Latest news with #JayBryson
Bloomberg
11-07-2025
- Business
- Bloomberg
Single Best Idea: Stoltzfus & Bryson
Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio. In this episode, we feature conversations with John Stoltzfus & Jay Bryson. Watch Tom and Paul LIVE every day on YouTube:
Yahoo
18-06-2025
- Business
- Yahoo
Fed Foresees Stagflation, Higher Interest Rates Ahead
The Federal Reserve officials stuck to their interest rate expectations this week, but shifted their economic outlook in their latest economic projections. The Federal Reserve Open Markets Committee's economic projections showed that the central bank is likely to cut interest rates two more times, or half a percentage point, throughout the rest of the year. The projections line up with similar forecasts in March and late last year. However, not everything is the same as in prior projections. The Fed forecast shows unemployment and inflation rising higher than officials previously thought. The projection underscores the Fed's reasoning behind its wait-and-see approach. Despite the inflation rate coming closer to its annual target of 2%, the Federal Reserve held rates at their current level of 4.25% to 4.50% on Wednesday. 'The summary forecasts that were published today imply that the FOMC sees a bit more stagflation than it did in March,' said Wells Fargo Chief Economist Jay Bryson. What it says: More officials forecast unemployment moving higher in 2025, with most now projecting an unemployment rate of between 4.4% and 4.5% this year, sending the median projection up to 4.5%. The unemployment rate stayed at 4.2% in May, recent data showed. Officials see unemployment staying around 4.5% in 2026 and 2027. Both projections are higher than the March forecast. What it means: Officials don't see a breakdown in the labor market ahead, though joblessness may tick higher than previously expected. With a solid labor market helping keep the economy strong, Fed officials see more time available to them to keep interest rates high in order to get the Personal Consumption Expenditures (PCE) inflation rate back to its 2% target. 'From the Fed's perspective, substantial ongoing uncertainty paired with a good-enough-for-now labor market is ample justification to continue its wait-and-see approach,' said Indeed Senior Economist Cory Stahle. What it says: Inflation will get worse before it gets better. Fed officials now see the median PCE inflation rate moving to 3% in 2025, higher than the median rate of 2.7% forecasted in March. Projections for 2026 and 2027 were also higher than the March forecast and showed that officials expected inflation to remain above the Fed's goal of 2%. What it means: Officials are likely factoring in expected price increases from tariffs, resulting in higher inflation over the next few years. While the Fed's projections indicate that price pressure may persist, it wasn't enough for them to significantly reduce their interest rate projections. 'Their revised quarterly forecasts indicate they remain dovish and inclined to 'look-through' a temporary spike in inflation and cut interest rates by 50 [basis points] this year to support an anticipated weakening in economic activity," wrote Nationwide Chief Economist Kathy Bostjancic. What it says: The dot plot shows that FOMC members are divided on where interest rates are going. The top row shows that seven of the 19 members see interest rates remaining unchanged at 4.25% to 4.5% throughout the rest of the year. Another row of eight votes shows that the Fed will cut interest rates two more times to bring them down to 3.75% to 4%. Only four members foresee a different result for the Fed. When taken together, the average projects a half-percent interest rate cut this year. What it means: The results generally indicate that despite a declining inflation rate and continued strong job growth, more members are cautious about whether interest rates need to be cut at all. The dot plot shows that the number of members who don't believe the Fed will cut at all this year increased by three, while fewer projected that the Fed would cut by 50 basis points than in March. 'They don't seem to be in a hurry to cut rates, but appear open to doing so under the right conditions,' said eToro U.S. Investment Analyst Bret Kenwell. Read the original article on Investopedia
CNN
18-06-2025
- Business
- CNN
If the Fed lowers interest rates this year, it'll likely be because of bad news. Here's why
Rising unemployment will likely be what pulls the trigger for the Federal Reserve to finally begin lowering interest rates again, economists say. Since January, the Fed has stood on the sidelines, keeping its benchmark lending rate unchanged at about 4.4%. Officials have said in recent speeches that they want to see how President Donald Trump's significant policy changes, including on tariffs, affect the US economy first before considering further rate cuts. Renewed tensions in the Middle East add even more to the uncertainty that has paralyzed the central bank. Officials are expected to continue with their strategy of staying on hold at the conclusion of their two-day policy meeting on Wednesday, with an announcement at 2 p.m. ET. But the economy could soon buckle as Trump's tariffs begin to force shoppers to pull back on their spending, eventually sending unemployment higher as company profits take a hit. That would give the Fed, which is responsible for preserving the labor market's strength, the signal to start lowering rates. New economic projections from Fed policymakers could show they expect to lower rates at least once this year — and it will likely be because of bad news, economists say. 'The Fed will probably start to cut rates in the second half of the year as the tariffs start to weigh on growth and you see the unemployment rate coming up,' Jay Bryson, chief economist at Wells Fargo, told CNN. While the Fed will likely lower rates eventually, the Fed's expected decision on Wednesday might not sit well with Trump, who has torn into Fed Chair Jerome Powell for not lowering borrowing costs already, describing the Fed leader as a 'fool' and a 'numbskull.' In April after Trump unveiled a massive tariff hike on dozens of countries, Powell predicted the Fed could be in a situation in which both of the US central bank's goals — stable prices and maximum employment — are 'in tension.' A stagnant economy combined with rising inflation is referred to as 'stagflation,' which isn't happening outright, but forecasts from most economists, in addition to Fed officials themselves, show the US economy is trending in that direction. Officials' new projections, to be released Wednesday, will likely show they still expect stagflation to slowly take shape this year. Such a situation puts the Fed in a difficult situation, and Powell has said how the Fed responds depends on which variable is in a worse state. The bigger worry for the Fed may end up being with the labor market. 'The steady unemployment rate notwithstanding, cracks are becoming more evident in the labor market,' Jim Baird, chief investment officer at Plante Moran Financial Advisors, wrote in a recent analyst note. 'Job openings are down, job creation has slowed, and unemployment claims continue to edge higher.' Fed officials have signaled that they will step in by lowering rates if the labor market shows concerning signs of strain. For months, Trump has lambasted the Fed and Powell himself for not lowering borrowing costs quickly enough. Trump has said the Fed is lagging behind its European counterpart and has claimed, without evidence, that the reason Powell is not lowering rates is to help Democrats. (The Fed is an independent agency whose decisions on monetary policy are free of political interference.) Trump has also said the Fed ought to lower rates to reduce the federal government's interest payments on its massive budget deficits, which are expected to grow even larger if Congress passes the president's tax and spending bill. 'We're going to spend $600 billion a year, $600 billion because of one numbskull that sits here (and says), 'I don't see enough reason to cut the rates now,'' Trump said at the White House last week. However, Fed officials don't consider the government's finances when setting rates. They focus on achieving their so-called dual mandate of stable prices and maximum employment. Other administration officials have piled on to the criticism of the Fed recently. 'It's unbelievable how much we would save if [Powell] did his job and he cut interest rates,' Commerce Secretary Howard Lutnick told Fox News last week. 'Come on. He's got to do his job soon.' Last week, Vice President JD Vance accused the Fed of deliberate misconduct for not lowering borrowing costs, writing in a post on X that the Fed is engaged in 'monetary malpractice.'
