Latest news with #MarcSumerlin
Yahoo
a day ago
- Business
- Yahoo
There's one thing that could throw cold water on rate cuts, says one of the contenders for Fed chief
The bond market could be an obstacle to rate cuts. That's according to one of the people in the running as a potential replacement for Jerome Powell. If the 10-year yield were to rise after a rate cut, the would Fed need to hit pause again, Marc Sumerlin said. President Donald Trump could soon get his wish for lower interest rates, but there's a wrinkle in the outlook for more cuts from the Federal Reserve. Marc Sumerlin, an economist on the president's shortlist for the next Fed Chair, said that he thinks the central bank could run into a big obstacle as it tries to lower interest rates further: the bond market. Speaking to Bloomberg on Friday, Sumerlin pointed to the Treasury yield curve, essentially the difference in yields among short and long-dated government bonds. The 10-year yield is hovering around 55 basis points above the 2-year, which indicates that the Fed has room to cut interest rates by that amount, Sumerlin said, adding that he supported a jumbo-sized 50 basis-point rate cut in September. "You know you can cut by that amount without really upsetting things," Sumerlin said. But, if the Fed were to cut rates 50 basis points at its September policy meeting and the 10-year Treasury yield were to go up in response, that'll send a clear message to central bankers. "You have to stop cutting. It's that simple," Sumerlin said. The 10-year US Treasury yield — which Trump's team has said the president is monitoring closely — is a major influence on borrowing costs for consumer loans like mortgages as well as corporate debt. A further rise in the 10-year would be a tough pill to swallow. The weakest part of the economy at the moment is the housing market, Sumerlin said, adding that the Fed couldn't afford to have the 10-year yield go up. "You can't have the long-end go up. And that's your constraint right now," he added. It could also spell bad news for the inflation outlook. If the 10-year yield were to climb as a result of the Fed cutting interest rates, that's a sign bond investors are expecting inflation to rise as the central bank loosens monetary policy, and are pricing in higher rates in over the long term in response. Trump has harangued Fed Chair Powell for months over interest rates, demanding the Fed cut despite lingering concerns about higher inflation from tariffs. In posts on Truth Social, he's called the current central bank chief "Too Late," a "major loser," and flirted with the idea of firing Powell, though he clarified earlier this year that he would let him ride out the rest of his term. Sumerlin, a former economic policy advisor to President George W. Bush, is on Trump's list of contenders for the new Fed Chair. US Treasury Secretary Scott Bessent told Fox Business on Thursday that he was vetting all the candidates. Read the original article on Business Insider
Bloomberg
2 days ago
- Business
- Bloomberg
Sumerlin Supports 50 Point Fed Rate Cut
The Fed funds rate is 'too high' and a 50 basis point cut would work due to the inversion of the curve, economist Marc Sumerlin said on "Bloomberg Surveillance" Friday morning. Sumerlin, a former Bush administration official and founder of Evenflow Macro, is reportedly being considered as a replacement for Federal Reserve Chair Jerome Powell. (Source: Bloomberg)
Bloomberg
2 days ago
- Business
- Bloomberg
Sumerlin Says Fed Would Need to Stop Cuts If 10-Year Yields Rose
Economist Marc Sumerlin, viewed as a candidate to chair the Federal Reserve, said policymakers should slash interest rates next month, but cautioned that they would have to stop if longer-term Treasury yields rose. 'The weakest part of the market, or the economy right now is housing, and so you can't have the long end go up,' Sumerlin, an economist who runs the consulting firm Evenflow Macro, said in a television interview on Bloomberg Surveillance. 'That's your constraint right now.'
CNBC
3 days ago
- Business
- CNBC
We can easily do a 50 bps 'make-up cut' without disrupting anything: Evenflow Macro's Marc Sumerlin
Marc Sumerlin, Evenflow Macro managing partner and former NEC deputy director, joins 'Squawk Box' to discuss the Fed's inflation fight, state of the economy, impact of tariffs, his thoughts on being a possible candidate for the next Fed Chair, and more.
Free Malaysia Today
09-08-2025
- Business
- Free Malaysia Today
Trump's team expands search for Fed chair to about 10 names
Current Fed chair Jerome Powell's term ends in May, triggering a search for his successor. (EPA Images pic) WASHINGTON : US President Donald Trump's team is reviewing new contenders to lead the Federal Reserve once chair Jerome Powell's term ends in May, including a long-time economic consultant and a past regional Fed president, the Wall Street Journal reported on Friday. The 10 or so people on the newly expanded list include former St. Louis Fed president James Bullard and Marc Sumerlin, a former economic adviser to president George W. Bush, WSJ said, citing officials. Trump last week said he had narrowed the list to four. National Economic Council director Kevin Hassett and former Fed governor Kevin Warsh remain under consideration, along with current Fed governor Christopher Waller, WSJ said. Reuters has previously reported that these three are candidates but could not immediately verify the rest of the report. Trump has been criticising Powell all year for not cutting rates, building on disappointment with the Fed chief that emerged during his first term as president shortly after he elevated Powell to the Fed chair role. It was not clear what a broader list of candidates would mean for the timing of an appointment. Treasury secretary Scott Bessent is helping lead the search. The president moved quickly to name an ally to the Fed Board this week after Fed governor Adriana Kugler, a Biden appointee who did not support rate cuts, unexpectedly resigned as of the end of this week. Council of Economic Advisers Stephen Miran will serve out the remaining months of Kugler's term, which ends on Jan 31. Trump has indicated a search continues for someone who could fill the Fed Board role for a 14-year term beginning Feb 1.
