36 Burst results for "Chairman Powell"
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Moment for chairman Powell and the FOMC. That was Bill Dudley. The former New York fed president catching up with Lisa and I in the last hour or so, what do they do? When they understand there is a signal that you send when you do do something and also a signal you send when you choose not to. You know, we were saying this before the ECB meeting last week. And we said, what do they want to do? We don't want to be Christine Lagarde. They clearly were debating it. They came out with a 50 basis point rate hike. And actually, it probably was the right thing based on market response that day. Whether it was this week, we'll have to see. But my point is, it's hard to know what the market responds will be. To the decision, let alone what the decision is. Well, everyone's pretty split because no one really has any idea. Correct. So Goldman and Jan had CS have come out and said this morning we expect the FOMC to pause and it's March meeting this week because of stress in a banking system. That's Goldman. They're at pause. Matt brille and vesco 5 minutes ago. Same data in front of us all is basically saying no. They're going to go 25. So financial advisers are therapists to their clients. How are they giving them therapy when essentially they're saying you're asking me, I have no clue. So this is really the sort of conundrum that people have. Where do you get a guide? If this is really a moment that we haven't seen before. I've always said the FA's are meant to be market therapists and they should do courses in psychology. I think that they do. Some of them do. The smart ones do. Equity features right now. I'm not saying all the other ones aren't anyway. I mean, S&P right now, down a tenth of 1% in a bond market yields in three or four basis points, three 39 on a ten year on a tier yield with down another 7 basis points to three, 77. We're taking out more hikes for price and in more cuts, it's not just the U.S.. It's Europe, the UK, take your pick. I just never joined a party and maybe there won't be one. Over in Japan after the events of the last few weeks, but again, who knows? Michael arachi joins us now. Cofounder and CEO, aeris management. Michael, wonderful to catch up with you, sir. I think we need to talk about speed, just how quickly this is moving. What do you make of it all? I think you hit on a big challenge in today's market environment relative to past cycles. I think with the speed with which money can move from the system, the speed with which information is coming at us, it's getting harder and harder to distill the signal through the noise. So we're talking with you, Michael, at a time when people are wondering, who will take over some of the institutions that are seeing some distress? Who will come to the rescue? And we were talking with Bill Dudley about how big banks learned their lesson during the financial crisis. And our concerned about litigation risks. From your vantage point, given the areas overseas $352 billion of assets, including more than $200 billion of credit, what's your view on that? Where is your role? That's interesting. I think the private credit markets have been playing a little bit of a stabilizing role here over the last couple of weeks and months as liquidity and the traded markets is not what it used to be. I think folks like Ares are coming in and really providing liquidity in certain markets where liquidity has gone been. One thing I think about now is one of the larger private credit managers is we don't know exactly how this all will unfold, but I can tell you one thing we will see more regulation of banks, both midsize and large. We will likely see a change to bank capital regulatory framework here in the U.S. and abroad, and that capital contraction will make it ever more important than private credit plays a role in funding the real economy. So at what point, I want to go to the funding the real economy in a second. But just in terms of the here and now, is Aries going in and picking up bank bonds is Aries coming in and discussing how to finance banks that perhaps are threatened with deposit outflows. I remind you, Lisa, we play strictly in the private market. We do have certain pockets of capital within our opportunistic credit and distress businesses that will dabble in the public market opportunity to get created here. But the opportunity set for Aries and those that look like us really come in and deal with pretty provider through the small companies that may be challenged to get liquidity from midsize and regional banks and it could be as a real good counterparty to the bank on right path braids that they try to revisit the liquidity on their own balance sheet. You talked about the broader capital sphere that we're watching and this concern about whether commercial real estate operators as well as individuals and small businesses can get the loans that regional banks used to provide to them. Michael private credit might step in, but how much more expensive will it be to get it from a private equity company or a private debt firm than from a regional bank? Look, I think historically, the private credit markets have been more expensive. That's largely because they tend to provide a level of creativity or innovation or frankly more leverage or structural flexibility than a bank solution could. But I think the market is pretty well attuned to a higher cost of capital. I think you raise an important point though here is what we're dealing with now is liquidity and duration, not credit. And we're already seeing the impact that positive capital is having as rates are moving up so quickly. I think we first need to get from point where the equity valuation environment adjusts in the new realities that people can actually afford a higher cost capital if that's where the state. Michael, one issue that's come up repeatedly over the last week. Is this idea that ultimately now will end up with tighter lending standards tighter financial conditions. Think a lot of people are lining up to give us the stats about how dependent certain parts of this economy are on the financing from small and medium sized banks. We're thinking about real estate, a whole lot more. Michael, how are you thinking about the ripples from what's developed in the last couple of weeks from these banks and what regionals are going through? And what it means for an asset class that I imagine you're exposed to. Look, I think it could be very challenging, I think that the fed is doing everything it's supposed to do to step in and provide confidence. I was pleased to see the larger banks in the markets step in to provide support to first republic. I think at the end of the day, again, this is duration liquidity and confidence, not credit. So I would hope that folks calm down again see the signal through the noise and get back to lending, but it is a real risk, obviously, the extent that people continue to lose confidence, capital leaves that part of the banking sector and it is going to make it harder for people to act as capital for sure. It feels like a year ago, but last week, Larry Fink of BlackRock said that there are a number of shoes that are going to drop first, it was Silicon Valley bank, then it was other smaller and medium sized banks. And next, it would be the private credit and private equity and venture capital markets that wouldn't get that credit. Do you agree with that? I think one thing that is probably most missed on understood about the private markets, which is why it's always been this view that the canary in the coal mine and yet every time we have a crisis or a mini crisis private markets and to emerge fairly unscathed and I think the big difference that folks don't really appreciate is one most private credit assets are held unlevered to the extent for lever
Bloomberg Daybreak Asia
Fresh update on "chairman powell" discussed on Bloomberg Daybreak Asia
"The Bloomberg Business app and Bloomberg Radio dot com. Bloomberg. The world is listening. If you love them enough to listen to them practice the same song on tuba. Please be done. Over and over and over and over and over. Then surely you'll check NHTSA dot gov slash the right seat to make sure they're correctly bubbled in the back seat. Sounds good honey. Check today at NHTSA dot gov slash the right seat. Brought to you by the National Highway Traffic Safety Administration and the Ag Council. Economics. Chairman Powell looks brilliant off of this. Finance. Some breaking news for you. A share sale. Investment. You're still seeing some momentum intact. The Bloomberg Surveillance Podcast. Do you want some volatility Tom? Please. Do you want me to go then? Tom King. Jonathan Pero. Lisa Abramowitz. And the names that shape the world's markets. The Chief Executive Officer J .P. Morgan. James Diamond.
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Abduction in Mexico are back on U.S. soil. They were brought to a hospital in Brownsville, Texas, two other Americans were killed and with a group got caught at a drug cartel shootout last week. The Biden administration preparing to relax COVID-19 testing restrictions for travelers from China could happen as soon as Friday. NBA action the next loss nets and the wizards won the warriors lost and the NHL, the islanders won the devil's lost in the NFL, the Giants agreed to a four year $160 billion deal with quarterback Daniel Jones. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I'm John Tucker. This is Bloomberg, Nathan. Okay, John, thanks. It's about 5 42 on Wall Street. This is Bloomberg daybreak, I'm Nathan Hager, alongside Karen Moscow. Let's get more on how to position your investments now that the hawks are flying at the fed, at least judging from chairman Powell's testimony yesterday at the Senate. We're joined live this morning by Nadia lovell, senior U.S. equity strategist at UBS. Nadia, thanks for joining us this morning. So what do you do? Now that chairman Powell is saying that if the data continue to come in hot, rates might need to go even higher. Yeah, we think that, you know, you want to have a balance approach in this market. We're probably going to chop around here for some time. And it had been clear that the equity market had been ignoring the massive repricing that we have seen in the race market year to date to just account for that higher secure inflation of equities had just been flying despite of that. And despite the fact that the jurors seen earnings estimates continue to move lower. So it feels like the market has gotten expensive year to date relative to bonds, the attractiveness has to decrease. And so you're not really getting paid much for that equity risk. And so we just think that the back half of the year looks less promising and equities. We think that the risk is skewed to the downside. I mean, we actually reduce our S&P price target recently for year round to 3800. So we think that you want to just have a balanced approach from here on out and have a little bit of a defensive exposure as well as a little bit of offensive exposure. And the S&P closed just below 4000 at 39 86 yesterday. Are you shifting your expectations on what the fed's going to do when it comes to rates? I mean, it seems like Powell opened up the possibility of another 50 basis point hike this month. What's your view? Yeah, it's very clear that 50 basis points is definitely on the table. I mean, if you didn't hear governor Walla last week, Powell clarified that yesterday that the data just remains quite strong. I mean, today we're going to be watching very closely the jolts job openings data later this morning and then perils on Friday and CPI next week. If those surprise to the upside then the likelihood of 50 basis points, it is there. Near term, we are looking for more 25 basis points in the March meeting and then another 25 in May and June for a terminal of 5 and a quarter to 5 and a half percent. But things were made quite fluid and dated dependent and they'll bias is definitely truly upside at this point. So no conviction then on that 5 and a quarter to 5 and a half percent terminal rate. I mean, we've heard from the likes of BlackRock grappling with the possibility of a 6% terminal rate. Is that on your radar? It is. It is something that we are definitely watching. Again, depending on what happens in the jobs market on Friday, if we see another very strong number, as you know, for the January, we got 517,000. If we see something well above 300 thousand on Friday and we see any sort of pick up in average hourly earnings, then we could have a terminal rate that might need to approach 6% if this data persists over the next two months. So what does that mean for stocks if we do get a terminal rate moving even higher than this market's pricing? Well, first of all, is there more pricing in for this market to do when it comes to terminal rate? The bond market has been quick to price this in. The equity market again always looking for those glimmers of hopes in the macro data and it has been home and on to the stronger, more resilient economy and ignoring the higher rates. So we don't think that is priced in to the equity market just yet. And if we do have a terminal rate that goes up to 6% valuation needs to come in a lot more, we have a four P multiple that is close to 18 times that's going to get pushed down further and the earnings outlook probably deteriorates even more. And so we think that that would indicate even more downside to the S&P 500, maybe even lower than our 3800 year end price target. Are there pockets of the market where you see stocks valued fairly? You mentioned that valuations are pretty stretched across the broader market, but what about at a sector or even cap level? Yeah, I think the defensive sectors like consumer Staples, a price in for their reasonably traditionally these sectors trade out of premium to the market. I mean, it's sort of
CNBC's Fast Money
"chairman powell" Discussed on CNBC's Fast Money
"You know, I was talking to art cash in this morning, I was walking the street and ahead of Powell next week and all the fed talk that we've had recently. He was saying that a 50 basis points was more of a probability on the table if it became more of a probability. The markets would perceive that as a mistake by the fed and there would be a severe adverse reaction to that, to the notion of 50 is more likely. Grassland, do you see that? Because right now, the markets are content with 25, 25, 25, and so on till the end to the pause, but a 50 might be conceding that something went awry. Or it's just off that huge jobs number where they want to get ahead of something, but I think 25 will be absorbed with the market. And to that point, maybe the market is adjusted for that 50 basis point height. I don't think that's what they should do. I think that when the market took a definite stance where every time we would hear from chairman Powell, the market would sell off. Now we're in that gap where he doesn't speak. The market sells off when he does speak the market rallies. So I think the market is hoping for a 25 basis point hike, but they're ready for a 50. I think it's going to be 25 for longer periods of time. All right, meantime, let's get to industrials powering higher this year, the XLA, a 5 and a half percent since January, some notable outperformers Steel Dynamics, as mentioned, WW Granger hitting all time highs today, plus GE. Hitting a level not seen in almost two years. But what's next for this group?
