Latest news with #Goolsbee
Yahoo
4 days ago
- Business
- Yahoo
Dollar Pressured by Dovish Fed Comments
The dollar index (DXY00) on Monday fell by -0.33%. The dollar on Monday dropped from a 3-week high and turned lower on dovish Fed comments. Fed Governor Bowman and Chicago Fed President Goolsbee said they favored a Fed rate cut at next month's FOMC meeting. Also, Monday's rebound in stocks curbed liquidity demand for the dollar. In addition, Monday's fall in the 10-year T-note yield to a 6-week low weighed on the dollar's interest rate differentials. The dollar initially rallied to a 3-week high Monday after the weekend attack by the US on Iran's nuclear facilities boosted safe-haven demand for the dollar. The dollar also found support from the stronger-than-expected US PMI and existing home sales reports. Palantir, Nuclear Stocks, and the Put/Call Ratio: Key Stocks, Sectors, and Indicators on Watch After U.S. Strikes on Iran Dollar Pressured by Dovish Fed Comments Dollar Firms on Escalation of Middle East Tensions Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! The June S&P US manufacturing PMI was unchanged at 52.0, stronger than expectations of a decline to 51.0. US May existing home sales unexpectedly rose +0.8% m/m to 4.03 million versus expectations of a -1/3% m/m decline to 3.95 million. Fed Governor Bowman said, 'Should inflation pressures remain constrained, I would support lowering the fed funds policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market.' Chicago Fed President Goolsbee said the Fed could resume interest rate cuts if the inflation hit from tariffs remains subdued. The markets are discounting the chances at 23% for a -25 bp rate cut after the July 29-30 FOMC meeting. EUR/USD (^EURUSD) Monday rose by +0.42%. The euro recovered from early losses on Monday and rallied after the dollar gave up an early advance and sank on dovish Fed comments. The euro on Monday initially moved lower due to weaker-than-expected Eurozone June PMI reports. Also, dovish comments on Monday from ECB Governing Council member Centeno undercut the euro when he said the Eurozone economy needs more ECB stimulus. The June S&P Eurozone manufacturing PMI was unchanged at 49.4, weaker than expectations of an increase to 49.7. Also, the June S&P Eurozone composite PMI was unchanged at 50.2, weaker than expectations of an increase to 50.4. ECB Governing Council member Centeno said, 'The supply and demand conditions are still too weak in the Eurozone to allow a return to the 2% inflation target without further stimulus.' Swaps are discounting the chances at 6% for a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) Monday rose by +0.07%. The yen tumbled to a 1-1/4-month low against the dollar today on concern that rising energy costs will derail Japan's economy after the escalation of Middle East hostilities pushed crude prices up to a 5-1/4 month high. The yen also fell after Japanese officials denied a Financial Times report that said the US asked Japan to raise its defense spending to 3.5% of annual GDP. However, the yen recovered most of its losses on Monday after T-note yields plunged following dovish comments from the Fed. The yen also garnered support from Monday's Japanese economic news, which showed that the June Jibun Bank Japanese manufacturing PMI expanded at its fastest pace in 13 months. In addition, the Japan Finance Ministry's cut in its long-term bond sales was supportive for the yen. The June Jibun Bank Japan manufacturing PMI rose +1.0 to 50.4, the highest level in 13 months. The Japanese Finance Ministry said it will reduce the volume of 20-year, 30-year, and 40-year bonds sold in auctions by a combined 3.2 trillion yen ($21.7 billion) starting in July through the end of March 2026. August gold (GCQ25) Monday closed up +9.30 (+0.27%), and July silver (SIN25) closed up +0.170 (+0.47%). Precious metals moved higher Monday after the US launched attacks over the weekend on Iran's nuclear facilities, escalating tensions in the Middle East and prompting some safe-haven demand for precious metals. Lower global bond yields on Monday were also supportive of precious metals. In addition, dovish central bank comments boosted demand for precious metals as a store of value. Fed Governor Bowman and Chicago Fed President Goolsbee said they support a Fed rate cut at next month's policy meeting, and ECB Governing Council member Centeno said the Eurozone economy needs more ECB stimulus. Fund buying of gold and silver continues to support prices. Gold holdings in ETFs rose to a 1-3/4 year high last Friday, and silver holdings in ETFs rose to a 2-3/4 year high. Monday's rally in stocks limited the upside in precious metals. Also, Iran's meager retaliation attempt against the US for attacking its nuclear facilities reduced safe-haven demand for precious metals after missile attacks by Iran on US bases in Qatar were intercepted with no damage done to US assets. 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
Yahoo
02-06-2025
- Business
- Yahoo
Chicago Fed president says ‘six-pack' economy hiding under layer of uncertainty
