Latest news with #Barkin
Yahoo
26-06-2025
- Business
- Yahoo
Dollar Falls as President Trump Looks to Fast-Track His Pick for New Fed Chair
The dollar index (DXY00) today is down by -0.49% at a 3-1/4 year low. The dollar retreated today following a Wall Street Journal report that said President Trump is considering accelerating when he will announce the next Fed Chair. The dollar remained lower after today's US economic news of a downward revision in Q1 GDP and a wider-than-expected May trade deficit report, which was a bearish factor for Q2 GDP. The dollar received underlying support from stronger-than-expected initial unemployment claims, core capital goods orders, and pending home sales reports. Also, hawkish comments from Richmond Fed President Barkin were supportive of the dollar when he said he favors waiting for more clarity before adjusting interest rates. What Will It Take to Push Gold Prices to New Record Highs? Dollar Undercut by Reduced Middle East Tensions Dollar Falls as President Trump Looks to Fast-Track His Pick for New Fed Chair Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. US weekly initial unemployment claims fell -7,000 to 236,000, showing a stringer labor market than expectations of 243,000. However, weekly continuing claims rose +37,000 to a 3-1/2 year high of 1.974 million, above expectations of 1.950 million, signaling more people are staying out of work for longer. US Q1 GDP was revised lower to -0.5% (q/q annualized), weaker than expectations of no change at -0.2% as Q1 personal consumption was revised downward to +0.5% from +1.2%. The Q1 core PCE price index was revised higher to +3.5% (q/q annualized), stronger than expectations of no change at +3.4%. US May capital goods new orders nondefense ex-aircraft and parts rose +1.7% m/m, stronger than expectations of +0.1% m/m and the largest increase in 4 months. The US May trade deficit of -$96.6 billion was wider than expectations of -$86.1 billion, a negative factor for Q2 GDP. US May pending home sales rose +1.8% m/m, stronger than expectations of +0.1% m/m. Richmond Fed President Barkin said he expects tariffs will put upward pressure on prices, and with so much still uncertain, he favors waiting for more clarity before adjusting interest rates. The dollar retreated today after the Wall Street Journal reported that President Trump may announce Fed Chair Powell's replacement as soon as September, an unusually early appointment. That reinforced expectations of a more dovish leaning Fed, after Trump criticized Powell for holding interest rates steady. Because Powell's term expires in May 2026, announcing a new Fed chair far earlier than the traditional three-to-four-month transition period could allow the chair-in-waiting to influence expectations about the likely path for interest rates. An overly dovish Fed would likely produce higher inflation, which depreciates the value of the dollar. The markets are discounting the chances at 25% for a -25 bp rate cut after the July 29-30 FOMC meeting. EUR/USD (^EURUSD) is up by +0.50% at a 3-3/4 year high. The euro rallied today after the dollar sank on reports that President Trump may name Fed Chair Powell's successor as soon as September, making Fed Chair Powell a lame duck before his term ends in May 2026, and fueling speculation that early Fed rate cuts are more likely. Gains in the euro are limited after the German Jun GfK consumer confidence index unexpectedly declined. The German Jun GfK consumer confidence index unexpectedly fell -0.3 to -20.3, weaker than expectations of an increase to -19.2. Swaps are discounting the chances at 9% for a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) today is down by -0.69%. The yen climbed toa 1-1/2 week high against the dollar today as the dollar tumbled after the Wall Street Journal reported that President Trump would name a successor to Fed Chair Powell sooner than expected, which fueled speculation the next Fed chair will be more dovish than Mr. Powell, a negative factor for the dollar. Today's slide in the 10-year T-note yield to a 7-week low is also bullish for the yen. August gold (GCQ25) today is down -15.70 (-0.47%), and July silver (SIN25) is up +0.289 (+0.80%). Precious metals today are mixed. Today's strength in stocks has reduced demand for safe havens in precious metals. Also, hawkish comments from Richmond Fed President Barkin weighed on gold prices when he said he favors waiting for more clarity before adjusting interest rates. In addition, today's report that showed weekly jobless