Latest news with #Kashkari
Miami Herald
29-06-2025
- Business
- Miami Herald
Fed official sends strong message on interest rate cuts
Who's ready for a cut in interest rates? We. All. Are. Don't miss the move: Subscribe to TheStreet's free daily newsletter Whether mortgage rates, student loans, credit-card bills or auto loans, America runs on empty when it comes to the post-pandemic interest rates we are paying. The Federal Reserve Bank of Minneapolis President and CEO Neel Kashkari expects changes ahead in 2025, even though there hasn't been a rate cut all year. Related: Fed official makes surprising interest rate cut prediction Kashkari, in keeping with other economists and market watchers, is keen to see how President Donald Trump's whipsawing tariffs and their co-joined trade wars increase inflation and/or impact the job markets. Federal Reserve Board Chair Jerome Powell defended keeping the Federal Funds Rate steady in June per the Fed's dual mandate: prudent monetary policy regulating the money supply that keeps inflation and unemployment relatively low and GDP happily growing along. Kashkari, in comments before the Montana Chamber Foundation on June 26, described the balancing process similar to a "seesaw." "That dual mandate is what we're always trying to achieve," Kashkari said. Powell describes the economy as solid but that a "wait-and-see" forecast is needed until the full impact of the expected tariff prices passes through inflation and employment numbers over the next three months. The Federal Open Meeting Committee controls the Federal Funds Rate, which banks charge each other overnight to borrow money. The funds rate is tied to the cost of borrowing money for consumers, investors, and businesses. The Federal Open Meeting Committee said June 18 it would keep the Federal Funds Rate at 4.25% to 4.50%. Related: Fed's Powell sent a blunt message on interest rates this week Both Fed and market watchers were forecasting the next probable rate cut could appear at the September FOMC meeting. Then Fed Governors Christopher Waller and Michelle Bowman said in separate comments earlier this week that a funds rate cut could come as early as the Fed's July 29-30 meeting if the tariff inflation proved to be short-term and not as strong as originally expected. Kashkari offered his views in a June 27 essay as to why the tariffs and the trade war have not yet shown up in the data. "I see two likely explanations: The economic effects of the trade war are delayed, or companies are finding ways to avoid the tariffs (or some combination of both),'' he wrote. While inflation has continued slowly trending toward the 2 percent target and activity has held up, the labor market has also cooled gently, with the unemployment rate holding at 4.2 percent and unemployment claims not showing a rapid acceleration, Kashkari said. "Our outreach to industry contacts suggests many businesses are reluctant to pass on price increases to customers, especially if trade deals could soon emerge and reduce overall tariff rates,'' he added. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year While the debate of whether tariffs will lead to a one-time increase in the price level or to a more persistent increase in inflation is important, Kashkari said the Fed must try to determine if that price level increase is merely delayed or is likely to be smaller than what was announced. "This is challenging and will take time,'' he noted. Kashkari, who is a member of the FOMC this year, said he is retaining his position of two .25 percent funds rate cuts this year, with the first possibly coming in September, depending on what the data showed. "If we were to cut in September and then the effects of tariffs showed up this fall, I believe we should not be on a preset easing course,'' he said, adding that if the data called for it, "we could hold the policy rate at the new level until we gained greater confidence that inflation was headed back to our target." President Trump repeated on June 27 that he wanted the Fed to cut the fund rate down to 1% when it meets in late July. Related: Fed official suggests major interest rate change coming soon The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
29-06-2025
- Business
- Yahoo
Dollar Moves Higher on US Trade Tensions with Canada