The Breakdown
Jerome Powell Believes He Might Actually Get His Soft Landing
"Welcome back everyone. I mentioned earlier in the week that this week would be the first really consequential macro week of the year. The reason of course is that the fed's first FOMC meeting was slated for Tuesday and Wednesday. Now, heading into this meeting, the markets were highly convinced that the Federal Reserve is going to continue to decrease its pace of rate hikes by increasing the federal funds target rate by 25 basis points. While this would mean that interest rates were still climbing, by and large, the market was more interested in the trendline than in the specifics. In fact, coming into this meeting, the really big question wasn't so much how much rates would be raised, although of course the fed could have surprised with a larger than expected hike. Instead, it was about what other signals and communications would there be about how the fed was thinking about the economy as a whole after a few months of seemingly declining inflation and more granularly for stocks, what Powell would say about loosening financial conditions over the past few months that led to January's rally. Specifically, markets were waiting to see if Powell would seek to stamp out the enthusiasm, or would he strike a different tone. So what did we get? As expected the FOMC decided to increase their policy interest rate by 25 basis points, bringing the target range to 4.5 to 4.75%. This represents another step down in the speed of hikes, which had been moving at a blisteringly fast pace of 75 basis points per meeting across 5 consecutive meetings last year before slowing down to 50 basis points at the previous FOMC meeting in December. Chairman Powell said shifting to a slower pace will better allow the committee to assess the economy's progress towards our goals as we determine the extent of future increases that will be required to attain a sufficiently restrictive stance.
CoinDesk Podcast Network
"chairman powell" Discussed on CoinDesk Podcast Network
"The breakdown is produced and distributed by coin desk. What's going on guys? It is Thursday, February 2nd, and today we are talking about the first FOMC rate decision of the year and whether chairman Jerome Powell is finally truly convinced that he has a chance at a soft landing. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review or if you want to dive deeper into the conversation. Come join us on the breakers Discord. You can find the link in the show notes or go to bit LY slash breakdown pod. Welcome back everyone. I mentioned earlier in the week that this week would be the first really consequential macro week of the year. The reason of course is that the fed's first FOMC meeting was slated for Tuesday and Wednesday. Now, heading into this meeting, the markets were highly convinced that the Federal Reserve was going to continue to decrease its pace of rate hikes by increasing the federal funds target rate by 25 basis points. While this would mean that interest rates were still climbing, by and large the market was more interested in the trendline than in the specifics. In fact, coming into this meeting, the really big question wasn't so much how much rates would be raised, although of course the fed could have surprised with a larger than expected hike. Instead, it was about what other signals and communications would there be about how the fed was thinking about the economy as a whole after a few months of seemingly declining inflation and more granularly for stocks, what Powell would say about loosening financial conditions over the past few months that led to January's rally. Specifically, markets were waiting to see if Powell would seek to stamp out the enthusiasm, or would he strike a different tone. So what did we get? As expected the FOMC decided to increase their policy interest rate by 25 basis points, bringing the target range to 4.5 to 4.75%. This represents another step down in the speed of hikes, which had been moving at a blisteringly fast pace of 75 basis points per meeting across 5 consecutive meetings last year before slowing down to 50 basis points at the previous FOMC meeting in December. Chairman Powell said shifting to a slower pace will better allow the committee to assess the economy's progress towards our goals as we determine the extent to future increases that will be required to attain a sufficiently restrictive stance. Alongside this chairman Powell confirmed that quantitative tightening policy would remain steady, rolling treasury bonds off the fed's balance sheet as they mature. Now when it came to that all important question of what the tone would be, Powell's speech was definitely lacking in the sort of hawkish tone that some pundits were predicting. His prepared remarks remain pretty similar to December's speech with no additional flourishes. He had the same major notes that we've heard before. The labor market remains too tight, although wage growth appears to be moderating, the labor force participation rate has an improved. Inflation remains far too high, but longer term inflation expectations continue to be well anchored. Reducing inflation will likely require a period of quote below trend growth and some softening of labor market conditions. Now when it comes to forward guidance on future rate policy, chairman Powell again articulated the FOMC's view that ongoing rate hikes will likely be appropriate. Reiterating that, quote, the historical record caution strongly against prematurely loosening policy. We will stay the course until the job is done. Overall, chairman Powell gave the impression of a data dependent fed that is hopeful about recent data, but knows they don't have the full picture yet. So let's now dig a little deeper into the specific areas of discussion, and let's kick it off with the one that has loomed large for the last year, inflation. In the discussion, Powell clearly recognized the improving situation regarding inflation, saying, quote, the inflation data received over the past three months shows a welcome reduction in the monthly pace of increases. While recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path. Regarding recent data showing a looming risk of recession, Powell said that disinflationary process that you now see underway is really at an early stage. He noted that much of the moderation in inflation appears to be simply due to desirable effects like supply chains becoming more functional. Now while overall headline inflation is clearly moderating, Powell continued to point to non housing services inflation as evidence that there is still more work to do. Quote, we have a sector that represents 56% of the core inflation index where we don't see disinflation yet. We don't see it. It's not happening yet. It's still running at 4% on the 6 and 12 month basis. There's nothing happening there. Indeed, the stickiness of services inflation was the main reason Powell view that inflation fight is still ongoing. It would be very premature, he said, to declare victory or to think we've really got this. We see ourselves as having a lot of work left to do. Now, very reasonably, some people asked him then, well, how much information and what data will you need to see to be satisfied that inflation is in check. To that Powell responded, I don't think there is going to be a light switch flipped. I think it's just an accumulation of evidence. And when it comes to any sort of pivot, Powell said that the fed's base case is a slow disinflationary period, where it will not be appropriate to cut rates until at least the end of the year. Next topic, what about labor markets? Concerns about tightness in the labor markets have been at the very forefront of Powell's communications about how the fed thinks about where the economy is headed and how they might need to evolve their policies. Specifically persistent tightness has given them the confidence to stay the course with their tightening cycle and is also made them I think more convinced that there is still room for a soft landing that doesn't involve some sort of brutal recession. Yesterday morning the job openings turnover survey or jolts data was released, showing the ratio of job openings to unemployed workers had moved back to 1.9. Although this ratio has previously been used as key evidence of labor market tightness by Powell, yesterday he dismissively called the date of volatile. Instead he continued to categorize the labor market as quote too tight, citing high levels of job creation and a high rate of quitting. He did acknowledge a slowdown in wage growth as an early sign of labor market loosening.
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Energy and drive to actually make them and we've made all the necessary steps to achieve them. I'm very proud that we've met each and every qualitative event quantitative target that we set for the 2020 to 22 period. It's going to be the same for the next period 23 to 25. We're setting the bar high, but we also know how to get there. You're setting the bar high. And what about capital returns, Phillip? What guides your thinking as you approach that new planning horizon then out to 2025, what's going to guide your thinking on returning cash to shareholders? I think we are going to have a lot of continuity in this capital returns in the last few years have been record high. And you will be seeing this in the animal presentation. We're going to give a little spotlight on that. Later on this morning, we will continue with our dividend policy as we've laid it out. We propose the same dividend as last year. And as we said, excess capital above the threshold will be looking into share buybacks or moving forward. So expect us to be in full continuity on that price. Philip given your very optimistic in terms of the company's ability to navigate the macro environment for the next couple of years. I'm curious just what you're kind of base thesis is. Do you think we're in a new normal for higher elevated inflation globally and therefore higher policy rates or do you think over the next couple of years will quickly return to the era of the last decade? I don't think we'll return into the area of the last decade. The last decade was more than normally than the normal I believe. We should be ending in territory of positive inflation and positive rates in the next few years. And I think that's a good normalization. And do you think do you think your clients have bought into that idea, Philip, that we're not going back to the old days? I think there's always taking time to adapt and obviously the playbook need to be the playbooks of the entire investment industry and that has operated in a very long deflationary period. And with a lowering interest rates for a number of decades, our clients and the markets will adapt. And I'm looking forward to accompany them on that path with our advice. I wonder what you see in the European economy at this point. I'm thinking specifically, I guess, of the Eurozone because we have the ECB meeting today, Philip. How would you expect the ECB to balance the inflationary pressures with the threats to the economy as we go through this year? I have no crystal ball on that. I mean, we've just seen what the fed did last night looking forward to the action in Europe. And again, I think the balance between growth and inflation is also topic for Europe. Economics. Chairman Powell looks brilliant finance, the breaking news for you. A share sales. Investment. How much dynamism is there to the economic recovery? The Bloomberg surveillance podcast. Do you want some volatility Tom? Please, you want me to go there. Jonathan
AP News Radio
Fed Chairman Powell has tested positive for COVID-19. Symptoms called mild.
