35 Burst results for "Fomc"
September FOMC Meeting Preview: The Fed Waits for Congress to Act
"Focus will be shifting to the Federal Reserve and next week's Fed meeting, of course, complete coverage here on Bloomberg Radio. Andrew Sheets is chief cross assets strategist at Morgan Stanley in London. We can't simply coast on an expectation of The central banks will solve all problems and I think this is what makes the debate around US fiscal policy. So important is that I think we're facing a really key decision point. Or how the economic growth in the U S, like going forward, And we think that would matter for markets even if the head keeps policies, and he was interviewed this morning on Bloomberg Surveillance, the 10 year Yield 100.66% Gold down 3/10 of 1% 1940 ounce crude West Texas Intermediate Up 2/10 of 1% 37 39 a barrel
The alpha generating opportunity for the second half of 2020
"Of K P W as we enter the second half over this year, I think we have very little clarity, Visibility whatsoever. Government e Year and well this economy and the pandemic situation will look like from New York City this morning. Good morning to world alongside Tom Kay. Together with Lisa, Grab it some Jonathan Farrow, one hour, 12 minutes away from your opening about We roll over just a little bit. A mild move lover, down six points. The S and P 500 off by 2/10 of 1%. That's the equity market is the bond market for your Treasury yields have been lower. The curve has been flattered through much to the morning so far, your 10 year yield comes down to basics points. You're 30 year down almost three and a foreign exchange muted price. Actually, G 10 through much of this morning euro dollar Going absolutely nowhere. Poundsterling just a little bit weak. It's on the pound. Just a little bit lower. Well, interesting in the pound. Maybe Francine Lacqua, driving the pound weaker with her conversation with the chancellor of the exchequer earlier today, right now to have you reset for the second half of 2020 a guy who writes an incredibly interesting short research note. Michael Purvis is great because it six or seven or eight pages instead of the 30 pages a boilerplate that your eyes glaze over on. And in that he always tries to get out front of the trend. He did that to a tea with the Asia currency dynamics about 23 years ago. He is tall back and we're thrilled. Michael could join us this morning. Michael Purvis real simply. Where's the opportunity? Right now? What do you writing about is the truth. Alfa generating opportunity for the second half. You know, it's it's a tough question. Tough. I think for any of us, we were shifting. I would start by answering that question. If we were the first half was very fine area, you know, almost sort of wrist on wrist Call Allah 2010. The second half is going to be a much more nuanced sort of less binary set of analyses. And there's a lot of things that are just to come into the foreground. Just after we clear the Fourth of July holiday, which is all of that right around the corner. They're so I think the framework shift there, you know, in terms of how one position For the second half. I am looking, you know, opportunistically to sell volatility. I did that a couple of weeks ago when we had that big spike after the FOMC. There. You know, I'm looking at, you know, on my long equity portfolio toe have sort of a core ballast of what other people have. Which is you know the big cap tax, which is sort of an all weather type of Equity investment. It's almost a separate after classes to itself. There. I think the areas that are very interesting into the second half is looking at this potential sort of pivot where Europe, the European condition. Maybe moving into a into a more interesting place with stimulus slowly coming together and at the same time writing political risk in the United States. With a whole bunch of uncertainties. But what kind of policies were going to get out of D? C in 2021? There's no like I expect. I expect for the f B X, you know, to be most likely rangebound. I think it's gonna be hard to be a committed bear in the second half, but the same time it's gonna be hard to be That they committed bowl and then I think not too much that answer, But I would also suggest that look, you know it's it's arguably a consensus trade right now, but I've been Very constructive and precious metals for some time, and I continued to be so I think we're going to see a lot of pick up their particularly in the minors and silver. Well, Michael, that's basically a whole book. So let's pick out part of the story gets a Europe Do you think we could see re allowed performance on the continent? Well, I you know, Look, European equities have been the mother of all value traps for some time. We've all been there revolved and you know, sort of excited. You had a glimmer of hope in 2017 that lasts about 6 to 9 months. There. But I do think that there's something that investors have to keep their eye on here. Which is that there is, um you know, perhaps a bit as the catalyst has brought together. The new sense of European cohesion, and you're saying that with this with this very large 750 billion grow stimulus plan France, Germany over Anchoring there, and it seems like there's slowly getting old 26 countries on on board with it, but it's very important because it underscores declining. If it happens, it'll level harmonized. Interest rates across the eurozone. Um you know the spread of TB. The bones will come down and arguably, O'Neil should come higher as well. But at the same time, the political risk premium that's always exist in the euro should come down. I think I look, there's a lot Can happen between now and that you know whenever that might become a reality, but it represents a very, very important chefs in terms of training it, you know, it may be The long euro trait is the easier crazy and say my along the equities right now or or or the widow maker of sorting fun, but I think it's very, very important because over the long term mechanic tracked Very substantial capital flows that have been very US focus. Back into the eurozone, and that has implications that will ripple across. I think the whole the whole investment landscape. Again with the caveat gifted when it comes to happen, But there is a moment of building there that We had not seen before. Michael purpose
Unemployment Claims: 1.5 Million New State Filings in a Week
"You there was a decline as I mentioned but there's a box isn't there there is and I would say the decline here which left to go pick up on what we've seen before down by sixty eight thousand from the previous week and the total number of claims might throw in the pandemic program which is expanded Karen's act related benefits goes to two point two million blisters use that headline number one point five million that's still five times higher than we would have seen a book for the crisis and aware at forty six million total new claims so believe the unemployment rate is still in the mid teens here and it's important to remember that with each of these claims were talking about a person some of whom are wage earners or previous wage earners that we're looking at food on the table for their families I've heard instances and maybe you have to have people who have been offered the chance to go back to work because of the re opening of part of the economy but it declined because they are getting more through this unemployment there on a when the benefits we'll talk more this has been reported I think it is as you indicated primarily anecdotal and the anecdotes are coming from employers many of whom are let's say bar restaurant readers and I would say this is part of the inefficiency of acting quickly to try to attack this crisis it's quite clear that as the program expires at the end of July that will not be a part of what eventually I think Democrats and Republicans are going to reach it now how would you gauge the joblessness levels over what has reached now about three months since this pandemic really made itself felt in the economy still historic and we think about the fact that we believe the unemployment rate now at roughly fourteen percent is four percent higher than the worst financial crisis and Great Recession by the end of the year the federal reserve has projected a collectively with the members of the FOMC that we might get below ten percent bought you know a lot is riding on that not the least of which is the way the virus behaves and as we know we don't have a great deal of experience with that and treatments remain
Global markets seen taking economic hit as coronavirus spreads
"One story that dominated both global and regional markets this week the deadly coronavirus on choosing the head of the World Health Organization visited Beijing to assess China's response to the crisis that came as the country reported more than four and a half thousand cases and more than hundred the Ptolemies we are more with the Merck's Chris at sea in Tokyo and Simon Ballard as well he's the chief economist at first up and down the back South Korea and rubber was off yesterday so they're essentially catching up not only to the declines in Asia yesterday but even the the Friday's selloff on Wall Street so the Korean markets had a lot of catching up to do which explains why there are particularly hard hit today Australia also under performing but if you look just in the afternoon session here we're seeing some signs of easing in the selling pressure so the the Nikkei is off of its lows it's only down about point six percent that's about half its it's declined from earlier today we're seeing Chinese stock futures also coming back just a little bit some interesting headlines just scrolling saying that China is telling brokerages to be rational in what they're telling investors they're telling people don't you know stored pricing and you know do stay here China's foreign minister saying that China has the tools to win this war against the virus so there's a little bit of a sense of you know you you can see governments taking action here you can see here they understand the scale of the problem so that's providing some reassurance I was going to follow up on that actually the efforts are definitely picking up the scale of the undertaking significant but as you look to the comfort of global coordination there is the reality of global economic disruption is that what the market really needs to start factoring in yeah well you got the situation where you know that there's going to be a significant you know near term had to Chinese grows to gross really across the globe if you think about the impact that Chinese consumers have through tourism or you think about the disruption to the global supply chain so you've got this short term impact but then you've got the assumption that once the disease passes they'll be rebound so number of economists are saying you know what I'm not going to change my full year twenty twenty projection for global growth for even Chinese growth at this point I'm just gonna assume that we're going to see see some growth shift from the first half into the second half nobody really rushing to mark down their full year forecasts just yet but the you know the bottom line is we don't know really how big of an impact this is going to have you know we're still a ways away from the peak of the number of infections from a peak in the number of deaths unfortunately so until we get a clearer picture in the next week and a half or two it's going to be you know guess work on the part of economists and investors alike Chris thank you very much Chris and see that in Tokyo running up the latest market action our guest host this morning a sign of ballot chief economist at first the Debbie bank something good to see this morning so we read are trying to pull with the contagion and the impact all of this active gold ring story I've seen the first number sent to me this morning from mentor partners that Chinese growth could be started by a hundred to two hundred basis points took me through the global impact of a contraction in China grows by night two percent in the first two quarters of this year if that's the scenario yeah and that's exactly that's exactly the wrist that with with with with facing today in terms of you know listen to the director general of the of the W. H. O. now add in China so the pining again I think we just looking for further clarity from them as to whether they still see it as a as a domestic relatively contained issue or whether there's a reserve a space into a more global pathogen I suppose of the sauce two point zero if we go back to two thousand to two thousand three at the sauce event you know that triggers your view previous because said a serious downturn in economic activity in the region especially in China where it shaved about one percent just over one percent of Chinese GDP triggered a recession in Hong Kong that was the time when GDP in China still managed to increase between two thousand two to the end of two thousand three from seven percent to eight percent when now talking if you recall about the risk the last month of of of moving to sub six percent GDP territory with China we didn't get that we held a six percent as you know as per consensus as per Beijing's expectations but usually one percent off that now when you go into the five percent you could possibly to high four percent level on Chinese GDP if this Haroon of ours continues to mutate and and and and and spread something that because we've seen in the commodities space where is that going to hand because the phone so the market's life team put exactly that question to our audience question of the day coming through then how far will the corona virus related to climb the commodities extends this something that is going to be as severe as we've seen in the past with some of these events or are people going to focus on the global growth forecast for twenty twenty staying intact I think people still gonna focus on that twenty twenty growth full cost overruled the news flow the headlines and the the volatility that we see in the market over the next couple of weeks if if not being honest about us a couple of days is going to be key in terms of one what happens in the bond market in the what happens in the commodity market is probably a reflection of the overrule sort of risk of this nature of investor sentiment at the service station you know it's raining it's pouring but this study no room for you know the old man to be snowing in the back and you could be what you all the elements that we see this you say no the ten year round it down to one sixty that hit one forty five back in September is mass was talking about earlier on so you know if we do see sort of negative connotations coming from the WHL if we continue to see you know this mutation I'm a and an expanse of cases and remember we were two thousand to two thousand seven hundred cases on Monday work for the whole thousand today I'm hearing them doubling serving twenty four appeared we could soon be about a thousand that we had in the sauce in our back in two thousand and three and that's with then good sort of Dr you know Dr risk aversion hiring drive that taking a yield back through the one fifty back down towards the one fifty if not one forty five no and certainly dampened expectations for commodity prices in terms of your expectations for slower global growth environment in outlook Simon can we just take this a little bit further with central bank reaction we see the market we price from the fat mother was when I pricing twenty five basis points back to back that was originally in a in the front of twenty twenty one to the market is already beginning to price central bank action it does that come across your timeline intends the fat in terms the PTO see if I emphasize the what if there is Dayton the mutation as you say in numbers activists scale of a real global pandemic and that's that's a huge plus a huge different of course all the time the time is made a little different this week by the fact we've got the FOMC on Wednesday with bank of England which is more of a coin toss with the bank of England on Thursday and as you say in the futures market was looking for that first all that additional twenty five basis point cut to come in in two thousand twenty one because of the risk of ocean nature of market sentiment at eleven that's brought forward into so the queue for October you know depending on the news flow over the next twenty four hours I really don't think the fed's going to cut you know this month they suggested they stated previously that I'm very comfortable with the level of accommodation and it would need a meaningful event to trigger a sort of a moving rates from from where they are today you know for the time being you know the the crown of ours doesn't seem to be that meaningful event in order to to trigger the fed but certainly it's it's it's bringing a more dovish rhetoric into the market place now then we had done it earlier this month
A glance at global bond yields
