Latest news with #interestratecut
Yahoo
18-07-2025
- Business
- Yahoo
Fed should've cut rates in 'April and May,' economist says
Federal Reserve Governor Christopher Waller made a clear call for an interest rate cut at the Fed's July meeting, citing signs of weakness in the labor market. Brian Jacobsen, chief economist and strategist at Annex Wealth Management, joins Market Catalysts to break down Waller's stance and what it signals for the Fed's path ahead. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. A Fed governor, Christopher Waller, made his strongest call yet for a rate cut in July. Waller, who's reportedly on Trump's shortlist to replace Powell as Fed chair, opened a speech Thursday bluntly stating, quote, "I believe we should cut the policy rate at our meeting in two weeks." With me now to discuss his commentary, Brian Jacobson, Annex Wealth Management chief economist and strategist. Brian, it's great to see you. And I would love your take on Chris Waller's argument, which he, you know, this was not a tweet argument, right? This was not a press conference sound bite. This was sort of a long laid-out argument for why he thinks the labor market in particular is weaker than it appears and warrants a cut. What do you think? Does he make a convincing argument? Well, I think you're absolutely right. There is a lot of steak, and not necessarily just sizzle, to what he said. And if you think about the trajectory of Waller's views on monetary policy, I think he does really bear listening to, because he was very hawkish just a couple of years ago, and then he's shifted to being a little bit more, hey, let's go on pause, but then shifting back towards, now you could argue, being more dovish. So, he is not just going to kind of like tow the line. He's an independent thinker and there's a lot of substance to what he says. My concern is that really the time to have been cutting rates was April and May, and we might actually get some strength now to the overall economy because of the one big beautiful bill. There's a lot of incentives in there for business investment. And so, maybe some of the weakness that we have seen in the private sector labor market, which is what he's been focused on, not just the overall, which includes the public sector. So, private sector payroll growth has really been lackluster. But now, are we going to see a reacceleration as lots of businesses decide that, wow, 2025, we can take advantage of some of this 100% bonus depreciation. Let's really maybe launch some of these capital expenditure plans that we had put on pause for a while. So it sounds like you think the balance of risks skews more, in other words, it is more risky to cut than to wait at this point, in your view, if I'm reading you correctly. Well, I do think that the level of the interest rates right now is still restrictive. It's about more where are we likely to be come September, October, November? I think we'll see that reacceleration there. Now, I could be wrong about that. I would think that the balance of risks would suggest that shifting to slightly lower rates. I put the neutral fed funds rate right now where maybe they should be at about half a percentage point lower than where they are, right? So, maybe that's kind of splitting hairs when you think about all of the errors in forecasts, and also the volatility of the underlying economic data. But I could see maybe 50 basis points more of cuts, and then that being more appropriate. So I would love to see the Fed do a little bit more of an adjustment. I think they paused prematurely, and I would like to see them kind of maybe course correct here. And so I'm pretty sympathetic with what Waller has said. Interesting. Okay, so how is all of this translating into your strategy right now? I mean, obviously, the Fed's not the only game in town. We still have the tariff headlines sort of hanging over the market to some extent, and we're in earnings season. So what does all of that equal for you? Well, I think that it's really about we're towards the end of that storm, right? I think Jamie Dimon, was it a year ago or two years ago? Lose track of time now where he said, you know, like a storm was coming. And then, for a while, we're in the eye of the storm, and now, maybe, we're at the back end of that storm in terms of the uncertainty, because a lot of that is going to be resolving, hopefully, by August 1st. Maybe there'll be a punting of that deadline for certain parties and the such. But once we get that type of clarity, I think that really, then, we'll see CEOs and CFOs no longer sitting on their hands, really thinking about what their expansion plans look like. Because, right now, it feels like they're kind of in survival mode thinking, you know, there's no reason to make any sorts of moves now, when if we just wait a month or two, that we'll get more information and can make a more informed decision. So I think that really, I'm still positioned for growth in the overall economy, a reacceleration as we go towards the end of this year, and that argues, I think, for cyclicals, like industrials, financials, and a little bit of perhaps defensives in there in terms of healthcare, just for good measure. Related Videos July preliminary consumer sentiment: What it means for the Fed Fed Governor Waller thinks interest rates are over 1% too high Fed's Waller on Labor Market, Rate Cuts, Inflation, Fed Chair Rate Cuts Ahead? Fed Voices Weigh In as Stocks Hit Record High 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