"Federal Reserve chairman Jerome Powell is working from home after coming down with the coronavirus. The Federal Reserve announced that board chairman Jerome Powell has tested positive for COVID-19 and is experiencing mild symptoms. The fed says Powell is up to date with all his COVID vaccines and boosters. The fed is in the midst of an aggressive drive to tame high inflation and is expected to raise its benchmark interest rate by at least a quarter point at the next meeting set for January 31st to February 1st. That timetable could allow Powell to recover in time to participate in person,
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"To Friday's gains, TK, the S&P up a third of 1%. It's a nice lift and it comes off the big, big lift that we saw on Friday. I would note also, John, I think, critically off China reopening oil up 3% gets my attention. Brent crude, $81 a barrel. Big moves we saw in the equity market on Friday, big moves we saw in the bond market as well, yields lower a whole lot lower. We've got to tease out the economic data on earth it means at the moment promo and spare a thought for chairman Powell has got a respond to this tomorrow. Will it matter? Well, anything he say actually have credibility in markets because a lot of the fed officials have been saying the same thing They've got more work to do. And this market is saying, we're seeing soft landing, we're seeing this perfect ending here with two data prints that might suggest that things aren't as strong as previously. Do you think 50 is scream self landing? People are saying you need to see that softness to services. And the reason why people say that as a soft landing and not a hard lighting is because wages are coming off, but the numbers on the headline number are still strong. So people are talking about a soft landing. Again, does this matter? It is one data print. How much does this actually indicate what's coming? Although you are seeing earnings starting to trickle out, perhaps more than Mike Wilson took. That's the downside risk. Let's talk about the upside risk, China reopening. We've seen in EM equities. Emerging market equity is up more than 20% since the loads of October time. Big moves were seen here. I'm going to go back to blinders essay in The Wall Street Journal of the gentleman from Princeton, the former vice chairman races look, here's the reality, China's reopening, Pacific bid to Pacific Rim with a bid John, I mentioned ADX, Y, with a nice lift there, Laurie seen in the last hour at talking up. We got a killer guest must listen must watch for global Wall Street coming up. And this is on the optimism this year will not just be the United States. Like Schumacher of wows Fargo coming up in about 28 minutes. So let's see how the longest of invest go coming up very, very shortly. Alessio a month ago, constructive risk. And DM and international specifically will pick up on that in a moment. Equity futures right now are about a third of 1% on the S&P 500 just to whip through the price action briefly. Yields a little bit higher by three or four basis points on a ten year three 59 €48 dollar term. Approaching one O 7 here, one O 6 85. Dollar dynamics really there are 6.78 distant from ¥7 per dollar and be showing strong China's strength and again, I'm going to take that J pulaski who I know is Jay won't get up for his folks full disclosure. He's got a slide in with farrow in the 9 o'clock midday hour. I have his fucking check for months. Well, get him on because I think he's been right and he shouldn't be punished on the win of it. He couldn't predict a China lockdown. It's over. And now we're ripping. I priced Jay's getting what he wanted. Business class to Shanghai today. How much? $34,000. You can't for one see. Are you kidding? $34,000 one seat. Nonstop. Wow. Wow, seriously, why airline? This is united. Full disclosure. I've got family in China, so we want to get over there, but the answer is I'm going to monitor that and watch it come down to something intelligent. Can you meet halfway? Can you meet somewhere else? It's under collegial discussion. We brought in McKinsey to handle those things. Well, if you want some consulting, you know, available. Okay, thank you. Okay, Lisa, we've worked that out. Yeah. You haven't worked at the fee, at least that will be, I guess, the negotiation in the break as to your consulting services. Today, as far as meeting in the middle, Central Bank speak includes both with Lena fed president Rafael bostic at 1230 p.m.. And on the other side of the Atlantic Bank of England, chief economist Hugh pill at 5 30 p.m., although he will be speaking in New York. Also, it is notable that Austin goolsby becomes the president of the Chicago Federal Reserve. How much do we get a sense of them pushing back against the excitement around a soft landing type of scenario or do they lean into it? Do we get any signal that perhaps they're excited and they're going to welcome this to possibly slow down the pace of rate hikes and the end result. Today we also get the three amigo summit that would be Joe Biden of the U.S. Andres Manuel Lopez Obrador of Mexico and Canada's prime minister Justin Trudeau all joining together in Mexico City for this North American leader summit, a lot of issues on the table very much. Thomas, you've been mentioning the immigration question around the United States, but also at a time when so many people are talking about moving manufacturing to local areas. How much do we get a sense of some meat behind that versus some of the contradictions that people have with where those trade policies should go? And aftermarket kicking off that earning season for the banking industry, Jeffries, expected to release the fourth quarter results. Question mark, especially ahead of JPMorgan releasing on Friday along with a host of the other major banks. How much do
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Or subscribe on Apple podcasts. The judge that interest rates, we still have to rise significantly. At a steady pace, to reach levels that are sufficiently restrictive to ensure a timely return of inflation to our 2% medium term target. Our future policy rate decisions will continue to be data dependent and follow a meeting by meeting approach. That was near the start of the news conference later on, I think increasingly present the guard lost some patience through the Q&A near the end. We're not pivoting. We're not wavering. We have more grants to cover. We have longer to go. We're in for the long game, just punch punch, punch, punch, punch. You remember we talked about the hawkish crisis hits of chairman Powell in the November news conference was kind of it from person to guard there yesterday at the ECB. But there was one message and one message in it. Without a doubt. You are misinterpreting me every single time I am being very clear. Do you think she rehearsed that? In the mirror? Yeah. There will be no pivot. We vote. Possibly, well, the bond market's listening in Italy. Unlike the treasury market, which has not been listening to chairman Powell, you mentioned a two year so let's talk about the front end of the curve in Italy yesterday. That was a 39 basis point move. That's not normal. On a two year in Italy this morning, up 8 basis points. I mean, you think about things that aren't normal, just bring up the German two year on my screen and get you the last couple of days. Today, the German two year is up 7 basis points. The two year yesterday up 25, 26 basis points on a German two year year. That's pretty impressive that move. It's shocking, considering where we've been and that we were negative for so long. It's also shocking to think that we're heading into a downturn. And there will not be a fiscal response that is capable in the same kind of way. If you're borrowing at these kinds of levels, and that's why I think the Italian response to this, even behind closed doors. In a furious. It's very interesting. And that's perhaps why you're seeing a bit of softness in the Euro as well, because what does this mean in terms of the reaction function and sort of the offset to any kind of downturn? And more rate hikes and a bit of QT, she half yellow notes joins us now, global head of FX strategy at Credit Suisse. What did you make of that from president guard yesterday? It's only been most people's expectations in terms of implied future rate hikes. Our own economists at Credit Suisse now look for three and a half percent as the terminal rates for the ECB, which is pretty high, higher than I would have expected a year ago. Isn't it going to be there long? Well, that's the thing. If you now start looking at futures expectations in the interest rate curve, you're starting to see the inversion get much bigger. For example, if you look at September 23, futures against September 24 features in the UI will strip. We're now looking at 50 basis point inversion there. That was 37 basis points before this move. So the market, it can believe in the idea of the terminal rate being that higher think, but it's not going to believe as much in the idea that it can stay that high. And I think that's going to be a weak link for the Euro going forward. Well, so in other words, given the fact that the ECB seems determined to move forward with this, is this going to be a parody type of situation for the Euro again, or do you think that it will really break in terms of what the resolve will be from the ECB? No, I think it's probably more of a barrier to consistent gains for the Euro rather than an instant reason for it to go back to parity. So if you look at a dollar, for example, at the end of September, we had the same 50 basis point inversion between September 23, September 24, sofa futures. Now that's a 150 basis points. So the market again was pushing down 2024 rates quite aggressively for three months and a dollar fell throughout that period of time. I think at a much earlier stage in this process for the Euro, I think the Euro can go a bit higher still. But I'd be keeping a very close eye on exactly that same spread in the Euro as well, because as that gets more inverted, that takes away the steam, I guess, the energy behind the Euros. This ability to rise. This is what I'm struggling with China. If you end up with a weaker Euro on the heels of a hawkish proclamation from the ECB. This increases the inflation risks in the Euro region, how do they counter that? It was the problem earlier this year. We talked about it a few times, so she had, I guess, the big call for an FX strategist. Regime shift. They changed their adapt evolve. Sometimes it's all about race differentials. Other times it's just about risk sentiment more broadly in the market, maybe even the economy. What do you think is the most dominant factor right now and perhaps what is going to be the dominant factor in 23 for this FX market? So certainly rate differentials have been an important factor. That's why you're a dollar is back at one O 6. When we started below parity, this quarter. So I do think that that's a significant factor. But there's also the terms of trade story as well. If you remember, Euro was not weak only because of rate differentials. It was weak early in the year largely because of balance of payment shifts linked to very high
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"The market open this morning, Wall Street moving lower after the route yesterday following chairman Powell's comments S&P futures are down 16 points Dow futures down a 108 NASDAQ futures are lower by 57 points, ten year treasuries down 23 30 seconds a yield of 4.19% on the benchmark, two year yield now at 4.72%, British pound ahead of the BOE decision 1.1245 against the dollar this is Bloomberg This is a Bloomberg money minute, Fenty J Powell is leaving no doubt that interest rates will continue to go higher to bring down inflation and said race will rise more than earlier projected, but the path may soon involve smaller hikes, Paul said it was still possible the U.S. could avoid a recession, but he acknowledged that the window for doing that has narrowed given how persistent inflation has proven to be and stocks sold off on Wall Street yesterday after the fed raised rates and other three quarters percent. The S&P 500 posted its worst route on a fed decision day since January 2021 falling two and a half percent. More and more companies will be listing pay ranges on their job postings even where that's not required by law. Google IBM and Wells Fargo are the latest to make the announcement following American Express this week, Citigroup post salary ranges and Microsoft plans to do so next year. Right now only New York City and Colorado require pay ranges to be listed on job ads. Genus survey, Bloomberg radio. Not completing high school is more of a social thing than it was an academic thing. I came out in the 11th grade. Nobody was embracing you. The kids were cruel. It was very difficult to be gay. Even though all these years have passed, I still had that longing to have my diploma. The hard part was determining that I was going to do it. But I definitely didn't do it alone. At age 30, with the help of her mentor, Carissa finished her high school diploma. I have a mentor, Maria. She convinced me to continue my education and finish what I started to get my diploma. Just never judges. She's a true role model. If you're even considering getting your
WTOP
"chairman powell" Discussed on WTOP
"It maintain that strength as the fed Federal Reserve continues to raise those interest rates to hold down inflation. This morning, Mark Hamrick senior economic analyst for bankrate dot com with his reads on the latest numbers. I think the real takeaway here is the job marker remains remarkably stable in robust and unfortunately, and this is why financial markets are reacting the way they are. The job market is too strong for the likes of the Federal Reserve, which looks at all of this as another source of inflation when there seems to be no shortage of potential sources of rising or sustaining high prices. It kind of seems antithetical to our values, doesn't it, that a very, very strong job market can be problematic Mark? It does. And chairman Powell has been asked about that many times, including by me. The problem is that this is the inherent conflict, not to mention, you know, quote unquote values, which is an accurate statement or phraseology. The fed itself has a dual mandate, which is stable prices, which we've experienced anything but as well as maximum employment. And here they are essentially willing to say that for the sake of the economy, we need to prioritize the inflation problem and basically say, in this case, we have to let the job market worsen to dampen demand. And the question is, how much more will it worsen, but I think the default forecast right now over the next year right now is rising unemployment and that's a kind of pain that ultimately all of us will share. Well, how far into the future is there a sense that we're only months away from the fed of reaching its goal of tamping down inflation? Do we have any sort of sense of timing here? Well, not according to their own forecast, so they go out now about two and a half or three years with their forecasts. And you have to go out to the end of that forecast where they see inflation getting close to their 2% target. But chairman Powell as well as plenty of other interested observers will be quick to say that the ability to forecast that far out at this point is quite poor and our recent experience affirms that because very few individuals predicted the current circumstance, which is causing all these problems. Mark, I'm breaking your economic analyst for bankrate, dot