"Let's check in on the markets now that we've been talking about this all week the backup in global bond yields take a look at the benchmark yield on the ten year China government bond that is currently trading around three point three percent still lots of people have speculated that the PPO C. would step in to suit the market with some additional liquidity that did not happen this morning so lots of people scratching their heads around that one I should just add it's a slightly different story in U. S. treasuries ahead of the FOMC meeting today the basis points there in down about a one bit as we await the FOMC a similar story also for the Ozzy ten year bond yield that is sliding after inflation data at the lower end of the RBC target all right now speaking of the markets let's get more with so he can read and in Hong Kong and not neat solution to Susan in Mumbai Sophie let's start with you what's the latest in Asia Tracy this Wednesday Asian stocks under pressure set snap a four day advance with the heavy earnings lined up across the region but we were right on the eco a date a friend a Japanese retail sales out this morning for September showed a jump ahead of the sales tax hike now in Tokyo the Nikkei two two five set to snap a seven day game with earnings coming in heavy there Namora searching on its best quarterly performance in seventeen years now here in Hong Kong the hang sang losing ground as investors have to consider a bleak economic picture chief executive Terry land today saying for your growth and not likely to be better than the first half of this ahead of third quarter GDP data which is likely to confirm that Hong Kong has fallen into a recession so overall stocks are meandering lower and as you said treasury's guiding higher and at two ten spreads narrowing ahead of the FOMC decision Ozzie binds Tracy as you pointed out climbing with the curve ball flattening after their corn inflation came in line with estimates so we're seeing pricing for an RB a rate cut for number November easy even as a CPA data did remain slug yeah a story of global easing in the near term but out lots of speculation about what comes after that what comes after the FOMC it rate cut today in particular Navneet let's check in on the Indian markets now looks like it's a positive start yep it is on the internet cookies rather have been bucking the trend within the Asian facts of we've had a positive sign though we may have come off from the opening levels that are hopes that to government could look at rationalizing taxes which the equity investors and that includes the long term capital gains tax which was introduced last year as for some reports of these two reading back for any sort of announcement but in back of that be able to witness a stellar rally yesterday buying interest continues but as we speak I guess the bank fifty has slipped into the red it's don about fifty points member nifty is I'll be three percent from its all time high levels by the bank fifties of a about six percent to as we speak the intern rupees assisting somebody because of engine ready closer to the mark of seventy one to the dollar in terms of individual stocks so the large cap telecom player party at that has seen somebody recovery after falling yesterday they gave us September quarter of data with regard to the performance and the average revenue per user came as a big surprise on back of French Mauldin Stanley has maintained their reading of equal weight and HDFC life because sitting with games after to UK and Chardon sped up a standard life which has about twenty percent stake up in September fighting sold about five percent stake in the opening session today mistake scene was at a discount of about eight percent to yesterday's closing but looks like the markets and absorb all the setting that is coming into the stock and distracted positively up about three and a half percent all right so we can read in there and not need Seleucia disease a thank you
Fed to buy Treasury bills starting next week to ease money-market pressure
"East fed judge our own Paul this week said that the central bank will resume buying treasury securities to avoid a repeat of the recent turmoil in money markets while leaving his options open on interest rates he indicated that the purchases would be made up of treasury bills and he stressed that it should not be seen as a return of crisis area Cutie I want to emphasize that the growth of our balance sheet for reserve management purposes should in no way be confused with a large scale asset purchase programs that we deployed after the financial crisis neither the recent technical issues nor the purchases of treasury bills we are contemplating to resolve them should materially alter the stance of monetary policy use of got more with Steven and is had a pack of market strategist to add ACSI trade you know let's face the facts I think the you know looking back here back twenty seventeen twenty sixteen we knew the feds they're going to have this on enviable task when it came to unwinding this massive balance sheet now you know it came to logger heads as September when there's a delusion paper hitting the markets with tax receipts going out yeah this really put a lot of pressure on overnight finding markets just couldn't find an offer the repo market so these things just reeks of trouble but you know starting on that side of the street a couple decades ago tell you funding is always tight around quarter and and especially here and so for a lot of the you know or report guys this wasn't really that much of a catastrophe but fortunately the fed to come to the rescue the provided there one week to week repose they offered overnight repose unnecessary to suit the market's concern and I really think this reserve management policy aspect of Q. we is right on I think this is enough to help out the primary dealers deal with the delusion paper that's on the street right now Stephen how much more are you expecting the fed to deliver on in terms of rate cuts as we end up twenty nineteen going to twenty twenty I think the market Smith's pricing expectations of the states markets always want more that's for sure I think what we're looking at here is the fed's pretty March a highlighter overnight lows J. power highlighted overnight is the payroll data he seems to be happy with the number coming in around the three month average coming around around a hundred fifty seven thousand that suggests that city's gonna benchmark somewhere lower we think that benchmark somewhere around a hundred thirty five thousand we think it moves below there I think the sh the feds then do share from the sort of and easing cycle to the fullest easing cycle I think is really predicated on the data the feds have definitely shifted back into data dependency counseling and one work one rate cut I would be surprised if two hits if we see a deterioration which I think is unlikely mind you the generation on the payroll data but you know we'll have to just play it by ear and see how the data plays a I mean you look at break even Steven I mean this is a measure of expected inflation and we are at the lowest level in three years how does that play into how strategy should be done in US assets at the moment with everything we've talked about historically that suggests you know there's lots of wiggle room here policy wiggle room for the fence these but you know the inflation metrics of below for so long it doesn't even appear globally the delusions central bank gazing across the board is affecting inflation in any part of the world so I'm not sure how much a deeper move lower and overnight funding is gonna have stoked inflationary first that's a concern the feds have they got to deal with this I think more so they're really concerned about the effects of this global growth the X. if weeding everywhere impacting the US economy were starting to see that the manufacturing sector we all know the big talk here everybody's worried about it moving into the consumption sector I think this is what what they're most concerned about what they really want to defend possibly by taking more aggressive preemptive action that I even think they're they're going to come come forward with later in the week the FOMC minutes show policy makers are getting down to serious business that particularly focused on inflation J. Paul is promising to offset persistent on the shooting of the fed's two percent target by line prices to run above that for a period of time the problem is that how may no longer had the central bank when it comes to the time to follow through on the advice we got more with making a moccasin global chief economist at society general if we look ahead I would expect to see further rate cuts from the fed at this stage I think the triggers for the rate cut is basically the economic data that'll be coming in slowing pace of job creation leading indicators on the PMI I think all of that will feed into the fed's decision process but I think importantly if we look at just how low the fed will go we expect that coming into twenty twenty one we will see the range on the fed funds rate at back to zero zero point twenty five and one of the reasons for that is because we're building in this idea of a new under under shoot overshoot wrote world if we can call it that on the inflation side from the fed which means that it's it's a it's not an exact science but it probably means we get about fifty basis points lower than we may have been otherwise if we were just mechanically applying the old rule from the the the the rule that's currently being communicated by the fed so I do think even in the short term it gives us more monetary easing from the US side now coming back to to my previous point I think monetary policy help stabilize the situation what I really question is whether it can give us that that lift off that we previously been thinking about you know previously when you come into a downturn the central bank eases policy trade policy help stabilize the situation what I really question is whether it can give us that that lift off that we previously been thinking about you know previously when you come into a downturn the central bank eases policy this helps credit constraints on various balance sheets and it also increases demand for credit but also importantly at bye bye getting that strong lift down on the interest rate you get that accelerating effect and I did struggle to see how that's coming through at this point in time I I belong to the group of economists that think that there is such a thing as a reversal rate where if you get interest rates very deeply into negative for very long period of time it starts actually to hurt the economy rather than help the economy now if you ask me where exactly that reversal rate is the answer is I'll tell you what we've seen it because it's not something that any of us with any accuracy can pre defined but I do think we're getting lower levels I still think monetary policy is positive at this stage but just not that strong acceleration okay which was talk about the fact that straight to your because you take me very naturally that have we hate is a reverse the race with a negative rates in Europe at the moment but I think what we're seeing is a it's a very fragmented picture across Europe because there is the German rates yeah as for example the Italian right so it's a very different picture but what we have seen and I think this is an indication that we are getting closer to that reversal rate we have seen a lot of noise out of the German financial industry some of the the larger managers there warning us about the potential damages of those very low interest rates and very negative interest rates as a process over the longer term keep in mind that the German banks will find it very difficult to pass on the negative rates to their retail consumers keep in mind that the pension and insurance companies will also be struggling the lower the longer rate environment stays with us for and then there's a final point to the lower for longer is that it has been encouraging that hunt for yield so at some point in time we can be concerned how much longer can you continue to sustain asset valuations that a mismatch with fundamentals but being supported by liquidity okay I'm gonna should be a Greek government bond jeans at you and I I'm Tracy myself with old live three thirty five forty percent years that have like a ten year government bond paper what I need to know from you is what back one point forty one attends yesterday grease joined the negative bone to cloud the issue thirteen week bills negative point zero two is this is this Paul McGann madness or is it perfectly acceptable logic I think it's perfectly acceptable logic and for two reasons for this so first of all if we think about what's going on today are we worried that there's going to be a new debt restructuring increase and to my mind the answer is no are we worried that we're going to see and in the foreseeable future any kind of except by Greece from the euro again my answer is no and as an investor looking at grace looking at a hunt for you to Asian it makes perfect sense to go into Greece at this point in time just from the from the belief of those two questions now of course if things start to deteriorate again we could be in a very different a position but in the short time I think it's very consistent what we're seeing
"fomc" Discussed on P&L With Pimm Fox and Lisa Abramowicz
"Relates to trade because that's been one of the big issues that's been whipping the market around one of my favorite topics I think there is expectation that this is going to get solved in a blink of an eye I think that's really a reach easy solution at this point well here's why I think that what the market's reaction just today immigration volume David we watch these crazy miniscule headlines and we're up two hundred two hundred and I'm saying to myself there must be some Ming Ma of people out there that think that this is going to be obviously the just not gonNa work that way whether it's the election cycle whether it's China wanted to solve this on its intellectual property issue or it's just what the next president mayor all these components I think this is a multi issue not a multi-month issue and for that reason we're GONNA be stuck with this for a while I want to ask you a question I've been thinking about all morning thing which is at a time of an everything rally yet again it's not a comfortable everything rally with a lot of rotation under the surface but if you look at the average is it is a very strong performance nonetheless involves and equities what's the argument as an active manager at that point when the feds basically backstopping markets suppressing volatility and forcing people to do things that they're uncomfortable with an into assets that are going to keep rallying even if they shouldn't be this is behavioral finance one one my Gosh ripped now you're gonNa have percent on the AG nearly twenty percent of the SNP take your money off the table the thrill you made this kind of money this year and rotate to a neutral position because of the point you made whether you call this a potemkin market whether it's financed by the artificial earnings it's time to take some money off the table but the Fed is still going to be back stopping the market over the next couple of months and into next year so my question is you could out your money but then when you put it back it might actually be it'd even higher point right neutral not overweight there's the answer to that is don't go underweight neutral and by that you're right about the Fed but I don't think the Fed could stimulate enough to really dryers divers higher the reality is the canary in a coal miners do we get a business recession that impacts unemployment and causes consumer confidence to a row so far it hasn't happened and if it doesn't happen we're GONNA trade along this bound for a while until we get a catalyst higher lower and for me I don't WanNa take that political or economic with so neutral is a lot safer than overweight we are coming up on earnings starting next week it's something we haven't talked about probably for because there's been so much more on the macro front to talk about but earnings outlook isn't that great I don't think the earnings necessarily are something that supports equities how you thinking about the market's going into earnings most important earning season in three years simply put this is the one that matters this is the gorilla because the first two we got through whether they ratcheted down Expectations are we somehow surpassed it and I'm less worried about the more worried about the revenue side the sale side if we can get positive sales momentum plus two plus three percent were so if we can get through this earnings season we're going to be okay but the key is if we go negative on sales and earnings it can be very problematic for market and I could see this giving back a good five to eight it would not surprise me at all fill Bajada thank you so much for joining us really appreciate you coming in sharing your thoughts fills a chief executive officer for lodden Tomen Asset Management Funds braving the rain here in New York City joining us here Bloomberg interactive brokers to you're giving us some thoughts on the markets.