Malay Mail
18-07-2025
- Business
- Malay Mail
Ringgit firms as Fed rate cut bets weigh on dollar
KUALA LUMPUR, July 18 — The ringgit opened firmer against the US dollar on Friday as traders shied away from the greenback amid growing anticipation of an interest rate cut by the US Federal Reserve (Fed), said an analyst. At 8 am, the ringgit rose to 4.2340/2580 against the greenback, compared to Thursday's close of 4.2465/2510. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Fed Governor Christopher Waller suggested the central bank cut interest rates this month, and that it should not wait for the labour market to deteriorate before doing so. Mohd Afzanizam added that investors remain cautious amid concerns whether countries can secure concessions before the new US tariffs take effect on Aug 1. 'Issues surrounding the US tariff remain high on the agenda,' he told Bernama. On the domestic front, he said all eyes are on the advance estimate of Malaysia's second quarter 2025 gross domestic product (GDP) scheduled to be announced today. 'We forecast the economy will grow by 4.5 per cent, as front-loading activities are expected to support Malaysia's external demand, while a resilient labour market and ongoing investment activities will continue to drive domestic demand,' he added. On that note, he said the ringgit is likely to trade within the RM4.24 to RM4.25 range against the US dollar today. At the opening, the ringgit was traded higher against a basket of major currencies. It rose against the Japanese yen to 2.8523/8687 from 2.8548/8580, strengthened against the British pound to 5.6867/7189 from 5.6886/6946 and advanced versus the euro to 4.9178/9457 from 4.9217/9269 at yesterday's close. The local note also trended higher against most Asean currencies. It rose vis-a-vis the Singapore dollar to 3.2939/3131 from 3.3013/3051, gained against the Thai baht to 13.0385/1201 from 13.0521/0720, appreciated against the Indonesian rupiah to 259.1/260.6 from 259.8/260.2 and edged up versus the Philippine peso to 7.39/7.44 from 7.41/7.43 previously. — Bernama
Reuters
15-07-2025
- Business
- Reuters
FTSE 100 reaches 9,000 level with trade talks, rate path in focus
July 15 (Reuters) - The UK's FTSE 100 surpassed the 9,000-point mark for the first time on Tuesday, as investors took comfort in a relatively tariff-shielded market and rising bets of a Bank of England interest rate cut. The blue-chip FTSE 100 (.FTSE), opens new tab was up 0.1% at 9,001.1 points — touching a fresh intraday record high as of 1035 GMT — while the domestically oriented FTSE 250 index (.FTMC), opens new tab climbed 0.6% to a more-than-three-year high. "The UK market has acted as something of a safe haven amid global trade uncertainty in recent months, thanks in part to the UK quickly striking a trade deal with the U.S.," said Jonathan Unwin, UK head of portfolio management at Mirabaud Wealth Management. The UK is one of only two countries to have a trade deal with the U.S. "Expectations of UK rate cuts are further supporting rate-sensitive stocks, while the currency drag from dollar weakness has largely played out at this stage." The blue-chip index has risen about 20% from its April lows when U.S. President Donald Trump's announcement of "Liberation Day" tariffs sent global stocks plunging. Later on Tuesday, British Finance Minister Rachel Reeves will set out measures to ease access to mortgages when she gives the annual Mansion House speech. Investors will also tune in to BoE Governor Andrew Bailey's commentary on the central bank's rate outlook. Traders are currently pricing in 89% chances of a 25 bps rate cut in August, as per data compiled by LSEG. Industry data showed British retail spending bounced back in June, following weak sales growth in May, as unusually hot weather boosted demand for fans and summer clothing. Among individual stocks, Experian (EXPN.L), opens new tab rose 4.7% after the credit data firm reported an 8% organic revenue growth in the first quarter and reaffirmed its annual forecasts. Barratt Redrow (BTRW.L), opens new tab slid 6.2% after Britain's largest homebuilder said home completions missed expectations for fiscal 2025, as concerns around affordability resurfaced and deterred private buyers. B&M (BMEB.L), opens new tab slumped 8.5% after the discount retailer missed like-for-like sales estimates in its UK business in the first quarter.