The dollar index (DXY00) Friday rose by +0.22%. Positive trade news is bullish for the dollar as the US moves closer to trade deals with China and other trading partners. The dollar also found support after the US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose more than expected, a hawkish factor for Fed policy. In addition, an upward revision to the University of Michigan's US June consumer sentiment index is supportive of the dollar. The dollar raced to its high Friday afternoon when President Trump said he was ending all trade discussions with Canada and threatened new tariffs on the country after it moved to implement a digital services tax. Gains in the dollar were limited from Friday's weaker-than-expected US May personal spending and income reports. Also, dovish comments from Minneapolis Fed President Kashkari weighed on the dollar when he said he sees two 25 bp Fed rate cuts this year. Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. US May personal spending unexpectedly fell -0.1% m/m, weaker than expectations of a +0.1% m/m increase. May personal income unexpectedly fell -0.5% m/m, weaker than expectations of +0.3% m/m and the biggest decline in more than 3-1/2 years. The US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose +0.2% m/m and +2.7% y/y, stronger than expectations of +0.1% m/m and +2.6% y/y. The University of Michigan US Jun consumer sentiment index was revised upward by +0.2 to 60.7, stronger than expectations of no change at 60.5. The University of Michigan US Jun 1-year inflation expectations were unexpectedly revised lower to 5.0%, weaker than expectations of an upward revision to 5.2%. The 5-10 year inflation expectations were revised downward to 4.0%, weaker than expectations of no change at 4.1%. Minneapolis Fed President Kashkari said he sees two 25-bp Fed rate cuts this year, with the first potentially in September, but warned that tariffs could have a delayed impact on inflation and that policymakers should remain flexible. US Commerce Secretary Lutnick said that the US and China had finalized a trade understanding reached last month in Geneva, including a commitment from China to deliver rare earth materials. China's Commerce Ministry also confirmed the agreement and stated that it will review and approve eligible applications for the export of controlled items, and the US will cancel the restrictive measures taken against China. In addition, Commerce Secretary Lutnick said the White House has imminent plans to reach agreements with a set of 10 major trading partners ahead of a July 9 deadline for reciprocal tariffs. Meanwhile, the Treasury Department announced a deal with G-7 countries that will exclude US companies from some taxes imposed by other countries in exchange for removing the "revenge tax" proposal from President Trump's tax bill. The markets are discounting a 19% chance of a -25 bp rate cut at the July 29-30 FOMC meeting. EUR/USD (^EURUSD) Friday rose by +0.03% and posted a new 3-3/4 year high. The euro moved higher Friday from the stronger-than-expected French Jun CPI report, which is hawkish for ECB policy. Also, higher German bund yields have strengthened the euro's interest rate differentials after the 10-year German bund yield rose to a 1-week high Friday at 2.606%. Gains in the euro were limited on Friday after the Eurozone's June economic confidence survey unexpectedly declined and after the dollar strengthened when President Trump announced he was ending all trade discussions with Canada. The Eurozone Jun economic confidence survey unexpectedly fell -0.8 to 94.0, weaker than expectations of unchanged at 94.8. France Jun CPI (EU harmonized) rose +0.8% y/y, stronger than expectations of +0.7% y/y. Spain Jun CPI (EU harmonized) rose +2.2% y/y, right on expectations. Swaps are pricing in a 7% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) Friday rose by +0.21%. Weaker-than-expected Japanese economic news weighed on the yen Friday, following the unexpected decline in May retail sales and the less-than-expected rise in the Jun Tokyo CPI, which are dovish factors for BOJ policy. Also, Friday's rally in the Nikkei stock index to a 5-month high has reduced safe-haven demand for the yen. In addition, higher T-note yields on Friday were bearish for the yen. Japan May retail sales unexpectedly fell -0.2% m/m, weaker than expectations of a +0.3% m/m increase. Japan Jun Tokyo CPI rose +3.1% y/y, weaker than expectations of +3.3% y/y. Jun Tokyo CPI ex-fresh food and energy rose +3.1% y/y, weaker than expectations of +3.3% y/y. August gold (GCQ25) Friday closed down -60.40 (-1.80%), and July silver (SIN25) closed down by -0.554 (-1.51%). Precious metals settled sharply lower on Friday, with gold falling to a 4-week low. Friday's stronger dollar and higher global bond yields undercut metals prices. Also, positive trade news on Friday sparked a rally in stocks that curbed safe-haven demand for precious metals as the US moves closer to trade deals with China and other trading partners. Precious metals remained lower after Friday's news showed that the US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose more than expected, a hawkish factor for Fed policy. However, precious metals recovered from their worst levels on Friday after President Trump announced he was ending all trade talks with Canada and threatened new tariffs on the country following its implementation of a digital services tax on the US. Also, Friday's economic news, which showed an unexpected decline in US May personal spending and personal income, is dovish for Fed policy and supportive for precious metals. In addition, dovish comments from Minneapolis Fed President Kashkari on Friday were positive for gold demand as a store of value, as he stated that he sees two 25-bp Fed rate cuts this year. Fund buying of gold continues to support prices after gold holdings in ETFs rose to a 1-3/4 year high Thursday. 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. 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Yahoo