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Morning, I'm Nathan Hager. And I'm Karen Moscow, U.S. stock index futures are lower the morning we are coming up to 6 O one on Wall Street and we check the markets every 15 minutes throughout the trading day, on Bloomberg, S&P futures down about 36 points this morning down features down 253, and NASDAQ futures down 137 ten year treasury down 1930 seconds 3.11% and a yield on the two year at 3.45% Nathan. Karen were still feeling the impact of a hawkish J Powell this morning global stocks are at a one month low. The last time we saw the yield on the two year treasury this level was 2007. This morning slump follows the worst day for U.S. stocks since June 13th, the major indexes all fell at least 3% with the NASDAQ plunging almost 4%. The catalyst for the sell off, chairman Powell signaling interest rates will stay higher for some time. Katrina L senior economist at moody's analytics says the fed shares comments have brought implications. It makes sense to say that U.S. recession odds have also increased because that laser sharp focus on trying to bring down inflation is really the priority of the fed at this point. And so as a consequence of that, I mean domestic demand just really has to come down. Katrina Elle with moody's analytics says the fed is also uncomfortable with the current tightness in the labor market, $1.2 trillion in market value was wiped out on Friday. Well, Nathan the strong message by Jay Powell and the fed last week has some on Capitol Hill pushing back. Senator Elizabeth Warren says she's worried the Central Bank will tip the U.S. economy into recession. Do you know what's worse than high prices and a strong economy? It's high prices and millions of people out of work. I'm very worried that the fed is going to tip this economy into recession. Senator Elizabeth Warren tells CNN she does not believe higher interest rates will curb current inflationary pressures. Jay Powell and the fed get another key economic report to evaluate this week, Karen, on Friday, we see the August jobs report here with the preview is Bloomberg's Finney del giudice. Economists say U.S. payroll growth moderated after scoring a July gain in more than a half million technology firms have been trimming payrolls and freezing hiring, but job openings continue at historic highs. The U.S. unemployment rate is also one of the lowest in decades. More numbers, this month's conference board, consumer confidence index could improve thanks to lower gasoline prices
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Was chairman Powell wrapping up the news conference and we are go in this equity market from New York City this afternoon good afternoon on TV and radio. This is our coverage of the fed decides. Look at this, your equity markets absolutely flying on the NASDAQ on the S&P 500 up by 2.7% on a S&P on the NASDAQ up by more than 4%. Treasury yield shaping up as follows, we take a dive at the front end of the yield curve, down 9 basis points on a two year to two 97 on a ten year lower by four basis points to two 77 and echoes of the ECB and president the guard at a meeting last week forward guidance is dead. Take a listen to this. We think it's time to just go to a meeting by meeting basis and not provide the kind of clear guidance that we had provided on the way to neutral. That non committal starts Tom seemed to trigger this idea. That Pete fed hawkishness is behind us. No question I did some work here John the NASDAQ movie see is back 16 months to a lonely day in March of 2000 21. The Ford guidance has gone John, but what I really saw there in particularly a poignant moment, two thirds, three quarters of the way through the press conference where it seemed like a very tired Jerome Powell sort of stepped back is with great respect for their public service. They're making it up as they go. That's the new Ford game making out for a while and we're here from him and Jackson hole, hopefully. Bran, what is it about fair days? March 16th, that 3.7% on the NASDAQ may 4th at 3.4. And Aztec 100 June 15th up two and a half percent today. Where are we now at more than 4%? Yeah. You did a great job on Twitter. What happens then the day after? Well, the last two meetings we've found are pretty dramatically so. I mean, how much is this basically the market not getting it right? Not fed chair Jay Powell because the market took a listen to what he said. No forward guidance. Then you're going to go meeting by meeting data dependent. They recognize the softening, but emphasize the strong labor market inflation number one goal, and somehow this is dovish. Somehow this means they're going to back away sooner. Perhaps you could read into his comments that at some point that were traced some of the rate hikes. But that's just logic. I mean, at some point, they will come back down. I mean, it could be 2035, right? I mean, it's just logic. So it's interesting to me that people just want to buy. And they're going ahead with it. Are we going to be highly sensitive to incoming data? Much more so now. And not just the CPI report, but also the labor market report. And if you want to blend to both, look for the ECI. We'll get that later this week as well. Tommy for allow me, just give me some time to go through these quotes from chairman Powell. These rate hikes have been large, and they've come quickly, and it's likely that they're full effect is not being felt by the economy. There's probably some significant additional tightening of the pipeline. That's what he said in the news conference. Pair that quote with this one. As the stance of monetary policy Titans further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation. Tom is what he didn't say. It's what we heard in the first place. Exactly. It's the lack of commitment to going big, which is reinforcing. This move at least for now. It's a brown most point. I think we've got to recognize on fed days. Do not define the fed decision by the price action of the day because the following day over the last couple of meetings Tom have been very different. This is absolutely profound and it's around what I call a type one type two model and a type one model is basically what you say, what you say, what comes out of your mouth. But you're absolutely right, John, what's so important here and what gave sustenance to this market going into the Apple Amazon soiree tomorrow, what's so important here is what he didn't say, and that pulled away from the with respect stride and see that we hear for someone like doctor Dudley. I would love for someone in that news conference just to tell him where the market is trading based on what he's saying. At some point in the future, Mike McKee might be that. Why doesn't he have a Bloomberg terminal at the podium? Mike McKee's going to ask him next time around my case with us now. Mike, what did you make of that? Well, I had a Bloomberg terminal at the podium, but I didn't ask him about that. I think the key takeaway if I could sort of put it in a story form is that the fed knows where it's going, but it doesn't know where it is yet. They know that the economy is slowing, which they want. They know that inflation may be coming down, but they can't be sure of that. They don't think that we will go into recession because the labor market is so strong, but they can't prove it. So at this point, they're just going to take a step back, wait and see. He didn't rule out 75 basis points, but he didn't say that was the base case either. So basically, he's trying to give them as much flexibility as possible until they can read the map and figure out where they are. Michael McKee, a lot of the charts that we're looking at, maybe two ten spread is the best, is they look like a CCM 5 strike from lore. They look like a hockey stick with a sharp bend. Is that because this chairman decided not to be chairman Volcker this afternoon? No, I don't think so. You could read it one of two ways. You could read it that way, or you could read it that the fed is determined enough to tackle inflation that the market thinks inflation isn't going to be the problem going forward. So at this point, though, I would not look at the reaction today to what Jay Powell said. I mean, people had positions on. They have to react to it. Wait for the next two days. When we get some data that will really matter on growth, and it's not the headline, Tom. Composition, whether business investments slowed as J Paul said it was with a consumer spending is slowing significantly. And then we'll look to the ECI he brought that up as a major indicator to see where we are with wages, one of the key inputs to the NBER's decision on whether to call a recession is whether incomes less transfer payments, they take out government payments like unemployment insurance, whether that's continuing to rise. It's been rising strongly if it's still going up it suggests that there's still momentum in the economy and we're not in recession. Mike McKee, thank you so much. Right now with our interview of the day with a former fed official without question, William Dudley is that Bloomberg economic senior adviser the former president of the New York Federal Reserve and of course for years with Goldman Sachs. Bill, I thought of you when we saw forward guidance exit stage right today. And I went back to Dudley and mckelvey. What will our world be like without forward guidance? People are just going to have to parse the economic data a little bit more and think about how that economic day is going to affect how the fit behaves. I mean, I think Paul made it clear today that they think that they've reached an important point where monetary policy now is broadly neutral. But that doesn't mean that they're going to stop. He also said that policy beef to make restrictive. And I think the rally that we're seeing today is just a relief rally that happens most of the time when we have these settings because the risk of that is over. Oh, you know what's actually happened and some people can breathe easier and some people put this guy after the meeting. I didn't really hear his comments as dovish. You know, he kept coming back to the tunes summer of economic projections. And if you look at the summary of economic projections, that's ending the year at three and a half to three quarter to three and a half percent. And with another 50 basis points of tightening in 2023. That's quite a bit more than what's priced into the markets today. So the fact that he came back to this June SCP projections three or four times in his remarks suggests to me that the fed
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Been. Governor Bailey there of the Bank of England alongside chairman Powell, president the guard, and blinken's very own francine lacquer, futures look like this on the S&P, we're negative 1.5% on the S&P on the NASDAQ 100. We're down by 1.8. Bonds are rallying. There's one for you. Treasuries up yields down by 6 basis points to 3.03% on a ten year and look at this in Euro dollar. For G ten today, this is the picture. It's dollar strength with the exception of the Japanese yen. That's that kind of risk aversion story. You might expect Euro dollar one O three 92, support for this pair has been one O three 50 ton. Getting closer to those levels again for a second time this year. Yeah, we're going to recalibrate, you're going to see that over the weekend, not that we're to the weekend, yet claims coming up to speech from the president coming up as well. John, just some house cleaning the vix through 30 to me is a big deal. I mean, I know in the equity space, it's like, well, okay, the vix is so 1950s, but the fact is the vix above 30 shows the angst. I'm going to call it John the collective angst that's out there. This morning, John also note the ten year yield. Can we see a two 99 handle on tenure? I'm with you, Tom. Treasuries are doing something they haven't done through most of the year so far. They're responding to bad news in a different way. They're not the provider of them, bad news. We've been talking about high yield higher inflation, messy markets, and now start to see bonds behave like bonds in a way you might expect them to. For global Wall Street, get out the powder paper and take notes. Jane foley is a student of foreign exchange. Yes, dollar centric, but with robbo bank, far more looking at the linkages between foreign exchange. What I notice irrefutable and I know that president Trump was way out front on this chain is strong, strong dollar, trade weighted dollar by any indices is back to 2003, even back to 2000 two. What is a significant of a strong dollar back 20 years? Well, this is, as you say, a pretty strong dollar. But I think what it's reflecting is the riskiness of other assets. There is a pretty strong correlation or inverted correlation between the dollar and one hand and risky assets when risky assets are not performing well, or the dollar goes up and vice versa. And I think if we look at the tone in markets right now, people talking about the U.S. recession potentially over the winter in Europe because the gas prices in a slower growth worldwide, then that's an environment which is the dollar performs well and risky assets do not. And I think that's very much a story that we're looking at right now. I don't go short term with too much respect for your work, Jane, but I am going to do it here on June 30. Where does Euro and yen set up against dollar September 30? Well, you know, our forecast for dalien sorry for Euro dollar for a while has been one of three ish and the reason for that is that we have this massive big support level and one O three and a half. And we're staring really quite closely at that today. If we go below that, you know, we could see parity and I think for a while we've been able to outline the risk of a parity and this is to do with Europe. This is to do with gas prices high over the winter. This is to do with that creating these recessionary conditions taxation. And that of course put in a lot of focus on fragmentation in the Eurozone, which is a bad story for the Euro. So that is what we're looking at. I think this week, but with respect to the yen, well, that is a yield story. Now the dollar has gone up today at more than the yen, and it's almost up to you about one 36, but actually if U.S. yields do start to come down, then I think that gives the bank of Japan a little bit of room to carry on doing their yield curve control until they want to stop it, which will be one way to begin to go up in Japan. Jane, I want to stick on the Euro for a minute. You're really saying it's quite bearish for the Euro right now, which a lot of people see the same, especially given some of the gas constraints for Germany. So why haven't we seen more weakness already? You know what, I think people are only just beginning to come round to the recessionary story for the Eurozone. We've heard that as a forecast for a while and we've been an outlier, but I think more recently, you know, that has become or that view that we could see recession over the winter months has become a little bit more commonplace in the market. Now we've got the guard still defending the view that she still thinks the ECB we would still carry on seeing growth in the Eurozone, but the fact that she is defending it, again, this week, the fact that she's reiterating it almost sounds like a push back against the fact that she's aware of these weight of views coming through from the market about Eurozone growth. Now, if you look back to last week, we have the German finance economy minister talking about the possibility that we could have maybe supply cut off to some industries in Germany that would relate to Italy to very difficult not to see recession if that happens. Jane, the spiraling effect of a weakening currency at an inflationary environment is something that is also a bare case because it will only exacerbate inflationary pressures in the Euro region, prompting the ECB potentially to act more aggressively, only furthering the downturn. How much are you looking at the incremental weakening in the currency as a bare case for the economic trajectory? This is really quite interesting. And I think we've seen this quite a lot in the last few weeks, certainly this month amongst central banks. If you look, for instance, at a speech by Catherine Mann from the Bank of England last week, she was talking about the spillover effects of the fed hiking by large amounts. And that coming through into the UK and perhaps setting the scene for a more aggressive pace of interest rate hikes in the UK just to defend the currency. Now you can see that already in Norway, Norway height interest rates recently by 50 basis points bigger than expected, it only served to stop the currency going down. It didn't push the currency higher. The Rick's bank today, 50 basis points not an awful lot of gain for the currency, et cetera. So we're seeing this momentum where central banks have to go big because all of the big ones are going big. And as you say, that can just accentuate the downside risks in terms of
