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Miami Herald
16 hours ago
- Business
- Miami Herald
President Trump sends harsh message to Federal Reserve on interest rate cuts
President Trump upped the ante on the Federal Reserve hours after the latest jobs report, angrily demanding Fed Chair Jerome H. Powell slash the federal interest rate to create greater demand for consumer loans and better terms for business investment. And POTUS wasn't shy about it. Related: Veteran fund manager resets stock market forecast amid Musk, Trump fallout The president pounded out a furious message to the central bank chair, once again calling him "Too Late" Powell in Truth Social media posts. The lashing included references to rate cuts in Europe, plus a debatable declaration that there is "virtually no inflation (anymore)." The President's June 6 comments came as the Department of Labor reported that hiring remained stable in May with employers adding 139,000 jobs, gains that were slightly higher than expected but down from April. The unemployment rate stayed the same at 4.2%, as expected by most economists. Image source:While stocks bounced on the jobs report and recession concerns eased a tad, there is still a strong sense of caution due to the recession and, in some corners, even stagflation concerns. The $36.21 trillion U.S. debt, one of the major points of debate of Trump's "Big Beautiful Bill," now in the Senate, also made the president's screed. "If 'Too Late' at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due…Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!,'' wrote President Trump. Related: Jobs report shifts Fed interest rate forecasts President Trump, just days before the June 6 jobs report, blasted the central bank chairman as "unbelievable" and a "disaster" on Truth Social for Powell's delay in lowering interest rates, a move Trump maintains is choking economic growth. Minutes from a meeting of the Federal Reserve Bank leaders, which was held in early May and released on May 29, show the central bank voted to undertake open market operations "as necessary" to maintain the federal funds rate in a target range of 4.25% to 4.50%. The Board of Governors of the Federal Reserve System also voted unanimously in early May to approve establishing the primary credit rate at the existing level of 4.5%, meaning interest rates for lenders, consumers, and the rest of Americans likely won't fall in the short term. This led to Trump's increasing displays of frustration against Powell. Veteran fund manager Chris Versace wrote on TheStreet Pro that the market will likely rethink the three 25-basis point rate cuts expected per the CME's Fed Watch Tool. "With Atlanta Fed President Raphael Bostic signaling ahead of this data that he sees room for just one rate cut, the growing likelihood is more Fed heads will fall into that camp based on the aggregate data published this week." Versace says. " We also have to wonder if Bostic's comment helps lay the groundwork for the Fed's upcoming set of economic projections that it will publish alongside its next policy decision on June 18.'' Related: Analyst resets stocks, gold outlook after rally The chances of more than one rate cut in the second half of 2025 will likely increase if May CPI and PPI inflation data released this coming week support "May inflation data we've seen thus far and there is no meaningful progress on trade deals,'' Versace says. The president isn't buying it. "Too Late" at the Fed is a disaster! Europe has had 10 rate cuts, we have had none,'' Trump posted. Note that Europe has actually had eight central bank cuts recently, not ten. "Despite (Powell), our Country is doing great,'' Powell said. "Go for a full point, Rocket Fuel!" The "Rocket Fuel'' moniker is apparently a new one from the White House. A spokesperson for the Federal Reserve, responding to a comment about the full point cut, said, "We don't have anything to share here." Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Business Standard
3 days ago
- Business
- Business Standard
U.S. Stocks Mixed as ADP Jobs Data Misses; Trump Pressures Fed, Bond Yields Slide
Weaker-than-expected job growth and a surprise services sector contraction weighed on markets; Trump calls for rate cuts, while housing and chip stocks rally. The Dow dipped 91.90 points or 0.2 percent to 42,427.74, the S&P 500 inched up 0.44 points or less than a tenth of a percent to 5,970.81 and the Nasdaq rose 61.53 points or 0.3 percent to 19,460.49. payroll processor ADP released a report showing much weaker than expected private sector job growth in the month of May. It also said private sector employment rose by 37,000 jobs in May after climbing by a downwardly revised 60,000 jobs in April. Following the release of the ADP report, President Donald Trump took to Truth Social urging Fed Chair Jerome Powell to lower interest rates. Institute for Supply Management released a report showing service sector activity in the U.S. unexpectedly saw a slight contraction in the month of May. It also said its services PMI fell to 49.9 in May from 51.6 in April, with a reading below 50 indicating contraction. The Fed is still widely expected to leave interest rates unchanged at its next meeting later this month, with CME Group's FedWatch Tool currently indicating a 95.6 percent chance the central bank will leave rates unchanged. Broader markets showed a lacklustre performance, housing stocks moved significantly higher on the day, driving the Philadelphia Housing Sector Index up by 1.7 percent. Semiconductor stocks were considerably strong, as reflected by the 1.4 percent gain posted by the Philadelphia Semiconductor Index. Gold and pharmaceutical stocks also saw some strength on the day, while energy stocks came under pressure as the price of crude oil gave back ground following a two-day surge. Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index climbed by 0.8 percent while China's Shanghai Composite Index rose by 0.4 percent. The major European markets also moved upside. The German DAX Index advanced by 0.8 percent, the French CAC 40 Index increased by 0.5 percent and the U.K.'s FTSE 100 Index edged up by 0.2 percent. In the bond market, treasuries moved sharply higher in reaction to the latest U.S. economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, plunged 9.5 bps to 4.36 percent.
