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Yahoo
a day ago
- Business
- Yahoo
Fed minutes: Most officials worried about inflation moving higher
WASHINGTON (AP) — Most Federal Reserve officials said last month that the threat of higher inflation was a greater concern than the potential for job losses, leading the central bank to keep its key rate unchanged. According to the minutes of the July 29-30 meeting, released Wednesday, members of the Fed's interest-rate setting committee 'assessed that the effects of higher tariffs had become more apparent in the prices of some goods but that their overall effects on economic activity and inflation remained to be seen.' The minutes underscored the reluctance among the majority of the Fed's 19 policymakers to reduce the central bank's short-term interest rate until they get a clearer sense of the impact of President Donald Trump's sweeping tariffs on inflation. So far inflation has crept up in the past couple of months but hasn't risen as much as many economists feared when Trump unveiled some of his duties. The Fed left its key interest rate unchanged last month at about 4.3%, though two members of its governing board dissented in favor of a rate cut. Both dissenters — Christopher Waller and Michelle Bowman — were appointed to the board during Trump's first term. At a news conference after the meeting, Chair Jerome Powell signaled that it might take significant additional time for the Fed to determine whether Trump's sweeping tariffs are boosting inflation. When the Fed changes its rate, it often — though not always — affects borrowing costs for mortgages, auto loans, and credit cards. The Fed typically keeps its rate high, or raises it, to cool borrowing and spending and combat inflation. It often cuts its rate to bolster the economy and hiring when growth is cooling. Christopher Rugaber, The Associated Press 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
Associated Press
a day ago
- Business
- Associated Press
Fed minutes: Most officials worried about inflation moving higher
WASHINGTON (AP) — Most Federal Reserve officials said last month that the threat of higher inflation was a greater concern than the potential for job losses, leading the central bank to keep its key rate unchanged. According to the minutes of the July 29-30 meeting, released Wednesday, members of the Fed's interest-rate setting committee 'assessed that the effects of higher tariffs had become more apparent in the prices of some goods but that their overall effects on economic activity and inflation remained to be seen.' The minutes underscored the reluctance among the majority of the Fed's 19 policymakers to reduce the central bank's short-term interest rate until they get a clearer sense of the impact of President Donald Trump's sweeping tariffs on inflation. So far inflation has crept up in the past couple of months but hasn't risen as much as many economists feared when Trump unveiled some of his duties. The Fed left its key interest rate unchanged last month at about 4.3%, though two members of its governing board dissented in favor of a rate cut. Both dissenters — Christopher Waller and Michelle Bowman — were appointed to the board during Trump's first term. At a news conference after the meeting, Chair Jerome Powell signaled that it might take significant additional time for the Fed to determine whether Trump's sweeping tariffs are boosting inflation. When the Fed changes its rate, it often — though not always — affects borrowing costs for mortgages, auto loans, and credit cards. The Fed typically keeps its rate high, or raises it, to cool borrowing and spending and combat inflation. It often cuts its rate to bolster the economy and hiring when growth is cooling.
Reuters
a day ago
- Business
- Reuters
Gold firms as dollar weakens, focus on Jackson Hole
Aug 20 (Reuters) - Gold rose on Wednesday as the U.S. dollar eased, with market participants bracing for the upcoming Jackson Hole symposium, while minutes revealed that Federal Reserve dissenters appeared alone in favoring a rate cut at the July meeting. Spot gold gained 0.9% to $3,344.37 per ounce, by 2:23 p.m. EDT (1823 GMT) after hitting its lowest level since August 1 earlier. U.S. gold futures closed 0.9% higher at $3,388.50. The U.S. dollar eased, making dollar-priced bullion more affordable for other currency holders. USD The two Federal Reserve policymakers who dissented against last month's decision to keep interest rates unchanged - Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller - appeared to be alone in advocating for a rate cut, a readout of the gathering released showed. Within 48 hours of the meeting's conclusion, weaker-than-expected jobs data seemed to validate their concerns. "Traders are shrugging this off as they view this news as stale as it came before the shocking employment report," said Tai Wong, an independent metals trader. Market spotlight shifted to Fed Chair Jerome Powell's speech at the annual Jackson Hole economic symposium on Friday. "If Powell is dovish, it's bullish for gold, as it does not bear interest. It will need to break through $3,350/oz and then ultimately retest $3,400/oz if he's dovish," said RJO Futures market strategist Bob Haberkorn. Traders currently expect an 83% chance of a quarter-point rate cut in September, according to the CME FedWatch tool. Goldman Sachs maintained its $4,000/toz mid-2026 forecast, citing structurally strong central bank demand, ETF inflows supported by Fed easing, and a 30% probability of a U.S. recession within 12 months. Meanwhile, U.S. President Donald Trump called on Federal Reserve Governor Lisa Cook to resign over mortgage allegations, intensifying his effort to gain influence over the U.S. central bank. Among other metals, spot silver rose 1.1% to $37.78 per ounce, platinum gained 2.1% to $1,333.43 while palladium steadied at $1,115.15.
