Latest news with #PersonalConsumptionExpendituresIndex
Yahoo
18-06-2025
- Business
- Yahoo
Fed decision: Rates likely to hold despite inflation progress
The Federal Reserve is expected to hold interest rates steady Wednesday afternoon, despite inflation sitting near its target and pressure from President Trump to cut. Yahoo Finance Senior Reporter Jennifer Schonberger joins Morning Brief to explain why officials may keep two rate cuts on the table for later this year. Tune into Yahoo Finance's live coverage of the Fed decision at 2 p.m. and Fed Chair Jerome Powell's press conference at 2:30 p.m. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. We're counting down to the Federal Reserve's interest rate decision, due out 2:00 p.m. Eastern Time today. The Fed expected to hold rates steady, despite pressure to cut from President Trump. Yahoo Finance's Jennifer Schonberger has more on what to expect. Jennifer, what are you looking forward to here? Good morning, Brad, and the Federal Reserve just kicked off the second day of their two-day policy meeting moments ago here in Washington, where they're widely expected to hold rates steady in the range of 4 and a quarter to 4 and a half percent for the fourth meeting in a row. All eyes, however, will be on whether the Fed still sees two rate cuts this year. And at the heart of this really lies just how much inflation the Fed sees ahead. Back in March, the Fed saw inflation rising to 2.8% this year from two and a half projected back in December. Some economists expect that will be ratcheted higher this afternoon. But inflation in April, as measured by the Fed's preferred inflation index, the Personal Consumption Expenditures Index, clocked in at 2.1%, practically at the Fed's 2% goal. And adjusting for volatile food and energy prices, inflation rose two and a half percent, dropping from March. And in May, the Consumer Price Index also showed a mild reading on inflation. So why then, when tariffs had kicked in full blast starting in April and inflation basically hit their 2% goal, is the Fed holding rates steady in the range of 4 and a quarter to 4 and a half percent? Well, it's the risk that tariffs pose ahead and the uncertainty around that. Will tariffs lead to higher inflation or not? Two months is not likely enough for the Fed to tell. Minutes from the Fed's last policy meeting showed almost all Fed officials expected inflation from tariffs to be longer lasting. But we're also constantly seeing the chance for changes to tariffs, for instance, this week with Canada and the US working to potentially eliminate steel and aluminum tariffs. On the flip side, will lower growth ensue instead because consumers can't swallow higher prices if they occur? Fed Chair, Jay Powell, and the Fed are likely to continue that wait-and-see approach. That's why many think it's likely they will actually keep two rate cuts for this year. They don't want to change much when the outlook is changing so much, and they're just unsure. Brad. Jennifer, we also know what's playing out in the Middle East and in that conflict. How does that factor into the Fed's outlook? And what are we expecting to hear? They are certainly going to be watching what's going on in the Middle East closely, particularly as it pertains to oil prices. But at this juncture, Brad, I just wouldn't expect them to actually integrate any of that into their actual outlooks for inflation and growth. However, if we do see things worsen, if oil facilities were to be struck and that caused a spike in oil prices, then certainly that may be taken to consideration. Thank you so much, Jennifer. Everyone can stay with Yahoo Finance all day for more coverage on the Fed. We'll bring you the decision live 2:00 p.m. Eastern when it crosses, followed by Fed Chair Jerome Powell's press conference at 2:30 p.m. Eastern Time. 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
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
02-06-2025
- Business
- Yahoo
Technical analyst has a warning about markets
Technical analyst has a warning about markets originally appeared on TheStreet. Let's talk about April 22. That day, the Standard & Poor's 500 jumped 2.5%, which is nice in and of itself. But it also reflected investor relief that China and the United States might start to resolve their trade differences and that President Trump said he wasn't going to try to fire Federal Reserve Chairman Jerome Powell. 🔥 💰 Beneath the surface, something else happened. The S&P 500 broke above a key indicator line that technically-minded investors watch carefully, and that move up suggested stocks could go higher. The S&P 500, in fact, climbed nearly 12% through May 29. What happens now, however, is a little tricky if one listens to technical analyst Bob Lang, a contributor to theStreet Pro. Based outside Boston, Lang is known for his work in options and stock a podcast interview with Chris Versace, manager of theStreet Pro portfolio, Lang said he wants to see confirmation of that buy signal before getting too bullish. (It's called the Moving Average Convergence Divergence Indicator, or MACD for short.) The confirmation hasn't come yet, Lang said. You can watch the video here. There are macro issues in the way: Tariff and trade worries. Lang is worried about lack of progress on trade deals. Inflation worries. The Personal Consumption Expenditures Index showed annual inflation in April dropping to 2.1% year over year. Excluding food and energy, the change was 2.6%. Worries about when the Federal Reserve will cut interest rates. Lang believes the Fed is also focused on bringing inflation down to 2% or lower. The CME Group's FedWatch tool sees two cuts, maybe three, before the end of the year but probably not before September. (President Trump and Fed chairman Jerome Powell lunched last week, and the president said he thought the Fed should cut rates now.) The Fed's key federal funds rate is still at 4.25% to 4.5%, and it is high enough to help keep mortgage rates near 7% and limit activity in the housing market. The Federal Open Market Committee, which sets the rate, cut it three times in the fall of 2024 from a post-pandemic high of 5.25% to 5.5%. The committee's Fed's next meeting is June 17-18, and it's fairly important. At the meeting, the committee will also release their personal projections of where they see the economy is Lang said, the Fed's policy effectively is a warning for investors not to speculate too much. The Fed's job really isn't to bail out the stock market, Lang said. There are other issues. Nvidia () was one at the end of the week with first-quarter earnings. Lang was hoping for a strong earnings report that would push the shares solidly above $137. The earnings were better than expected, especially given that the U.S.