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Of our faces. Chairman Powell, mister summers, has suggested several years of greater than 5% unemployment might be necessary to contain inflation. Would you agree with that assessment? I guess I would say that I don't want to comment on other people's forecast generally, but my assessment is that it's going to depend to a significant extent extent on factors like how long does the war run and how long does it take supply chains to improve in that kind of thing. There's a lot of uncertainty around that. I would have a lot of humility about trying to predict with any clarity exactly where the economy is going to be in the next three years, for example. But my assessment though is that there's certainly paths to get inflation down to 2% with outcomes that are substantially less troubling than what you just read. You've a characterized a soft landing as getting back to 2% inflation while keeping the labor market strong. What's your confidence that the fed can achieve this goal without causing a recession? So I think that is our goal. That's our intention. I think it's going to be very challenging. We've never said it was going to be easy or straightforward. It's going to be challenging and the events of the last few months have certainly made it more challenging. And nonetheless, there are pathways through which that could happen. And in particular, what we saw in the early part of 2021 when inflation went up was very strong demand surged against what were unanticipated supply side constraints. And the result was prices went up a lot, much more than could be explained by just the increase in demand. And so in principle, if demand can move back down, then inflation could move back along that path just as quickly as it went up. In principle, no one's guaranteeing that, but the idea is this is not the same. There are relationships in the economy for how quickly inflation would move compared to demand moving. This could be an unusual situation because we have had what is an effective vertical supply curve where there isn't any more supply or a very steep supply curve. So you get really sharp increases in prices. You could get sharp declines for the same reason. So that could be a difference. And I think we'll find out, ideally. But ultimately, we need to see progress on the supply side. And we're not waiting for it. Our job and our tools work on demand. And that's what we're working on now is getting demand down to a more sustainable level so that supply can catch up and is in better balance with demand. Karen bell, thank you. Thank you, senator Diane's senator rossoff on behalf of the chair. Democratic senator John ossoff of Georgia. Right now, the S&P 500 is up, 12 points, the Dow Jones Industrial Average of 64, the NASDAQ 100 is higher by 75 points. This is Bloomberg radio. Much of what you are responding to and adapting to is beyond your control. Your success is the country's success to a significant extent. It's the world's success and I fervently hope for your success and appreciate your continued efforts. I'd like to ask you to specify if you can, what transmission mechanisms you believe are most sensitive right now to the change in monetary policy, what forms of consumption you expect to be most sensitive to it and the extent to which you anticipate that some of the effects that you hope to have on aggregate demand through the increase in rates are transmitted via financial markets and if so how? So I guess I would say three basic channels through which are tools work the first would be interest sensitive spending so that's durables, including cars and things like that, durable goods. Housing, for example, so when rates go up, a spending on those purchases which tend to be financed with debt will be restrained. That's one major, major channel. The second is just asset prices generally across the economy when interest rates go up, it raises the cost of holding assets. It can cause assets again broadly across the economy to either moderate their growth or decline somewhat in value. And that has an effect on a broad effect across the economy on spending on everything. The third channel is really the exchange rate, which you can think of as another asset price, but that also has the effect of pressing down on inflation. So we look at all of those, starting with the first one, you can see we just talked about the housing market. Housing market is the classic part of the economy that's very sensitive to interest rates. And you're going to see a moderation in housing demand. You're going to see declining slower increases at least in housing prices. So those are the three main channels I would point to. Let me ask about in terms of asset prices and how financial markets are responding to the fed's stance. I've consistently asked you and secretary Yellen when you appear before the committee to talk about systemic risks, risk to financial stability, risk of financial contagion, where you're moving swiftly and markets are volatile. There are perhaps institutional trades that could rapidly unwind or exotic financial instruments that no longer function well. What do you anticipate to be that parts of capital markets now or the phenomena in capital markets that present the greatest risk to financial stability as the fed takes the aggressive action that you're taking? Well, I would start by saying that the banking system is very strong, well capitalized, highly liquid, does a much better job of understanding the risks that it runs and managing them than before the global financial crisis. And that's a reflection of the work that regulators did in that the banks did to so that part of the financial system is critically very strong and we saw that through the pandemic and we see it now. To your point though, capital markets did show real periods of illiquidity during the immediate aftermath of the pandemic. And so we've been looking at ways we I say broadly that regulatory community has been looking at ways to address that so you remain concerned about money markets. Well, that's a different. So money markets that's a part of the economy, which it has become illiquid because the assets that they were invested in were not able to be turned into cash quickly to fund depositors wanting to take their money back. So we stepped in and had to provide that liquidity for the second time, there are reforms going on there at the SEC, which should
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Thank you very much Does that reps of the news conference with chairman Powell an eventful one This is the fed decides on Bloomberg television and Bloomberg radio alongside Tom Keane and Lisa bravi Sam Jonathan farrow Your equity market on a S&P 500 looking a little something like this up by more than 2% on a S&P on an Aztec by 3.2 We were up on May 4th by 2.99% on March 16th by 2.24% at least I'm thinking about those kind of moves because they were the previous two fed meetings Based on what we heard in the last hour this is the kind of move we're getting at the equity market equities up and at the bond market yields down How much is this just a relief rally Just resetting a little bit after the uncertainty of what the fed would do here hard to get to have any takeaway from the strength that we're seeing right now considering the fact that you have the likes of Morgan Stanley now forecasting a 4% fed funds rate by the end of this year not next year this year and if you look at fed funds futures now we are looking at 3.7% fed funds rate by February You start looking at all of these metrics You start wondering you know Scott minard saying that all risk assets look suspect in this at what point does it sell off recoup or do we end up getting affirming up here with perhaps uncertainty from the fed This market faded a 75 in July Barclays straight out the gate just mama to go said 50 basis points of the next meeting The market latched on to something really early in this news conference Take a listen to these comments from the fed chairman And I do not expect moves of this size to be common From the perspective of today either a 50 basis point or a 75 basis point increase seems most likely at our next meeting Lisa you have to play the idea we'll get another 75 And it was just enough seemingly to spark a rally in this market Now I want to be very careful about this I don't want to define a news conference by an intraday move on a S&P 500 Because we have done a tremendous amount of work in this market over the last week to add a lot of yield it's at a bond market and take a lot of weight on off the equity market Oh yeah the vix comes in under 30 28.01 right now John I was sort of surprised John at the quiescent nature of U.S. dollar The currency market particularly after the emotion of the emergency ECB meeting this morning I thought it all adapted and adjusted to Powell ad lib and Powell reading off the scripts as he did often in the press conference I thought he came out of this in one piece Just about We'll get to my McCain moment Lisa I really want your thoughts on this Those words from chairman Powell I don't expect moves of this size to be common went on to say from the perspective of today either a 50 basis point or 75 basis point increase most likely at our next meeting He also talked about getting mildly restrictive by yearend three to say 3.5% Your thoughts on what he said and how the markets responded to it I don't really understand the connection I don't understand it because right now with the fed is saying is we were surprised by the data We thought that it would help us out and get easier It actually has moved in the wrong direction We moved aggressively even with that 75 basis points that we took off the table at the previous meeting And we expect that it won't be that common How much how much credibility that credibility that's perhaps a little bit of a loaded word but how much credence can the market give in a fed that is moving as quickly as the economic data which is surprising all economists Should we talk to a man who was in the room Mike McKee I can tell you he's out of the room now Mike McKee joins us right now Mike your thoughts on what you heard in that news conference Well I think in some ways the chairman was admitting that the fed had gotten it wrong and that they were going to try to do their best to change the way they approach things obviously the Michigan numbers scared them They are concerned about inflation expectations going up And enough so that they change their view and went to the 75 basis point which the chairman suggested was the right thing to do and it was also the right thing to do to give it a little more guidance on that I think what he was trying to do in response to what Lisa was saying is not get pinned down again Not get in a situation where they're going to have to reverse themselves He said 50 at the last meeting in 75 was not on the table But now they have plenty of time until July 27th to sort out where inflation is And as he pointed out you won't have inflation numbers coming right before a meeting this time So it'll be a little bit easier for them I think the biggest change here is that he now says they have to go into restrictive territory And that was not the view at the last meeting last meeting was Well we'll have to wait and see But so now we know they're going to have to go higher and then we know how high they think they want to go this year and you can start to parcel out rate increases over the various meetings Mike McKee thank you so much John we got to do the yield curve here before we go to Bill Dudley And he's a big moves Tom The two year yield 21 beats in 3.21% is remarkable If I told you three months ago TK the fed would come out today.
WTOP
"chairman powell" Discussed on WTOP
"You don't have to be an expert economist right now to know inflation is just raging You feel it when you fill up your gas tank or when you stop by the grocery store to grab a few things say And now the Federal Reserve we here is preparing to make moves to fight those high prices This morning bank rate senior economic analyst Mark Hamrick on how aggressive this new action will be Well I don't know how aggressive it is but it definitely is a change in posture and so with many people out and about in their automobiles right now we'll use the analogy of the Federal Reserve has had its foot on the accelerator And now it's going to begin to pull its foot off of the accelerator aiding the economy at a more aggressive rate to use your word there And so that's a step in drawing down asset purchases which have been raging on at a 120 billion a month until recently Those will end in the spring and that's a prelude to then putting the foot on the brake for the economy and presumably then dampening inflation and basically that or reserve officials signaled that there could be three interest rate hikes next year but that isn't written in stone by any stretch of the imagination So how will we be affected by these changes Well first of all the question really is an open one and that is does the biggest part of this inflation problem resolve itself next year as supply chain disruptions essentially are addressed And that's the question that we're all wondering about But the main part is just that the fed takes its foot off the accelerator having had it really almost pedal to the metal sets this crisis began in the first quarter of last year And so with growth as a strong as it's looking maybe 6 to 7% on an annualized rate here in this current fourth quarter the unemployment rate approaching 4% The argument's quite strong at the economy needs no further acceleration And that's why Federal Reserve officials are signaling what they are Is there a sense that Wall Street's bump had anything to do with this I think there's some relief actually the fed is in the process of getting this right or at least closer to right And the question was asked on the virtual news conference of chairman Powell Have you been behind the curve in this process I think the concern among many consumers as well as people who operate in business has been exactly that that the fed's been slow to react to inflation and basically didn't see it coming or didn't think it would persist And so that this is always sort of a moving target I think there is a relief on the part of investors and ultimately the rest of us By senior economic analyst more camera.
Bloomberg Radio New York
"chairman powell" Discussed on Bloomberg Radio New York
"Boxer you don't want to be fighting against somebody who's clearly going to go down in the first round Nobody wants to watch that If you win the Big Ten championship and I hope you do I'll be rooting for Michigan for sure That's really good for the rivalry Big Ten football back this week gonna be good again So it's not just the SEC It's good And they played it Big Ten style right It was the running game that we couldn't in the snow And it was in the snow It looked great And then the Michigan state game afterwards against Penn State in the snow So that was Big Ten football at its best So all right Matt bos we're gonna let you go here because we're gonna get to this testimony coming up soon after he's a Federal Reserve reporter for Bloomberg News And Matt is interesting yesterday you know after what fed chairman Powell said yesterday you wonder what can be added to it today Well I think Boseman made a great point about him taking a stand here and trying to maybe he's trying to jawbone inflation expectations down not saying that there's not going to be actual policy moves behind it But it's possible that the consumer looks at Powell as just two dovish and that obviously weighs on inflation expectations or lights him up as well So if they if he is able to take a stand and look stronger less kind of wimpy when it comes to inflation then maybe that'll bring the expectations down and he won't have to hike too much On the other hand if the economy is strong enough he's gonna be able to Let's be honest right 50 basis points from zero isn't gonna kill anybody No that's not you know we're still extraordinarily I'm talking to somebody who is looking for a mortgage Yes So I want rates to be low but they are already so low Three and a quarter percent without even shopping around is what I see for 30 year fix Without even giving them my FICO score they're like ah three and a quarter no problem That's cheap Yep absolutely it's a good time to be in the marketplace So again congratulations on getting that house All right let's go get a Bloomberg business.