claims fell more than expected is a hawkish factor for Fed policy and bearish for precious metals. Finally, reduced geopolitical risks in the Middle East are curbing safe-haven demand for precious metals as the ceasefire between Israel and Iran continues to hold. Today's downward revision to US Q1 GDP was negative for industrial metals demand and bearish for silver prices. Today's slump in the dollar index to 3-1/4 year low is a bullish factor for metals. Also, today's report from the Wall Street Journal that said President Trump is considering announcing Fed Chair Powell's replacement a soon as September has reinforced expectations of a more dovish leaning Fed, which boosts demand for precious metals as a store of value. Silver prices also have carryover support from today's rally in copper prices to a 2-3/4 month high. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
New York Post
20-06-2025
- Business
- New York Post
Fed divided over whether to slash interest rates in July
Federal Reserve officials are signaling a widening divide over when to begin cutting interest rates, with Governor Christopher Waller pushing for a reduction as soon as next month — while Richmond Fed President Thomas Barkin is warning that tariff-driven inflation risks still loom large. 'I think we're in the position that we could do this as early as July,' Waller told CNBC's 'Squawk Box' on Friday. 'That would be my view, whether the committee would go along with it or not.' Waller argued that inflation has cooled enough to justify easing monetary policy and downplayed concerns over Trump-era tariffs. 'It should be a one-off level effect and not cause persistent inflation,' he said. 4 Federal Reserve Governor Christopher Waller signaled Friday that the central bank could begin easing interest rates as early as next month. REUTERS 4 Richmond Fed President Thomas Barkin is warning that tariff-driven inflation risks still loom large. REUTERS Barkin took a more cautious tone, telling Reuters: 'I don't think the data gives us any rush to cut…I am very conscious that we've not been at our inflation target for four years.' He pointed to ongoing uncertainty over trade policy, telling Reuters: 'There will be some inflationary impact. It's hard to know how much.' A Federal Reserve governor is a nationally appointed official who always votes on monetary policy. The president of a regional Fed bank, such as Richmond, votes on a rotating basis and focuses on regional conditions. Barkin noted the labor market remains solid and consumer spending is steady. 'Nothing is burning on either side such that it suggests there's a rush to act,' he said. His comments came just after the Fed released its latest Monetary Policy Report to Congress, which acknowledged that inflation is 'somewhat elevated' and trade policy impacts are 'highly uncertain.' Consumer spending, Barkin said, is 'holding up fine. It's not frothy. It's not weak.' Employers, he added, are still in a 'low-hiring-low-firing' posture. The central bank held its key rate steady this week. Projections showed a near-even split: 10 officials see two or three cuts in 2025; nine see one or none. 'There are two perfectly reasonable views that are articulated there,' according to the Richmond fed boss. Waller urged a cautious start. 'You'd want to start slow and bring them down, just to make sure that there's no big surprises. But start the process. That's the key thing,' he told CNBC. Markets showed mixed signals Friday. As of 1:01 PM EDT, the Dow Jones rose 118.13 points (0.28%) to 42,289.79. The S&P 500 edged down 0.67 points to 5,980.20, and the Nasdaq slipped 54.82 points (0.28%) to 19,491.45. 4 Fed Chair Jerome Powell said this week that the central bank would keep interest rates steady. Getty Images 4 President Trump has been agitating for the Fed to lower interest rates for months. AP Trump has called for steep rate cuts to ease pressure on the $36 trillion national debt, recently labeling Fed Chair Jerome Powell 'stupid' and a 'numbskull.' Still, Powell and others have maintained a cautious stance, emphasizing a wait-and-see approach. 'We've been on pause for six months, thinking that there was going to be a big tariff shock to inflation. We haven't seen it,' Waller said. The next Fed meeting comes just ahead of a July 9 trade deadline that could bring another round of tariffs. 'I'd say the overwhelming reaction we're still getting is wait and see,' Barkin said. 'Wait and see is not put your foot on the brakes. It's just not put your foot on the gas.'
