Latest news with #PangaeaPolicy
Yahoo
28-07-2025
- Business
- Yahoo
Fed's July rate cut odds are near zero: What to expect
Federal Reserve Chair Jerome Powell will announce the central bank's latest interest rate decision and deliver remarks on Wednesday, with the market expecting rates to hold steady. Bank of America Securities senior US economist Stephen Juneau and Pangaea Policy founder Terry Haines discuss what they expect from the Fed meeting. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. The Federal Reserve is widely expected to hold interest rates steady at its July meeting this week, as chances of a cut in September hover around 60%. Joining me now, Stephen Juneau, BVA Securities senior US economist, as well as Terry Haynes, Pangaea Policy founder still with us. Uh Stephen, so um when we look at the expectations around Powell here, as I said, not the expectation that we will see any kind of cut to rates, but what do you think is going to be the message here from Powell this week? I think it's going to be more of the same. It's going to be a wait and see message. You know, there's really no rush for the Fed to cut, and we have to remember that Friday they're going to get uh the all important employment report where they might see some evidence. So why do you want to front run that, and then further down the line the Fed has Jackson Hole uh where it gives them another opportunity to maybe guide the markets. So I think it's really a wait and see see we haven't seen material weakness on the labor market emerge yet. Inflation is kind of stuck at 2.8% when you look at core PC or 2.7%. So there's just really no rush to do anything at this meeting. So Stephen, it sounds like you're kind of on the same page as the Fed, that they are safe to sort of wait and see what's happening and that the data has not justified yet a cut to rates. Yeah, absolutely. I mean, I think that's the right approach for now. You have to wait at this point in time, you know, when you have this dual mandate and you have this tension between the dual mandates where inflation is running above 2%, and it has been for a few years now, and you have upward pressure finally starting to emerge from tariffs. Well you want to be cautious with cutting into that, even if they are more of a temporary driven price hike. Uh even if it does mean that inflation is not going to be super persistent, you need to see evidence of that. And then when you have the labor market with unemployment rate at 4.1%, well you just don't need to respond right now. There's no real need to kind of cut rates or ease policy rates today, and you have time uh given where the economy is today to really evaluate where things are headed, evaluate where inflation is going to go, evaluate where the labor market's going to go. Uh so really this meeting is more of a holding period, uh and then we'll see what happens over the next few months and how the data moves. Well, of course, there's the economics of all of this, and then there's the politics of all of this. And that's where Terry sort of comes into it and where his perspective comes from. Um again, we had the president this morning saying he thinks the Fed should cut rates. What is all of this theater all about? You know, the two of them meeting at the Fed, etc. All of the tweets and the rhetoric around this. What do you think it's all about, Terry? Well, you know, they at some point it's going to occur to people that are out there trying to, you know, quote-unquote defend the Fed, some of whom want Powell to resign to defend the Fed, which is hilarious, but uh it's not about removing Powell. Uh Powell is Trump's scapegoat uh for stubbornly high prices and anything economic that's not getting corrected fast enough. You know, every time Trump uh talks about Powell, uh now we have, you know, multiple news organizations, including this one, uh you know, having him on air talking about it so that message gets sent publicly to the public that whatever you're concerned about isn't Trump's fault, it's these uh these uh these swamp people that were uh that we're concerned about. And finally, you know, Trump will get credit whenever interest rates fall, and if I if I remember correctly, consensus is still two times this year. Uh Trump gets credit for falling interest rates whenever it happens. So uh so it's a win-win for him all all along. But you know, this isn't really about threatening Fed independence, and I think the uh I think Hardhat Palooza last week uh showed that pretty clearly because there was no follow-up on any of it. Well, Stephen, what do you think? Do you think there is a real threat to Fed independence here? I mean, the markets don't seem, at least the bond market is not showing much concern. I think for us as economists, we we tend to think about the Fed really needs that independence to actually do its job. And I think what the administration also learned in kind of that firing event, if we're going to fire Powell, maybe we won't fire