse result. Flash GDP for the eurozone was better than expected on 30 April. $1.13 remains an important technical reference. A break clearly below there might open the way to $1.11 and possibly lower in the medium term, especially if sentiment and the American job report support. Conversely, a bounce from here would probably mean a retest of the latest highs around $1.156 sooner or later. Overall, euro-dollar's performance since the end of February has been very strong, so it'd be possible to see the price consolidating for a while before making clear new highs if the uptrend does indeed continue. Apart from 2 May's NFP, next week's press conference from the Fed is critical. Cable remained close to three-year highs on 1 May after completing a very strong monthly performance in April. Significantly lower political instability in the UK and a generally weak US dollar amid uncertainty over tariffs both helped the pound to gain. Broadly speaking, the pound is less vulnerable to current political and trade issues than many other currencies given that the USA has a fairly large trade surplus with the UK in terms of goods and the British government seems very eager to placate the American administration. Highs around $1.343 from late last month coincide neatly with September 2024's peak, so it might be quite difficult for the price to break out above there unless there's a strong fundamental driver, whether from monetary policy or something else. The main dynamic support is the 50 SMA from Bands which triggered a bounce around 7 April, but in the short term the 20 SMA is also in view as a possible support. The maturity of the uptrend makes it questionable whether there'll be a new high in the next few days, especially with important releases coming up next week. Volatility will probably increase significantly around 7-8 May because the Fed and BoE will meet on consecutive days. The probability of a hold by the Fed has been very high for some time but the BoE is expected to call for a single cut. This article was submitted by Michael Stark, an analyst at Exness. The opinions in this article are personal to the writer; they do not represent those of Exness. This is not a recommendation to trade. This article was originally posted on FX Empire To The New World Order and Back Slight Bounce by the Dollar Despite Weaker GDP Sportradar Group Scoring with Big Money Agnico Eagle's Strong Gold Production Attracts Big Money Franco-Nevada Poised to Rise with Gold Loar Soars on Big Money Buys Sign in to access your portfolio