Latest news with #CMEFedWatch
Business Recorder
3 days ago
- Business
- Business Recorder
Nvidia powers Nasdaq to record high; S&P 500 lags as data, earnings parsed
NEW YORK: The Nasdaq cruised to a fresh record high on Tuesday, powered by a jump in Nvidia, while the S&P 500 hovered below its peak, as investors digested an inflation report and a flurry of major bank earnings. US consumer prices posted their biggest jump in five months in June, hinting that tariffs may be starting to heat up inflation. Still, underlying inflation stayed moderate, offering some reassurance despite the headline spike. Hopes for a July rate cut have all but vanished, and bets on a September move dipped to 55% from 60% after the latest data, according to CME FedWatch. 'It's (CPI data) perfectly in line with expecting the Fed to kind of re-engage on rate cuts at its September meeting,' said Ross Mayfield, investment strategist at Baird. At 11:33 a.m. ET, the S&P 500 gained 0.71 points, or 0.01%, to 6,269.27, and the Nasdaq Composite rose 136.40 points, or 0.66%, to 20,776.73. The Dow Jones Industrial Average fell 251.28 points, or 0.57%, to 44,208.37. The Nasdaq was boosted by AI-chip leader Nvidia, which rose 4.4% after unveiling plans to resume sales of its H20 AI chip to China. Other chipmakers also advanced, with Advanced Micro Devices and Super Micro Computer rising more than 6% each. The technology sector rose 1.7% to hit a record high. Meanwhile, Wall Street opened the second-quarter earnings season on a somber note, with banking stocks whipsawing in volatile trade. JPMorgan Chase slipped 0.4% despite raising its 2025 net interest income outlook, while Wells Fargo fell 5% even as its profit rose on reduced loan-loss reserves. BlackRock notched a new milestone , managing a record $12.53 trillion in assets amid optimism over trade deals and rate cuts, yet its shares slid 5.4%. The KBW Bank Index sank to a two-week low, down 1.1%. Bucking the trend, Citigroup climbed 3% after its traders delivered a windfall that boosted second-quarter profits. Mayfield, referring to the banks' results, said 'there must have been a higher bar to clear, but most of the reporters so far have beaten estimates, which is what you want to see.' Despite President Donald Trump's renewed tariff threats - this time aimed at Russia - markets largely brushed off the rhetoric, focusing instead on a breakthrough from negotiations with US trade partners. Hopes were buoyed after Trump signaled a willingness to talk following his weekend warning of 30% tariffs on the European Union and Mexico from August 1. At least four Fed officials including Board Governor Michael Barr are scheduled to speak later in the day, potentially offering fresh clues on the central bank's next steps. Nine of the 11 S&P 500 sectors were trading in the red. Among other movers, Trade Desk surged 9.7% after the software firm was set to join the benchmark S&P 500 index. Declining issues outnumbered advancers by a 2.65-to-1 ratio on the NYSE and by a 2.06-to-1 ratio on the Nasdaq.
The Herald Scotland
6 days ago
- Business
- The Herald Scotland
Trump administration ramps up pressure on Fed chair Jerome Powell
In June, Trump called Powell a "stupid person" who has "done a poor job," adding that he's called the Fed chair "every name in the book" to try to get him to cut rates. He added, "Nothing works." Powell has also come under fire from Office of Management and Budget Director Russell Vought, who suggested Powell has "grossly mismanaged the Fed" and misled Congress about an "ostentatious" headquarters remodel. Powell has previously defended the project, calling some of the more extravagant descriptions "misleading and inaccurate" during a June testimony before the Senate Banking Committee. The administration's pressure tactics appeared to continue July 11, when William Pulte, director of the Federal Housing Finance Agency and chairman of the Board of Fannie Mae and Freddie Mac, said in a statement Powell's resignation would be "the right decision for America, and the economy will boom." Buying a house: Fannie and Freddie may use new credit scores. Will it help you get a mortgage? Pulte referenced "reports" that Powell is "considering resigning." When asked for confirmation, the Fed declined to comment but directed USA TODAY to the many times Powell has said he intends to serve his term, set to end May 2026. Pulte's statement comes ahead of the central bank's July 29-30 meeting. The CME FedWatch, which tracks the likelihood of a rate cut based on futures prices, says there's a roughly 93% chance rates hold steady at 4.25% to 4.5% after the meeting. In June, the Fed held interest rates steady for its fourth straight meeting and kept its forecast for two cuts in 2025. Officials project they'll lower rates by a half percentage point this year to a range of 3.75% to 4%. While lower rates would juice the economy and help reduce federal debt interest payments, Powell has said the Fed wants to see how tariffs impact inflation before cutting rates. Trump in June said he's already looking for Powell's replacement, but he may have to wait if Powell doesn't step down voluntarily. A May Supreme Court ruling downplayed Trump's ability to fire Powell, noting that the Fed is "a uniquely structured, quasi-private entity" and unlike other independent agencies with members subject to terminations decided by the president.