Business Recorder
28-05-2025
- Business
- Business Recorder
Minutes of Fed's May meeting likely to show officials grappling with uncertainty
The U.S. Federal Reserve at its May 6-7 meeting undercut expectations that it would change its policy interest rate anytime soon, and minutes from that session released on Wednesday may show just how firmly policymakers are holding onto their current wait-and-see approach. The minutes will be released at 2 p.m. EDT (1800 GMT) and in key ways have been superseded by developments since then. The meeting took place when concern over the economic fallout from changes in global trade and tariff policy was intense, stoked by President Donald Trump's announcement in early April of massive new import taxes. A week later the most aggressive of the new tariffs had either been lowered or postponed in announcements by Trump that reduced pressures that had been driving bond yields sharply higher, buoyed a sinking stock market, and led analysts who regarded a U.S. recession as a near certainty in a high-tariff world to upgrade their growth forecasts. Still, the minutes are likely to show policymakers wrestling as much with uncertainty as with the negative outlook from early May, and the erratic nature of administration policymaking - Trump from this past Friday to Sunday announced then postponed steep new taxes on European imports - hasn't changed. Fed's Williams says monetary policy is in good place right now 'I've been describing this as driving through fog,' Richmond Fed President Tom Barkin said Tuesday on Bloomberg Television. 'It's just very hard.' Barkin said that data for the year so far shows the economy on the same path as it has been, with reasonably low unemployment and inflation easing to the Fed's 2% target. But there are competing narratives, he and other policymakers say, that see a new jump in inflation in coming months as tariffs take hold, or rising joblessness as widespread uncertainty and rising costs fuel a slowdown, or even a toxic combination of both. Until it is clear which way the economy pivots under the influence of shifting global trade rules, the Fed has little reason to alter the 4.25% to 4.50% policy interest rate it has maintained since December. 'Published data shows an economy very much on the same trajectory that we've been on for the last year or two. Low unemployment, inflation settling toward target,' Barkin said. 'I could describe how some of these forces, like tariffs, might be inflationary. I can describe how other forces, like lower gas prices, might be disinflationary,' he said. 'Less government spending might be less employment…People who haven't hired for 18 months, if spending continues, might need to start hiring. So I'm waiting to see what happens.' Fed staff have been trying to estimate the likely impact of different tariff rules in a series of studies that may get mention in the minutes if they were presented to policymakers as part of the discussion around the economic outlook. But even those reports are contingent on the assumptions made about final tariff levels, something likely to remain unknown at least until July when a 90-day reprieve on the stiffest import taxes expires. Market optimism about the final outcome of the trade debate has been based on an expectation that negotiated deals with lower levies will by then have been approved. Even then it may take months more for the Fed to know how the economy is responding. Investors now anticipate the Fed holding the policy rate steady at the June and July meetings, but cutting a quarter point in September and again in December. 'Until we know more about how this is going to settle out and what the economic implications are for employment and for inflation, I couldn't confidently say that I know what the appropriate path will be,' Powell said at a May 7 press conference at the end of the Fed's meeting.
Reuters
28-05-2025
- Business
- Reuters
Minutes of Fed's May meeting likely to show officials grappling with uncertainty
WASHINGTON, May 28 (Reuters) - The U.S. Federal Reserve at its May 6-7 meeting undercut expectations that it would change its policy interest rate anytime soon, and minutes from that session released on Wednesday may show just how firmly policymakers are holding onto their current wait-and-see approach. The minutes will be released at 2 p.m. EDT (1800 GMT) and in key ways have been superseded by developments since then. The meeting took place when concern over the economic fallout from changes in global trade and tariff policy was intense, stoked by President Donald Trump's announcement in early April of massive new import taxes. A week later the most aggressive of the new tariffs had either been lowered or postponed in announcements by Trump that reduced pressures that had been driving bond yields sharply higher, buoyed a sinking stock market, and led analysts who regarded a U.S. recession as a near certainty in a high-tariff world to upgrade their growth forecasts. Still, the minutes are likely to show policymakers wrestling as much with uncertainty as with the negative outlook from early May, and the erratic nature of administration policymaking - Trump from this past Friday to Sunday announced then postponed steep new taxes on European imports - hasn't changed. "I've been describing this as driving through fog," Richmond Fed President Tom Barkin said Tuesday on Bloomberg Television. "It's just very hard." Barkin said that data for the year so far shows the economy on the same path as it has been, with reasonably low unemployment and inflation easing to the Fed's 2% target. But there are competing narratives, he and other policymakers say, that see a new jump in inflation in coming months as tariffs take hold, or rising joblessness as widespread uncertainty and rising costs fuel a slowdown, or even a toxic combination of both. Until it is clear which way the economy pivots under the influence of shifting global trade rules, the Fed has little reason to alter the 4.25% to 4.50% policy interest rate it has maintained since December. "Published data shows an economy very much on the same trajectory that we've been on for the last year or two. Low unemployment, inflation settling toward target," Barkin said. "I could describe how some of these forces, like tariffs, might be inflationary. I can describe how other forces, like lower gas prices, might be disinflationary," he said. "Less government spending might be less who haven't hired for 18 months, if spending continues, might need to start hiring. So I'm waiting to see what happens." Fed staff have been trying to estimate the likely impact of different tariff rules in a series of studies that may get mention in the minutes if they were presented to policymakers as part of the discussion around the economic outlook. But even those reports are contingent on the assumptions made about final tariff levels, something likely to remain unknown at least until July when a 90-day reprieve on the stiffest import taxes expires. Market optimism about the final outcome of the trade debate has been based on an expectation that negotiated deals with lower levies will by then have been approved. Even then it may take months more for the Fed to know how the economy is responding. Investors now anticipate the Fed holding the policy rate steady at the June and July meetings, but cutting a quarter point in September and again in December. "Until we know more about how this is going to settle out and what the economic implications are for employment and for inflation, I couldn't confidently say that I know what the appropriate path will be," Powell said at a May 7 press conference at the end of the Fed's meeting.