27-06-2025
- Business
- Yahoo
Dollar Supported and Gold Prices Sink on Trade Deal Optimism
The dollar index (DXY00) today is up slightly by +0.07%. Positive trade news is bullish for the dollar as the US moves closer to trade deals with China and other trading partners. The dollar also found support after the US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose more than expected, a hawkish factor for Fed policy. In addition, an upward revision to the University of Michigan's US June consumer sentiment index is supportive of the dollar. Gains in the dollar are limited from today's weaker-than-expected US May personal spending and income reports. Also, dovish comments from Minneapolis Fed President Kashkari weighed on the dollar when he said he sees two 25 bp Fed rate cuts this year. Dollar Falls to 3-1/4 Year Low as President Trump Looks to Fast-Track His Pick for New Fed Chair What's Driving Platinum? Dollar Supported and Gold Prices Sink on Trade Deal Optimism Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. US May personal spending unexpectedly fell -0.1% m/m, weaker than expectations of a +0.1% m/m increase. May personal income unexpectedly fell -0.5% m/m, weaker than expectations of +0.3% m/m and the biggest decline in more than 3-1/2 years. The US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose +0.2% m/m and +2.7% y/y, stronger than expectations of +0.1% m/m and +2.6% y/y. The University of Michigan US Jun consumer sentiment index was revised upward by +0.2 to 60.7, stronger than expectations of no change at 60.5. The University of Michigan US Jun 1-year inflation expectations were unexpectedly revised lower to 5.0%, weaker than expectations of an upward revision to 5.2%. The 5-10 year inflation expectations were revised downward to 4.0%, weaker than expectations of no change at 4.1%. Minneapolis Fed President Kashkari said he sees two 25-bp Fed rate cuts this year, with the first potentially in September, but warned that tariffs could have a delayed impact on inflation and that policymakers should remain flexible. US Commerce Secretary Lutnick said that the US and China had finalized a trade understanding reached last month in Geneva, including a commitment from China to deliver rare earth materials. China's Commerce Ministry also confirmed the agreement and stated that it will review and approve eligible applications for the export of controlled items, and the US will cancel the restrictive measures taken against China. In addition, Commerce Secretary Lutnick said the White House has imminent plans to reach agreements with a set of 10 major trading partners ahead of a July 9 deadline for reciprocal tariffs. Meanwhile, the Treasury Department announced a deal with G-7 countries that will exclude US companies from some taxes imposed by other countries in exchange for removing the "revenge tax" proposal from President Trump's tax bill. The markets are discounting a 21% chance of a -25 bp rate cut at the July 29-30 FOMC meeting. EUR/USD (^EURUSD) today is up +0.17% at a new 3-3/4 year high. The euro has support today from the stronger-than-expected French Jun CPI report, which is hawkish for ECB policy. Also, higher German bund yields have strengthened the euro's interest rate differentials after the 10-year German bund yield rose to a 1-week high today at 2.606%. The Eurozone Jun economic confidence survey unexpectedly fell -0.8 to 94.0, weaker than expectations of unchanged at 94.8. France Jun CPI (EU harmonized) rose +0.8% y/y, stronger than expectations of +0.7% y/y. Spain Jun CPI (EU harmonized) rose +2.2% y/y, right on expectations. Swaps are pricing in a 7% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) today is up by +0.17%. Weaker-than-expected Japanese economic news is weighing on the yen today, following the unexpected decline in May retail sales and the less-than-expected rise in the Jun Tokyo CPI, which are dovish factors for BOJ policy. Also, today's rally in the Nikkei stock index to a 5-month high has reduced safe-haven demand for the yen. In addition, higher T-note yields today are bearish for the yen. Japan May retail sales unexpectedly fell -0.2% m/m, weaker than expectations