USA Today
7 days ago
- Business
- USA Today
Trump administration ramps up pressure on Powell as Fed holds rates steady
President Donald Trump has frequently voiced dissatisfaction with the Fed's 'wait-and-see" approach to lowering interest rates under Powell. The Trump administration appears to be ramping up pressure on Jerome Powell to step down as Federal Reserve chair, with one federal agency issuing a statement voicing support for his departure. President Donald Trump, who nominated Powell as Fed chair in 2017, has frequently voiced dissatisfaction with the Fed's recent 'wait-and-see" approach to lowering interest rates, calling instead for rates to quickly drop from 4.25% to 4.5% to as low as 2.25%. In June, Trump called Powell a "stupid person" who has "done a poor job," adding that he's called the Fed chair "every name in the book" to try to get him to cut rates. He added, "Nothing works." Powell has also come under fire from Office of Management and Budget Director Russell Vought, who suggested Powell has 'grossly mismanaged the Fed' and misled Congress about an 'ostentatious' headquarters remodel. Powell has previously defended the project, calling some of the more extravagant descriptions 'misleading and inaccurate' during a June testimony before the Senate Banking Committee. The administration's pressure tactics appeared to continue July 11, when William Pulte, director of the Federal Housing Finance Agency and chairman of the Board of Fannie Mae and Freddie Mac, said in a statement Powell's resignation would be 'the right decision for America, and the economy will boom.' Buying a house: Fannie and Freddie may use new credit scores. Will it help you get a mortgage? Pulte referenced "reports" that Powell is 'considering resigning.' When asked for confirmation, the Fed declined to comment but directed USA TODAY to the many times Powell has said he intends to serve his term, set to end May 2026. Pulte's statement comes ahead of the central bank's July 29-30 meeting. The CME FedWatch, which tracks the likelihood of a rate cut based on futures prices, says there's a roughly 93% chance rates hold steady at 4.25% to 4.5% after the meeting. In June, the Fed held interest rates steady for its fourth straight meeting and kept its forecast for two cuts in 2025. Officials project they'll lower rates by a half percentage point this year to a range of 3.75% to 4%. While lower rates would juice the economy and help reduce federal debt interest payments, Powell has said the Fed wants to see how tariffs impact inflation before cutting rates. Trump in June said he's already looking for Powell's replacement, but he may have to wait if Powell doesn't step down voluntarily. A May Supreme Court ruling downplayed Trump's ability to fire Powell, noting that the Fed is "a uniquely structured, quasi-private entity" and unlike other independent agencies with members subject to terminations decided by the president.
Yahoo
05-07-2025
- Business
- Yahoo
The Fed forecast that everyone's watching: Chart of the Week
We're fully back to the macro play-by-play. Of the Fed's anticipated moves, that is. And on Thursday, a surprisingly robust June jobs report dramatically lowered the likelihood of a rate cut this month. Reflected in the chart that everyone's watching, the central bank is on a path to hold steady, reaffirming the view that the economy is in strong enough shape for policymakers to wait for more clarity on tariffs or for further signs of trouble. Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy A sudden reversal after Wednesday's data from ADP that showed weakness in private payrolls, the employment report appeared to end increasing speculation that the Fed would step in at the end of the month to protect a deteriorating labor market. "While there were some elements of softness beneath the better-than-expected headlines, the June employment report was strong enough to allow the Federal Reserve to keep policy on hold as it monitors the impact of tariffs on inflation," said Nancy Vanden Houten, lead US economist at Oxford Economics. As our Chart of the Week shows, markets are now pricing in just a 5% chance the central bank lowers rates at its July meeting, down from a 24% chance seen a day prior, according to the CME FedWatch Tool. The promising jobs data even shifted expectations further down the calendar. Traders grew more skeptical of a September cut from the Fed, with markets now pricing in a 68% chance the Fed reduces rates then, down from a 94% chance observed a week ago. Jeffrey Roach, chief economist at LPL Financial, said the Fed can comfortably sit in 'wait and see' mode with payrolls like these, but noted that "the administration is still actively negotiating details with several major trading partners and the eventual business impacts are unknown." In other words, a lot can still happen. The chart as a stand-in for a preview of Fed policy carries political implications. Just a day before the jobs numbers came out, President Trump unleashed his harshest criticism of Fed Chair