Powell, that give and take, that pull back, but they learned is that they may not actually accomplish their goals if they were to kind of destroy or uh reduce Fed independence rather. So that combination of factors, the the independence of the Fed that's really ingrained in economists, coupled with the fact that the administration's objectives may not be achieved by reducing Fed independence, I think that keeps it safe, you know, and we've we've heard, as as Terry mentioned, you know, Powell's not getting fired. Uh that's what the president told us last week. Um it's a bit of a distraction, I think, if anything. Um and that's what we're going to see kind of move forward. Related Videos Trump has set up Powell as a 'very convenient scapegoat' Boeing Q2 earnings preview: Tariffs & Air India crash in focus Pimco's Forgash: High-Yield Market at Highest Quality in Years Microsoft, Meta, Apple, Amazon: How to play Big Tech earnings Sign in to access your portfolio
Yahoo
08-07-2025
- Business
- Yahoo
What Trump is trying to achieve with his tariffs
Stocks fell on fresh worries about President Trump's tariff plans. In the video above, Pangaea Policy founder Terry Haines explains why the president is making tariff announcements and what he is hoping to achieve with his tariff plans. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. These are negotiating tactics. What Trump is trying to do, tellingly, is not impose tariffs immediately with no warning, uh, uh, April. He's trying to give, he's trying to give recalcitrant, uh, what he views as recalcitrant countries time to actually get their acts together and come in with a deal. In the perfect Trump world, uh, put together very well by Scott Bessant and Howard Lutnick, uh, in the perfect Trump world, there would be no tariffs, because what would happen is that the other country would always agree to lower its tariffs to the minimum possible and open its trade and get rid of its trade barriers to let more United States trade in. And thus, there would be no need for tariffs. This is an imperfect world, so you're going to see these fluctuations over time, but we're, we're, we're here, we're moving towards a less tariffed world than we were before. It, it's impressive, Terry, how much power and authority the president has here. You know, he, he posts these on social media, he can move markets with it. You know, just a quick civics 101 class here if you would. Where is, where is Congress in all this? Well, Congress is in the role, Congress has two roles here. Firstly, Congress passed the law that prior presidents signed to give the president the authority to do these things. So, it's, you know, it's really Congress's authority the president is exercising the authority. So, but Congress has kind of the, the, you know, kind of the power of the chain pulling, if you will. If Trump really got way far off of where Congress thought he should go on tariffs, Congress has the ability to kind of guide and grumble and suggest he ought to come back in a little bit more. And I would suggest that Congress in fact provides a lot of that subtle pressure today right now because what, what this Republican Congress wants is a continuation of trade, not a situation where trade proves to be yet one more bump in, in allied relationships at a particularly difficult geopolitical time. 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
08-07-2025
- Automotive
- Yahoo
Why Elon Musk's America First party may not 'amount to much'
Tesla (TSLA) CEO Elon Musk announced that he plans to launch a new political party called the "America Party." But Pangaea Policy founder Terry Haines says that Musk only passes one of the five tests he has for a third party to be successful. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. I think Musk's uh America party isn't likely to uh amount too much for. And I'll give you I'll give you a five test and he only meets one of them. First is money. Uh, I think he's got enough. So check on that. Secondly, the brand. I mean, he's torched his brand with both the most engaged people on the left and the most engaged people on the right. That's hard to do, but this is an unusual guy. So I think the brand is probably not in good shape. Thirdly, uh does he have trust? I mean, you know, the brand's in the toilet. So I I would say not not any trust to move things forward. Uh, fourthly, does he have a plan? Uh, not so far except to provide people more freedom and uh and cut spending. So good luck with that cuz he couldn't do it when he was actually sitting next to the president. And fifthly, are there results uh available? Uh he couldn't achieve what he wanted to achieve uh the few months he was in there. So why would anybody think he could do it now? Plus, existing politicians find him radioactive. So uh on both the left and the right. So I think he's uh I I think this isn't going to amount to much, frankly.
Axios
07-07-2025
- Business
- Axios
Trade deals come and go. Can stocks rally either way?
