Latest news with #EllenZentner
Yahoo
30-05-2025
- Business
- Yahoo
Fed expected to keep rates on hold despite cool inflation reading
A cooler inflation reading from the month when President Trump's tariffs went full blast likely won't shake the Federal Reserve's stance of holding interest rates steady, with policymakers still seeing a risk that duties push prices higher as the year progresses. "We'll have to wait until next month to get a real sense of how tariffs are affecting the economy,' said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "The question isn't whether tariffs will have an impact, it's a question of how big that impact will be.' The "core" Personal Consumption Expenditures (PCE) index — which strips out food and energy costs and is closely watched by the central bank— rose 2.5% on an annual basis in April. The Fed's goal is to get this number down to 2%. The new reading was in line with expectations and cooler than the 2.7% annualized change recorded in March. Core prices also rose 0.1% in April from the prior month, in line with expectations for a 0.1% increase and the monthly increase seen in March. Jeffrey Roach, chief economist for LPL Financial says Friday's inflation print is 'as good as it gets,' as he expects prices to reaccelerate in coming months. 'Headline inflation decelerated in April to the lowest inflation print we will likely see for the rest of the year,' Roach added. There is an internal debate within the central bank about whether any inflation from tariffs will prove to be a one-time increase or more longer lasting. The White House has argued that the Fed should view any price increases as a one-time event, with Trump himself repeatedly calling for the Fed to lower rates, but many Fed officials have made it clear they are not sure which way things will go. President Trump told Fed Chair Jerome Powell Thursday during a meeting at the president's invitation that he is making a mistake by not lowering rates, echoing his calls all year for the Fed to cut rates. The Fed said in a statement that Powell "did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook." Dallas Fed president Lorie Logan sent a strong veiled message Thursday night about holding rates steady in the face of President Trump's calls to lower rates. Logan said rates are in a 'good place' now and that it could take 'quite some time to know whether the balance of risks is shifting in one direction or another.' She said the effects of rate changes take time to play out and to get the balance right, the Fed needs to think about where the economy is headed, not just where it is now. 'In the short run, a central bank could always juice employment by cutting interest rates,' she said. 'People might enjoy that for a little while. But over time, excessive rate cuts would trigger a spiral of inflation.' Some Fed policymakers are arguing for "looking through" the impact of the duties as temporary, but Minneapolis Fed president Neel Kashkari said this week he believes trade talks could take "months or years" to resolve and that "there could be tit-for-tat tariff increases as trading partners respond to one other." According to minutes released from the Fed's last policy meeting on May 6-7, almost all Fed members see the risk that inflation from tariffs could prove to be longer lasting than expected. Some thought tariffs on intermediate goods —parts used to make products such as steel or aluminum — could contribute to a more persistent increase in inflation. A few thought supply chain disruptions caused by tariffs also could have longer lasting effects on inflation, reminiscent of such effects during the pandemic. At the same time, several said a number of factors could offset the uptick and persistence in inflation, including reductions in tariff increases through trade negotiations, consumers' low appetite for price increases, the potential for a weakening economy, or if firms move to increase market share rather than raise prices. 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
Yahoo
17-05-2025
- Business
- Yahoo
Markets Not Pricing In the Bad Data Ahead: Morgan Stanley's Zentner
Ellen Zentner, Morgan Stanley Wealth Management's chief economic strategist and global head of thematic macro investing, says the markets are not pricing in the bad inflation data that is ahead. She speaks on "Bloomberg The Close." Sign in to access your portfolio
Los Angeles Times
15-05-2025
- Business
- Los Angeles Times
Wall Street drifts back within 4% of its record after the S&P 500 notches a 4th straight gain