World Economy: Get Ready for Biggest Week of 2019
"Well investors are bracing for what what might be the busiest week of the year for the world economy we get rate decisions from the bank of Japan and bank of England and Brazil there's also China PMI data and U. S. non farm payrolls on Friday as well of course the prospect of the FOMC lowering rates for the first time since two thousand eight is the big one J. pal is expected to keep the world's largest economy running hot as he tries to keep the expansion going on that note let's bring in LGT capital partners executive director and global strategist Mikio quemada Mikhail it's nice to have you with use of a myself today let's start with the obvious question looking at the U. S. economic data and we did get the GDP figure on Friday showing two point one percent annualized growth on the other hand we did have PC inflation coming in worse than expected but you know two point one percent U. S. economic growth that's not too bad is a rate cut justified by the economic data in the US personally I think it is absolutely justified and I would actually vouch for zero by four fifty basis points the reason is because why growth is okay each eve even if you look at the nominal number it's around four percent on an annual basis that's above the ten year average so the growth is okay but inflation is below target and below expectations and as always inflation expectations are below target there's always a case for central banks to surprise on the easing side whether they will actually do it that's a different question I don't I don't think they will go for fifty we kill we put together a chart to show the strong consensus that is building behind a twenty five bit rate cut from the fed our clients to get the extra perspective this is a story a fed funds futures probability but also story of the spread between implied August rates in current levels that is closer to twenty five bits what happens after this make you what happens in the second half of the year as we get closer to September and October well I I don't want to exclude the unlikely possibility that they will do fifty basis points which would be very good I leased in my view but assuming as you suggest that they do twenty five and as is the consensus I think we will need some time for market said they the markets will probably reacted by the room or sell the fact kind of situation so that means they'll probably sell off for a while and then the markets will adopt a wait and see I can check to see if that's enough of the economy does what the companies said Billy what kind of outlooks they deliver for the rest of the year you know the earning season is still ongoing so there will be a period of questioning and you know wait and seeing for the second half if they do fifty basis points I think we'll it'll be a more bullish outlook overall still you know the album is not negative but twenty basis points is kind of like room not really convincing in my view so do you chase risk assets at this point and the reason I ask is because if you take a look at this chart for instance pull it off on the G. TV function on your Bloomberg you can see that when the fed started hiking rates that actually pushed one month treasury yields above the dividend yield on the S. and P. five hundred four eight you know a reasonable amount of time and we saw a flood of money go back into cash like assets money market funds now with the fed poised to cut you would expect that to reverse and you would expect a lot of people to go back into things like equities hi respawns things like that is that something that you would do it this juncture well you know at the end of the day such just about the contents also but what this card will do to the economy and I think you both twenty five to fifty will have a positive effect it's just that fifty basis points will give us more confidence that indeed we will have foster GDP growth going forward so I would see it in degrees happening but the simple answer is yes I think a rate cut is a good thing for for his castle scored Mikhail we come on in the area no role to an editorial for Bloomberg and it's trending with clients say here's what he had to say this is a an important bit of what he really whatever unfolds this busy week to call press are likely to persist first you've got the key data releases and policy meetings that are going to fail to lift the extra ordinary uncertainty in the global economy and then second markets will ignore the competing signals confident that central banks will continue to insulate them from the economic reality are we out of touch with economic reality make here no not at all I would say I would also not agree that the outlook is extraordinary and certain I mean it is uncertain but there's always uncertainty that the the way I look at it is if you look at the entire ten year cycle and you look at either nominal growth if you want to keep it simple in the U. S. or you look at the broader global you know purchasing manager type servi indices which quite well I show you this sort the cycles within the larger bull market that we had over the past ten years we had three slow downs this one is the third one the current one all of these slow downs were combined with extra ordinary fears that turned out to be nothing the first one was a double date in the early two thousand tends the fear that you know we would relapse into a recession very quickly after the great financial crisis never happened the second one was the China hard landing it did lead to a commodity bear market that led to a crashing many emerging markets in the mid two thousand tens but that's hard landing in China never happened either and now we have the third slow down this time this story is the Cold War I their story the trade war with some connotations of a Cold War and the question is will it ever happen in as bad as away as some imagined and I don't think so I think the economy is the answer to everything the economy is weakening but it's not disasters you have chip makers a dominant chip maker in Taiwan I'm sorry I'm in Asia just a few days ago actually giving a pretty bullish outlook in my view about their what they think is going to happen to cap ex despite the trade war and everything and of course they have exposure to all the board markets so I don't think we have extra ordinary the uncertain outlook sometimes we have some uncertainty but we also have central banks are doing the right thing make sure the economy supplied with money
Markets React to the US Federal Reserve's Potential Rate Cuts
"Let's talk about the markets this morning a reaction to the fed was a driver Powell's comments yesterday cementing market bets for a rate cut at the end of July leaving the door wide open now VT motors pricing it at twenty five basis point cuts with some allies even looking at a half basis point cut the pricing is for almost three quarters of a percentage point of easing by the end of twenty nineteen so that's the crucial bit to suppose there a fool on the ten year U. S. yields I was sitting next to touch of obviously for German bund yield so we get the E. C. B. accounts for my veggie meeting later today so that will be watched closely by markets the S. and P. top three thousand yesterday before pulling back just slightly in Asia this morning the embassy on a specific gaining eight tenths of one percent the Sean how come there pulling back into negative territory along with the CSI three hundred at the yen is strong before tens of one percent the Donna they pulling back down two tenths of one percent we actually have the toll of four of the POWs testimony yesterday and then vice in reaction to the FOMC minutes themselves emerging Asian currencies gaining essentially boldly on this dollar weakness the south Korean one if the ticket for example oil this is a seven week high that we saw yesterday as seems to be holding this morning with sixty dollars fifty for the bow on W. T. I. two tenths of one percent we got this Gulf of Mexico storm brewing a third of Gulf output is currently sure a close so that's one thing driving the markets and gold gets the fed boost to offer one thousand four hundred and twenty two the Troy ounce I'll give you a note to a bit coin down three percent it's been an interesting move a bit coin three days of gains than yesterday afternoon a tumble and again will love it this morning for
"fomc" Discussed on WAFS Biz 1190
"Become a voting member of the FOMC next year, while still with us is version. Eight Mason, nerve, she's chief investment officer over Eastbourne investments. She joins us from our studio in Singapore version. We're talking a little bit about the fed earlier in the show. I just want wanted to get your thoughts on the market pricing of interest rate cuts has the market push too far when it comes to pricing easing from the fed. That's my belief, I think, the, the market currently in both for nineteen and twenty four cut clearly, we should expect to slow down in the US economy. But the, the, the cuts that are price, I think are excessive we will need to see the data I, but then -ticipant of harsh today is going to be I think probably is too steep. So that takes us to the question of when you see equity market told g step by inversion even put together the yield curve, twos tents and the s&p five hundred and there's a love the article on the Bloomberg today talking about should it should you run to the IT's tens never inverted, but they are beginning to steepen. I'm when we see these kinds of steepening after flight apropos nineteen ninety-five is it time to run for the hills because that's steepening of the curve was followed by drop in the SNP. I'm do you think that it will hold true, this time again that the same the same rhythm will take place? I think the environment is very different. So should you run for a very short term? He'll if you're not structured for volatility in the full, you, you might want to I think we'll see. But I still think that, that volatility is an opportunity to buy because if you look at the global environment, and you do not believe we are getting into recession. You have rates lower for longer. You have this talk show adjustment. That is taking place. But overall once this EPSN would say, next wave of UPS downgrades, thanks place, at least seeing inequities. We could find very attractive opportunities. So I would stay in the field. What we do have the ECB also coming up later today, and we have the European Commission that has formally started that disciplined process against Italy. I'm wondering how much is this going to complicate situation? That's already arguably quite complicated for the key. Yeah. I think that is that is that is interesting, of course, the room for maneuver of the CB if we had a slow down. And if the fed was cutting rates is much, much smaller in a way the toolbox is is reduced. I presume thing that we would be on, on the whole, we might have a little bit more announcements at the next meeting, which I believe, is on June six the, you know, of, of various elements in terms of forward vision. But the talian situation is probably complicating things to them. Version of very briefly, the market's really beginning to price in another rate cut from the Bank of Japan. Ability of the swaps market. Do you think that they will cut rates is not a is that a reasonable assumption on Monday, take another variation briefly? I think it's a little bit difficult to say, I personally don't think that will happen. I think it will depend on probably what happens in the US, which is linked to global growth, we should expect slower global growth. But at this point, the data is not really confirming very slow down that, that would come in that. Okay. Version lovely and succinct response, I'm going to stay in the field of equities visually Masimov, chief investment officer is spring investments. Thanks for joining Tracy on myself quick. Reminder, Bloomberg users. Of course, you can interact with Tracy myself have a chat with us. Go to your IB. You can also go to GT go browse the charts. I'm catch up on the engine us on TV go. You can say if the charts you can use all the data that we produce this is Bloomberg. There are lots of considerations when you travel comfort and safety, and the big question will, I still get the business news? I need isn't enough to convince us that growth is not going to roll over. Here's your answer,.