Federal Reserve Bank of Chicago President Austan Goolsbee speaks during the third day of the Mackinac Policy Conference at the Grand Hotel on Mackinac Island, Mich., on May 29, 2025. (Photo by Andrew Roth/Michigan Advance) MACKINAC ISLAND – The president of the Federal Reserve Bank of Chicago says that while the United States may be heading towards stagflation, there is still a strong economy hidden underneath a layer of uncertainty. Austan Goolsbee, speaking at last week's Mackinac Policy Conference, pointed to low unemployment rates and inflation hitting targets to suggest that rates should be 'well below where they are today' within the next few years. But he said that's at risk due to the uncertainty caused by constantly shifting federal economic policies, like President Donald Trump's will-he-won't-he approach to tariffs – which he said Michigan is the most exposed state to in the country. 'If we can get the dust out of the air, I do still think that underneath there is a strong dual mandate economy,' Goolsbee said, referring to the Fed's responsibilities to stabilize prices and maximize employment. 'The longer we go contemplating really big changes, like some of the ones that have been discussed, the more that fades into the background.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Goolsbee compared it to when he started going to the gym and asked his trainer how long it would take for him to develop a six-pack. 'Everyone has a six-pack underneath. The problem is not the lifting of weights; it's you've got to get all of what's on top of there off before you can see it,' Goolsbee said. 'And I feel a bit like that on the economy, you know, if we can just get this off of there, there's a six pack.' While Goolsbee said that the economy is currently heading in the direction of stagflation – with inflation rising at the same time employment is deteriorating – he said it will likely not be anywhere near as dramatic as the stagflation of the 1970s, when inflation was at 13% with an 8% unemployment rate. But he said any decision the Fed has to make can have a large impact on people's lives. 'What the Fed decides affects regular people. It is not just a game to be played out in the stock market,' Goolsbee said. 'It affects construction, it affects purchasing cars, it affects whether you can buy a house.' Ultimately, he said that while it would be easier to make those decisions with more stability, he said the Fed will adapt to whatever conditions they are presented with. 'I always say that our model at the Fed is the same as the Midwest, that there's no bad weather, only bad clothing,' Goolsbee said. 'You tell me what the conditions are, and I'll tell you what jackets you're supposed to wear.'
Straits Times
29-05-2025
- Business
- Straits Times
US Fed's Goolsbee: If tariffs are avoided, policy rate can come down
Mr Austan Goolsbee says the US labour market was stable and inflation was heading towards the Fed's 2 per cent goal before tariffs were introduced on April 2. PHOTO: REUTERS US Fed's Goolsbee: If tariffs are avoided, policy rate can come down NEW YORK - Chicago Federal Reserve Bank president Austan Goolsbee on May 29 said he believes that if big tariffs could be avoided, either through trade deals or otherwise, the US central bank could likely cut interest rates given the underlying strength of the economy and the direction of inflation. Comparing the economic effect of tariffs to a layer of fat atop an otherwise healthy set of abdominal muscles, 'you've got to get all of what's on top of there off before you can see it,' Mr Goolsbee said, at the 2025 Mackinac Policy Conference. 'And I feel a little bit like that on the economy. You know, if we could just get this off of there, there's a six-pack underneath.' Mr Goolsbee did not comment directly on a May 28 ruling by a US trade court that blocked many of the tariffs put on by the Trump administration that have threatened to push up inflation and slow economic growth, including the 'Liberation Day' levies from April 2. Before that date, Mr Goolsbee said, the labour market was stable and inflation was heading towards the Fed's 2 per cent goal, conditions that would allow the Fed to bring the policy rate down from its current 4.25 per cent to 4.5 per cent range and towards its long-term settling point. Based on the most recent Fed policymaker projection, that long-term neutral rate is around 3 per cent. For now, though, uncertainty over tariffs is causing businesses to have a 'pencils down' moment as they wait for clarity on trade policy, Mr Goolsbee said. The Fed finds itself in a similar situation, with policymakers particularly worried about the possibility of tariffs disrupting downward progress on inflation and pushing up the unemployment rate. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
29-05-2025
- Business
- Yahoo
Fed's Goolsbee: if tariffs are avoided, policy rate can come down
(Reuters) -Chicago Federal Reserve Bank President Austan Goolsbee on Thursday said he believes that if big tariffs could be avoided, either through trade deals or otherwise, the central bank could likely cut interest rates, given the underlying strength of the economy and the direction of inflation. Goolsbee did not comment directly on a ruling Wednesday by a US trade court that blocked many of the tariffs put on by the Trump administration, including the aggressive "Liberation Day" levies from April 2. Before that date, Goolsbee said, the labor market was stable and inflation was heading towards the Fed's 2% goal, conditions that would allow the Fed to bring the policy rate down to its long-term settling point, well below the current 4.25%-4.5% rate. 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
Yahoo
29-05-2025
- Business
- Yahoo
Fed's Goolsbee: if tariffs are avoided, policy rate can come down
(Reuters) -Chicago Federal Reserve Bank President Austan Goolsbee on Thursday said he believes that if big tariffs could be avoided, either through trade deals or otherwise, the central bank could likely cut interest rates, given the underlying strength of the economy and the direction of inflation. Goolsbee did not comment directly on a ruling Wednesday by a US trade court that blocked many of the tariffs put on by the Trump administration, including the aggressive "Liberation Day" levies from April 2. Before that date, Goolsbee said, the labor market was stable and inflation was heading towards the Fed's 2% goal, conditions that would allow the Fed to bring the policy rate down to its long-term settling point, well below the current 4.25%-4.5% rate.
