Latest news with #rateCut
Wall Street Journal
09-07-2025
- Business
- Wall Street Journal
Fed Minutes Show a Wide Divide on Rate Cuts This Year
Some Federal Reserve officials saw no interest-rate cuts for the rest of 2025, while two others said they would be open to an interest-rate cut at the next meeting of the central bank's rate setting committee. The latest on the Fed's thinking came out in the minutes from its June meeting. The timing of the Fed's next rate cut has been in the spotlight lately with President Trump applying increasing pressure on Fed Chair Jerome Powell to lower interest rates.
CNA
02-07-2025
- Business
- CNA
Stocks climb to record, gilt yields surge on finance minister uncertainty
NEW YORK :Global stocks rose to a record high on Wednesday after U.S. data showed an unexpectedly weak reading on the labor market while British government bond yields surged on growing speculation about the future of the country's finance minister. The ADP National Employment Report showed private payrolls dropped by 33,000 jobs last month after a downwardly revised 29,000 increase in May and well below the 95,000 increase expected by economists polled by Reuters. The data comes ahead of Thursday's government payrolls report, although there is little, if any, correlation between the two. Also on tap for Thursday are weekly initial jobless claims. Market expectations for a July rate cut by the U.S. Federal Reserve climbed to just over 27 per cent after the data, up from 20.7 per cent in the prior session, according to CME's FedWatch Tool. "Employment softening and inducing the Fed to lower rates would be a positive, but if it softens too much, that would be a negative for growth and profits," said Jim Awad, senior managing director at Clearstead Advisors LLC in New York. On Wall Street, the S&P 500 and Nasdaq closed at record highs, buoyed in part by a bounce in Tesla after the stock dropped 5.3 per cent on Tuesday. Tesla shares closed up 4.97 per cent after the electric automaker posted its quarterly deliveries. The Dow Jones Industrial Average fell 10.52 points, or 0.02 per cent, to 44,484.42, the S&P 500 rose 29.41 points, or 0.47 per cent, to 6,227.42 and the Nasdaq Composite rose 190.24 points, or 0.94 per cent, to 20,393.13. MSCI's gauge of stocks across the globe climbed 3.84 points, or 0.42 per cent, to 921.24 after hitting an intraday record of 922.27, while the pan-European STOXX 600 index closed up 0.18 per cent, lifted by renewable energy and luxury stocks. Longer-dated U.S. Treasury yields rose, with the benchmark U.S. 10-year note up 3.4 basis points at 4.283 per cent. British government bond yields surged, at one point jumping nearly 23 basis points, the most since October 2022, after finance minister Rachel Reeves appeared visibly distressed in parliament, a day after the government sharply scaled back plans to cut benefits. The yield on the 10-year government bond, or gilt, was last up 16.8 basis points at 4.621 per cent. Sterling tumbled 0.83 per cent to $1.3631 after dropping as much as 1.35 per cent and was on pace for its biggest daily percentage drop since June 17. The dollar index, which measures the greenback against a basket of currencies, rose 0.13 per cent to 96.76 and was on track to snap a streak of nine straight declines, with the euro off 0.03 per cent at $1.1801. President Donald Trump said on Wednesday the U.S. would place a 20 per cent tariff on Vietnam, lower than initially announced as investors await progress on deals with other countries. He had previously said he was not considering extending the deadline for countries to negotiate trade deals, even as negotiations with top trade partner Japan failed to make headway, although he expected a deal with India. "The Vietnam-U.S. trade deal that was announced obviously alleviates one piece of the uncertainty puzzle around trade, not only because of the direct impact, but also perhaps as an indicator that there's more to come here over the coming week or so, all of which would help to alleviate what's been a major source of uncertainty for the last three months," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Southfield, Michigan. Investors were also eyeing Trump's massive tax and spending bill - which is expected to add $3.3 trillion to the national debt, slash taxes and reduce social safety net programs as it works its way through Congress. Republicans in the House of Representatives teed up a procedural vote on the bill that could reveal whether the party has enough support to pass it out of Congress. U.S. crude jumped 3.06 per cent to settle at $67.45 a barrel and Brent settled at $69.11 per barrel, up 2.98 per cent on the day as Iran suspended cooperation with the U.N. nuclear watchdog.