The Fed's Messaging Dilemma
"Hey, everyone Cardiff N Stacey here. And we know we just know that you cannot wait to discuss interest rates, and what Federal Reserve chaired your own Powell said today at the end of the two day meeting of the Federal Open Market committee or just the FOMC which is kind of like F O M O, except nobody really out on it. The ABC's the committee within the fed that meets every six weeks to vote on how to manage the economy. Oh, the anticipation we reviewed economic and financial developments in the United States and around the world and decided to leave our policy interest rate on changed. Okay. Look the tone in the language used by chair Powell are not super excited I designed yes. On purpose because the language does matter to the fed is in kind of a tricky situation not because of what's happening right now. But because of what might happen for the rest of this year today on the indicator from planet money, we speak to someone who used to be. A member of the fed. And she explains why if the fed wants to navigate its way out of this tricky situation, it will have to choose its words, so very carefully. Support for this NPR podcast and the following message. Come from Exxon Mobil, the company working to make carbon capture technology more efficient and affordable. So it can be deployed at industrial sites worldwide. Find out more at energy factor dot com. Support also comes from WordPress dot com with powerful site building tools and thousands of things that she was from users can launch his site. That's free to start with a room to grow. Get fifteen percent off any new plan. Purchase at WordPress dot com slash indicator. The Federal Reserve manages the economy by adjusting interest rates. So for example, if the fed wants to boost the economy, it will lower interest rates, so people will take out more loans because interest rates are cheaper. And then they'll use that money from those loans to buy things like houses or cars and that boost the economy, and here is what the fed is dealing with right now on the one hand unemployment is relatively low at the moment and the economy is growing at a healthy pace. So you would not think. That the fed would be planning to boost the economy any more than it already is. And in fact, the fed chose today not to further boost economy it kept interest rates right where they are on the other hand, the fed is also responsible for keeping inflation going up by two percent. A year not much lower than two percent and not much higher. It's like they're Goldilocks swit- spot. And normally when the economy is growing fast enough and unemployment is low enough, you would expect inflation to also be rising. Because when the economy is growing, it means the people have jobs and more money to buy things. And so they start spending more money, and then prices of those things go up a little that's inflation. But since the middle of last year, even though the economy has been growing inflation has been falling. And it is now well below the feds two percent target. In fact, let's make that the planet money indicator. Inflation right now is rising at one and a half percent. Maybe that falling inflation is just a blip and it'll start going back up later in the year. But if it does not start going back up towards two percent. And remember, it is the feds job to make sure it does get back up to two percent, then the fed would have to consider boosting the economy even more to bring inflation backup. And so now, we can discuss the feds dilemma, if the fed is not careful in explaining why it is boosting in a Konami that already seems to be healthy. It could send a confusing message to the public it might even backfire. So we called up someone who understands how this all works first-hand. I am Sarah bloom Raskin, I was a governor on the Federal Reserve Board and the Federal Open Market committee. I am currently a Rubinstein fellow at Duke University Sarah was on the Federal Reserve from two thousand ten to two thousand fourteen and the governor she was one of the people at the fed who always voted on monetary policy. And she said there are a bunch of different ways that the public might interpret fed decision to boost the economy later this year. So the communication becomes critical. How does the fed talk about a rate cut? Why? Exactly is the fed doing it. How were they going to communicate the reason for that move? And the words they choose are going to be really important in determining what path the economy actually takes. This communication happens in press conferences, like the one today with chair Powell and also in speeches that members of the fed give to the public that communication influences. How the public interprets any decision made by the fed and in our conversation with Sarah, she identified four different ways, the public might interpret decision to further boost the economy, I the public might think that the fed is panicking that it is boosting the economy because it thinks the economy is about to collapse. And I think if the fed were to take such an action that could itself unsettle markets and potentially tip the economy into a place that the fed didn't intend it to go. And what you mean does it if people start believing that the economy is in trouble it? Could become almost like a self fulfilling prophecy people stop spending money because they wanna make sure they have enough money to hold them over during the upcoming hard times. But if everyone stop spending money all at once that will itself bring on the hard times because he Konomi needs people to spend their money in order to keep going, obviously, the fed would like to avoid this particular interpretation of its decision. The economy's a flat circle. Which brings us to the second. Possible interpretation that the fed is boosting healthy economy. Just in case things get bad later, especially since any decision by the fed normally takes a little while to affect the economy monetary policy acts with a lab it it doesn't act immediately. So these people are going to say, let's lower rates now because we're going to be getting into choppy waters later. So that is the second interpretation if the fed decides to boost the economy later this year, it's not because the fed is panicking. But because it wants to preempt a recession before it can start the third possible interpretation, basically is why not why not the economy? What? Yeah. Let's see what this baby can do. Who cares? If it's already growing fast. Let it keep growing even faster. That would be great. It means more jobs. It means more people getting raises. Remember, it's been a long slog since the recession ended in two thousand and nine and since inflation is too low anyways booth. Getting the economy would be perfectly consistent with the feds job. It's not like boosting the economy a little more. We'll send inflation skyrocketing way above the fence target and Sarah. At least thinks that is a plausible case. I think that is a completely appropriate argument one that is absolutely possible. And that there is space actually for more stimulation to occur and that that stimulation can happen without doing anything super dangerous to the inflation rate. And finally, there is a Fourth Way that the public might interpret decision by the fed to stimulate the economy, and that is that the fed caved to political pressure and specifically political pressure from President Donald Trump. See the president has aggressively called for the fed to cut interest rates and stimulate the economy. Because of course, he wants his presidency associated with a super strong economy. But the fed is supposed to make decisions based only on. What is good for the economy not on? What is good for a politician or political party? And so traditionally the president does not comment that much on monetary policy. President Trump has broken with that tradition. And it means that the fed will have to convince the public that it is not being influenced by the president's words that it is still acting independently. How do you think you would have responded to it? If some kind of pressured like this had been coming from the White House while you're on the FOMC. Well, we would try very hard to to not respond to it. So basically the fed will try to tune out the president. But more importantly, it will need to convince the public that it has tuned out the president. So look, this is all still hypothetical, but if inflation remains low or even goes lower the fed eventually will have to decide whether or not it wants to stimulate the economy by lowering interest rates. The message coming from the fed if it does make that choice will have to be crystal clear because Sarah points out just lowering rates might. Not be enough. How the fed explains its decision will matter too because rates are not the only tool that the fed has for managing the economy. It's other tool is the language it uses and like any tool it can be used and it can be misused.
Pressure On China To Agree To Trade Deal
"Radio. Even though we have a lot of liquidity offline from may happy made if you are taking today off there still some selected assets that are trading and some important events to look ahead to US equity futures advancing then he had apples upbeat forecasts. Traders expecting lower volumes throughout the day. Then bit of movement coming through in terms of US equity futures higher. You've got a bit of movement on the ASX two hundred straight up about eight tenths of one percent. Other than that. It's pretty quiet on the equity side in terms of the handover overnight. We did have course, they Tekere innings more generally with apple but also a little bit of a well, it was a weight on the shoulders from Google corporate earnings and develop the trade conflict between the US and China remain front and center, that's for sure I mean, running through some of the currency pairs here. You're looking here the Bloomberg dollar index. That's just barely about the flat line here quiet on the Major's front. So I mean, pretty much all of these pairs unchanged. Eurodollar one twelve twenty Donnie in one hundred and eleven fifty and cable is up less than a tenth of one percent. Short of one thirty fifty five commodities are on the pressure a little bit. Brent crude Coney down six tenths of one percent. We have higher inventories out of the US and the initial data overnight. Gold is lower by three tenths of one percent. So the metals on the pressure let me run through some of the news as well. In terms of the corporate earnings because we are getting of course, quite a few fast and furious start off with Sainsbury's fiscal year revenue at twenty nine point zero one billion pounds. You're looking here at fiscal year sales of thirty two point four one billion pounds to final dividend. Shares going to be seven point nine Pence. Few notes on guidance year Sainsbury saying the consumer outlook continues to be uncertain and that they are well-placed to navigate the external environment. So that's on the Sainsbury's front more retail input from next currently first quarter retail sales coming through a negative three point six percent. The market was looking for actually more of a contraction here down six point two one percents of slightly better than some of the analysts had pencilled in. I go to online sales eleven point eight percents the estimate heroes for twelve point eight percent. And so a little bit of a little bit better on the retail sales. But a little bit short of estimates on the online sales on guidance. They're still seeing fiscal year pre-tax at seven hundred and fifty million pounds and still see full price sales at up one point seven percent. And then also on the economic front. We've got some UK April house prices. They're up zero point four percent on the month. That's the nationwide. Up zero point nine percent on the years that is some economic input as well. So that's a bit of a flavor then on what's happening with these corporate earnings. Let's get now to some of the stories we're watching very carefully starting off with what's happening with the United States and China. The White House is ramping up pressure on China to reach a trade deal in the next two weeks. Bloomberg daybreak Asia anchor Bryan Curtis has more from Hong Kong, the US said once again, he would walk away from the talks if no deal, Mick Mulvaney, President Trump's acting chief of staff said negotiations would not go on forever. So the administration is making its impatience known a slight shift from the earlier more optimistic messaging still going into talks today. Treasury Secretary Steven Mnuchin said the US side had a nice working dinner last night with vice-president Leo hub, two of the quick notes. The F T says the US is likely to accept a watered-down commitment from China on security that to speed up a deal and. And Chinese regulators said today, both Chinese and foreign banks will no longer be subject to ownership caps on local banks Kong, Bryan Curtis. Bloomberg daybreak Europe. That means on world financial markets away. Today's Federal Reserve announcement on the US interest rates. Bloomberg's Michael Mckee has a preview. This fed meeting is widely expected to be a nun event except for that little possibility of a rate cut. No, not a policy cut to the fence target. But an adjustment to the rate of interest. The central Bank pays banks on excess reserves the effective federal funds rate traded a record five basis points above the excess reserves rate Tuesday most traders blamed technical rather than policy issues such as a rise in repo rates on other securities that suggests the fed doesn't need to do anything others note, though, it's been an ongoing problem and forecast a slight cut in the rake in Washington, Michael Mckee, Bloomberg daybreak Europe. And as the central Bank meant to weigh monetary policy. Donald Trump sought to pressure the fed to make drastic moves to boost and already healthy US economy in a pair of tweets Tuesday. Trump criticized the fed for having incessantly lifted interest rates and wonderfully low inflation Colfer steep interest rate cut and the resumption of bond purchases as well. The thing with the theme. The president's comments came as another political drama swirled around the central Bank on Capitol Hill Trump's plan nomination. He recalls Stephen Moore to the