CNN
18-06-2025
- Business
- CNN
If the Fed lowers interest rates this year, it'll likely be because of bad news. Here's why
Rising unemployment will likely be what pulls the trigger for the Federal Reserve to finally begin lowering interest rates again, economists say. Since January, the Fed has stood on the sidelines, keeping its benchmark lending rate unchanged at about 4.4%. Officials have said in recent speeches that they want to see how President Donald Trump's significant policy changes, including on tariffs, affect the US economy first before considering further rate cuts. Renewed tensions in the Middle East add even more to the uncertainty that has paralyzed the central bank. Officials are expected to continue with their strategy of staying on hold at the conclusion of their two-day policy meeting on Wednesday, with an announcement at 2 p.m. ET. But the economy could soon buckle as Trump's tariffs begin to force shoppers to pull back on their spending, eventually sending unemployment higher as company profits take a hit. That would give the Fed, which is responsible for preserving the labor market's strength, the signal to start lowering rates. New economic projections from Fed policymakers could show they expect to lower rates at least once this year — and it will likely be because of bad news, economists say. 'The Fed will probably start to cut rates in the second half of the year as the tariffs start to weigh on growth and you see the unemployment rate coming up,' Jay Bryson, chief economist at Wells Fargo, told CNN. While the Fed will likely lower rates eventually, the Fed's expected decision on Wednesday might not sit well with Trump, who has torn into Fed Chair Jerome Powell for not lowering borrowing costs already, describing the Fed leader as a 'fool' and a 'numbskull.' In April after Trump unveiled a massive tariff hike on dozens of countries, Powell predicted the Fed could be in a situation in which both of the US central bank's goals — stable prices and maximum employment — are 'in tension.' A stagnant economy combined with rising inflation is referred to as 'stagflation,' which isn't happening outright, but forecasts from most economists, in addition to Fed officials themselves, show the US economy is trending in that direction. Officials' new projections, to be released Wednesday, will likely show they still expect stagflation to slowly take shape this year. Such a situation puts the Fed in a difficult situation, and Powell has said how the Fed responds depends on which variable is in a worse state. The bigger worry for the Fed may end up being with the labor market. 'The steady unemployment rate notwithstanding, cracks are becoming more evident in the labor market,' Jim Baird, chief investment officer at Plante Moran Financial Advisors, wrote in a recent analyst note. 'Job openings are down, job creation has slowed, and unemployment claims continue to edge higher.' Fed officials have signaled that they will step in by lowering rates if the labor market shows concerning signs of strain. For months, Trump has lambasted the Fed and Powell himself for not lowering borrowing costs quickly enough. Trump has said the Fed is lagging behind its European counterpart and has claimed, without evidence, that the reason Powell is not lowering rates is to help Democrats. (The Fed is an independent agency whose decisions on monetary policy are free of political interference.) Trump has also said the Fed ought to lower rates to reduce the federal government's interest payments on its massive budget deficits, which are expected to grow even larger if Congress passes the president's tax and spending bill. 'We're going to spend $600 billion a year, $600 billion because of one numbskull that sits here (and says), 'I don't see enough reason to cut the rates now,'' Trump said at the White House last week. However, Fed officials don't consider the government's finances when setting rates. They focus on achieving their so-called dual mandate of stable prices and maximum employment. Other administration officials have piled on to the criticism of the Fed recently. 'It's unbelievable how much we would save if [Powell] did his job and he cut interest rates,' Commerce Secretary Howard Lutnick told Fox News last week. 'Come on. He's got to do his job soon.' Last week, Vice President JD Vance accused the Fed of deliberate misconduct for not lowering borrowing costs, writing in a post on X that the Fed is engaged in 'monetary malpractice.'
CNBC
05-06-2025
- Business
- CNBC
Don't see the labor market falling apart at this point, says Wells Fargo's Jay Bryson
Jay Bryson, Wells Fargo chief economist, joins 'Squawk Box' to discuss the state of the economy, the Fed's rate path outlook, reports of inflation data accuracy, and more.
