Latest news with #Kugler
Yahoo
5 days ago
- Business
- Yahoo
Solid US Economic News Lifts the Dollar
The dollar index (DXY00) on Thursday rose by +0.29% and posted a 3.5-week high. Signs of strength in the US economy may keep the Fed from cutting interest rates and are supportive of the dollar. Weekly initial unemployment claims unexpectedly fell to a 3-month low, June retail sales rose more than expected, and the July Philadelphia Fed business outlook survey rose to a 5-month high. The dollar added to its gains Thursday after Fed Governor Kugler said it's appropriate for the Fed to hold rates steady for "some time." However, the dollar fell back from its best levels on dovish comments from San Francisco Fed President Mary Daly, who said she expects two 25 bp rate cuts this year. US weekly initial unemployment claims unexpectedly fell -7,000 to a 3-month low of 221,000, showing a stronger labor market than expectations of an increase to 233,000. More News from Barchart Gold and Silver Are Grinding Sideways. Here's What Could Change That, and When It Might Happen. Dollar Rallies to 3-week High Dollar Falls Back on Apparent Trial Balloon for Firing Fed Chair Powell Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. US June retail sales rose +0.6% m/m, stronger than expectations of +0.1% m/m, and Jun retail sales ex-autos rose +0.5% m/m, stronger than expectations of +0.3% m/m. The US June import price index ex-petroleum was unchanged m/m, weaker than expectations of +0.2% m/m. The US July Philadelphia Fed business outlook survey rose +19.9 to a 5-month high of 15.9, stronger than expectations of -1.0. The US July NAHB housing market index rose +1 to 33, right on expectations. Fed Governor Kugler said the Fed should keep interest rates on hold "for some time," citing the acceleration of inflation as tariffs begin to boost prices. San Francisco Fed President Mary Daly said the most recent set of rate projections from Fed officials, issued in June, offered a "reasonable outlook" in pointing to two 25 bp rate cuts by year's end. She added that the Fed should not wait too long before moving on rates, because if they wait until inflation is 2%, they've "likely injured the economy in some way that was completely unnecessary." On the trade front, President Trump said late Wednesday that he intends to send a tariff letter to more than 150 countries notifying them their tariff rates could be 10% or 15%, effective August 1, and that the group was "not big countries who don't do that much business with the US." Also, Commerce Secretary Lutnick said Nvidia could soon resume sales of its less advanced H20 chips to China, and Advanced Micro Devices received similar assurances from the Commerce Department, in a sign that the US may be in the process of negotiating a grand trade deal with China. Treasury Secretary Bessent is expected to meet his Chinese counterpart, Vice Premier He Lifeng, within "the next couple of weeks" and signaled the US will likely extend an August 12 deadline for the easing of sky-high tariffs. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17. EUR/USD (^EURUSD) Thursday fell by -0.40% and posted a 3.5-week low. The dollar's strength on Thursday undercut the euro. The euro also came under pressure on comments from Italian Deputy Premier Tajani, who said the euro is "too strong and the ECB needs to cut interest rates "to weaken the euro. Swaps are pricing in a 1% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) Thursday rose by +0.51%. The yen is under pressure due to concern that Japanese Prime Minister Ishiba's Liberal Democratic Party (LDP) could lose its majority in Sunday's upper house election. The promises by Japan's ruling Liberal Democratic Party of cash handouts to voters and promises of lower taxes by the opposition have sparked concerns of fiscal deterioration, which are bearish for the yen. The yen extended its losses after T-note yields rose. Japanese trade news is mixed for the yen. On the negative side, Japan's June exports unexpectedly fell -0.5% y/y, weaker than expectations of +0.5% y/y. Conversely, June imports unexpectedly rose +0.2% y/y, stronger than expectations of -1.1% y/y. August gold (GCQ25) Thursday closed down -13.80 (-0.41%), and September silver (SIU25) closed up +0.184 (+0.48%). Precious metals on Thursday settled mixed, with the price of gold sliding to a 1.5-week low. Thursday's rally in the dollar index to a 3.5-week high was bearish for metals. Also, strength in stocks on Thursday has curbed safe-haven demand for precious metals. In addition, precious metals came under pressure after President Trump said he's "not planning on doing anything" to remove Fed Chair Powell. Finally, hawkish comments Thursday from Fed Governor Kugler undercut precious metals when she said the Fed should keep interest rates on hold "for some time." Precious metals recovered from their worst levels Thursday, with silver moving into positive territory when San Francisco Fed President Mary Daly said recent Fed rate projections offered a "reasonable outlook" in pointing to two 25 bp rate cuts by year's end. Precious metals also receive safe-haven support from global trade tensions, following President Trump's announcement that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1. In addition, fund buying of gold continues to support prices after the amount of gold in ETFs rose to a nearly 2-year high on Wednesday. 