fed sports looks increasingly uncertain as a third Republican Senator voices downs. The story from Bloomberg's Charlie Pellett. Senator Lindsey Graham of South Carolina. A key ally of the president told reporters that Moore would be quote, a very problematic nomination, though, he has not made up his mind. Senator Joni Ernst of Iowa and Senator Richard Shelby of Alabama on Monday voice. Their own concerns about more a Heritage Foundation fellow and a former Trump campaign adviser Ernst the senate's fourth ranking Republican told reporters, quote, I am not enthused about what he has said in various articles later, Monday Shelby. The former chairman of the banking committee said he thought the proposed nomination, quote has some problems Charlie Pellett. Bloomberg daybreak Europe. That's something singing. Singapore where Mark Cranfield and markets live team joins us, Mark. Let's start off with the mlive question of the day. The fed odds in terms of the likelihood of a move very contradictory and not really in line with what we're seeing the job market. Yes. Good morning, certainly the market by some as strong as it's been since the nineteen sixties in the United States pretty healthy condition. We've also saying some pretty good wage growth as well. Even though it hasn't really fit injuring flation too much. So Fava certainly in the GDP data from Las week, as well already know the picture is pretty healthy economy. We go to started go to the payrolls not becoming up on Friday, and the fed will certainly be thinking about this as well because it probably reinforce this very strong picture of job market. So when you have that in the background certainly makes a bit curious as to why the mock is getting so excited about the polls. Not of the fed may take the opportunity to to try and rain the market back in a little bit and try and get them back more to a neutral territory because of that. Let's talk about the greenback. It's climbed against all but three of its group ten currency peers and twenty nineteen to folks at TD North America point out that any further strengthening any wheat test of some of those twenty eighteen is could mean trouble for stocks can be trouble for high your credit and currencies as well. More. Generally. You're seeing that dollar bears can return to hibernation after the FOMC run me through your thinking. Yeah. So we had a little bit of softness in the dollar towards the individual pro, and that's not unusual this month and maneuvering which goes on. And it's quite often the case where people are just have to tidy things up in the came off a little, but the fundamental case for is is pretty hard to ignore right now, particularly against the emerging market currencies. You've got short term rates in America, which are very high in comparison to other g ten currencies relatively high compared to the emerging market world. Plus as we were saying this pretty strong background of data from the United States. And they made it very. Clear it's on a long-term polls here. So he's not really going to be going anywhere. We've monetary policy at the same time. There's other countries that want to lower interest rates in in Asia. We've had India of moved already we've got to Malaysia looking at it, South Korea looking at it Philippines, Indonesia, they're all heading towards lower rates environment. So that certainly from an investor's point to you. They're probably thinking that the fed is beginning to look like a high yield currency here. So we could save it. If a rebound once the fed is out the way people start looking ahead to Friday's jobs report. It's always a pleasure catching up. Thank you for stopping buying. It's Mark Cranfield. Remember the for real time market commentary and analysis to markets. Lifelock. That's the only Bloomberg terminal. Let's get into some of the corporate news because apple their their numbers of projected quarterly sales top analysts estimates more from Bloomberg's Charlie Pellett. The reports suggest demand for iphones stabilized after a disappointing holiday period. The company also reported solid revenue. Growth from its services business as consumer sign up for a growing Schwartz board of digital subscriptions. Apple shares have surged more than forty percent from twenty one month low in early January after lacklustre iphone sales prompted the company to cut its holiday revenue forecast. So far this year. Apple is up twenty seven point two percent in New York. Charlie Pellett, Bloomberg daybreak Europe and do better as demand for all. The shares offered in its IPO just one day after kicked off throat show in London. That's according to people familiar with the matter, the ride hailing company will continue meeting potential buyers in New York and San Francisco as it seeks to raise as much as nine billion dollars right time now for the latest elsewhere in the world with Bloomberg's leeann guarantee, man. Good morning Yussef Kwun guidos gamble to take control. Venezuela appears to have flops the position need publicly called on the armed forces toback his attempts to oust nNcholas Maduro, but the military command. And state loyal to the president the US reiterated its support for quite, but it seems to have little effect. Japan has seen the first voluntary handy of the chrysanthemum throne in more than two hundred gays. Bloomberg's Crisan STI has this report from Tokyo Japan. Welcome to new emperor on Wednesday with hito acceding to the throne in a ceremony attended only by males symbolic, Hugh leader ushers in a new era Ray, or beautiful harmony, one of the emperor's first major tasks will be to entertain US President Donald Trump who arrives later this month for state visit interfere Chris Asti, Bloomberg daybreak. You're in the UK. There's around with a neighbor vets policy on another e referendum some of the party's MP's won't want an Olsen Kim stances, while others would prefer a better Brexit deal general election yesterday, the ponies governing buddy agreed to stick to its policy of simply keeping the option of another poll on the table it disappointed labor backbencher Mary Cray danger. We're trying to ride. To wholesalers on nicest. Theresa May has demonstrated over the last two years is that you end up leasing date. The country is looking to the labor party for leadership. They're looking to labour leader for leadership, and this may French police carrying out full, potentially violent protests across the country. Bloomberg's Caroline Conan reports for the first time the universe will join climate activists any traditional union marches, but as many as fifteen hundred black blocks anarchists are also expected in Paris. French president mccone came up with a new wave of reforms last tweak. The two-thirds of the French said they were not convinced in Paris, counting Kernen, Bloomberg daybreak Europe. Cable news twenty four hours a day on air take takes on Twitter,.
"fomc" Discussed on C-SPAN Radio
"The plan was set in motion in the fall of twenty seventeen and the FOMC in now this past March that it will conclude the rundown in September starting in October. The fed will begin reinvesting maturing principal that comes to the fed also recently decided that it's up racial regime will be significantly different going forward than before the financial crisis before the crisis the quantity of federal of. Of fit fit reserves in the banking system was very small about twenty billion dollars and these Bank deposits on the feds books paid no interest to change the level of short term rates, the New York fed border sold treasury securities to slightly altered the quantity of reserves bailable to banks almost every day, the New York fed intervened in the markets to keep interest rates near target after the financial crisis. The fed was granted the power to pay interest on the reserves that banks hold in their fed accounts. And when the fed began raising its target for short rates at the end of twenty fifteen it relied on this tool. Namely, it raise the interested paid on these reserves to push up money market rates. Generally, this tool has been used throughout the recent tightening cycle and this operating regime is working quite will. So the M C his now decided that it will remain in place. It allows the fed to avoid day-to-day interventions in the money markets, and it's compatible with large reserve holdings by banks at the Federal Reserve something that banks now want to satisfy new liquidity requirements from financial stability standpoint. This regime is also much safer. When the FOMC ceases balance sheet run off in October the fits s it holdings will have declined to around three point seven trillion dollars and the process will have run. Its course. Balance-sheet runoff had the potential to promote to provoke considerable financial market disruption. Indeed, the difficulty of exiting from purchases had been a concern in the committee, and in congress with some observers anticipating that are rundown of the fed balance sheet, which sparked financial bedlam. But fortunately things have gone quite smoothly. My hope was that. It would be about as interesting as watching paint dry. And this mainly worked out that way. Smooth exit means that there should be less resistance in the future to deploying SF purchases again. Looking forward. One of the most important concerns now facing the fed is how monetary policy can respond to a future downturn. This is the focus of a monetary policy framework and communications review being currently conducted by the. OMC, and it's something you will likely hear much more about in the next few years and mentioned earlier one factor affecting the general lift of interest rates is the rate of inflation. In other factor is the liberal of neutral real interest rates the inflation adjusted or real short rate currently stands around half a percent. And it's now commonly anticipated that the normal levels of real interest rates in most developed countries will remain quite low far lower than historical experience for a long time to come it. Decline in real interest rates was evident, even before the financial crisis in most developed countries. And it seems to result from slow productivity growth and aging populations these two factors boosts saving and to press investment pushing real interest rates down with a two percent inflation target and a real interest rate of say one percent short rates. Would average three percent in net means the fed would have for less room to cut rates in a downturn. To support the economy than it had in the decades prior to the financial crisis. There's a good deal of thinking now about how the fed can address this challenge. Of course, it should keep asset purchases as I mentioned in the tool kit. But it may also be desirable for the fed to shift its inflation objective slightly instead of seeking two percent inflation at all times. Good and bad. The fed could seek two percent inflation on average over the business cycle. This sounds like a modest shift in objectives. But it means the fed would actively try to boost inflation somewhat both two percent during expansions in order to offset a persistent shortfall of inflation during the period, like the one we just experienced when policy was constrained by zero lower bound on interest rates and inflation ran for many years six or seven years below two percent. Shift of this sort would prevent inflation expectations and actual inflation from itching down over time, and would would enable the fed to premise markets that it will hold short-term rates very low for a long time when they hit zero something that should pull down longer term rates and promote faster recovery. Let me next turn to financial stability. This is she's radio programming from Monday out briefly review, our efforts to substantially reduce the odds of another financial crisis. The US and global financial system was in a dangerous place ten years ago. I believe that it is now significantly safer. Congress the administration and the fed and other regulatory agencies implemented new laws regulations and supervisory practices to limit the risk of another crisis. We closely coordinated with policy makers around the world. The upshot is that we have a more resilient financial system. Banks or far healthier the risk of runs. Owning maturity transformation is reduced derivative sir safer efforts to enhance the resolve ability of systemic firms have promoted market discipline in reduce the problem of too big to fail, and it system is in place to more effectively monitor in address risks that arise outside the regulatory perimeter. Throughout we coordinated efforts here with those in other countries through the Basel committee, the Financial Stability Board and the group of twenty to win. Sure that efforts in one country to tighten standards would not be undermined through shifting of risky activities abroad. We also wanted to ensure globally level playing field in terms of accomplishment..
ECB's Draghi worried about Fed's independence
"Top story. President Trump has renewed his attack on the Federal Reserve. He tweeted that the stock market could be as much as ten thousand points higher the word for the FOMC derided quantitative tightening. As for the killer comes after ECB president. Mario Draghi said he's concerned about the relationship between the president and the fed speaking of the IMF spring meetings in Washington, you said he's quote, certainly worried about central Bank independence. Let's get out to Eric Robertson. He's the global head of FX global macro strategy at Standard Chartered Bank. Eric every central Bank has a finite amount of credibility capital recently. We saw in Turkey how quickly that can get a VAT berated and how difficult it is to build again. And we store that confidence. How far are we from a scenario like that? How quickly it's credibility getting burned up here. If you're talking specifically about the US, I look I think we're still a long ways away, the fed has an almost religious adherence to its institutional independence. And we've said a number of times that you know, Trump and his administration can can comment or tweet all they want. But I'm not really worried about the Fed's independence, and I don't think we're very worried about some of the potential fed governors that Trump has nominated. I think the fed will be fairly resilient here.