Reuters
a day ago
- Business
- Reuters
Fed dissenters appeared alone in favoring rate cut at July meeting, minutes show
WASHINGTON, Aug 20 (Reuters) - The two Federal Reserve policymakers who dissented against the U.S. central bank decision's to leave interest rates unchanged last month appear not to have been joined by other policymakers in voicing support for lowering rates at that meeting, a readout of the gathering released on Wednesday showed. "Almost all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4.25% to 4.50% at this meeting," the minutes of the July 29-30 meeting said. Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller both voted against the decision to leave the benchmark interest rate unchanged, favoring instead a quarter-percentage-point reduction to guard against further weakening of the job market. It was the first time since 1993 that more than one Fed governor dissented against a rate decision. Not even 48 hours after the conclusion of last month's meeting, data from the Labor Department appeared to validate the concerns of Bowman and Waller when it showed far fewer jobs than expected were created in July, a rise in the unemployment rate and a drop in the labor force participation rate to the lowest level since late 2022. More unsettling, though, was an historic downward revision for estimates of employment in the previous two months. That revision erased more than a quarter of a million jobs thought to have been created in May and June and put a hefty dent in the prevailing narrative of a still-strong-job market. The event was so angering to President Donald Trump that he fired the head of the Bureau of Labor Statistics. Data since then, however, has provided some fodder for the camp more concerned that Trump's aggressive tariffs risk rekindling inflation to hold their ground against moving quickly to lower rates. The annual rate of underlying consumer inflation accelerated more than expected in July and was followed by an unexpectedly large jump in prices at the producer level. The minutes showed officials continued an active debate on the effects of tariffs on inflation and the degree of restrictiveness in their policy stance. Several policymakers commented that the current level of the federal funds rate may not be far above its neutral level, where economic activity is neither stimulated nor constrained. Fed policymakers assessed that the effects of higher tariffs had become more apparent in some goods prices but that the overall effect on the economy and inflation remained to be seen, the minutes showed. Looking ahead, participants noted they may face difficult tradeoffs ahead if elevated inflation proved more persistent while the job market outlook weakened. Heading into the release of the minutes, CME's FedWatch tool assigned an 85% probability of a quarter-percentage-point reduction in the Fed's policy rate at the September 16-17 meeting. That rate has been unchanged since December. The minutes were released just two days before a highly anticipated speech from Fed Chair Jerome Powell at the annual economic symposium near Jackson Hole, Wyoming, which is hosted by the Kansas City Fed. Powell's keynote speech on Friday morning - set to be his last such address as head of the central bank, with his term expiring next May - could show whether he has joined ranks with those sensing the time has come for steps to shield the job market from further weakening or if he remains in league with those more wary of inflation in light of its moves away from the Fed's 2% target. The lack of rate cuts since Trump returned to the White House has agitated the Republican president, and he regularly lashes out at Powell for not engineering them. Trump is already in the process of screening possible successors to Powell. After the unexpected resignation earlier this month of one of the seven Fed governors, Trump has a chance to put his imprint on the central bank soon. The president has nominated Council of Economic Advisers Chair Stephen Miran to fill the seat recently vacated by former Fed Governor Adriana Kugler, a term that expires at the end of January. It is unclear whether Miran will win Senate confirmation before the Fed's next meeting. On Wednesday Trump demanded that Fed Governor Lisa Cook resign from the central bank over allegations of wrongdoing connected to mortgages on properties she owns in Georgia and Michigan.
Yahoo
16-06-2025
- Business
- Yahoo
Dow futures drop while oil prices jump as escalating Israel-Iran conflict targets critical energy assets
Stock futures were mixed on Sunday as investors weighed the impact of the escalating Israel-Iran conflict that shows no signs of any potential off-ramps ahead. Oil prices jumped after Israel attack key areas of Iran's energy infrastructure over the weekend, while Tehran said closing off the Strait of Hormuz was under serious consideration. Fed policymakers will meet in the coming week. U.S. stocks signaled some weakness on Sunday night as futures tumbled and oil prices jumped amid the escalating Israel-Iran conflict that shows no signs of any potential off-ramps ahead. Stocks sold off sharply on Friday after Israel launched an air campaign that struck Iran's top military leadership, nuclear facilities, and bases around the country. Over the weekend, both sides continued their bombardments with key areas of Iran's energy infrastructure increasingly targeted. That includes oil refineries, fuel depots, and a massive natural gas field. Futures for the Dow Jones Industrial Average fell 31 points, or 0.1%. S&P 500 futures were flat, and Nasdaq futures also edged up 0.1%. U.S. oil prices jumped 2% to $74.50 per barrel, and Brent crude also shot up 2% to $75.77. That's after oil soared 7% on Friday as markets reacted to the early stages of the Israel-Iran conflict. An Iranian lawmaker said over the weekend that closure of the Strait of Hormuz, a critical chokepoint in the global energy trade, was under serious consideration. The equivalent of 21% of global petroleum liquids consumption, or about 21 million barrels per day, flows through the strait. In a note on Saturday, George Saravelos, head of FX research at Deutsche Bank, estimated that the worst-case scenario of a complete disruption to Iranian oil supplies and a closure of the Strait of Hormuz could send oil price above $120 per barrel. The yield on the 10-year Treasury slipped 1.7 basis points to 4.407%. The dollar fell 0.12% against the euro and 0.26% against the yen. Gold rose 0.47% to $3,468.10 per ounce. Surging oil prices reignited inflation fears, just as consumer price data was showing more signs that President Donald Trump's tariffs were having minimal impact so far. That put upward pressure on the 10-year yield on Friday as hopes for rate cuts from the Federal Reserve later this year dimmed. Inflation, tariffs, and the volatile geopolitical landscape will be top of mind when Fed policymakers are due to meet this Tuesday and Wednesday. While they aren't expected to adjust rates, they will release a fresh set of forecasts for future rates and economic indicators. Chairman Jerome Powell will also hold a press briefing on Wednesday afternoon. This story was originally featured on Sign in to access your portfolio