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 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
5 days ago
- Business
- Yahoo
Dollar Climbs on Signs the US Economy Is Holding Up
The dollar index (DXY00) today is up +0.35% at a 3.5-week high. Signs of strength in the US economy may keep the Fed from cutting interest rates and are supportive of the dollar. Weekly initial unemployment claims unexpectedly fell to a 3-month low, June retail sales rose more than expected, and the July Philadelphia Fed business outlook survey rose to a 5-month high. The dollar added to its gains today after Fed Governor Kugler said it's appropriate for the Fed to hold rates steady for "some time." US weekly initial unemployment claims unexpectedly fell -7,000 to a 3-month low of 221,000, showing a stronger labor market than expectations of an increase to 233,000. More News from Barchart Gold and Silver Are Grinding Sideways. Here's What Could Change That, and When It Might Happen. Dollar Rallies to 3-week High Dollar Falls Back on Apparent Trial Balloon for Firing Fed Chair Powell Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. US June retail sales rose +0.6% m/m, stronger than expectations of +0.1% m/m, and Jun retail sales ex-autos rose +0.5% m/m, stronger than expectations of +0.3% m/m. The US June import price index ex-petroleum was unchanged m/m, weaker than expectations of +0.2% m/m. The US July Philadelphia Fed business outlook survey rose +19.9 to a 5-month high of 15.9, stronger than expectations of -1.0. The US July NAHB housing market index rose +1 to 33, right on expectations. Fed Governor Kugler said the Fed should keep interest rates on hold "for some time," citing the acceleration of inflation as tariffs begin to boost prices. On the trade front, President Trump said late Wednesday that he intends to send a tariff letter to more than 150 countries notifying them their tariff rates could be 10% or 15%, effective August 1, and that the group was "not big countries who don't do that much business with the US." Also, Commerce Secretary Lutnick said Nvidia could soon resume sales of its less advanced H20 chips to China, and Advanced Micro Devices received similar assurances from the Commerce Department, in a sign that the US may be in the process of negotiating a grand trade deal with China. Treasury Secretary Bessent is expected to meet his Chinese counterpart, Vice Premier He Lifeng, within "the next couple of weeks" and signaled the US will likely extend an August 12 deadline for the easing of sky-high tariffs. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17. EUR/USD (^EURUSD) today is down -0.44% at a 3.5-week low. The dollar's strength today is undercutting the euro. The euro also came under pressure on comments from Italian Deputy Premier Tajani, who said the euro is "too strong and the ECB needs to cut interest rates "to weaken the euro. Swaps are pricing in a 1% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) today is up by +0.41%. The yen is under pressure due to concern that Japanese Prime Minister Ishiba's Liberal Democratic Party (LDP) could lose its majority in Sunday's upper house election. The promises by Japan's ruling Liberal Democratic Party of cash handouts to voters and promises of lower taxes by the opposition have sparked concerns of fiscal deterioration, which are bearish for the yen. The yen recovered from its worst levels after T-note yields gave up an early advance and turned lower, improving the yen's interest rate differentials. Japanese trade news is mixed for the yen. On the negative side, Japan's June exports unexpectedly fell -0.5% y/y, weaker than expectations of +0.5% y/y. Conversely, June imports unexpectedly rose +0.2% y/y, stronger than expectations of -1.1% y/y. August gold (GCQ25) today is down -28.60 (-0.85%), and September silver (SIU25) is down -0.144 (-0.38%). Precious metals today are moving lower, with the price of gold sliding to a 1.5-week low. Today's rally in the dollar index to a 3.5-week