Latest news with #DianeSwonk
Malay Mail
17 hours ago
- Business
- Malay Mail
US Fed set to keep rates unchanged, resisting Trump's calls for cuts amid economic uncertainty
WASHINGTON, June 15 — The US central bank is expected to keep interest rates unchanged for a fourth straight policy meeting this week, despite President Donald Trump's push for rate cuts, as officials contend with uncertainty sparked by the Republican's tariffs. While the independent Federal Reserve has started lowering rates from recent highs, officials have held the level steady this year as Trump's tariffs began rippling through the world's biggest economy. The Fed has kept interest rates between 4.25 per cent and 4.50 per cent since December, while it monitors the health of the jobs market and inflation. 'The hope is to stay below the radar screen at this meeting,' KPMG chief economist Diane Swonk told AFP. 'Uncertainty is still very high.' 'Until they know sufficiently, and convincingly that inflation is not going to pick up' either in response to tariffs or related threats, 'they just can't move,' she said. Since returning to the presidency, Trump has slapped a 10 per cent tariff on most US trading partners. Higher rates on dozens of economies are due to take effect in July, unless an existing pause is extended. Trump has also engaged in a tit-for-tat tariff war with China and imposed levies on imports of steel, aluminium and automobiles, rattling financial markets and tanking consumer sentiment. But economists expect it will take three to four months for tariff effects to show up in consumer prices. Although hiring has cooled slightly and there was some shrinking of the labor force according to government data, the unemployment rate has stayed unchanged. Inflation has been muted too, even as analysts noted signs of smaller business margins — meaning companies are bearing the brunt of tariffs for now. At the end of the Fed's two-day meeting Wednesday, analysts will be parsing through its economic projections for changes to growth and unemployment expectations — and for signs of the number of rate cuts to come. The Fed faces growing pressure from Trump — citing benign inflation data — to lower rates more quickly, a move the president argues will help the country 'pay much less interest on debt coming due.' On Wednesday, Trump urged Fed Chair Jerome Powell to slash interest rates by a full percentage point, and on Thursday, he called Powell a 'numbskull' for not doing so. He said Powell could raise rates again if inflation picked up then. But Powell has defended US central bank independence over interest rates when engaging with Trump. 'Cautious patience' For their part, Fed policymakers have signaled 'little urgency' to adjust rates, said EY chief economist Gregory Daco. He believes they are unwilling to get ahead of the net effects from Trump's trade, tax, immigration and regulation policy changes. Powell 'will likely strike a tone of cautious patience, reiterating that policy remains data dependent,' Daco said. While economists have warned that Trump's tariffs would fuel inflation and weigh on economic growth, supporters of Trump's policies argue the president's plans for tax cuts next year will boost the economy. On the Fed's path ahead, HSBC Global Research said: 'Weak labour market data could lead to larger cuts, while elevated inflation would tend to imply the opposite.' For now, analysts expect the central bank to slash rates two more times this year, beginning in September. The Fed is likely to be eyeing data over the summer for inflationary pressures from tariffs, said Ryan Sweet, chief US economist at Oxford Economics. 'They want to make sure that they're reading the tea leaves correctly,' he said. Swonk warned the US economy is in a different place than during the Covid-19 pandemic, which could change how consumers react to price increases. During the pandemic, government stimulus payments helped households cushion the blow from higher costs, allowing them to keep spending. It is unclear if consumers, a key driver of the economy, will keep their dollars flowing this time, meaning demand could collapse and complicate the Fed's calculus. 'If this had been a world without tariffs, the Fed would be cutting right now. There's no question,' Swonk said. — AFP
Yahoo
18 hours ago
- Business
- Yahoo
US Fed set to hold rates steady in the face of Trump pressure
The US central bank is expected to keep interest rates unchanged for a fourth straight policy meeting this week, despite President Donald Trump's push for rate cuts, as officials contend with uncertainty sparked by the Republican's tariffs. While the independent Federal Reserve has started lowering rates from recent highs, officials have held the level steady this year as Trump's tariffs began rippling through the world's biggest economy. The Fed has kept interest rates between 4.25 percent and 4.50 percent since December, while it monitors the health of the jobs market and inflation. "The hope is to stay below the radar screen at this meeting," KPMG chief economist Diane Swonk told AFP. "Uncertainty is still very high." "Until they know sufficiently, and convincingly that inflation is not going to pick up" either in response to tariffs or related threats, "they just can't move," she said. Since returning to the presidency, Trump has slapped a 10 percent tariff on most US trading partners. Higher rates on dozens of economies are due to take effect in July, unless an existing pause is extended. Trump has also engaged in a tit-for-tat tariff war with China and imposed levies on imports of steel, aluminum and automobiles, rattling financial markets and tanking consumer sentiment. But economists expect it will take three to four months for tariff effects to show up in consumer prices. Although hiring has cooled slightly and there was some shrinking of the labor force according to government data, the unemployment rate has stayed unchanged. Inflation has been muted too, even as analysts noted signs of smaller business margins -- meaning companies are bearing the brunt of tariffs for now. At the end of the Fed's two-day meeting Wednesday, analysts will be parsing through its economic projections for changes to growth and unemployment expectations -- and for signs of the number of rate cuts to come. The Fed faces growing pressure from Trump -- citing benign inflation data -- to lower rates more quickly, a move the president argues will help the country "pay much less interest on debt coming due." On Wednesday, Trump urged Fed Chair Jerome Powell to slash interest rates by a full percentage point, and on Thursday, he