Daily Mail
11-07-2025
- Business
- Daily Mail
After the economy shrinks again, summer rate cut 'looks inevitable'
A summer interest rate cut 'looks inevitable' after official figures yesterday revealed the economy shrank for a second month in a row. The Office for National Statistics (ONS) said gross domestic product (GDP) contracted by 0.1 per cent in May following a fall of 0.3 per cent in April. Experts said that, combined with signs of a deteriorating jobs market, it would add further pressure on the Bank of England to cut interest rates at its next meeting – despite inflation remaining stubbornly high at more than 3 per cent. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales (ICAEW), said the downbeat GDP figures 'increase anxiety over the health of the UK economy'. He added: 'The lack of momentum in the UK economy indicated by these sluggish figures means that an August interest rate cut looks inevitable, despite the recent spike in inflation.' Markets yesterday signalled a near-80 per cent chance of a cut from 4.25 per cent to 4 per cent at the next meeting, with a further cut to 3.75 per cent also pencilled in by the end of the year. That would provide a boost for millions of borrowers. Bank officials, led by governor Andrew Bailey, have signalled a 'gradual and careful' approach to rate cuts but he has acknowledged signs that the job market is weakening. Recent figures showed that more than 100,000 jobs were lost in May alone. James Smith, UK economist at ING Bank, said: 'Until now, officials have appeared highly reluctant to move beyond their recent, gradual once-per-quarter cutting pace. 'In part, that is because the Bank assesses employment growth to be virtually flat. The latest data suggests that's an increasingly optimistic view of the jobs market.' The pound fell by nearly a cent to below $1.35 versus the US dollar following the GDP figures and was lower against the euro. Chancellor Rachel Reeves admitted that the figures were 'disappointing'. Matthew Ryan, of global financial services firm Ebury, said: 'Britain may be heading for recession far sooner than markets had anticipated. It will now take something quite special for the UK to avoid an outright contraction in GDP in Q2.'
The Guardian
07-07-2025
- Business
- The Guardian
Australia news live: Jewish group calls for national anti-hate unit; RBA expected to cut rates
Update: Date: 2025-07-07T20:38:58.000Z Title: Reserve Bank widely tipped to cut rates today Content: Borrowers should be in for some welcome good news today, with the Reserve Bank board widely expected to deliver an interest rate cut at 2:30pm, Sydney time. Financial markets and economists agree that a second straight cut is essentially a done deal, although there's always a chance that the central bank will surprise us all and hold. If they do follow up with a 0.25 percentage-point move lower to 3.6%, it will be the third cut in the RBA's cash rate target, following moves in February and May. Weak household spending and a bigger than expected drop in inflation in May both supported the case for lower rates, economists say, not to mention the looming threat of Donald Trump's trade war. A rate cut today would trim $76 from the monthly interest bill on a $500,000 mortgage, bringing the total benefit of this year's cuts to nearly $230 once lenders pass them on to their customers. Of course, what's good news for existing homeowners is more problematic for would-be homeowners, who are seeing property prices accelerating again as borrowing costs fall. RBA governor Michele Bullock will hold a press conference at 3:30pm where she will no doubt be asked whether we can expect further rate cuts this year. Update: Date: 2025-07-07T20:38:58.000Z Title: Welcome Content: Good morning and welcome to our live news blog. I'm Martin Farrer with the best overnight stories before Rafqa Touma picks up the news baton. The Reserve Bank's monetary policy committee meets in Sydney today and it is widely expected by economists and analysts to conclude with a decision to cut interest rates by 0.25%. We have more coming up, plus the news when it happens at 2.30pm. Australia's leading Jewish group has stepped up its calls for a stronger government response to the alleged arson attack on a synagogue in Melbourne by calling for a national unit to combat hate crimes. More coming up. The copyright case brought against Nine by the fiance of Bondi Junction stabbing victim Dawn Singleton over its use of a photograph of the dead woman in an edition of 60 Minutes ended last night with a judgment in favour of defendants on the eve of the trial. More coming up.