high is bearish for metals. Also, strength in stocks today has curbed safe-haven demand for precious metals. In addition, precious metals came under pressure after President Trump said he's "not planning on doing anything" to remove Fed Chair Powell. Finally, hawkish comments today from Fed Governor Kugler undercut precious metals when she said the Fed should keep interest rates on hold "for some time." Precious metals have safe-haven support from global trade tensions after President Trump said that he intends to send a tariff letter to more than 150 countries notifying them their tariff rates could be 10% or 15%, effective August 1. Also, fund buying of gold continues to support prices after the amount of gold in ETFs rose to a nearly 2-year high on Wednesday. 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
05-06-2025
- Business
- Yahoo
Fed's Kugler looks to hold rates steady as she warns of higher inflation from Trump's tariffs
Federal Reserve governor Adriana Kugler warned Thursday she sees the risk of higher inflation from tariffs, and supports keeping interest rates steady for now. "I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain," Kugler said in a speech at the Economic Club of New York. The Fed next meets on June 17-18, and is not expected to make any changes to monetary policy. It has not altered its benchmark rates so far in 2025 after reducing them by a full percentage point at the end of 2024, citing uncertainties about President Trump's policies. "I view our current stance of monetary policy as well-positioned for any changes in the macroeconomic environment," Kugler added Thursday. Kugler said she expects higher tariffs this year will continue to push up inflation over 2025. She referenced research from the Federal Reserve staff, which estimates that 20% tariffs on Chinese imports earlier in the year raised overall inflation as measured by the 'core' Personal Consumption Expenditures Index, by 0.2%. But since tariffs on China are higher than 20%, and tariffs have increased for other countries, she added, 'these results tell me, first, that the pass-through of tariffs into prices is relatively quick, and, second, should elevated tariffs persist, even just in the short run, larger effects may be coming soon." She added a surge in imports to get ahead of higher tariffs earlier this year has delayed the price effects associated with those tariffs, and the reversal in that surge that she expects in the next few months will likely signal larger price increases. Kugler is also eyeing three channels through which tariffs could lead to longer-lasting inflation. She warned an increase in short-term inflation expectations could give businesses leeway to raise prices, increasing the persistence of inflation. Companies could also take advantage of price increases on goods impacted by tariffs to raise prices on items not impacted by the levies. As well, Kugler cautioned that tariffs on parts used to make final products could lead to second-round effects on inflation. And the possibility of lower productivity, Kugler said, could also push up prices. Meanwhile Kugler says so-called soft data — surveys of businesses and consumers — suggest that price increases are coming. Kugler pointed to surveys for May showing indexes for inputs and selling prices being elevated relative to the beginning of the year, and that probably reflects the effects from higher tariffs. On the consumer side, she pointed to a handful of recent surveys including one from the University of Michigan that have shown short-term inflation expectations rising. Michigan's survey also revealed a pop up in longer-term inflation expectation. But she noted that she still sees stability in most measures of longer-run inflation expectations. Right now, Kugler says the job market remains resilient, but warned that trade and other policy changes could raise the unemployment rate. And while the economy looks to be on solid footing based on official data measures, she noted that the Fed's May Beige Book showed stagnation, suggesting the economy might be starting to slow. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
05-06-2025
- Business
- Yahoo
Fed's Kugler looks to hold rates steady as she warns of higher inflation from Trump's tariffs