Yahoo
28-05-2025
- Business
- Yahoo
Markets sink as Fed's decision fuels uncertainty
The crypto market faced broad selling pressure on May 28 as traders reacted to heightened uncertainty around U.S. interest rate policy. The global cryptocurrency market cap fell 4.2% to $3.52 trillion, with leading tokens such as Ethereum (-1.2%), XRP (-3.6%), and Solana (-4.1%) leading the decline. Bitcoin remains above $107,000, but it dropped 2.4% in the last 24 hours. The Federal Reserve stated that the risks of both inflation and unemployment are high, and that it remains vigilant, monitoring developments that might exacerbate either risk. The FOMC chose to hold the fed funds rate steady in the target range of 4.25% to 4.50%, without making any commitments to cuts or rate hikes at this time. Instead, they stated that their decisions would be data-driven and that they would address any risks that arose going forward. They also said they would continue the Fed's balance sheet reduction process, which essentially means the Fed will gradually sell off U.S. Treasury and mortgage-backed securities to tighten financial conditions. Finally, as they always do, the Fed committed to returning inflation to 2%, which is consistent with maintaining substantial employment. Also, it stated that it is prepared to act either way on monetary policy if and when new risks are revealed. Markets are now re-evaluating their expectations. According to the CME's FedWatch Tool, the probability of a rate cut by the September meeting is now 48.1%, with no change expected for 40.3%. In the meantime, Kalshi's data anticipated a decline in the forecast for total rate cuts in 2025 from 4 to less than 2 total cuts. Counting on the Fed's decision also slowing down the rate of balance sheet reduction, traders are now preparing for a prolonged environment of policy tightness, a backdrop likely to restrict near-term upside for crypto. Markets sink as Fed's decision fuels uncertainty first appeared on TheStreet on May 28, 2025
Yahoo
13-05-2025
- Business
- Yahoo
Recession forecasts slide in betting markets with US-China trade tensions cooling
Betting markets have adjusted to lower odds of a recession this year after progress on US-China trade talks. The chance of an economic downturn fell to 40% after news that the US and China would lower tariffs for 90 days. Markets broadly are adjusting outlooks on Monday as stocks rally sharply. Bettors in the prediction markets are dialing back recession views, with the odds of a US downturn falling on the latest trade-war developments. Big bets on Polymarket and Kalshi predict a 40% chance of recession as of Monday, down from 52% at the end of last week. Anxiety about the economy is ebbing thanks to progress on trade talks between the US and China over the weekend. Both countries agreed to substantially lower sky-high tariffs for 90 days, temporarily removing a major headwind that has slashed economic and market optimism over the past month. Polymarket's recession outlook hasn't been this low since April 2, a day before the Trump administration unleashed the wave of reciprocal tariffs. Other parts of the market are also growing more upbeat about the path of the economy through the rest of this year. While large-cap US indexes surged on the China tariff update, the Russell 2000 also kept pace, climbing as much as 4%. The index is made up of small-cap stocks, which are typically more susceptible to the cyclical swings in the economy. US crude oil jumped 4% from Friday's close amid stronger prospects for US and global growth to hold up as the trade war cools. Meanwhile, bond yields rose as investors ditched the ultra-safe government bonds in a broad shift to risk. At the same time, expectations for the Federal Reserve to cut interest rates this summer have shifted, with CME FedWatch Tool data indicating that the first rate cut will occur in September, pushed back from July. Just last week, the central bank emphasized major uncertainty about the economy, and analysts warned about a recessionary scenario that could force the Fed to cut rates. With a China trade deal now in the works, a longer timeline on rate cuts suggests that Fed officials have more time before the economy slows enough to demand a response from the central bank. "This removes a major tail risk from the economic outlook," Apollo's chief economist Torsten Slok told Bloomberg TV. "The growth downside risks that everyone is worried so much about, that's coming from no longer having trade between the US and China, is just no longer the risk that we thought, literally, 24 hours ago." Read the original article on Business Insider Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
The U.S. Dollar Slips as Economic Uncertainty Rises