Stocks buoyed after Fed confirms dovish turn
"Stories, and we're starting in the United States where the fed says that interest rates could be on hold for quite some time as rising global risks way on the outlook for the US economy. And domestic inflation remains meets it chairman. Jerome Powell says that there's no data to suggest a move either up or down, adding the policy makers should remain. Patient and let the situation play out. We don't see data coming in that suggests that we should move in either direction they suggest that we should remain patient and let the situation clarify itself. Over time. When the time comes will act appropriately the FOMC's, slashed the number of projected rate hikes this year from two to
What to expect from the upcoming FOMC meeting
"The Federal Reserve will be holding a two day meeting. USA radio's Chris Barnes with a preview now from Washington DC fed policymakers to meet Tuesday and Wednesday, and they'll issue a statement at the end of the meeting on Wednesday, that's likely to note that while the economy is on firm footing. It does face risks from slowing growth in some trade conflicts against that backdrop to thinking goes it would be unwise to keep raising interest rates as the fed did for. Times last year. Instead, the fed is expected to keep its key short-term rate in a range of two point two five percent to two point five percent and many analysts believe the policy makers will scale back their projection of rate hikes this year from a cube to one or perhaps even none
Fixed Income: Definition, Types, How It Affects Economy
"Let's talk fixed income Alex Harris bond reporter for Bloomberg news is in our Bloomberg interactive brokers studio, Alex so nice to see you. What are some talk about a crazy busy week free? But what are you looking at the markets today today, thankfully was a little bit calmer. You said it was boring. We're a little more come on. Let's just be relative to what was happening yesterday with the FOMC minutes. And there was a lot packed today. A little bit calmer was seen a backup and yields however, still range-bound because again, there's all this uncertainty floating around. So I think really today's move was driven more by the investment grade corporate bond calendar. You know yesterday you had alive lily come in with a with a big bond issue. Tens and out the curve and their funding an deal Tae, Boston scientific four point three billion. They were across the curves. Five cross the curve excuse me, five years to thirty years or bond market alive and kicking alive and kicking as long as there's day where you're not getting a whole lot of fedspeak and things are relatively calm. And there's not a lot of volatility. I think they can come in. And that's what's pushing the market a little bit. You have the five thirty s curve is steeper today. It's round fifty three basis points. So in on the new issue market what's the reception in there? And what's liquidity in the marketplace? Mean you're still getting people taking down these deals in clearly they're coming and they can come with four point five billion yesterday from Lilian then Boston scientific and follow up with another four point three reception is still good and as long as follow Tila ty- remains somewhat subdued and now the feds on hold. I think it just gives you a bit of an opening and the long end is an attractive place. For issue. Just because investors want that yields. So they're gonna pick up what they can get. So, but again, you know, ten year thirty year treasury yields still rangebound, we have trade uncertainty. We have Brexit uncertainty. We have all these issues on the table that have yet to be resolved. And until we get a resolution. A can't see the treasury yields breaking out one way or
"fomc" Discussed on Marketplace with Kai Ryssdal
"This is a bit couple of days from monetary policy. Watchers the Federal Reserve meets today and tomorrow on interest rates and the general health of the economy, technically, actually, I should say that it's the Federal Open Market committee. That's kicking off its first two day meeting of the year. The FOMC is gonna vote on whether to raise interest rates. Spoiler alert. They are almost certainly not going to raise rates. But the reason I mentioned it is that this being January exactly who gets vote has changed. Marketplace's Nancy Marshall genzer explains. When fed chair Jerome Powell walks into a press conference to announce the decision on interest rates as he did last month. Today, we raised our target range for the short term interest rates by another quarter of a percentage point Powell make it all the glory or blame but rates are actually decided by vote of the FOMC. There are typically nineteen members. But only twelve vote Powell always is six other fed governors. Always the head of the New York fed always. But the presidents of the other eleven Federal Reserve Bank spread across the country rotate for on seven off former fed economist and Owen says there's a reason for that. If all the Bank presidents participated each year, then the regional Bank presidents would then dominate the FOMC. The rotation hasn't changed since one thousand nine hundred thirteen when the Federal Reserve was established cities that had bigger populations back then like Cleveland and Saint Louis at the vote every other year for cities that were on the frontier like San Francisco in Dallas, it's one year on two years off, historically, the vote meant everything. Peter Conte Brown is fed historian at the university of Pennsylvania. He says when it wasn't your turn to vote. You had no voice. It's a rotating out as members of the federal market committee would do meant you were rotating into oblivion Conti Brown says the. Started changing in the nineteen eighties. When then chair Paul Volcker was ratcheting up interest rates read, the fed transcripts, and you see more and more input. By those who didn't have the vote by the time. The financial crisis hit in two thousand seven everyone in the room seemed to have an equal voice. And there was plenty of disagreement. But the nature of the culture is you don't want to seem like you're totally deviant outside the norm. That's Richard Fisher. Who is head of the Dallas fed from two thousand five to twenty fifteen. He says the fed always presents a United front, but there are places to express yourself if you wanna vent like the speaking circuit. I made a lot of speeches speech. It's during the financial crisis about near-zero interest rates pouring so much cheap money into the economy that it was hurting savers and encouraging risky investments. That overtime might sink the economic ship and the quantity could slosh around the whole the ship. And if it got out of control could capsize the ship reflecting on his decade at the Dallas fed in two thousand fifteen Fisher spoke at the economic club of New York where he called for the New York fed to share the vice chairs position on the FOMC has I uttered those words, I could tell I was in the doghouse people have questioned whether the voting rotation should be more. Let's say equal, but that would take an active congress. In the meantime, Boston, Chicago, Saint Louis and Kansas City move into voting position today. Cleveland San Fran Richmond. And Atlanta move out. The shift isn't expected to tip the balance of the fed any further toward raising interest rates. In Washington, I'm Mansi Marshall genzer for marketplace..
Bloomberg, Mick Mulvaney And UK discussed on Fox News Sunday
"Headquarters acting White House chief of staff, Mick Mulvaney, warns that another partial government shutdown is possible. That's if President Donald Trump and congressional leaders can't come to an agreement that includes funding for a US, Mexico border wall Mulvaney was interviewed today on Fox News Sunday in the UK, Prime Minister, Theresa may faces votes in parliament this week on amendments to her Brexit withdrawal agreement. The government is opposing moves by rank and file politicians to force a delay in the March exit date rather than crash out of the European Union without an agreement Philip Hammond, UK chancellor of the exchequer spoke to Bloomberg at the economic forum in Davos, what would be a betrayal of the British people. If we either didn't deliver Brexit for them, or we delivered Brexit in a way that undermined their prosperity in an I believe in no deal Brexit would undermine Britain's prosperity. And that is not what people voted for votes on amendments in the UK. K R planned for Tuesday. Then as scrapped its decision to sever diplomatic ties with the US each country agreed to keep so-called interest section opened in their respective Capitols, operate like embassies. The countries have thirty days to set those up coming up this week. We get earnings from closely watched apple Bloomberg's Deborah Maui. Reports apple shares plunged earlier this month after lowering its revenue outlook for the first time. In twenty years. The focus on Tuesday will be on how the company plans to cut back its dependence on the iphone and grow at services business. A whole lot of other companies are set to report earnings as well, including Lockheed. Martin Honeywell Qualcomm, Facebook, Microsoft, and tesla meantime, there's an FOMC meeting, and we also get the January jobs report. Global news twenty four hours a day on air and it took on Twitter powered by more than twenty seven hundred journalists and analysts in more than one hundred twenty countries. I'm Susanna Palmer this. This is Bloomberg. Winning
"fomc" Discussed on Bloomberg Radio New York
"The minutes of your last FOMC meeting. Now you release your minutes not the day after the meeting. Why don't you release your minutes the day after meeting we released a statement, which summarizes the decision and the language is very carefully structured to express the rationale for the decision. And then we actually go back and read the transcript, very carefully. We humilate the perspectives offered by seventeen different members. And it takes three weeks to go through that process, and we publish the nets. We used to publish them with a couple of months delay. Now, we publish them with a three week delay. So they're meant to amplify. What's what's in the decision in those meeting a minute meetings? It said that there was fair debate about whether you should increase interest rates the fed fundraiser, not but was unanimous. So was it fair to say that it was the United view of the FOMC that you should increase interest rates when it turns out that the debate was more divided than. Maybe the vote was. So I would say one of the great things about our system is that we really have institutionalized diversity of perspectives twelve different. Reserve Bank presents each of whom has his own economic staff, and they come in. And so at every meeting we have a robust discussion debate and often disagreement over the past policy, and I personally think that's a great way to reach a better decision. So in the end people have to choose to vote with the proposal or not in this case, everyone voted for all other were disparate music's breast at the meeting minutes reflect when people don't vote for the proposal. It's recorded that they didn't vote for it is that right? Often issue. A a statement of why they descended a they'll explain themselves. The whole thing explain yourself carefully to the public transparently. And we try to put all of that out on the record for people. That's Federal Reserve chairman Jay Powell and coming up more of the fed chairs conversation with Carlisle group ho founder, David Rubenstein.
President Donald Trump, Jerome Powell And Governor Dudley discussed on 0 Show
"Bloomberg reported President Donald Trump has been talking with advisors about making an unprecedented attempt to remove Jerome Powell Treasury Secretary Steven Mnuchin said on Twitter yesterday, Trump is not weighing such a move William deadly former New York fed president and FOMC vice-chairman said if Powell was fired and he could do it legally. He should stay on. As governor Dudley
"fomc" Discussed on KDWN 720AM
"Yesterday. Many FOMC participants headed participants had participants participant problem with our audio this morning. Participants had expected that economic conditions would likely call for about three more rate increases in two thousand and nineteen. We brought that down a bit. And I think it is more likely that the economy will grow in a way that will call for to interest rate increases over the course of next year. What kind of year will two thousand nineteen we know that the economy may not be as kind to our forecast next year as it was this year history attests that unforeseen events as the year unfolds made buffet the economy and call for more than a slight change from the policy projections released today with that caveat, there are two important differences in the policy at what today versus next year in early two thousand eighteen we saw a rising trajectory for growth today. Instead, we see growth moderating ahead epilepsy. Participants along with many other forecasters headlong predicted some moderation of growth in two thousand and nineteen conditional tightening of financial conditions. We've seen over the past. Couple of months along with signs of somewhat weaker growth abroad. Have also led us to Mark down growth and inflation projections. A bit immediate FOMC participants projections shows growth of three percent this year and two point three percent in two thousand and nineteen with growth remaining next year above its longer run normal value. The unemployment rate is projected to fall a bit further to three point five percent by the end of two thousand nineteen inflation in the median projection remains near two percent second the economy has continued.