Jerome Powell. In a Truth Social post Wednesday night, the president said Powell "should resign immediately," amplifying what has been an intensifying White House pressure campaign against the central bank leader. And on Thursday, Treasury Secretary Scott Bessent questioned the Federal Reserve's judgment on interest rates, suggesting their benchmark rate is too high. While the forecast chart itself isn't a Fed product, it's a reliable indicator of the direction of Fed policy, at least in the moment. As a gauge that's closely monitored by Wall Street and the financial press, it both reflects the market's thinking and has the ability to influence it. That's all to say that the sizable shift toward no cutting in July will likely add to the administration's displeasure with Powell — and play-by-play is sure to continue on July 15 when we get a fresh reading from the other side of the mandate with the Consumer Price Index's inflation numbers. But as far as the market's concerned, it's... not. The good news of a healthier-than-expected labor market pushed the S&P 500 and Nasdaq to new all-time highs. Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
Business Insider
03-07-2025
- Business
- Business Insider
The jobs report has dashed hopes of a rate cut this summer
Say goodbye to the prospect of a rate cut this summer. Investors have slashed the odds of an interest rate cut from the Federal Reserve this month after data released Thursday indicated the job market was unexpectedly strong in June. The robust jobs report gives the central bank room to keep interest rates elevated, with employment strong and inflation remaining above its 2% target. The report indicated that employers added 147,000 jobs to the economy last month, handily beating expectations of 110,000. In another sign of strength, payrolls for May were revised upward to 144,000, and the overall unemployment rate unexpectedly ticked down to 4.1% from 4.2%. According to the CME FedWatch tool, the perceived chances of the Fed cutting rates by 25 basis points plunged Thursday morning, dropping from a 23.8% chance Wednesday to 6.7% after the release of the jobs report. Markets still see a September rate cut as likely, with odds of about 71% after the jobs report. Stocks moved slightly higher as traders cheered the strong data, but dimmer rate-cut views kept a lid on more pronounced gains. Still, the S&P 500 managed to rise to a fresh intraday record of 6,271. The bigger reaction to the jobs data was in the bond market. Yields jumped on the prospects for the Fed to keep rates higher for longer. The 10-year US Treasury yield jumped 4 basis points to about 4.34%. The yield on the 2-year Treasury, which is the most sensitive to Fed policy, spiked 9 basis points to 3.88%. "The firm June unemployment rate waves the Federal Reserve off the possibility of a July rate cut, which shifts the spotlight to September," Mark Hamrick, a senior economic analyst at Bankrate, wrote in a note. "If businesses keep expanding payrolls like they've done so far this year, the Fed can comfortably sit in 'wait and see' mode at the upcoming policy meeting. Uncertainty around tariffs and trade have apparently not spooked businesses into shedding workers," said Jeffrey Roach, the chief economist at LPL Financial. Pressure on Powell The report is unlikely to lead to rate cuts this month, which means the Trump administration's withering criticism of Fed Chair Jerome Powell could intensify. Powell has signaled the central bank is comfortable holding interest rates steady while the central bank monitors the path of inflation and any impact from tariffs. This week, Powell said the Fed would have cut rates already were it not for Trump's trade war. Trump, who has harangued Powell to cut rates for years, posted on Truth Social on Wednesday suggesting the Fed chief leave his position. "' Too Late ' should resign immediately!!!" Trump wrote, referring to the nickname he has frequently called Powell to express his annoyance at not cutting interest rates earlier. Trump's post also linked to an article detailing a post on X from William Pulte, the FHFA director, who suggested that Congress should investigate Powell. Pulte has criticized Powell for hurting the housing market by keeping rates high. "Like this tweet if you think it's time for Jerome Powell to resign," Pulte said in a separate post Wednesday evening. According to the latest Freddie Mac survey, the 30-year US fixed mortgage rate hovered at about 6.77% last week. Still, Powell looks likely to stand pat on interest rates, even amid escalating political pressure, Bankrate's Hamrick said. "He is determined to serve out the remainder of his term not being swayed by political pressure or blunt criticism from the president," he added. "Indeed, the president's pressure could have the opposite of the intended impact." Others have speculated that Trump's criticism only makes it less likely that Powell will bend and lower rates. Observers say Powell may now be more focused on his legacy of protecting Fed independence.
