Tariffs will drive core inflation above 3 percent range, says Point72's Dean Maki
CNBC's Steve Liesman and Point72 Asset Management's Dean Maki, join 'The Exchange' to discuss the Fed's next moves and the economy.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
3 hours ago
- Miami Herald
Top economist sends sobering tariff, interest rate forecast
From baby strollers to clothes dryers to lumber, American shoppers are acutely aware that tariffs are the highest they've been in 90 years. But they're not just paying for it at the cash register. Don't miss the move: Subscribe to TheStreet's free daily newsletter President Donald Trump's seesawing tariffs and their rip-roaring trade wars (O Canada!) are keeping interest rates high, according to many economists and market watchers. Related: Fed chair sends strong message on tariffs to Senate panel This means mortgage rates, auto financing, student loans, credit cards, and other forms of borrowing money cost more. So when will the economy perk up for consumers? Torsten Slok is a partner and chief economist at Apollo Global Management. He outlines his take on the rest of 2025 in the note "Mid-Year Outlook: At the Crossroads of Stagflation…". Image source: Bloomberg/Getty Images Federal Reserve Board Chair Jerome Powell defended keeping the Federal Funds Rate steady in June per the Fed's dual mandate: prudent monetary policy regulating the money supply that keeps inflation and unemployment relatively low and GDP happily growing along. Powell described the economy as solid, but said a "wait-and-see" forecast is needed until the full impact of the expected tariff prices passes through inflation and employment numbers over the next three months. The Federal Open Meeting Committee controls the Federal Funds Rate, which banks charge each other overnight to borrow money. The funds rate is tied to the cost of borrowing money for consumers, investors, and businesses. The Federal Open Meeting Committee said June 18 it would keep the Federal Funds Rate at 4.25% to 4.50%. Related: Fed official makes surprising interest rate cut prediction Both Fed and market watchers were forecasting the next probable rate cut could appear at the September FOMC meeting. Then Fed Governors Christopher Waller and Michelle Bowman separately said that a funds rate cut could come as early as the Fed's July 29-30 meeting if the tariff inflation proved to be short-term and jobs numbers held up. Federal Reserve Bank of Minneapolis President and CEO Neel Kashkari, who is a member of the FOMC this year, said he is retaining his position of two .25 percent funds rate cuts this year, with the first possibly coming in September, depending on the data shown. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year And former Fed Governor Daniel Tarullo told CNBC June 27 he wouldn't cut rates at this point, as "both sides of the mandate are performing reasonably well." Meanwhile, President Trump repeated the same day that he wanted the Fed to cut the fund rate down to 1% when it meets in late July. Slok's note offers a stern outlook for interest rates, tariffs, and recession odds: While below initial expectations, this is still the highest level of tariffs the U.S. has had in nearly nine decades and, if maintained, will have substantial impact on the U.S. and global economies. Tariff hikes are typically stagflationary shocks - they simultaneously increase the probability of an economic slowdown while putting upward pressure on prices. In our view, the current tariff regime increases the chance of a U.S. recession to 25% over the next 12 months. As a result, we continue to expect interest rates higher for longer. As of this writing, we see the Federal Reserve cutting rates only once in 2025, with a year-end fed funds-rate target range of 4.00% to 4.25%. We believe that Fed Chairman Jerome Powell will likely take a conservative approach to easing policy to safeguard against fears of runaway inflation. Economic data have mirrored the volatility in the markets and trade policy. Soft indicators (e.g., confidence surveys) have fluctuated in tandem with news of on-again, off-again tariffs, while hard data (i.e., employment and inflation) have shown more resilience. This discrepancy has added to uncertainty and continues to fog the economic outlook. Related: Fed official revamps interest-rate cut forecast for rest of this year The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
New York Post
3 hours ago
- New York Post
Trump says Republicans could miss July 4 deadline to pass ‘big beautiful' spending bill
President Trump is unsure whether Republicans will get his marquee One Big Beautiful Bill Act to his desk by the self-imposed Fourth of July deadline. 'I don't know. I mean, I can't tell you that,' Trump told Fox News' 'Sunday Morning Futures' in a pre-taped interview when asked about the timing of the bill's passage. 'I'd like to say, yes. But the problem is if we're two days late or five days late, everybody says, 'Oh, you had a tremendous failure.'' 'It's very important. If we don't have it, there's a 68% tax increase. If we have don't it, you know, the debt ceiling extension is very important,' he added. Trump revealed Sunday he's unsure if the 'big, beautiful bill' will be passed by July 4th. AP The One Big Beautiful Bill Act features Trump's legislative agenda, including the extension of the 2017 Tax Cuts and Jobs Act, bolstered border security, beefed-up defense spending, energy policy reforms, spending cuts and more. All of that is stuffed into one reconciliation bill to sidestep the 60-vote threshold needed to break a Democratic filibuster. The massive bill also increases the debt limit, ahead of the projected August to September debt ceiling deadline in which the US would run the risk of default. GOP leadership had publicly planned to put the megabill on Trump's desk by Independence Day. On Saturday evening, Senate Republicans advanced the mammoth agenda bill, kicking off the time-consuming procedural process to pass it. Senate Majority Leader John Thune (R-SD) has vowed to keep the upper chamber in town through the Fourth of July if needed to get the spending bill across the finish line. Despite starting the process, sharp divisions within the Senate GOP remain. Once it clears the Senate, it will then have to go through the House again before it can reach Trump's desk. One of the core divisions is over how much spending Republicans should cut. 'You also have to get elected. When you do cutting, you have to be a little bit careful, because people don't like necessarily cutting if they get used to something,' Trump said of the fiscal hawks demanding deeper cuts. 'And what I wanna do is do it through growth. We're gonna have growth like we've never seen before.' Despite starting the process, sharp divisions within the Senate GOP remain. REUTERS During his wide-ranging interview, Trump also spoke of how he plans to handle the $9 trillion US debt burden that is set to mature this year and faulted Federal Reserve Chairman Jerome Powell for not lowering rates. 'We're going turn it short term because we have a stupid person at the Fed if he would lower the rates,' Trump said of the looming debt obligation. 'But I don't want to have to pay for 10 years debt at a higher rate. 'And then we're to get somebody into the Fed who's going to be able to lower the rate.'
Axios
4 hours ago
- Axios
Trump accuses Powell of keeping interest rates "artificially high"
President Trump on Sunday accused Federal Reserve Chairman Jerome Powell of artificially inflating interest rates and said they should be less than half of what they are now. Why it matters: After Trump's threats to fire Powell scared global bond markets and caused interest rates to spike, the president and his administration have turned to insults and public demands instead. What they're saying: "We have a bad Fed chairman, but other than that ... it doesn't even matter, the numbers are so good it doesn't matter that he keeps the rates artificially high," Trump said on Fox News' "Sunday Morning Futures." "We should be at 1% or 2%," Trump added later in the interview. (The current target rate is a range of 4.25% to 4.5%.) He also once again criticized Powell personally as a "stupid person" and a "bad person." Catch up quick: On Friday afternoon, Trump told reporters he would not appoint anyone to be the new Fed chair unless they would immediately cut interest rates, the clearest signal yet that the White House intends to exert more control over monetary policy next year. Hours earlier, Treasury Secretary Scott Bessent told CNBC that the administration could nominate a replacement for Powell as soon as October, even though his term as chair runs through next May. Officials have floated the idea of a "shadow" Fed chair before, raising the prospect that the market may have to take very conflicting cues from two different officials at the same time. The intrigue: Trump said he had three names in mind for the next chair, but declined to say whom.