Fed chair Jerome Powell hints of limit to rate hikes
"Next year. The fed sheriff said in a speech at the economic club of New York that interest rates are just below the neutral rate that might indicate a pause coming next year Powell also said, the US economy is in good shape and inflation is tame my FOMC colleagues, and I as well as many private sector, economists are forecasting continued solid growth low unemployment and inflation remaining near two percent. In the meantime, President Trump and president Xi are set
Deutsche Bank Weighs Shake-Up Among Senior Executives
"Against the end. Just a little at one thirteen eighty eight a little bit of weakness against the euro, which is trading for one twelve ninety seven the euro back down below one thirteen but coming up coming back a little bit. The pound also had fallen and is coming back a little bit. Just barely right now. One twenty seven five. So the pound is still stuck under one twenty eight right now US ten year yields coming up, but still down at relatively low level three point zero six is what we're looking at for is what you'll get paid. If you lend your money to the US government right now for ten years. So that's a look at the data. We give it to every fifteen minutes here on Bloomberg radio. Let me also break if you headlines on the Bloomberg terminal this morning LaFarge Holcim confirms the two thousand eighteen targets as well. As the strategy for twenty twenty two with twenty nineteen sales growth between three and five percent. And it also sees recurring e dog growth next year, at least a level of five percent. Like for like, we're also getting threes. Some comments from callers gone through his lawyer. His lawyer is commenting after speaking with the now, former Nissan, chairman, still chairman and CEO of rent. Callers go after his arrest in Japan says that he will. He denies reports that he paused trading losses at Nissan. So call is denying reports that he paused trading losses to Nissan. It's fascinating actually, any comments that we get out of Carlos gone are going to be really interesting because keep in mind that he is in a Japanese jail, and he's not allowed to just talk to his lawyer anytime he wants it's you know, they decide when they give him time to talk with his lawyer, and he doesn't get very many visitors in there, even though no charges have been officially press waiting for the meeting tomorrow between Nissan and Mitsubishi and Renault to see how this alliance is going to hold up. Let's get to the top stories. The other top stories we're following for you, Marcus mentioned. Fed officials will kick it off at the fed. We've heard from a host of policymakers speaking New York, Richard Clarita, back more gradual rate rises calling risks less skewed. The downside, but Saint Louis president James borders, more cautious saying officials must monitor possible cracks in the recovery and Atlanta's Raphael Bostick went even further saying he notes pockets of distress. Meanwhile, Kansas City's Esther George said, the China trade standoff, isn't helping okay. So it seems as if we've got some differences in tone between different FOMC officials. Also, we're all looking
"fomc" Discussed on WAFS Biz 1190
"Let's get you a quick snapshot of how all markets finished the day yesterday. Of course, all is at a near four-year. Hi, Mr. Trump saber rattling against the Saudi King this morning. The doll will there and Don seven tenths of one percent. We have this lovely story. Foreign inflows the highest since April into the Tada. You've got the divine market real estate. Stocks took a little bit of a hit. Emma was off one point nine percent keeping on Drake and scull rally. Fifteen percent while could Thursday shareholder meeting. Bring on Qatar dying there in the market. You can just see Dhabi up a quarter of one percent and the Qatari market up a quarter of one percent petrochemical industries rising by one point two percents. Let's let's get you those figures. I mean, it's one of the few data points that we have in this part of the world and used of course, crucially by quite a few clients that you've got to you east of timber whole economy coming in at fifty five point three versus fifty five in August. So a very very marginal expansion on that front and then on the Saudi side you've got September. Hold economy PM coming in fifty three point four. The expectation was four fifty five point one in August. So still an expansion, but not as strong as it was the case in August. Interesting breakdown here from the Saudi Arabia batch of numbers new orders falling then in August. The lowest reading in fact since may of two thousand eighteen but it is the fifth consecutive months of expansion. We keep a close eye on this. Let's get back to our top story and talk about fed chair. Jay Powell, he says he welcomes recent pay increases and is confident low unemployment won't stoke inflation speaking in Boston, he said wage rises were broadly in line with the feds vision don't point to the labor market. Overheated. Rare pairing of steady low inflation and very low unemployment is a testament to the fact that we remain in extraordinary times, our ongoing policy of gradual interest rate normalization reflects our efforts to balance the inevitable, the inevitable risks that come with extraordinary times. So as to extend the current expansion while maintaining maximum employment and low and stable inflation. Tackling of UBS wealth management is still with us from our Singapore studio, and of course, Stephanie Flanders head of Bloomberg economics as well right here around the Senate to buy let me head out to Singapore. I and bringing this story for everybody to get a better feel of what it is that Mr Powell is having to deal with this is the muted inflation risk in an extraordinary economy. It shows the weakening link between employment and inflation energy TV library, easily is very easy to access tech Langton, where do you see the fed going from here given the domestic story so well under control, but globally, the risks arising, and even though it's all part of their mandate. It just cannot be ignored. Yeah. So I think Bobby from the FOMC last week was that at least the December expectations within the body itself. Is that tough of sixteen members actually is expecting a go ahead in December. What we actually also believe on our side is the Knicks ju- it'd be a bit more challenging for the US economy. And simply because we do believe that twenty five percent of tariff on the two hundred billion of Chinese imports is going to take effect from the first of January. So next year would be a bit more uncertain with regards to the policy rate path when the US group is slowing from two point eight percent to two point four percent did the fed could actually start to take on a bit of a more wait and see approach, but at least for the next three months in heading into December, the likelihood of a hike, and it's actually looking on the high side and on just based on that we are expecting the dollar strengthen Brawley. Versus the euro or the Chinese twin, for example. So at least on a tradable basis by expecting investors to be keeping on strong knowledge trend for the next three months. So tech calling calling a stronger dollar. I'm just interested when when power referred to historically at rare pairing low inflation, low unemployment, in fact, they can remain extraordinary times. Now, this takes me back to Greenspan. Yes. That's as old as I am. But I wonder is Jay Powell actually trying to challenge some sort of new paradigm in terms of these relationships, and we need to move forward in considering possibly in a new paradigm for you, are we I think when you look at that chart, you can see this is pretty extraordinary territory because we've not we've had this enormous decline in unemployment and. Yeah, inflation's still bumping along very low levels. No, no risk of it really gained well over over target. So you have to say we've had several years with an unusual that unusual combination. I thought was interesting in the speech was that he was still power still highlighting this risk that unemployment could be able to fall even further. That we could find out there's even more capacity in the labor market than we thought even though we've has fallen so low fewer than one unemployed person for every job opening down from I think twelve to one the peak of the recession he was highlighting that risk as well. As the risk the inflation might take off. Now, we tend to always focus just on the inflation. Get them raising rates. But I thought it was interesting that he was still talking about those in an even-handed way. And that was justifying his saying he was completely calm about being graduate. I mean, it just to your points on the infliction point. We had no doubt from J P Morgan. They Dame did the math. And again, they looked at the average interest rate in developed economies and waited for output and that past one percent for the first time since two thousand and nine and that sort of so so so that that crossover came with the fed raising rates last week still really lose. It is still really historical basis just to looking at this into link between. He was freights and the rest of the world and the risks that they bring to each other. I mean candidate continue with its path and continue to ignore what's happening in emerging markets because they are struggling and they are in pain. Well, we have some emerging markets that are struggling and actually economics. We've looked which ones of most vulnerable, and you can find on the on the terminal with the ones that are kind of flashing red. But relative to the past if you go back into h in history. When I was working of the US treasury was in the late nineties s the Asian financial crisis. And then you had a whole swathe of emerging market economies that we're in terrible trouble. And then numbers were much more extreme than most that you see now. So I think we have to sort of keep it in perspective that was also at a time when fed was raising rates, and it caused trouble for that for their financing that feels like that problem there is some pressure on emerging markets. But it feels a bit more like two thousand fourteen two thousand fifteen not something really excise bec-. But over time he's going to have to take into.
"fomc" Discussed on WCBM 680 AM
"Stuff to find sue's processed meats gluten I take I actually get billionaires comes from and they have inoperable, any again Jerusalem's either right up against the harder down in the area and within ninety days thing. Go away Cain the body will repair itself given right raw materials and stop the ongoing damage climates? Races. This. Email, in dock, from someone who says they have cyclical vomiting syndrome is there anything that they can do about this condition I've. Ever heard of that before yeah okay well you know doctors give names, the things that are. Free simple and usually they have sickle cyclical vine. Of vomiting for talking you need to ask some some questions and they have x. men, psoriasis bowel FOMC ranks, disease they have appendicitis and have a history of asthma do they have ringing in their ears and, migraines migraine ringing in the ears or migraines osteoporosis. In the skull and the cranial nerve is squeezed as the comes, from inside to the outside and you get vertigo you feel like you have motion sickness along with The nausea and vomiting it used to be called, in years is easy. Renamed wallich's vertigo 'cause I figured out what caused. Diarrhea still say you got a virus your inner ear no closes in the skull and, so here's a case, where again they wanna give on bad foods and fried foods processed meats.
"fomc" Discussed on Bloomberg Radio New York
"Demand for our liabilities during quantitative easing that, was really about assets in the long run what matters, is the public's demand for currency which has grown very strongly for the last few years and also the public's demand for reserves, in an era, where we require the. Banks to have lots of high quality liquid assets reserve the ultimate highly quality liquid assets so I think we're going to. Be finding out how big that demand is for those two liabilities and also some others and I think there are estimates we don't we, don't have a target range for example it's not it's not the case so you really don't know obviously we we all acknowledge, there will be, a greater demand for. Reserves but I'm still would anticipate that in the two two and a half trillion that might actually exceed demand so I guess German pal my. Next question is Is? It a goal of the fared, so I understand that. You, you you wanna keep I oh, e. ER that you particularly today this, is l. monetary policy is determined but do you see a day is the goal, of the Federal Reserve, to again have, open, market operations. The FOMC primarily Dr Monetary policy. So, I guess this is really the, debate between kind of the floor in, the corridor currently we are using the floor but is that the ultimate goal is, this a permanent tool. Or will we see Future where I e r sets the floor the FOMC sets the higher end. And let the market determine the, interest rate in between that floor? In ceiling what is the goal of the fed The committee has not made a decision on whether in the longer run will go back to, a corridor system were staying in what we have now which is floor system and win my the fed contemplate. This will be returning to that question I'd say fairly soon we it's something we've talked about periodically at various FOMC meetings and my thinking is that we will return, to it in a return to that discussion in a serious way in the relatively near future Well one thing I would have you consider, chairman pal as the board of governors takes a look. At this is ultimately the potential risk to. The Fed's independence of, having such an unconventional size balance sheet. Is you know I would, say regrettably congress rated relatively small fun of the Federal, Reserve to fund a transportation Bill I tried to find that I wasn't successful it's been rated twice so I've joined in with my colleagues We also know. Now that the fed. Funds the bureau of consumer financial protection Both of these have nothing to do with. Monetary policy I could foresee a day with a large large balance-sheet out there It was a potential of either. Municipalities of states on the brink of insolvency having congress decide the fed, needs to buy their bonds in propped. Them up I can also see one day and infrastructure. Bill coming down the pike no good way to pay. For it there's a big pot of money that, the fed has. Maybe the fed should be directed to buy these bonds and I think. We're seeing some of. This frankly across the pond when I look at the, Swiss central Bank or the e c b so? I'm just curious as you think about the size of. Your balance sheet do you ever consider its impact on your independence We do think about, those things and we've said that we. That the balance sheet will return to a size that's. No larger than it needs to be for us to. Affect monetary policy in our chosen framework well I, assure you Mr. Chairman if there's a big pot of money out there this congress mind. Find a way to. Get its hands on it so you might consider that, as you consider the size of your balance sheet Time has long since expired the chair now recognizes the ranking member Thank you Mr Chairman cheer Powell Well I've heard you stick repeatedly that it is too soon to tell whether the economic efforts. Are the recent implementation of tariffs. We'll be either positive or negative they're already serious indications that we're headed for trouble in the. Most recent June Fomeque meeting minutes several participants noted that their district business contacts had expressed concern about the adverse effects of tariffs and other proposed trade restrictions on future investment activity and that they were not planning, any new investments..