Phil's Gang
Powell Sees Taper Starting This Year
"About what pal is going to say on Friday. And basically nothing. Well, I think he is going to be appropriately vague and perfectly noncommittal. Well, guess what? That's what happened. But I also told you That he would not Paper. You would not raise rates because he had too many things going Augusta, one of the things Was I told you That you've got to have full employment. And right now. We're receiving every week. New sign up for unemployment unemployment checks The unemployment applicants each week I running between three and 450,000. Anything about 350,000 is a recession. Well, guess what he said. When he came out, Jack, what I said. Doesn't have full employment. The Federal Reserve Chairman Powell He just came out and said that well. You may likely begin to taper before the end of the year. However, you went on to say That rate hikes aren't imminent. As you're still much ground to cover. Before the economy hits, full employment, exactly what I said. I also said They're lying. They're not gonna They're not. They're not going to raise rates because they don't control it. Paul does not control the Federal Reserve. The same banks, TERT warlords, bank stir Gangsters. Who control the Federal Reserve, the same ones who control The military industrial machine.
Odd Lots
"chairman powell" Discussed on Odd Lots
"It's israelis restricting their hours. It's eating into their margins. It's causing the question business model. It's pushing many businesses. I talked to think about merging and getting scale. And i think that's that's an important trend of the order so we've talked quite a bit about the inflation question. I'm wondering if you could maybe Zoom in a little bit more on the full employment target and talk to us about how you're seeing that and how exactly your measuring full employment especially at a time. When chairman powell has expressed a desire to tackle inequality in the job market. So what does full employment actually look like to. You pre pandemic. I looked at a full dashboard. But i- board in specifically on the headline unemployment rate the whole population for black citizens hispanics women those with high school education or less as well as a measure called us six unemployed plus discourage workers people who work part time rather work fulltime. I still look at all those measures today. But i we broadened out our dash park dash or even further to look at things like open jobs. The quiz rate some of the conference board measures. And i think that. I think it's very appropriate to be looking at different groups to look at their Their labor force participation at unemployment rate and trying to look at opportunities to reduce the the slacken those groups and get them back into the workforce. But i think in assessing how tight the labor force is. It's never been more important to look at a wide wider set of benchmarks than before. And that's why you're probably not gonna hear me used pre pandemic targets in thinking about full employment today. i think structurally these supply. Demand imbalances are more pronounced. I think we've got more structural issues so it makes me look at a much wider of items in a much bigger dashboard. That i looked that i looked at pre pandemic. And that's caused me to say and we wrote a piece on this two months ago the labor force from what we can tell as much tighter than the headline measures would.
The Breakdown with NLW
Analyzing The March Federal Open Market Committee Meeting
"Is the fed's federal open market committee meeting today. Ray now the market is getting nervous because they see the economy heating up and they just don't believe that the fed is going to be able to keep interest rates at zero for as long as the fed. Says they're going to how that's showing up in. The numbers is the ten year treasuries at its highest point in a year. The thirty year treasury is its highest since two thousand nineteen growth. Stocks are down and inflation. Expectations are the highest in twelve years. Then what does the market want to hear out of this fed meeting to me. It seems like they basically want more details. Powell has said over and over that they're staying the course and then he has pointed particularly to their employment goals and just how far they have to go before they reach them but again like i said market seem not to really believe that and i think they want chairman powell to outline exactly the circumstances that would make the fed change its tune and change its policies. Frankly i'm not sure how much detail powell is. Going to be. Willing to indulge right now when we're not actually in a crisis were just seeing stock prices that are finicky insensitive to the that they might be extremely
Morning News with Manda Factor and Gregg Hersholt
Fed Chairman Powell testifies before Senate on economic outlook
"But not all the news is good federal reserve chairman Jerome Powell's warning about significant uncertainty in the economic recovery testifying in a virtual Senate hearing palace says that small businesses and lower income and minority Americans are still especially at risk the U. S. economy was devastated by the pandemic of policy just the economic recovery will be in jeopardy until more Americans have confidence that the virus is
WTOP 24 Hour News
More Than 1.5 Million Workers Sought Jobless Benefits Last Week
"Until the economic news that one and a half million laid off workers applied for unemployment benefits last week even as the economy appears to be slowly recovering before businesses partially reopening these days mark Hamrick senior economic analyst for Bankrate dot com says we should know here it is the tenth straight weekly decline in applications for jobless benefits since they peaked in mid March we're still seeing extremely elevated claims and they do seem to be I would say stabilizing of the headline numbers of new claims have been declining as you say for ten straight weeks bought yeah we look at the sort of headline numbers on the claims the main on employment program which had about you know a little more than one and a half million new claims but still there's another seven hundred thousand that are part of the carers act pandemic claims so we're still talking about two point two million overall and you know something along the lines of thirty million people in all continuing to receive unemployment so I think we're continuing to try to balance optimism with realism and obviously what's what's happening with the stock market we're getting a dose of realism circling back around it's probably one of the most commonly asked questions I've been getting for people whether they're essentially friends family or in media settings what's going on with Wall Street I just try to remind people that Wall Street is not main street and vice versa and with all the trillions of dollars in a stimulus or relief there been applied to the county the stock market reacted in kind for those and adventures who I would've largely urge to stay put through all this they've been rewarded by that thirty plus percent return from the lows during the pandemic it's obviously concerning we see nearly half of states with rising cases of coke at nineteen the chairman Powell basically stated things as they are many on Wall Street might of like two had a Rosier view but having a rosy view in the mess of everything we're dealing with probably would be a disservice to those who are suffering economically or because of their health mark Hamrick senior economic and list for Bankrate
Mark and Melynda
Fed chairman asks Congress to consider more stimulus
"About Nancy Pelosi's three trillion dollar stimulus package and this morning the chairman of the federal reserve chairman Powell gave a speech and he said yes Congress does need to spend more a lot more money otherwise all the money that's been spent so far could be wasted because we need to keep spending to help the economy recover I I agree and I disagree with that statement yes I think unfortunately we're going to have to spend some more money I do not think we have to spend it the way the Democrats are proposing with a lot of wasted money and I'll even go back to the other bills there were some things put in there that we did not need to spend our money on at that point I am not for saying we need to spend that money right now because I'm not convinced that the money that we've already allocated in the three previous bills has been spent in and we're already in a desperate need for more and I don't mean desperate in the sense of it's already ran out these people are gonna not be able to function without it I mean in a sense that we're not even that we're not a dry bones that we're not getting close to no okay well what's the right amount of money to replace in in that thing or to refill their coffers to
WTOP 24 Hour News
Jobless claims soar past 3 million to record high
"Update the government says a record three point three million people filed for jobless benefits last week more are coming says economist CRISIL factor says really confirms that the economy is now in recession fed chairman Powell admitted that might be the case today as the economy a side swiped by the
Bloomberg Markets
Data reaffirms expectation for a slowing in consumer spending
"More we are so lucky to have Danielle DiMartino both in the studio with us here chief executive officer and chief strategist of quill intelligence also a Bloomberg opinion column as a former fed employee in Dallas and you know I really want to focus on the consumer we got a number of data today I got a point consumer spending came in lower than expected and the Bloomberg consumer comfort index plunged the most on a weekly basis in eighteen years in eight years and yet Jake how this put all of his eggs in the one basket of saying we're not going to cut rates as long as the consumer hangs in there it's a big bet on his part I mean he really really is not diversifying fed policy let's put it that way all right so I take it just from that come along that you think that the fed you becoming more it's not so much the rate will look the economy is slowing and it gets tiresome to listen to these press conferences when Jay pals clearly in denial yes interest rate sensitive sectors actually let's just say sector because autos really haven't budged in fact auto buying intentions in the latest consumer confidence data are crashing so the only thing the only needle that's been moved by these rate cuts in housing that's it and and we're seeing as I was as I was just thinking least worst we saw in the bank earnings reports that the credit card spending rates have been coming down revolving credit has been a tremendous support for consumer spending we're seeing the saving rate take up we saw that this morning it took up to eight point three percent consumers are clearly battening down the hatches were seen deposits cash savings increase as well so I think the consumer senses that there's something amiss but again that's where Jay pals got all of his bass all right there are two questions implicit here first question well cutting rates actually encourage consumers to spend more no there it it's it's now I I don't think it will and that you know might mean he's been very good at press conferences about drilling him on this what are these rate cuts going to do I think the rate cuts have more to do with the plumbing in the financial system because the fed is buying treasury bills like there's no tomorrow and money market funds are arbitrage in this by parking their money at the fed where they get an additional ten basis points it's boxing the fed into where they have to continue to lower rates okay the second question that I have is regarding that credit card spending is the biggest banks I read the heard on the street column in the Wall Street journal about this and it was not that it is declining it's just that the growth in the credit card revolving credit has been lower right coming down and I guess they're two ways to read this you could read this as a tempering of the economy which everyone knows that it's slowing and you could or you could look at it as out waiting consumer confidence and a sign that things are gonna turn south which is the correct read I think that consumers know that there is slowing let jobless claims of barely moved by the breath of states that have increasing jobless claims has increased from about a third it hit seventy five percent in September we're running about fifty one percent now of state in the country with rising jobless claims and to your point about growth in credit card spending slowing the average weekly earnings will get new data out tomorrow morning but in June it was running at a four percent right in September it'd take down to two point six percent that's the paycheck growth it's not so much that income is declining it's that households know that their paycheck is no longer growing at the same pace so it's it appears a chairman pal and some members of the the dovish fed if you will are thinking about it it's all about the jobs and everybody's got a job on points at its all time low briefly tell off the sidelines a lot blah blah blah blah so tomorrow what's the what do you look at the cut through the blah blah blah tomorrow the jobs number so I'll be focused tomorrow on the sectors where we're seeing job growth if you looked inside the internals of the eighty P. report yesterday one sector financials that was the only one where you saw any growth of any kind and super large companies over a thousand place otherwise you name the sector contracting and you name the size of the business seriously slowing growth so I'm going to be looking at where jobs being created we've seen in the survey we've seen in the soft data that service and employment indices have come down with in in the case of market it's a ten year low so I'll be looking to see what types of jobs are being created dig into this consumer comfort data and you will see that the highest income earners their confidence has been coming down mom at a much faster pace than the people who they employ who still have high confidence are the is the consumer a leading or lagging indicator absolutely lacking every recession like sixty three percent of post war recessions we have been in recession with with expanding consumption it is not something that you look to to see where the economy is headed it is something you look in the rear view mirror to see post facto we're cooking what did you want to hear from chairman Powell yesterday that you didn't hear I wanted to hear a lot more about the repair facility I wanted to hear a lot more about why he contends that it's not quantitative easing just because it's at the at at the short end of maturity curve I don't think there were enough questions that were asked and I think that his intent and his Cinderella wish is to have a nineteen ninety five nineteen ninety eight redox and be Alan Greenspan to where the economy just continues to expand after three rate cuts but in ninety five we were at the beginning of an economic expansion in ninety eight we had a massive hedge fund blowing up these were idiosyncratic events were not there we're deep deep deep into this economic expansion and I would have preferred to have seen a little bit more about him saying no more rate cuts but by the way QB's blasting right king of the Martinez thank you so much for joining us really helpful Daniels the CEO chief strategist of quill intelligence also a Bloomberg opinion calmest giving us her smart thoughts on what we heard yesterday from chairman Palin the fed and what we might be looking for to what we need to focus on tomorrow with the jobs number of course Bloomberg radio will cover the jobs report in full as we