of a +0.3% m/m increase. Japan Jun Tokyo CPI rose +3.1% y/y, weaker than expectations of +3.3% y/y. Jun Tokyo CPI ex-fresh food and energy rose +3.1% y/y, weaker than expectations of +3.3% y/y. August gold (GCQ25) today is down -69.50 (-2.08%), and July silver (SIN25) is down by -0.676 (-1.85%). Precious metals today are sharply lower, with gold sliding to a 4-week low. Today's stronger dollar is undercutting metals prices. Also, positive trade news today sparked a rally in stocks that curbed safe-haven demand for precious metals as the US moves closer to trade deals with China and other trading partners. Precious metals remained lower after today's news showed that the US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose more than expected, a hawkish factor for Fed policy. Today's economic news, which showed an unexpected decline in US May personal spending and personal income, is dovish for Fed policy and supportive for precious metals. In addition, dovish comments today from Minneapolis Fed President Kashkari were positive for gold demand as a store of value, as he stated that he sees two 25-bp Fed rate cuts this year. Fund buying of gold continues to support prices after gold holdings in ETFs rose to a 1-3/4 year high Thursday. 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
Globe and Mail
28-05-2025
- Business
- Globe and Mail
Dollar Climbs and Gold Retreats on Trade Optimism
The dollar index (DXY00) Tuesday rose by +0.59%. The dollar moved higher Tuesday after President Trump over the weekend extended the deadline for a 50% tariff on US importers of EU goods by about 5 weeks to July 9 from June 1. The dollar also garnered support from hawkish comments Tuesday by Minneapolis Fed President Kashkari, who said he favors 'maintaining the fed funds rate at current levels.' The dollar extended its gains after the Conference Board's US May consumer confidence index rose more than expected to a 3-month high. Gains in the dollar were limited Tuesday after the US Apr capital goods new orders nondefense ex-aircraft and parts fell more than expected. Also, Tuesday's stock rally curbed liquidity demand for the dollar. The dollar still has some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months. The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-2/ years. The Conference Board's US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1. The US May Dallas Fed manufacturing survey general business activity index rose +20.5 to -15.3, stronger than expectations of -23.1. Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices. The markets are discounting the chances at 6% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) Tuesday fell by -0.46%. Tuesday's rally in the dollar undercut the euro. Losses in the euro were contained following Tuesday's better-than-expected Eurozone economic news, which showed strength in the economy. Additionally, hawkish comments from ECB Governing Council member Holzmann on Tuesday supported the euro since he stated that he doesn't support additional ECB interest rate cuts. The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1. Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months. ECB Governing Council member Holzmann said the ECB moving interest rates 'further south would be more risky than staying where we are and waiting until September.' Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Tuesday rose by +0.99%. The yen on Tuesday retreated from a 4-week high against the dollar and fell sharply after Japanese government bond yields plunged when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. The yen on Tuesday initially rallied to a 4-week high against the dollar after economic news showed Japan Apr PPI services prices rose more than expected, a hawkish factor for BOJ policy. Also, Tuesday's comments from BOJ Governor Ueda supported the yen when he said the BOJ will continue to tighten monetary policy as long as its objectives are met. In addition, lower T-note yields on Tuesday were bullish for the yen. Japan Apr PPI services prices rose +3.1% y/y, stronger than expectations of +3.0% y/y. BOJ Governor Ueda said, 'We will adjust the degree of monetary easing as needed' to ensure that the BOJ achieves its sustainable price goal if incoming news gives authorities greater confidence that their economic expectations will be met. June gold (GCM2 5) Tuesday closed down -65.40 (-1.94%), and July silver (SIN2 5) closed down -0.298 (-0.89%). Precious metals retreated on Tuesday due to an easing of trade tensions after President Trump extended the deadline on 50% tariffs on EU goods to July 9 from June 1. Also, dollar strength and Tuesday's sharp rally in stocks have curbed safe-haven demand for precious metals. In addition, hawkish central bank comments on Tuesday weighed on precious metals after Minneapolis Fed