"fomc" Discussed on Bloomberg Radio New York
"But only slightly upwardly revising inflation expectations so they presented a very positive picture i think jerome powell was less than fully forthcoming and the press conference but i'm not surprised and again as part of his interest i believe in not rocking the boat is that famous dot plot that everyone talks about something you really look at closely when you try to decide for investors where to move their money or how to invest it's not that it is so important but it's one of the few kernels have real information we get so it helps us get inside the the heads of the individual fomc numbers i thought it was foolish for the market to rely so much on the december dot plots since that reflected the views of a number of members that were rolling off the fomc however this dot plot is far more relevant because it is is giving us insight into the policy prescriptions of current voting members of the fomc and it does give us a sense of where they think things are going now of course powell rightly pointed out that the further out you get the less important is because they're really just taking educated guesses however looking at two thousand eighteen in two thousand nineteen does give us a lot of insight into what's going on in the heads of the fomc at least right now the term powell is really intent on not rocking the boat is there a risk of paying too much attention to the markets there's absolutely a risk of paying too much attention to the markets and i don't think he will pay too much attention going forward but i believe he wanted to create a smooth transition it's no coincidence that this very significant market turbulence that we've experienced for over a month now began right around the time that janet yellen passed on the baton to jay powell i don't think that's a coincidence i assume he doesn't think it's a coincidence and that he recognizes that at least up front he has to provide something of a smooth transition then it's his opportunity over the course of the year to really start changing and massaging for example the.
"fomc" Discussed on WAFS Biz 1190
"Significance of or that median lands i i think we do first of all this is immediate of all the fomc participants which can be up to nineteen it's less now because there's so many vacancies on the board but but it doesn't wait really important or not there's there's some members of the fomc who basically can say whatever they want and nobody really will pay that much attention to them others are extremely important clearly the chair is the most important so in a sense it can give a distorted view of of of what really is going on in terms of in terms of the committee because they key players are people like the the the the the chair of the board the vice chair of the fomc which is is is is is bill dudley right now the head of the federal reserve bank of new york and the vice chair of the board of governors which of course we we don't have one right now details for moment here rick and talk a little bit about general impressions keep house sounded a little more comfortable little bit more willing to just pine on discussing asset prices liquidity bank stress tests for instance and a little more perfunctory when it comes to economic theory about nehru for instance is that does that matter is that a good thing nothing it's also different style janet always liked to be actually completely prepared janet was not somebody who'd like to talk about things off the cost and jason lawyer he has that experience of being do that better so i think that there's a little bit of a different different than style and clearly there's also an issue that is not a phd economists you know he's very capable was think an excellent choice john was not going to be reappointed but he really does is not gonna wanna par pine an economic theory you win that's not as valley wick so i think it will be a difference in style but i i really don't think that at this juncture we're going to see a major difference in terms of the kind of actions that the j retake versus janet policy mix that we're seeing given unemployment expect about the fed to go to three point eight percent could we see a sort of elbow turn in the inflation rate.
"fomc" Discussed on Bloomberg Radio New York
"December dot pot since that reflected the views of a number of members that were rolling off the fomc however this dot plot is far more relevant because it is is giving us insight into the policy prescriptions of current voting members of the fomc and it does give us a sense of where they think things are going now of course powell rightly pointed out that the further out you get the less important is because they're really just taking educated guesses however looking at two thousand eighteen in two thousand nineteen does give us a lot of insight into what's going on in the heads of the fomc at least right now the chairman powell is really intent on not rocking the boat is there a risk of paying too much attention to the markets there's absolutely a risk of paying too much attention to the markets and i don't think he will pay too much attention going forward but i believe he wanted to create a smooth transition it's no coincidence that this very significant market turbulence that we've experienced for over a month now began right around the time that janet yellen passed on the tonto jay powell i don't think that's a coincidence i assume he doesn't think it's a coincidence and that he recognizes that at least upfront he has to provide something of a smooth transition then it's his opportunity over the course of the year to really start changing and massaging for example the dot pod i do expect at some point that they may increase the dot to four rate hikes this year if they get enough data suggesting higher inflation but out of the gate it's it's issue of not rocking the boat and creating some level of comfort with this new fomc christina so they raised rates this week and sounds like you are thinking that it could be as many as four this year it seems like a lot of people are debating between three and four how big of a risk you think.
"fomc" Discussed on Bloomberg Radio New York
"Of new york this morning you're you're right that um every quarter each participant in the fomc submits a projection of what they feel is going to happen to the economy and also their projection for appropriate monetary policy and at the december meeting the median participant called for three rate increases in two thousand eighteen now since then with we will submit another projection all of us in three weeks but since then what we've seen is incoming data suggests that strengthening in the economy we've seen continuing strength in the labor market we seen some data that will in my case ed some confidence to my view that inflation is moving up to target we've also seen continued strength around the globe and we've seen fiscal policy become more stimulative so i think each of us is going to be taking the developments between since the december meeting into account and rating down our new rate past says we as we go into the march meeting and i wouldn't want to prejudge that and and as you know the last time that that released its projections for the pace of interest rate increases was in mid december and since then we've had two major financial events one was the tax reform legislation and the other was the major budget agreement semi question is has your outlook for how quickly the fed should tighten monetary policy changed in light of tax reform and budget agreement i would say that the out my my personal outlook for the economy has has strengthened since december and again each member of the fomc is going to be writing down a new set of projections in a new estimate of appropriate monetary policy as we go into the march meeting which begins three weeks weeks from today and so i wouldn't want to prejudge show that that new set of projections but we'll be taking into account everything that's happened since december and yesterday the fed governor quarrels his leading the feds review posts crisis regulations stated and i quote we are not looking to relax regulation in quint he also said and i quote we're not looking to reduce capital for banks in quote do you agree with the governor quarrels that your goal is not to either relax regulations or to.
"fomc" Discussed on KQED Radio
"I choose now orgainzation i would like the nate dan and medicine so these are these are social fomc's two s it's challenge where it's admits there are a three organisations that need the if medicine i chose black seas arrive and then were there then man chosen effort we deliver medecine they are gangs asian owner ed they will come man and collect to collect so you i believe that it can become with you to the phones scores because go the case we've arrived at the pharmacy jobs actually cycled here on a bike with medicines in a foschi on the front i was just about five minutes away from our home and those drugs that she pulled out of a draw she said well she's pull them to the pharmacy we've come into this office this is where they keep drunks on the walls all on the walls behind this now the shelves floor to ceiling shelves full of books is all of these drugs and here i mean there are hundreds of him hundreds and hundreds of boxes all of these drugs they have all been terminated by people who didn't need them anymore gas has found not federal epa fahd mcgown greeks and other lady wearing long khawaga lab cut through turns out is the assistant pharmacist one she's handed over her boxes of medication asking how she feels i think copy nikko's eh it said nothing for me and they i finish about the giver is something very barth them the trump people a less fortunate medicines how expensive unlikey that though this time i have where the money to buy the medicine an i need the all i don't know and it's a very good tool giving my mind that they've i have no money for medicine some man by then said when the donate of me a shooter leaves much to get a word with the assistance and pharmacist kelly pera hello nice thank you warm these will say these are all all drugs the people have donated the fatima guidelines setting up although days call yes all these matches offering donations from individuals or organizations like give match that we work with and you've got this desk here in front of you what why these why these drugs on the desk here a c mehta ethical the every day people bring quite a few bucks mets all these medicines that you see on.
"fomc" Discussed on WAFS Biz 1190
"Potential to to be ah marketmoving and i agree with with racial i think that the for the employment number the focus is surely going to be on on earnings because that's truly where i think we need to see some some some gains and that's what surely lagged luke in terms of the fomc meeting and janet yellen final appearance there do you think we're going to get any more sort of color from jay powell also i mean obviously she's presiding who presumably will defer to her at her last official meeting but do we get any more flavor for what we're in store for from him keys probably gonna rely on his confirmation hearings to get people said sets away he wants to go in it feels very much like he's going to be continuation of johnny aliens approach as jay powell comes in this is all by janet yellen leaving tributed since space to explain how she feels by the economy and then shoot she'll go off realm but i think we get anything from the fed an odd personally i never typically interested in the number for nonfarm payrolls untaes be very very volatile so i'm wondering what is the biggest economic indicator rachel that you're looking at that affects really more broadly both the us credit and you know frankly emerging markets because the dollar has been the story of the day of the week what could make it go stronger and actually disrupt along the consensus trades right now single indicator i would cheat a little bit and say the financial conditions indicators are gone to bloomberg o n it combines a bunch of things i think the signals we we've gone back to as loose financial conditions as we've seen since two thousand fourteen we think this means party on for the near part of the year but as we go into the back half of the year watching volatility which has has begun to move up off the floor if it does more so than it will begin to decompress risk assets it is time now for the final rapid fire it's just part we ask questions she each of you and you have to answer really short answers the the first one is what's more likely to sell off in the next time months us.
"fomc" Discussed on Bloomberg Radio New York
"Need to see some some some gains and that's what's surely lagged luke in terms of the fomc meeting and janet yellen final appearance they're giving think going to get any more sort of color from jay powell also i mean obviously she's presiding who presumably will defer to her at her last official meeting but do we get any more flavor for what we're in store for for men keys probably gonna rely on his confirmation hearings two to get people it said so where he wants to go in it feels very much like he's going to be continuation of johnny aliens approach as k pao comes in this is all by janet yellen leaving she'll be getting some spice to explain how she feels by the economy and then she'll go off different realm but i think we get anything from the fed or not personally i never particularly interested in the number for nonfarm payrolls test very volatile so i'm wondering what is the biggest economic indicator rachel the you're looking at but affects really more broadly both the us credit and you know frankly emerging markets because the dollar has been these story of the day of the week what could make it go stronger and actually disrupt while the consensus trades right now single indicator i would cheat a little bit and say the financial conditions indicators are gone to bloomberg f c o n e combines a bunch of things i think the signals we we've gone back to as loose financial conditions as we've seen since two thousand fourteen we think this means party on for the near part of the year but as we go into the back half of the year watching volatility which has has begun to move up off the floor if it does more so than it will begin to decompress risk assets by it is time now for the final rapid fire on his part we ask questions to each of you and you have to answer really short answers the first one is what's more likely to sell off in the next nine months us highyield or investment grade bonds luke the.
"fomc" Discussed on KBNP AM 1410
"Is the more important conversation who's going to be the next head of the fed without a doubt that is that is the the fixation of everybody in the markets at the moment is who is going to succeed janet yellen and and and he's janet yellen even in consideration for another term and i think that is the big concern for market participants right now until we know who heads the fed we don't really know exactly what rates are going to do next year that's that's probably true but isn't that isn't it at the mall jin doesn't the machine have an impact here doesn't the machine shape put the fed chair as much as the fed chair shakes the machine i think biting personalities matter guy and i think that individuals are important i think if you look at the greenspan fed it was very much his fed you look at the burn he fed he was a thought leader on that fomc a lot of what was done with things the frenetic himself personally advocating and i would say the same thing with janet yellen so so yeah the machine is is important the machine charges along but leadership is also important and it is and and i think that whoever is the next fed chair we'll have a very strong saying the direction at the fomc takes will they continue targeting inflation and to used to any extent the taylor rule mean on the bloomberg you can type t a l go and get the taylor rule sort of plug in your own your own targets for neutral real rate for inflation target for nay ruehe just looking at what the fed i think would plug and right now they're already far ahead of where the taylor rule would put them so what does this mean well i think i think a lot of the models that the fed uses i'm sure the taylor rule is in there um and then other models that they have are being questioned and and i think that's if any if there's one big take away from the from the monetary policy we've seen since the financial crisis it's that all of the things that we thought were in play before have changed and and you only have to look at at uh at the phillips curve i think that's a big one i think.