NEW YORK — Most U.S. stocks drifted higher in quiet trading Thursday following a jumble of mixed reports that offered little clarity on how the U.S. economy is managing through President Trump's trade war. The Standard and Poor's 500 rose 0.4%, enough to extend its winning streak to a fourth day and to pull within 3.7% of its all-time high set earlier this year. The Dow Jones Industrial Average added 271 points, or 0.6%, and the Nasdaq composite slipped 0.2%. Stocks got a lift from easing Treasury yields in the bond market. They fell after the economic reports suggested the Federal Reserve may have more room to cut interest rates later this year to bolster the U.S. economy if it weakens under the weight of high tariffs. But the reports did little to spell out whether the economy is falling toward a recession, as many investors had been fearing, or shaking off the uncertainty after Trump called off many of his tariffs temporarily. The headliner reports said shoppers spent less at U.S. retailers last month than expected, while inflation was better at the wholesale level than economists forecast. Other updates said U.S. manufacturing looks like it's still contracting but fewer U.S. workers are applying for unemployment benefits than expected. Even though China and the United States recently agreed on a 90-day stand-down for many of their tariffs, 'the trade story isn't over, and it's still going to take time for tariffs to make themselves felt in economic data,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. Such uncertainty showed itself in Walmart's stock, which slipped 0.5% even though it reported a bigger profit for the latest quarter than analysts expected. Like other U.S. companies struggling through Trump's on-again-off-again rollout of tariffs, Walmart said it decided not to offer a forecast for how much profit it will make in the current quarter. Chief Financial Officer John David Rainey pointed to 'the range of near-term outcomes being exceedingly wide and difficult to predict,' though the company did say it expects sales to grow between 3.5% and 4.5%, not including the swings that shifting values of foreign currencies can bring. The nation's largest retailer also said that it must raise prices due to higher costs caused by Trump's tariffs. Equipment maker Deere said it's seeing 'near-term market challenges' and called the situation 'dynamic,' as many other companies have. It lowered the bottom end of its forecasted range of profit for the full year. But Deere's stock nevertheless rose 3.8% after it reported a stronger profit for the latest quarter than analysts expected. Cisco Systems was another winner and rose 4.8% after the tech giant likewise topped expectations for profit. Analysts said they're optimistic about Cisco's artificial-intelligence prospects. Elsewhere on Wall Street, Dick's Sporting Goods tumbled 14.6% after it said it would buy the struggling Foot Locker chain for $2.4 billion. Dick's also said that it made a better profit for the latest quarter than analysts expected. Foot Locker soared 85.7% after coming into the day with a loss of nearly 41% for the year so far. All told, the S&P 500 rose 24.35 points to 5,916.93. The Dow Jones Industrial Average added 271.69 to 42,322.75, and the Nasdaq composite fell 34.49 to 19,112.32. In the oil market, crude prices sank roughly 2% on expectations that more petroleum could be set to flow into global markets because of a possible deal between the United States and Iran over that country's nuclear program. Such a deal could help ease sanctions against Iran, which is a major producer of oil. Elsewhere, China moved to reverse some of its 'non-tariff' measures against the U.S. as agreed with Washington in their temporary trade war truce, while demanding that the U.S. side 'immediately correct its wrong practices.' A Chinese Commerce Ministry spokesperson accused the Trump administration of violating world trade rules by announcing that use of Ascend computer chips made by China's Huawei Technologies violates U.S. export controls. Stock indexes fell 0.8% in Hong Kong and 0.7% in Shanghai, while indexes were mixed elsewhere in Asia and Europe. In the bond market, the yield on the 10-year Treasury fell to 4.44% from 4.53% late Wednesday. Falling bond yields can encourage investors to pay higher prices for stocks and other investments. The two-year Treasury yield, which more closely tracks expectations for Fed action, dropped to 3.96% from 4.05% as traders built bets that the Fed will resume cutting its main interest rate as soon as September. The Fed has been keeping its main interest rate on hold this year as it waits to see how Trump's trade policies play out for the economy. Cutting rates would juice the economy by making it easier for U.S. households and companies to borrow and spend. But it would also push upward on inflation when worries are high that Trump's tariffs will do the same thing. Fed Chair Jerome Powell warned in a speech on Thursday that the world 'may be entering a period of more frequent, and potentially more persistent, supply shocks' that could goose inflation higher and present a 'difficult challenge for the economy and for central banks.' Choe writes for the Associated Press.