Politics, Policy, Power and Law
Bill Dudley: The Fed shouldn’t enable Donald Trump
"Former New York fed president bill Dudley got a chance to set the record straight today on the Bloomberg opinion column he authored contending the fed shouldn't enable Donald Trump he said in that column that the central bank should refuse to play along with an economic disaster in the making Republicans said they were outraged definitely would suggest the fed should play politics today he spoke to our Tom Kean and Jonathan Ferrell on Bloomberg surveillance we do have to reflect on off at the road around about a month ago I don't think on the quote with you since clarified and I want you to clarify once again it was the conclusion of the original that I think a lot of people's backs up and it said the following if the goal of mine a few policies to achieve the best long term economic outcome than fed officials should consider how the decisions will affect the political outcome it's twenty twenty when I got published how much push back did you get your full McCauley look I think there was a misunderstanding about what I was really trying to say what were you trying to say well the basic that main point the piece was to try to point out the fact that the president trump was trying this or have it both ways on trade he's pursuing a trade policy with China that pose risks for the economy at the same time as saying if the economy performs badly it's it's. the fed slow and my view is that the fed needs to make it very clear that the major risk to the economy is trade policy because creating uncertainty about investment and trade and supply lines and things of that sort and the fed needs to make it clear that that much your policy can only do so much about that I think the fed has made it more clear over the last few weeks I think if you look at chairman Powell's press conference he talked about trade and certainly a lot he talked about how the trade in certain is not some of the fed can easily address and that's the kind of push back that I thought was desirable I think a lot of people would be sympathetic with that view and that was the part of the pet that I think a lot of people were sympathetic with what they want with the mention of twenty twenty what is twenty twelve like I was I was trying to be provocative and what do they what they said the person to be very precise about it one could make if you accept the notion that the feds lofty goals are temps of maxim sustainable price and price stability over long term and one also accept the premise that this trade war might not be good for the the economic outlook then logic would say there's a question about should the fed take this should the fed take this into consideration at the end of the day I made very clear in the second piece that I wrote I don't think the fed should actually take this into consideration in setting policy if the fed were to do that they would become politicized and people would basically react by reducing the independence taking away the independence of the fed so you think the fed's already become politicized well it has become politicized because of the presence of tax on the fence so there's an academic piece that was good came out of the last I don't know twenty four of seventy two hours I saw it I just this morning and and they basically did a study of the effect of the present the fact the fact of the president's treats tweets on on the federal funds market and what they found was that the tweets actually were causing people to reduce their expectations about the federal funds rate so the fence already politicized in the sense that people are not sure now yeah if the fed is easing because that's the appropriate policy path or because of pressure from the trip president but that politicization. it's not coming from the fed is coming from the president but that is a really important point but also not politicize ation that pace I came from you and anyone this conversation now she's talk about in your face we came to say a former New York fed president should not comment on the current New York fed president but by mentioning twenty twenty can you appreciate how you've compromised your former colleagues and the optics around the next decision like I think that I think they're gonna behave in a a political way is there to do what they think is appropriate for the county and if I were sitting in their shoes I would do the exactly the same thing former New York fed president bill Dudley speaking today to Bloomberg's Tom Kean and Jonathan Ferrell and joining us now is Bloomberg news federal reserve reporter Chris Khandan Chris you heard Mister Dudley's explanation has he effectively put this controversy to rest high above the well it may continue to fade a bit but I think we can fairly call that a very tortured said of explanations about what bill Dudley said in what he has since claimed that he said and wrote they don't quite really match up in I think in the end it's clear that he has not made life for his former colleagues including take Powell easier he's made it more difficult well this is this really a triggered of some tough questions not only from Republicans but from Democrats absolutely and across I must say across the financial markets a lot of economists who watch the fed closely many who who used to work at the fed were fairly aghast at the initial call on it it really just invited hammering of the fed from certain corners on on Capitol Hill some folks that are going to take advantage of that and hammer the fed it it it as Jonathan very rightly pointed out in that interview the bill's own words politicized or or. give the appearance that the fed might act in a political manner when making a monetary policy decisions in may be justified in that and that's that's really it a poisonous idea for policy makers in this new study that was just published on Monday by the national bureau of economic research shows that market participants believe that the fed is under political pressure and will succumb to political pressure by the president so they think it's there that that's a very interesting study and quite frankly that surprised me I'd like to I I need to read more deeply into that but it does they claim to show a combined ten basis points off the expected fed funds futures contracts that's really I'd like to know how persistent that effect may be and we are the on the N. economics and fifteenth we do our own surveys of for instance economists these are not that's not the same body of people that are studied in that paper so they're not market participants but they are economists PhD Scott that following the fed and we asked them in several of our recent surveys over past months whether they think trump's criticisms would have any effect on monetary policy decision making and overwhelming the
Laura Ingraham
The Fed has a repo problem
"This week the federal reserve announced that it would offer banks and overnight repo operation now repo his Wall Street jargon for re purchase agreement. now when's the last time the federal reserve it was re purchasing things from banks do you remember. it was part. it allowed the federal reserve to go in and buy a with your money go in by different assets that were failing. now repo is a mechanism for short term generally a one day loan this is something that the banks they have to have a certain amount of cash in the bank overnight and so sometimes they'll just put assets up for sale and they'll say we need the money for the overnight and then the next day they re purchase the same asset back. now during the Tuesday repo operation the fed to pledge to fifty five billion dollars worth of funds available to the banks and the banks could sell the fed their assets. now they were selling a mortgage backed security securities are U. S. treasury bonds and that way the banks would have the cash on Tuesday the recall was oversubscribed by more than five billion dollars that means the bank showed up asking for cash more cash than the fed thought that they would even need. and that number was out by five billion dollars and so they are okay well there might be a bigger problem here so Wednesday now remember they haven't done this once in ten years they haven't done this since the collapse of the market. so the next day Wednesday they did it twice are they did it the second time. this time they said okay we're going to come to the table was seventy five billion so if anybody needs money tonight we'll it we have seventy five billion well this time the bank's showed up and they needed an additional twelve billion dollars over the seventy five. now yesterday the fed chairman Powell he announced a quarter point cut in the than the interest rate so he's lowering the interest rate and we're gonna have to get to that at some point. but he also said they do another round of repose last night for another seventy five billion dollars so they haven't done this since two thousand eight. they've done it now for three days in a row that tells you something is wrong. this is the first time since two thousand nine the federal reserve have stepped into the banking sector in in in the banking sector and offered cash.
Mark Belling
Powell: Fed ‘not forecasting or expecting a recession’
"Stocks rose slightly today to cap off back to back weekly gains boosted by optimism around the US China trade relations federal reserve chairman Jerome Powell said today the central bank's pivot this year to lower interest rates have helped sustain US economic growth chairman Powell also commented that the central bank is not forecasting or expecting a recession the most likely outlook is still moderate growth a strong labor market and inflation continuing to move back up Paul said at the close the Dow was up sixty nine to twenty six thousand seven ninety seven the S. and P. five hundred is up to and the nasdaq is lower by
Press Play with Madeleine Brand
Trump, Powell Powell And President discussed on Press Play with Madeleine Brand
"The war president trump is leading against the chairman of the federal reserve chairman Powell Powell gave a highly anticipated speech today about monetary policy trump had apparently wanted him to announce that he would slash interest rates Wanstead Powell said there are limits to what he can do in the midst of the ongoing trade war with China a trade war president trump started what trump responded today via tweets who is our bigger enemy fed chairman Powell or Chinese president xi and China has announced retaliatory terrorist today on American goods like cars nuts soy beans and oil joining me now to discuss all this is Chris Khandan he reports on the federal reserve for Bloomberg high I'm happy to be here are you well I'm fine thank you what did you take away from pal speech today right well there are a few things very interesting things first and foremost Powell did not hold the expectations that the fed barring something unexpected is going to go ahead and cut interest rates in September markets have priced in an interest rate cut of about twenty five basis points and he didn't say anything that would disabuse markets of that notion so we can be pretty safe in assuming the fed's going to go ahead and cut rates and that you should have please the president at least a little bit but clearly it was not enough now he wants a hundred basis point cut right yeah that's right that's right he's been pushing for a hundred basis points he may be the only person pushing for a hundred and there are the some other voices out there that say fifty would be appropriate but yeah he's way out there I'm not sure it ever be policed with whatever it is the fed does he really wants to see said somehow do more to goose growth in the economy trending or growth is slowing as expected towards trend growth which is about two percent and it's also being undermined by trump's on going trade disputes with China and with other countries and rather than seeking to resolve those he's pointing the finger at the fad well isn't that what Powell was basically living to today when he said there's only so much I can do this is one really easy he tried to be very careful now the set is is always very cautious if they come under attacks from elected official they're always very reticent to engage politicians and some sort of direct confrontation and certainly they're they're very hesitant about taking on the president directly but do you we've begun to hear some of the other regional presidents talk repeatedly about how trade is really the big worry for the companies that they talk to Patrick Harker from my Philadelphia said it's not the cost of capital companies are worried about it's the uncertainty over trade and then along comes Powell and he did it quite carefully but he said the in and out very quick quote from his speech there's no recent precedents to guide any policy response to the current situation in and direct reference to trade uncertainty so yeah he's really saying you know don't blame on us if you're worried about the economy perhaps slowing even more look at the trade front and that's clearly in control the president not
NPR's Business Story of the Day
U.S. Central Bankers Meet In Wyoming For Annual Conference