CNA
02-07-2025
- Business
- CNA
Stocks edge up to record, gilt yields surge on finance minister uncertainty
NEW YORK :Global stocks advanced on Wednesday after U.S. data showed a surprisingly soft reading on the labor market while British government bond yields surged on growing speculation about the future of the country's finance minister. The ADP National Employment Report showed private payrolls dropped by 33,000 jobs last month after a downwardly revised 29,000 increase in May and well below the 95,000 increase expected by economists polled by Reuters. The data comes ahead of Thursday's government payrolls report, although there is little, if any, correlation between the two. Also on tap for Thursday are weekly initial jobless claims. Market expectations for a July rate cut by the U.S. Federal Reserve climbed to just over 27 per cent after the data, up from 20.7 per cent in the prior session, according to CME's FedWatch Tool. "You take it as an additional data point and you throw it in the 'doesn't look good' column, and then you look to tomorrow which is going to be arguably much more meaningful," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Southfield, Michigan. On Wall Street, the S&P 500 and Nasdaq climbed, buoyed in part by a bounce in Tesla after the stock dropped 5.3 per cent on Tuesday. Tesla shares were last up 4.7 per cent after the electric automaker posted its quarterly deliveries. The Dow Jones Industrial Average fell 56.43 points, or 0.13 per cent, to 44,438.51, the S&P 500 rose 19.17 points, or 0.31 per cent, to 6,217.23 and the Nasdaq Composite rose 163.36 points, or 0.81 per cent, to 20,365.78. MSCI's gauge of stocks across the globe rose 2.62 points, or 0.29 per cent, to 920.02 after hitting an intraday record of 920.24, while the pan-European STOXX 600 index closed up 0.18 per cent, lifted by renewable energy and luxury stocks. Longer-dated U.S. Treasury yields rose, with the benchmark U.S. 10-year note up 4.9 basis points at 4.298 per cent. British government bond yields surged, at one point jumping nearly 23 basis points, the most since October 2022, after finance minister Rachel Reeves appeared visibly distressed in parliament, a day after the government sharply scaled back plans to cut benefits. The yield on the 10-year government bond, or gilt, was last up 16.8 basis points at 4.621 per cent. Sterling tumbled 0.84 per cent to $1.3628 after dropping as much as 1.35 per cent and was on pace for its biggest daily percentage drop since June 17. The dollar index, which measures the greenback against a basket of currencies, rose 0.19 per cent to 96.82 and was on track to snap a streak of nine straight declines, with the euro down 0.1 per cent at $1.1793. President Donald Trump said on social media on Wednesday that the U.S. has struck a trade deal with Vietnam. He had previously said he was not considering extending the deadline for countries to negotiate trade deals, even as negotiations with top trade partner Japan failed to make headway, although he expected a deal with India. "The Vietnam-U.S. trade deal that was announced obviously alleviates one piece of the uncertainty puzzle around trade, not only because of the direct impact, but also perhaps as an indicator that there's more to come here over the coming week or so, all of which would help to alleviate what's been a major source of uncertainty for the last three months," said Baird. Investors were also watching for signs of progress in Trump's massive tax and spending bill - which is expected to add $3.3 trillion to the national debt, slash taxes and reduce social safety net programs. Republicans in the House of Representatives teed up a procedural vote on the bill that could reveal whether the party has enough support to pass it out of Congress. U.S. crude jumped 3.09 per cent to $67.48 a barrel and Brent surged to $69.10 per barrel, up 2.98 per cent on the day as Iran suspended cooperation with the U.N. nuclear watchdog.
Economy ME
02-07-2025
- Business
- Economy ME
Fed's Powell sparks July rate cut hopes with ambiguous comments
Market expectations for a Federal Reserve (Fed) interest rate cut as early as this month increased after Chair Jerome Powell, when asked whether July was too soon for such a move, responded that he 'can't say,' noting the decision would hinge on incoming economic data. Following his remarks at a central banking forum in Sintra, Portugal, futures markets reflected roughly a 25 percent chance of a rate cut at the Fed's July 29-30 meeting, up from under 20 percent earlier. Market expects three rate cuts this year According to the CME FedWatch tool, traders are currently pricing a 21.2 percent chance of a quarter-point interest rate cut this month, up from 18.6 percent earlier. Projections for September reveal that 72.9 percent are pricing a 25-basis-point rate cut, while 19 percent expect the Fed to cut rates by 50 basis points. Markets are pricing in two additional cuts by the end of the year, one in October and another in December. U.S. labor market data released on Tuesday showed continued strength, with job openings increasing in May. This has heightened anticipation around Thursday's payrolls report, as investors look for clues on when the Federal Reserve might lower interest rates. Fed Chair Jerome Powell, facing pressure from President Trump to cut rates immediately, reiterated the central bank's cautious approach, stating it would 'wait and learn more' about the effects of tariffs on inflation before making a move. Read| Trump's tax-cut bill passes Senate, adding $3.3 trillion to debt: Potential impacts on healthcare and wealth distribution Powell cautious amid tariff uncertainty In June, the U.S. Federal Reserve decided to hold interest rates steady in the 4.25-4.50 percent range and signaled that rate cuts are still likely to happen in 2025. However, Federal Reserve Chair Jerome Powell cautioned against putting too much weight on that view, and said he expects 'meaningful' inflation ahead as consumers pay more for goods due to the Trump administration's planned import tariffs. If not for tariffs, Powell said, rate cuts might actually be in order, given that recent inflation readings have been favorably low. In the new economic projections released alongside the Fed's statement, policymakers saw growth in 2025 slowing to 1.4 percent, unemployment rising to 4.5 percent, and inflation ending the year at 3 percent, well above the current level. Under the new projections, inflation will remain elevated at 2.4 percent in 2026 before falling to 2.1 percent in 2027 amid largely stable unemployment. While policymakers still expect to cut interest rates by half a percentage point this year, in line with their March and December projections, they slightly slowed the pace to a single quarter-percentage-point cut in each of 2026 and 2027 in a bid to return inflation to its 2 percent target. The Fed cut interest rates three times last year, with the last move coming in December. However, policymakers have been reluctant to commit to a timeline for further cuts given the volatility of U.S. trade policy.
Reuters
26-06-2025
- Business
- Reuters
Fed's Collins: not enough data by July to decide on a rate cut
June 26 (Reuters) - Boston Federal Reserve Bank President Susan Collins on Thursday signaled she feels July would be too soon to considering cutting interest rates. 'We're only going to have really one more month of data before the July meeting,' Collins told Bloomberg News. 'I expect to want to see more information than that.' Collins also said she sees no urgency to cut rates and that her baseline expectation, that the Fed will resume cutting rates later this year, "could mean one rate cut, it's possible it means more than that, but I think the data will really need to tell us."