-China tariff dispute is limiting the semiconductor giant's business in China. The shares reached nearly to $140 in early Friday trading, then fell back to $135 at the close. Still, Nvidia ended May up 16.8%. The S&P 500 rose 6.2%, its best monthly performance since 2023. Futures trading in stock indexes late Sunday suggested stocks would open modestly lower. Another issue: money flow. "At the end of the day, it's the Big Money investors like the hedge funds, the pension funds, the charitable trusts, the mutual funds that it is really moving markets." Lang is a fan of the Chaikin Money Flow indicator (available in charting tools on many websites). The indicator offers views of money pouring into stocks or staying on the sidelines. Money poured into the market after April 22 but has eased in the last week. More Experts Fed official sends strong message about interest-rate cuts Billionaire fund manager sends surprising message on trade deficit Hedge-fund manager sees U.S. becoming Greece Lastly is what Lang calls the current "wash, rinse and repeat" pattern. The president or an administration spokesperson offers "a shocking word," Lang said. That's followed by a bit of investor panic that markets might get out of control. (Which is what happened after President Trump's tariff announcement on April 2.)Then, the administration walks the idea back, and the panic subsides. So, an investor should pencil in smart price targets and pounce when a target says "buy." (In Nvidia's case, that might be if the shares fall to between the stock's 50-day and 200-day moving averages, or $116 to $127.) That's followed by patience. Jumping in and out of a stock rarely pays, Lang analyst has a warning about markets first appeared on TheStreet on Jun 2, 2025 This story was originally reported by TheStreet on Jun 2, 2025, where it first appeared. Sign in to access your portfolio
Miami Herald
02-06-2025
- Business
- Miami Herald
Technical analyst has a warning about markets
Let's talk about April 22. That day, the Standard & Poor's 500 jumped 2.5%, which is nice in and of itself. But it also reflected investor relief that China and the United States might start to resolve their trade differences and that President Trump said he wasn't going to try to fire Federal Reserve Chairman Jerome Powell. Get $100 off TheStreet Pro - our best deal of the summer won't last long! Your portfolio will thank you Beneath the surface, something else happened. The S&P 500 broke above a key indicator line that technically-minded investors watch carefully, and that move up suggested stocks could go higher. The S&P 500, in fact, climbed nearly 12% through May 29. What happens now, however, is a little tricky if one listens to technical analyst Bob Lang, a contributor to theStreet Pro. Based outside Boston, Lang is known for his work in options and stock trading. Related: Broadcom earnings may produce shock and awe In a podcast interview with Chris Versace, manager of theStreet Pro portfolio, Lang said he wants to see confirmation of that buy signal before getting too bullish. (It's called the Moving Average Convergence Divergence Indicator, or MACD for short.) The confirmation hasn't come yet, Lang said. You can watch the video here. There are macro issues in the way: Tariff and trade worries. Lang is worried about lack of progress on trade deals. Inflation worries. The Personal Consumption Expenditures Index showed annual inflation in April dropping to 2.1% year over year. Excluding food and energy, the change was 2.6%. Worries about when the Federal Reserve will cut interest rates. Lang believes the Fed is also focused on bringing inflation down to 2% or lower. The CME Group's FedWatch tool sees two cuts, maybe three, before the end of the year but probably not before September. (President Trump and Fed chairman Jerome Powell lunched last week, and the president said he thought the Fed should cut rates now.) The Fed's key federal funds rate is still at 4.25% to 4.5%, and it is high enough to help keep mortgage rates near 7% and limit activity in the housing market. The Federal Open Market Committee, which sets the rate, cut it three times in the fall of 2024 from a post-pandemic high of 5.25% to 5.5%. The committee's Fed's next meeting is June 17-18, and it's fairly important. At the meeting, the committee will also release their personal projections of where they see the economy is headed. Related: Dell execs sound alarm with consumer comments And, Lang said, the Fed's policy effectively is a warning for investors not to speculate too much. The Fed's job really isn't to bail out the stock market, Lang said. There are other issues. Nvidia (NVDA) was one at the end of the week with first-quarter earnings. Lang was hoping for a strong earnings report that would push the shares solidly above $137. The earnings were better than expected, especially given that the U.S.-China tariff dispute is limiting the semiconductor giant's business in China. The shares reached nearly to $140 in early Friday trading, then fell back to $135 at the close. Still, Nvidia ended May up 16.8%. The S&P 500 rose 6.2%, its best monthly performance since 2023. Futures trading in stock indexes late Sunday suggested stocks would open modestly lower. Bloomberg/Getty Images Another issue: money flow. "At the end of the day, it's the Big Money investors like the hedge funds, the pension funds, the charitable trusts, the mutual funds that it is really moving markets." Lang is a fan of the Chaikin Money Flow indicator (available in charting tools on many websites). The indicator offers views of money pouring into stocks or staying on the sidelines. Money poured into the market after April 22 but has eased in the last week. More Experts Fed official sends strong message about interest-rate cutsBillionaire fund manager sends surprising message on trade deficitHedge-fund manager sees U.S. becoming Greece Lastly is what Lang calls the current "wash, rinse and repeat" pattern. The president or an administration spokesperson offers "a shocking word," Lang said. That's followed by a bit of investor panic that markets might get out of control. (Which is what happened after President Trump's tariff announcement on April 2.) Related: Stock market whipsaw triggers TACO trade Then, the administration walks the idea back, and the panic subsides. So, an investor should pencil in smart price targets and pounce when a target says "buy." (In Nvidia's case, that might be if the shares fall to between the stock's 50-day and 200-day moving averages, or $116 to $127.) That's followed by patience. Jumping in and out of a stock rarely pays, Lang said. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