called Powell a "numbskull" for not doing so. He said Powell could raise rates again if inflation picked up then. But Powell has defended US central bank independence over interest rates when engaging with Trump. - 'Cautious patience' - For their part, Fed policymakers have signaled "little urgency" to adjust rates, said EY chief economist Gregory Daco. He believes they are unwilling to get ahead of the net effects from Trump's trade, tax, immigration and regulation policy changes. Powell "will likely strike a tone of cautious patience, reiterating that policy remains data dependent," Daco said. While economists have warned that Trump's tariffs would fuel inflation and weigh on economic growth, supporters of Trump's policies argue the president's plans for tax cuts next year will boost the economy. On the Fed's path ahead, HSBC Global Research said: "Weak labor market data could lead to larger cuts, while elevated inflation would tend to imply the opposite." For now, analysts expect the central bank to slash rates two more times this year, beginning in September. The Fed is likely to be eyeing data over the summer for inflationary pressures from tariffs, said Ryan Sweet, chief US economist at Oxford Economics. "They want to make sure that they're reading the tea leaves correctly," he said. Swonk warned the US economy is in a different place than during the Covid-19 pandemic, which could change how consumers react to price increases. During the pandemic, government stimulus payments helped households cushion the blow from higher costs, allowing them to keep spending. It is unclear if consumers, a key driver of the economy, will keep their dollars flowing this time, meaning demand could collapse and complicate the Fed's calculus. "If this had been a world without tariffs, the Fed would be cutting right now. There's no question," Swonk said. bys/jgc
Yahoo
21-05-2025
- Business
- Yahoo
Why Is Crypto Down Today? Here's What You Need to Know
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. If you've checked your crypto portfolio today and noticed it's bleeding red, you're not alone. While Bitcoin and many altcoins had a solid run recently, the market took a noticeable dip on May 15—and a lot of casual investors are asking, what happened? Let's break it down. Bitcoin started the day with promise. Around 10:45 AM EST, BTC made a push higher, attempting to build on recent gains. But on the four-hour chart, it failed to break a previous high—a classic sign of momentum weakness—and rolled over. By the afternoon, Bitcoin had not only given back its gains, but was also trading in the red. This price action didn't happen in a vacuum. Don't Miss: — no wallets, just price speculation and free paper trading to practice different strategies. Grow your IRA or 401(k) with Crypto – . Crypto still tends to move in sync with broader risk markets—especially tech. Around 1:30 PM ET, the Nasdaq Composite, which had been up about 0.60% at its peak, also rolled over and ended the day flat. That's important because when U.S. equities pull back, risk-on assets like crypto often follow suit. While some argue that Bitcoin is decoupling from equities and becoming more of a macro hedge, that trend is still emerging. In the short term, the correlation is alive and well—particularly for altcoins. Altcoins have had a wild ride over the past couple of weeks. Some projects saw 100%+ rallies, which, let's be honest, isn't sustainable without a pullback. So today's selloff might feel dramatic, but it's not necessarily surprising. Here's the data: The altcoin market cap (including ETH) is down 2.67% today. Excluding Ethereum, the altcoin market cap is also down 2.66%. This broad-based dip suggests that investor appetite for high-risk coins is cooling—at least temporarily. Trending: New to crypto? on Coinbase. There's no single smoking gun behind today's crypto dip, but several macro headwinds are adding pressure: Tariff concerns are back in focus, despite a recent U.S.–China agreement. According to KPMG US Chief Economist Diane Swonk, "stop-and-go" tariff policies could disrupt supply chains, create policy missteps, and raise the risk of stagflation—a toxic combo of slow growth, rising prices, and higher unemployment. The Federal Reserve remains cautious and is keeping interest rates steady, citing persistent inflation and geopolitical uncertainty. For risk assets like crypto, this means less tailwind from easy money and more market sensitivity to macro headlines. Short-term pullbacks are normal, especially after big rallies. Altcoins are especially prone to failure to break higher shows buyer exhaustion, but not necessarily a bearish reversal— an eye on broader markets like the Nasdaq. As much as we want crypto to be its own island, macro still for continued headlines on tariffs, inflation, and Fed policy. These will shape crypto sentiment in the days ahead. Read Next: A must-have for all crypto enthusiasts: . 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock Send To MSN: 0 This article Why Is Crypto Down Today? Here's What You Need to Know originally appeared 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
New York Times
07-05-2025
- Business
- New York Times
Consumers Are Pulling Back, Spooked by Tariff-Related Price Increases
As central bankers weigh the possibility of President Trump's tariffs reigniting inflation, major companies are foreshadowing price increases and warning that shoppers are tightening their wallets. Executives at several companies that sell popular consumer products, like toys and wet wipes, this week pointed to signs of a pullback in spending. The comments came against a backdrop of plunging consumer sentiment as many companies have said that they intended to pass the cost of tariffs onto customers. Signs of slower spending and higher prices pose a challenge for the Federal Reserve, given its dual responsibility for keeping employment steady and inflation stable. Cutting rates could help address an economic slowdown, but the potential inflationary effect of tariffs have made officials cautious. The central bank is widely expected to keep interest rates steady on Wednesday. 'Having both firms and consumers saying prices are going to go up is not a good combination for the Fed,' said Diane Swonk, the chief economist at KPMG. 'It's yet another thing keeping them from doing anything with interest rates until they get more clarity on what the actual impacts are.'
CNBC
02-05-2025
- Business
- CNBC
Watch CNBC's full interview with KPMG's Diane Swonk
CNBC's Steve Liesman and KPMG's Diane Swonk, join 'The Exchange' to discuss the latest jobs report.