Yahoo
28-05-2025
- Business
- Yahoo
Minutes of Fed's May meeting likely to show officials grappling with uncertainty
By Howard Schneider WASHINGTON (Reuters) -The U.S. Federal Reserve at its May 6-7 meeting undercut expectations that it would change its policy interest rate anytime soon, and minutes from that session released on Wednesday may show just how firmly policymakers are holding onto their current wait-and-see approach. The minutes will be released at 2 p.m. EDT (1800 GMT) and in key ways have been superseded by developments since then. The meeting took place when concern over the economic fallout from changes in global trade and tariff policy was intense, stoked by President Donald Trump's announcement in early April of massive new import taxes. A week later the most aggressive of the new tariffs had either been lowered or postponed in announcements by Trump that reduced pressures that had been driving bond yields sharply higher, buoyed a sinking stock market, and led analysts who regarded a U.S. recession as a near certainty in a high-tariff world to upgrade their growth forecasts. Still, the minutes are likely to show policymakers wrestling as much with uncertainty as with the negative outlook from early May, and the erratic nature of administration policymaking - Trump from this past Friday to Sunday announced then postponed steep new taxes on European imports - hasn't changed. "I've been describing this as driving through fog," Richmond Fed President Tom Barkin said Tuesday on Bloomberg Television. "It's just very hard." Barkin said that data for the year so far shows the economy on the same path as it has been, with reasonably low unemployment and inflation easing to the Fed's 2% target. But there are competing narratives, he and other policymakers say, that see a new jump in inflation in coming months as tariffs take hold, or rising joblessness as widespread uncertainty and rising costs fuel a slowdown, or even a toxic combination of both. Until it is clear which way the economy pivots under the influence of shifting global trade rules, the Fed has little reason to alter the 4.25% to 4.50% policy interest rate it has maintained since December. "Published data shows an economy very much on the same trajectory that we've been on for the last year or two. Low unemployment, inflation settling toward target," Barkin said. "I could describe how some of these forces, like tariffs, might be inflationary. I can describe how other forces, like lower gas prices, might be disinflationary," he said. "Less government spending might be less who haven't hired for 18 months, if spending continues, might need to start hiring. So I'm waiting to see what happens." Fed staff have been trying to estimate the likely impact of different tariff rules in a series of studies that may get mention in the minutes if they were presented to policymakers as part of the discussion around the economic outlook. But even those reports are contingent on the assumptions made about final tariff levels, something likely to remain unknown at least until July when a 90-day reprieve on the stiffest import taxes expires. Market optimism about the final outcome of the trade debate has been based on an expectation that negotiated deals with lower levies will by then have been approved. Even then it may take months more for the Fed to know how the economy is responding. Investors now anticipate the Fed holding the policy rate steady at the June and July meetings, but cutting a quarter point in September and again in December. "Until we know more about how this is going to settle out and what the economic implications are for employment and for inflation, I couldn't confidently say that I know what the appropriate path will be," Powell said at a May 7 press conference at the end of the Fed's meeting. 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