This recent decline reflects growing investor unease about where the Federal Reserve is headed next—and whether its current strategy is sustainable amid shifting economic signals. Since the beginning of 2025, the Federal Reserve has kept its benchmark interest rate in the range of 4.25% to 4.50%. This high rate is part of its effort to curb inflation, which has lingered above the Fed's 2% target. By raising borrowing costs, the Fed aims to reduce consumer spending and bring inflation under control. However, signs of an economic slowdown are becoming harder to ignore. Despite these warning signs, markets are not expecting the Fed to lower rates at this week's policy meeting. According to CME Group's FedWatch Tool, investors assign only a 1-in-3 chance of a rate cut at the central bank's next major session in June, underscoring the uncertainty now clouding the Fed's decision-making process—and the dollar's path forward. Adding to the volatility is the return of trade tensions. In early April, President Donald Trump announced sweeping 'reciprocal' tariffs aimed at U.S. trading partners. While these new tariffs have not yet been implemented, their announcement alone has already disrupted financial markets and sparked anxiety among investors and policymakers. Economists warn that even if these tariffs are watered down before implementation, they could still dampen economic growth and drive inflation higher. This would complicate the Fed's job even further, as it tries to balance controlling inflation with keeping the economy from slipping into recession. These developments are particularly concerning because they come at a time when the U.S. economy was already expected to slow after its post-pandemic recovery phase. Sluggish growth, when combined with higher import costs due to tariffs, could present a dual challenge: weakening demand while pushing prices up. One of the key reasons behind the dollar's current weakness is the growing divide between hard and soft economic data—a disconnect that has investors, analysts, and central bankers scratching their heads. Hard data consists of concrete figures such as GDP growth, unemployment rates, manufacturing output, and retail sales. These indicators reflect past performance, showing us what has already occurred in the economy. So far, this data continues to show a reasonably strong economy. Job creation is steady, consumer spending is relatively resilient, and industrial activity hasn't yet declined sharply. Soft data, on the other hand, reflects how people and businesses feel about the economy. It includes surveys on consumer confidence, business outlooks, and inflation expectations. These indicators are forward-looking and attempt to predict what may come next. Right now, the story told by soft data is much gloomier. Consumer confidence is fading, and many businesses report growing concern about future sales, hiring, and investment. This divergence between perception and reality has created a murky picture of the U.S. economy's true health. For investors, this ambiguity has become a source of concern. The dollar's decline may partly reflect a growing belief that sentiment—usually a leading indicator—will soon drag the hard data down with it. The Federal Reserve now faces one of its most delicate balancing acts in decades. On one side, hard data tells a story of continued resilience. On the other, the mood on Main Street and in boardrooms is turning grim. The key question is certainly whether or not the Fed should respond now to the warnings in soft data, or wait for hard evidence of a slowdown? If the Fed cuts rates too soon, it may reignite inflation and undo much of the progress made in the past year. But if it waits too long, it risks falling behind the curve and pushing the economy into a deeper recession. According to the Baker-Bloom-Davis Index, which tracks uncertainty in U.S. monetary policy, investor anxiety about what the Fed will do next is now at its highest level since 1985—excluding the pandemic period. That makes this one of the most unpredictable moments in recent U.S. economic history. Economists at Goldman Sachs believe the Fed will soon change its priorities. The firm forecasts three rate cuts in July, September, and October, arguing that a softer economy will eventually push the central bank to act—even if inflation hasn't fully returned to target. For years, the U.S. dollar has benefited from a combination of aggressive interest rate hikes, a relatively strong economy, and its longstanding status as the world's safe-haven currency. But that narrative is beginning to change. With interest rates likely nearing a peak and economic uncertainty on the rise, the dollar's advantages are starting to fade. As speculation grows about upcoming rate cuts, the dollar is losing its appeal to global investors seeking higher yields and stability. Many are now looking to diversify their holdings. European and emerging-market currencies are regaining attention, and the Euro, British Pound, Swiss Franc and Japanese Yen have all gained ground against the American Dollar. The Taiwanese Dollar has strongly increased against the USD since the beginning of the month with a recent surge of almost 10% in a couple of trading days, reaching three-year highs. This shift isn't just about interest rates—it's a broader reassessment of global opportunity. If the U.S. slows while other regions stabilize or grow, capital may flow elsewhere, putting further downward pressure on the dollar. This article was originally posted on FX Empire Market Prepares for the FED: Traders Expect No Surprise Loar Soars on Big Money Buys Big Money Buying Backs Copart Once Again Slight Bounce by the Dollar Despite Weaker GDP Visa Shares Could Be Opportunity for Long-Term Investors The U.S. Dollar Slips as Economic Uncertainty Rises