Investors just got three extra weeks to decide if they need to care about tariffs again. But Wall Street's tariff optimism could be tested if President Trump picks tougher trade negotiation tactics over markets in the month ahead. Why it matters: How tariff negotiations unfold amid the new extension could either confirm the TACO trade, or signal that high levies are a risk investors need to account for again, which could threaten the rally that's driven stocks to fresh all-time highs. Catch up quick: Trump is now set to send letters on Monday to a dozen other countries, setting tariff rates on their imports. The letters could reaccelerate a trade war that some investors felt had begun to fizzle. His threat late Sunday night to put additional punitive tariffs on BRICS countries unsettled markets even further. Early Monday morning, S&P 500 futures were about 0.3% lower. Between the lines: Investors may be falling prey to black-and-white thinking, according to Terry Haines, founder of Pangaea Policy. "Markets want it all one way or the other, and the answer is we're kind of living in the twilight world where it's not easy," he tells Axios. Haines points to the press in India calling any tariff deals with the U.S. "phase one" deals, indicating they could change. Regardless of the back and forth for each country, some form of tariffs are likely to continue to exist. Zoom out: Tariffs matter to investors if they matter to consumers, according to data from Goldman Sachs. Companies are set to pass on 70% of the cost of levies to consumers through higher prices, according to economists at Goldman Sachs. If consumers can eat that increased cost without decreasing spending overall, that could keep corporate earnings intact. If consumers cut back on spending, which is starting to show in economic data, that could hinder corporate earnings growth, which could weigh on the broader market. Friction point: "The market is underestimating the probability that Trump imposes unilateral tariffs," David Woo, CEO of David Woo Unbound, says in a video to clients on Sunday. Woo argues it's time to "get properly short the market," as current equity levels make investors vulnerable to a negative shock, which could come from tariff policy. Bottom line: The levies Trump announced in April sent stocks to the brink of a bear market. Since then, consensus has been building around better-than-expected trade deals, or Trump flinching in the face of a bad market reaction.
Axios
03-07-2025
- Business
- Axios
Sector winners and losers of the "big, beautiful bill"
Manufacturing and defense companies stand to win from the " big, beautiful bill," while wind and solar fare worse and hospitals could be hit hard. Why it matters: Investors welcome the certainty of the bill, but are also nervous about heavily exposed sectors. The big picture: Companies will get expanded provisions on itemization and expenses, including 100% bonus depreciation, which allows business to deduct expenses immediately rather than over three years. Henrietta Treyz of Veda Partners says this could benefit manufacturers, although the stimulative effects of the bill could be muted by tariffs on things like steel and aluminum. "The John Deeres and Caterpillars of the world benefit from a 100% bonus depreciation" historically, she says. Defense spending also benefits, as armed services spending is set to increase by $150 billion under the bill. Couple that with the administration's push to grow the defense budget to over $1 trillion annually and it's a boost in spending that "markets do not appreciate…at all," says Terry Haines, founder of Pangaea Policy. Palantir, an AI-focused defense contractor with ties to Donald Trump, is still among the top five best-performing stocks in the S&P 500 this year. The other side: While a proposed tax on wind and solar projects was taken out of the bill, tax credits are still set to be removed. Tax credits are key to the economics of solar installation investments, and "for many in that sector, this bill would represent their fears confirmed," per a statement from John Gimigliano, principal in charge of federal tax legislative and regulatory services at KPMG U.S. The removal of a $7,500 electric vehicle tax credit is set to be a headwind for EV sales, which could be another pain point for Tesla (though its stock recently rallied even after soft delivery numbers.) Hospitals have"just gotten absolutely smoked, so much so that quite frankly there's no way that these cuts go into effect," according to Treyz. The Congressional Budget Office has estimated $1.1 trillion in health care cuts from the bill. This could weigh on hospital REITs that benefited from that government spending. The loss of social safety nets for millions of Americans could be an additional pressure point to the broader economy over time. The bottom line: Winners and losers aside, at least the market has a better handle on what's coming now.