"This message comes from n._p._r. Sponsor xfinity some things are slow like a snail races. Other things are fast like xfinity x. by get get fast speeds. Even when everyone is online working to make wifi simple easy awesome more at xfinity dot com restrictions apply today investors and global financial markets are keeping an eye or possibly all there is on jackson hole wyoming u._s. Central bankers are meeting there for an annual. The conference federal reserve chairman jerome powell will talk today. A lot of people are eagerly looking forward to that president. Trump has been after powell to lower interest rates to stoke like the u._s. Economy on the line with me. Now is neil crush cari. He's president of the federal reserve bank of minneapolis and he is in jackson hole for the conference. Thanks for joining us. Thanks for it happened this morning. So you agree with president. Trump at the federal reserve should cut interest rates why well first of all interest rates matter to the economy because this is the tool we used to either boost the economy or slow it down and it affects everybody you know if we allow the economy to grow strong as it can that should lead to higher your wages for all americans and that should hopefully if we have lower interest rates. It'll be cheaper for families people to buy a house or buy a car as an example. I i've been arguing that the u._s. Economy is not at risk of overheating that we can continue to allow the economy to grow stronger and so that's why i've been arguing. We need to have lower interest rates over the last two years at the same time some of the risks that actually increased you'd see a lot of businesses in america that are nervous today about tariffs and trade and into global economy and they're pulling back on their investments and businesses don't invest in the future. We'll have shorter economic growth now and we'll have sort of economic growth in in the future so for a variety of reasons. I think that my colleagues and i should probably take it easier on interest rates left economy grow more quickly and if we need to we can it always raise it two straight to tap the breaks later. Many of your colleagues disagree with you. The president of the kansas city fed boston's fed president. They say you know. Unemployment is at record lows. The economy is not not doing badly. Why not wait for more evidence of a real slowdown before we take the step of cutting rates or one of the things i feel like we've learned in the last ten years and around the world in that. It's better to act early than to be late. Let me back in the financial crisis in two thousand eight. I think we were always late in responding and i think now if if the global economy is slowing and we wait until we're sure we're headed into a recession. It's gonna be much harder to avoid that recession. Once it's in front of us and so to me it's it's safer and more prudent to take a little action now and if we need to raise rates in the future we always can but this is the nature of the debate that we're going to be having over the next month. Let let me ask you what you think. All of this has been like for chairman powell because the president has been openly shouting at him on twitter to cut interest rates <hes> about interest rates and some other things things. Do you have any insight into whether this is a difficult time for him. Well i have great admiration for chairman pol. I think he's an outstanding federal reserve chairman and eight plus public servant turban and i completely support him in his role. I one of the things i really credit him is that all of the noise the political noise out there has pushed him and pushed all of us to double down on focusing on data boca's on analysis and just do our best to make our best judgments based on what we think is right for the u._s. Economy and and not react political pressure. I think he's leading us in that direction. I think he's doing a terrific job and we're all committed to focusing on analysis not politics and he'd ask you to speculate confusing. Chairman powell has more backbone than maybe president trump expected well. I can't <hes> speculated on the president's expectations but i will say this. <hes> chairman powell's eight-plus plus public servant and absolutely knows what his job is and is doing a terrific job leading us in that direction. Why is it so important that the federal reserve is independent that it doesn't just do you with the president says one of the things we've learned in america and all around the world is that when the central bank plays politics it leads to really bad outcomes over the long run for the economy aww virtually every politician wants a strong economy when they're headed into a re election year it'd be very easy for them to say what rates and boost the economy to help my re-election election chances but if we do that at the wrong time it actually can be bad for the american people can can lead to the economy overheating and then we can have high inflation and that can be very damaging for families and for workers all across the economy so we have to avoid that the best way to avoid that just to set the politics aside make our best decisions based on data and analysis. Let me ask you about something. You mentioned a bit earlier. There are some signs of slowing global economic activity shrinking economy in germany is a big one slowing business investment in the u._s. How worried are you. That recession is on the horizon for this country well. It's very hard to predict recession but the single best predictor we have over the past fifty years is this nuanced thing called the yield curve where treasury government bonds longer-term bonds have a lower interest rate than short term bonds. You know if you if any of your listeners by a treasury bond your lending money to the u._s. government and if you're going to tie up your money for ten years typically you want higher interest rate than if you tied up one year well. This has happened now where long rates are lower than short rates. That's been a very predictive recessions historically and it signals that investors are nervous about the future that has now happened until i take that signal seriously and it's a reflection of worries about downside risk in the u._s. Economy neil curry is president of the federal reserve bank inc of minneapolis. We reached him in jackson hole wyoming. Enjoy the conference. Thank you very much.
Bloomberg Markets
Fed Chair Powell Signals Rate Cut as Economic Risks Loom
"Good morning to everybody on Bloomberg television and radio worldwide I. Michael McKee bloomers international economics and policy correspondent in Victor at all at the rocky mountain economic summit with a very special guest Tom bark and he's the president of the Federal Reserve Bank of Richmond thank you for joining us today getting up early out here and joining us to be here you and I are kind of the warm up act for chairman Powell second day of testimony today so let's talk a little bit about that yesterday he went before the house of representatives and the markets took his comments as saying we are going to cut rates in July do the markets get the right impression well they're much more expert than I am on that I think he said the same thing yesterday that he's been saying for the last month and that we said in our last memo which is we don't have forward guidance anymore in the memo we're watching very carefully what's happening and data and we're looking very much on upside rescind downside risks and you know at this point they're a little more tilted to the downside which is why we're looking at well the market's basically priced in a hundred percent chance of a rate cut now can you go against the markets we have a lot of time left before the meeting we'll see what happens will have a lot of data that comes and CP I came in this morning and we'll get PC inflation we have retail sales will get consumer spending and markets are smart so if the data ends up with a different kind of outcome the market's sole I'm sure
Bloomberg Daybreak: Asia
Powell, Bob And Wishart discussed on Bloomberg Daybreak: Asia
"Program I guess we got to begin with the fed chair his testimony today before a house committee he seemed to open the door to a rate cut may be as much as fifty basis points do you think that that would be too much to expect armed it won't surprise me at all dog I have a listening to chairman Powell and reading through his comments and that actually filed dovish days scene there was an opportunity for them to focus on some of the positives in the last few weeks such as as pretty decent employment report of some sort of breakthrough in the G. twenty meeting instead the repeated the let me Barbies about global trade about uncertainties of growth did not at all push back at market expectations so I would not be surprised at all if they work during the do a fifty basis point cut don't do wouldn't that sound a little bit should I say smell a little bit of panic yes Bob there is a school of thought that measured and slow because are stored as effective as aggressive caught so it could be that they are simply reacting to wrap thinking and getting ahead all slow down far more aggressively and trying to surprise the market no it's not completely surprising Wishart because bond markets for the rest of the year out in the pricing in more than just one twenty five basis points caught the bond market uprising in as as much as three Conferencia wouldn't surprise me if they need to to
Bloomberg Best
Fed holds rates steady, but opens the door for a rate cut in the future
"The Federal Reserve indicated a readiness to cut interest rates for the first time in more than a decade to sustain a near record US economic expansion, citing uncertainties in their outlook while chairman, Jerome Powell and fellow policymakers left their key rate in the range up two and a quarter percent to two and a half. They dropped a reference in their statement to being patient on barring costs and forecast. A larger miss of their two percent, inflation target this year, so June. For more insight, Bloomberg's Carol Massar and Jason Kelly spoke with Petri spa of Hamco, and IRA jersey. The chief interest rate strategist for Bloomberg intelligence. Let's get to you. Tell me what dump sad at you. What you think is really notable in this latest fed decision, and there was a like mixed thinking going into it in terms of investors the street and now we see in the feds got of mixed thinking, so I think firstly the fed did not disappoint. So the. The market was certainly pricing for the fed to be dovish, and they were I think, just appropriately dovish, I think there was the big risk and a lot of people were thinking that maybe they would take back some optionality and not be as dovish as the market thought, but I think between the dot plot and what they said in the statement, they kind of just met the market's expectations, not a whole lot more, and you do see a little bit of a market reaction because the thing is if the feds little dovish now they could get more. Dovish later so push pests qualley from pimco big takeaway for you. The fed is keeping its options open, if not, it's not going to cut until it sees something bad, because it's trying to save bullet. That's you know, for me if they go number one and number two, if that chairman Powell is very much aware that all I on him where every word every north one just going to dissect it and to extent that he is coming across more hawkish, and painted market sentiment could turn pretty quickly and put your one of the things I wonder is the sort of geopolitical backdrop here, you know, we're heading into a week. We ten days where present United States is going to be a soccer Japan meeting with his counterpart from China, president Xi. Those trade winds certainly are playing through this economy right now. How do you balance that out? If you're an investor what we heard from the fed today, and what we're hearing from a geo economic perspective, investors, look at potential trade war, and, you know, and on the other side of the fed standing by to support the economy. All the good news seems to have been priced in meaning that the market is under subpoena cups by your end that seems to be. Conclusion market is also anticipating that trade war with China is going to be averted same with Mexico yesterday. We saw that after the tweet from the president the market, but he strongly all of these good news have been priced in. But the question is, if the meeting for whatever reason does not go well, or we wake up to tweet that is hostile to China, that does issues are real and they haven't been priced in. So my sense stat investors are still very often, but it's best to consider caution going forward, especially where pricing in the market. I mean I do think about and, and, you know, I think about g twenty right? It's not this weekend next weekend. I do wonder if we get some resolution on some of these as folks around this table have have have termed policy gaps. Right. If we get some resolution between China and the United States. How that think how might that impact the fed? Thinking what it means for interest. I think that's one of the ironies here is that a lot of the angst and a lot of the certainly the market worry and market. Fear is really predicated on things that are, you know, quote unquote, manmade. Right. So these are actually policy decisions at someone can make. So if there is a kind of blanket resolution with all of the different trading that have been going on with the White House and other countries. All of a sudden, you can see not only risk assets do okay, but also quite frankly, the bond market selloff pretty significantly so compared to where the economy is already very rich to fair value. At least where we as the make fair value to be, so you can wind up seeing a pretty big pullback here. And actually, the fed may be take back a little bit of its dovish nece, as well, assuming that these trade problems go with you agree with that. Yes. Especially the last point, where between policy and removal of trade war with the moving in different direction. Meaning that should we receive bad news. News. You know, on trade fed will step in, but should we receive good news on trade? Meaning no-trade war, many people say, oh, that's going to be hugely positive, but consider that if we receive good news on the trade war front that the fed actually has room now to step back and said, we don't need to cut rates because, you know, the economy has been removed or reduced poetry Smalley of Pam, co an IRA jersey. The chief interest rates strategist for Bloomberg
Marketplace with Kai Ryssdal
The Fed was unusually chatty Tuesday
"The marketplace number oh, the day this Tuesday is five five members of the Federal Reserve's open market committee. That's the one that gets to decide interest rates. Remember five of them gave public speeches today. And believe me when I tell you for the fed that has a whole lot of talking central bankers have non at least historically been the most say, what's on your mind group of people that has been changing those we've been reporting and as marketplace's Mitchell Hartman tells us today, it has potential upsides and downsides back in nineteen Ninety-six. Then fed chair Alan Greenspan, uttered, the words irrational exuberance in a speech investors thought he was saying stocks were overvalued and the market tanked, probably not what Greenspan intended. But he did want to be opaque, says economist Frederic Mishkin, who served as a fed governor in the mid. Thousands. Michigan says one time after testifying to congress. One of the congress, people said that was very clear and Alan Greenspan, said, well, then it must have been a mistake. But under the next fed chair, Ben Bernanke transparency and frequent communication became guiding principles. That's continued under his successors. If you can get the markets understand how you react to future events that can actually make things monetary policy of warfare, active. A lot of what current chairman Jerome Powell. Communicates says university of Michigan economist, Betsey Stevenson is to reassure us that the feds got. It's all on the ball and on the news. Oh, and they're aware that obviously, the trade issues had the potential to have a big impact, so they're watching it really closely chairman Powell does have to contend with one communications challenge. His predecessors didn't says, dean Baker at the center for economic and policy research, and that's a president who publicly criticizes the fed POWs going to bend over back. Quds to say, we're not gonna listen to the present telling us to lower rates not Baker says, if economic conditions warranted Powell won't hesitate to cut rates and explain exactly why.