Trump is right about the Fed needing to lower rates, says Piper Sandler

09-07-2025

Piper Sandler agrees with Donald Trump that the Federal Reserve needs to lower rates, as the president's barbs at Chair Jerome Powell grow louder. "Politics aside, [Trump] isn't wrong. Just because the overall economy and market, which is increasingly a reflection of the largest businesses and wealthiest consumers, appears to be chugging along doesn't mean that lower rates aren't warranted," Michael Kantrowitz, the firm's chief investment strategist, wrote. "Historically speaking, every single broad-based improvement in the U.S. economy began with an improvement in housing, and for that to occur we'll need to see lower rates." Kantrowitz noted that just a modest decline in short- and long-term interest rates could lead to greater breadth in economic activity and stronger corporate earnings — both of which he said have been lacking in recent years. He also pointed to a somber housing market as another reason to lower rates. Kantrowitz said growing inventory and price declines as factors that pose a threat to economic growth. His note to clients comes as investors await the release of the Federal Open Market Committee's minutes from its June meeting, which will be out at 2 p.m. ET. They also come as Trump increasingly calls for the Fed to lower rates. On Wednesday, Trump said in a Truth Social post that fed rates are "AT LEAST 3 [percentage] Points too high." Trump is also reportedly considering naming a "shadow chair" until Powell departs his role. Despite Trump's comments and worries over the Fed's credibility, the U.S. stock market remains near record levels. The S & P 500 scaled to an all-time high last week and is up 6% for the year. .SPX YTD mountain S & P 500 performance over the past year. Still, a strong market does not assuage what he sees as intense levels of weak affordability and economic bifurcation. "The scar tissue from 2022's inflation shock has left policy makers and investors overly concerned that lower rates could cause another resurgence of inflation," he added. "This is recency bias at it's best, we are not in the COVID backdrop any longer and tariffs as an inflation risk akin to the 2022 experience is exaggerated." Mortgage rates have remained in a narrow range since early April, leading to historically low demand as homebuyers remain bogged down by overinflated house prices and low supply. Last week saw a strong jump in total mortgage application volume compared with the previous week, however, after a drop in mortgage rates.

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President Donald Trump says Japan will invest $550 billion in US at his direction. It may not be a sure thing.

Chicago Tribune

19 minutes ago

Chicago Tribune

President Donald Trump says Japan will invest $550 billion in US at his direction. It may not be a sure thing.

WASHINGTON — President Donald Trump is bragging that Japan has given him, as part of a new trade framework, $550 billion to invest in the United States. It's an astonishing figure, but still subject to negotiation and perhaps not the sure thing he's portraying. 'Japan is putting up $550 billion in order to lower their tariffs a little bit,' Trump said Thursday. 'They put up, as you could call it, seed money. Let's call it seed money.' He said 90% of any profits from the money invested would go to the U.S. even if Japan had put up the funds. 'It's not a loan or anything, it's a signing bonus,' the Republican president said, on the trade framework that lowered his threatened tariff from 25% to 15%, including on autos. A White House official said the terms are being negotiated and nothing has been formalized in writing. The official, who insisted on anonymity to detail the terms of the talks, suggested the goal was for the $550 billion fund to make investments at Trump's direction. The sum is significant: It would represent more than 10% of Japan's entire gross domestic product. The Japan External Trade Organization estimates that direct investment into the U.S. economy topped $780 billion in 2023. It is unclear the degree to which the $550 billion could represent new investment or flow into existing investment plans. What the trade framework announced Tuesday has achieved is a major talking point for the Trump administration. The president has claimed to have brought trillions of dollars in new investment into the U.S., though the impact of those commitments have yet to appear in the economic data for jobs, construction spending or manufacturing output. The framework also enabled Trump to say other countries are agreeing to have their goods taxed, even if some of the cost of those taxes are ultimately passed along to U.S. consumers. On the $550 billion, Japan's Cabinet Office said it involves the credit facility of state-affiliated financial institutions, such as Japan Bank for International Cooperation. Further details would be decided based on the progress of the investment deals. Japanese trade negotiator Ryosei Akazawa, upon returning to Japan, did not discuss the terms of the $550 billion investment. Akazawa said he believes a written joint statement is necessary, at least on working levels, to avoid differences. He is not thinking about a legally binding trade pact. The U.S. apparently released its version of the deal while Japanese officials were on their return flight home. 'If we find differences of understanding, we may have to point them out and say 'that's not what we discussed,'' Akazawa said. The U.S. administration said the fund would be invested in critical minerals, pharmaceuticals, computer chips and shipbuilding, among other industries. It has said Japan will also buy 100 airplanes from Boeing and rice from U.S. farmers as part of the framework, which Treasury Secretary Scott Bessent said would be evaluated every three months. 'And if the president is unhappy, then they will boomerang back to the 25% tariff rates, both on cars and the rest of their products. And I can tell you that I think at 25, especially in cars, the Japanese economy doesn't work,' Bessent told Fox News' 'The Ingraham Angle.' Akazawa denied that Bessent's quarterly review was part of the negotiations. 'In my past eight trips to the United States during which I held talks with the president and the ministers,' Akazawa said. 'I have no recollection of discussing how we ensure the implementation of the latest agreement between Japan and the United States.' He said it would cause major disruptions to the economy and administrative processes if the rates first rise to 25% as scheduled on Aug. 1 and then drop to 15%. 'We definitely want to avoid that and I believe that is the understanding shared by the U.S. side,' he said. On buying U.S. rice, Japanese officials have said they have no plans to raise the current 770,000-ton 'minimum access' cap to import more from America. Agricultural Minister Shinjiro Koizumi said Japan will decide whether to increase U.S. rice imports and that Japan is not committed to a fixed quota. Trump's commerce secretary, Howard Lutnick, has suggested that the Japanese agreement is putting pressure on other countries such as South Korea to strike deals with the U.S. Trump, who is traveling in Scotland, plans to meet on Sundayv with European Commission President Ursula von der Leyen to discuss trade. 'Whatever Donald Trump wants to build, the Japanese will finance it for him,' Lutnick said Thursday on CNBC. 'Pretty amazing.'