President Kashkari and ECB Governing Council member Holzmann said they favor keeping interest rates steady, and BOJ Governor Ueda said the BOJ will keep raising interest rates as long as its objectives are met. Weakness in Tuesday's US economic news was a bearish factor for industrial metals demand and silver prices. Apr capital goods new orders nondefense ex-aircraft and parts posted its biggest decline in 6 months, and the Mar S&P CoreLogic composite-20 home price index posted its smallest increase in 1-1/2 years. Lower global bond yields on Tuesday were supportive of precious metals. Also, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Silver is also pressured by concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Globe and Mail
28-05-2025
- Business
- Globe and Mail
Dollar Gains and Gold Plunges as Trade Tensions Ease
The dollar index (DXY00) today is up by +0.45%. The dollar is climbing today after President Trump over the weekend extended the deadline for a 50% tariff on European Union goods by about 5 weeks to July 9 from June 1. The dollar also garnered support from hawkish comments today by Minneapolis Fed President Kashkari, who said he favors 'maintaining the fed funds rate at current levels.' The dollar extended its gains after the Conference Board's US May consumer confidence index rose more than expected to a 3-month high. Gains in the dollar are limited after the US Apr capital goods new orders nondefense ex-aircraft and parts fell more than expected. Also, today's stock rally has curbed liquidity demand for the dollar. The dollar still has some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months. The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-2/ years. The Conference Board's US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1. Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices. The markets are discounting the chances at 2% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) today is down by -0.27%. Today's rally in the dollar is undercutting the euro. Losses in the euro are contained following today's better-than-expected Eurozone economic news, which showed strength in the economy. Additionally, hawkish comments from ECB Governing Council member Holzmann today supported the euro since he stated that he doesn't support additional ECB interest rate cuts. The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1. Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months. ECB Governing Council member Holzmann said the ECB moving interest rates 'further south would be more risky than staying where we are and waiting until September.' Swaps are discounting the chances at 97% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) today is up by +1.06%. The yen today retreated from a 4-week high against the dollar after Japanese government bond yields plunged when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. The yen today initially rallied to a 4-week high against the dollar after economic news showed Japan Apr PPI services prices rose more than expected, a hawkish factor for BOJ policy. Also, today's comments from BOJ Governor Ueda supported the yen when he said the BOJ will continue to tighten monetary policy as long as its objectives are met. In addition, lower T-note yields today are supportive of the yen. Japan Apr PPI services prices rose +3.1% y/y, stronger than expectations of +3.0% y/y. BOJ Governor Ueda said, 'We will adjust the degree of monetary easing as needed' to ensure that the BOJ achieves its sustainable price goal if incoming news gives authorities greater confidence that their economic expectations will be met. June gold (GCM2 5) today is down -69.60 (-2.07%), and July silver (SIN2 5) is down -0.389 (-1.16%). Precious metals today are sharply lower on an easing of trade tensions after President Trump extended the deadline on 50% tariffs on EU goods to July 9 from June 1. Also, dollar strength and today's sharp rally in stocks have curbed safe-haven demand for precious metals. In addition, hawkish central bank comments today are weighing on precious metals after Minneapolis Fed President Kashkari and ECB Governing Council member Holzmann said they favor keeping interest rates steady, and BOJ Governor Ueda said the BOJ will keep raising interest rates as long as its objectives are met. Weakness in today's US economic news is a bearish factor for industrial metals demand and silver prices. Apr capital goods new orders nondefense ex-aircraft and parts posted its biggest decline in 6 months, and the Mar S&P CoreLogic composite-20 home price index posted its smallest increase in 1-1/2 years. Lower global bond yields today are supportive of precious metals. Also, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Gains in silver were limited by concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