Federal Reserve governor Adriana Kugler warned Thursday she sees the risk of higher inflation from tariffs, and supports keeping interest rates steady for now. "I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain," Kugler said in a speech at the Economic Club of New York. The Fed next meets on June 17-18, and is not expected to make any changes to monetary policy. It has not altered its benchmark rates so far in 2025 after reducing them by a full percentage point at the end of 2024, citing uncertainties about President Trump's policies. "I view our current stance of monetary policy as well-positioned for any changes in the macroeconomic environment," Kugler added Thursday. Kugler said she expects higher tariffs this year will continue to push up inflation over 2025. She referenced research from the Federal Reserve staff, which estimates that 20% tariffs on Chinese imports earlier in the year raised overall inflation as measured by the 'core' Personal Consumption Expenditures Index, by 0.2%. But since tariffs on China are higher than 20%, and tariffs have increased for other countries, she added, 'these results tell me, first, that the pass-through of tariffs into prices is relatively quick, and, second, should elevated tariffs persist, even just in the short run, larger effects may be coming soon." She added a surge in imports to get ahead of higher tariffs earlier this year has delayed the price effects associated with those tariffs, and the reversal in that surge that she expects in the next few months will likely signal larger price increases. Kugler is also eyeing three channels through which tariffs could lead to longer-lasting inflation. She warned an increase in short-term inflation expectations could give businesses leeway to raise prices, increasing the persistence of inflation. Companies could also take advantage of price increases on goods impacted by tariffs to raise prices on items not impacted by the levies. As well, Kugler cautioned that tariffs on parts used to make final products could lead to second-round effects on inflation. And the possibility of lower productivity, Kugler said, could also push up prices. Meanwhile Kugler says so-called soft data — surveys of businesses and consumers — suggest that price increases are coming. Kugler pointed to surveys for May showing indexes for inputs and selling prices being elevated relative to the beginning of the year, and that probably reflects the effects from higher tariffs. On the consumer side, she pointed to a handful of recent surveys including one from the University of Michigan that have shown short-term inflation expectations rising. Michigan's survey also revealed a pop up in longer-term inflation expectation. But she noted that she still sees stability in most measures of longer-run inflation expectations. Right now, Kugler says the job market remains resilient, but warned that trade and other policy changes could raise the unemployment rate. And while the economy looks to be on solid footing based on official data measures, she noted that the Fed's May Beige Book showed stagnation, suggesting the economy might be starting to slow. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
05-06-2025
- Business
- Yahoo
Fed's Kugler: with upside risks to inflation, rates should stay where they are
(Reuters) -Federal Reserve Governor Adriana Kugler on Thursday said she supports keeping short-term U.S. borrowing costs at their current "moderately restrictive" level as long as tariffs continue to threaten to lift inflation. "Disinflation has slowed, and we are already seeing the effects of higher tariffs, which I expect will continue to raise inflation over 2025," Kugler said in remarks prepared for delivery to the Economic Club of New York. "I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain." Kugler's remarks, among the last of public comments from Fed policymakers ahead of their June 17-18 meeting, indicate that she sees inflation as the more pressing worry for the Fed. The central bank is widely expected to leave the policy rate in its current 4.25%-4.50% range for the next couple of meetings. While trade and other policy changes from the Trump administration may increase the jobless rate from its current 4.2% level, she said, so far the labor market looks stable. April spending data and many surveys -- including the Fed's own Beige Book, published on Wednesday -- show a softening in economic activity, she said, but "not yet a significant slowdown." The inflationary effects of tariffs, on the other hand, are already evident in a reversal of core goods inflation, and research shows not only that tariffs have already added to overall price increases but are likely to continue to do so, and relatively quickly. Meanwhile short-term inflation expectations have increased, and though most readings of long-term inflation expectations have remained stable, she said she is closely monitoring the jump in the University of Michigan survey. "I view our current stance of monetary policy as well-positioned for any changes in the macroeconomic environment," she said. 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