Milei Cuts Export Levies on Argentine Soybeans in Nod to Farmers

Yahoo

23 minutes ago

Yahoo

Milei Cuts Export Levies on Argentine Soybeans in Nod to Farmers

(Bloomberg) -- President Javier Milei said he's chopping tariffs on Argentina's exports of meat and crops including soybean products to appease the country's farmers, who view the libertarian leader as falling short on his free-trade promises. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Trump Administration Sues NYC Over Sanctuary City Policy Argentina's influential farming associations have been seeking relief from the levies, which have held back rural development in Argentina and helped make Brazil the region's undisputed agricultural powerhouse. Tariffs on soy meal and soy oil — Argentina is the top exporter of both — will fall to 24.5% from 31%. For soybeans, the rate drops to 26% from 33%, and for corn to 9.5% from 12%. Several beef cuts will now be taxed 5% instead of 6.75%. Argentina's export tariffs are 'a great scourge that should never have existed,' Milei said at an annual cattle show in Buenos Aires. 'These reductions are permanent and won't be reversed while I'm in power. Extinguishing export tariffs is an obsession of our administration.' Lower rates will make Argentina more competitive as global trade is redrawn by US President Donald Trump's tariffs. While Milei is ideologically opposed to the levies, he still needs the billions of dollars in annual revenue that come from crop and meat cargoes, especially soy, to achieve his priority of posting budget surpluses. While Milei has been unshackling agriculture from years of government intervention, export tariffs remain the elephant in the room. The cuts announced Saturday will help growers, who have strongly backed Milei but are struggling to turn a profit amid low global crop prices. Nicolás Pino, head of the Argentine Rural Society, called on Milei to keep shrinking the tax burden on farmers. 'That includes, above all else, scrapping export tariffs,' he said, addressing the event just before Milei. 'They're worse than the plague, floods or drought.' Burning Man Is Burning Through Cash Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk A Rebel Army Is Building a Rare-Earth Empire on China's Border ©2025 Bloomberg L.P.

Musk sought to stoke the Trump-Epstein scandal. Mission accomplished.

Washington Post

an hour ago

Washington Post

Musk sought to stoke the Trump-Epstein scandal. Mission accomplished.

One person stands vindicated as the enduring fallout of the Jeffrey Epstein scandal haunts President Trump this month: his former adviser and friend Elon Musk. During the public implosion of his alliance with the president in early June, Musk claimed that Trump was refusing to release files related to the Epstein investigation because the president was named in the documents. White House press secretary Karoline Leavitt dismissed the claim as an 'unfortunate episode,' suggesting that Musk's outburst stemmed from frustration with the adverse effects Trump's tax legislation would have on his businesses.