Bloomberg
15-05-2025
- Business
- Bloomberg
Markets Not Pricing In the Bad Data Ahead: Morgan Stanley's Zentner
Ellen Zentner, Morgan Stanley Wealth Management's chief economic strategist and global head of thematic macro investing, says the markets are not pricing in the bad inflation data that is ahead. She speaks on "Bloomberg The Close." (Source: Bloomberg)
Boston Globe
15-05-2025
- Business
- Boston Globe
Wall Street drifts higher following a jumble of mixed reports on the US economy
Advertisement Altogether, the reports suggested the Federal Reserve may have more room to cut interest rates later this year to bolster the U.S. economy if it weakens under the weight of high tariffs. But they did little to spell out whether the economy is falling toward a recession, as many investors had been fearing, or shaking off the uncertainty after Trump called off many of his tariffs temporarily. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Even though China and the United States recently agreed on a 90-day stand-down for many of their tariffs, 'the trade story isn't over, and it's still going to take time for tariffs to make themselves felt in economic data,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. Such uncertainty showed itself in Walmart's stock, which fell 0.4% even though it reported a bigger profit for the latest quarter than analysts expected. Advertisement Like other U.S. companies struggling through Trump's on-again-off-again rollout of tariffs, Walmart said it decided not to offer a forecast for how much profit it will make in the current quarter. Chief Financial Officer John David Rainey pointed to 'the range of near-term outcomes being exceedingly wide and difficult to predict,' though the company did say it expects sales to grow between 3.5% and 4.5%, not including the swings that shifting values of foreign currencies can bring. The nation's largest retailer also said that it must raise prices due to higher costs caused by Trump's tariffs. Equipment maker Deere also said it's seeing 'near-term market challenges' and called the situation 'dynamic,' as many other companies have. It lowered the bottom end of its forecasted range of profit for the full year. But its stock nevertheless rose 3.6% after it reported a stronger profit for the latest quarter than analysts expected. Cisco Systems was another winner and jumped 5.6% after the tech giant likewise topped expectations for profit. Analysts said they're optimistic about Cisco's artificial-intelligence prospects, and it was one of the strongest forces pushing upward on the S&P 500. Elsewhere on Wall Street, Dick's Sporting Goods tumbled 14.9% after it said it would buy the struggling Foot Locker chain for $2.4 billion. Dick's also said that it made a better profit for the latest quarter than analysts expected. Foot Locker soared 84.6% after coming into the day with a loss of nearly 41% for the year so far. It's the second buyout of a major footwear company in as many weeks as businesses struggle with uncertainty over how Trump's tariffs will impact imported products coming from overseas. Last week Skechers announced that it was being taken private by 3G Capital for $9 billion. Advertisement In the oil market, crude prices sank 2.3% on expectations that more petroleum could be set to flow into global markets because of a possible deal between the United States and Iran over that country's nuclear program. Such a deal could help ease sanctions against Iran, which is a major producer of oil. Elsewhere, China moved to reverse some of its 'non-tariff' measures against the U.S. as agreed with Washington in their temporary trade war truce, while demanding that the U.S. side 'immediately correct its wrong practices.' A Chinese Commerce Ministry spokesperson accused the Trump administration of violating world trade rules by announcing that use of Ascend computer chips made by China's Huawei Technologies violates U.S. export controls. Stock indexes fell 0.8% in Hong Kong and 0.7% in Shanghai, while indexes were mixed elsewhere in Asia and Europe. In the bond market, the yield on the 10-year Treasury fell to 4.44% from 4.53% late Wednesday. The two-year Treasury yield, which more closely tracks expectations for Fed action, dropped to 3.97% from 4.05%. Traders are building bets that the Fed will resume cutting its main interest rate as soon as September. The Fed has been keeping its main interest rate on hold this year as it waits to see how Trump's trade policies play out for the economy. Cutting interest rates would help juice the economy by making it easier for U.S. households and companies to borrow and spend. But it would also push upward on inflation when worries are high that Trump's tariffs will do the same thing. Advertisement Fed Chair Jerome Powell warned in a speech on Thursday that the world 'may be entering a period of more frequent, and potentially more persistent, supply shocks' that could goose inflation higher and present a 'difficult challenge for the economy and for central banks.' AP Business writers Matt Ott and Elaine Kurtenbach contributed.
