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Warsh’s balance-sheet gambit could push the Fed to cut rates
economy-and-politics1 month ago

Warsh’s balance-sheet gambit could push the Fed to cut rates

Trump’s Fed chair pick Kevin Warsh could push for rate relief by shrinking the Fed’s balance sheet, a move some economists say could amount to about 50 basis points of easing. His plan would try to offset balance-sheet tightening with lower rates, but selling assets is unlikely and inflation progress remains a constraint; Warsh will be pressed on independence at his Senate hearing, and any cuts would likely be gradual rather than swift.

via MarketWatch|
#balance-sheet#economy-and-politics#federal-reserve
IMF: Private credit won’t spark a 2008-style crisis, but risk remains
economy-and-politics1 month ago

IMF: Private credit won’t spark a 2008-style crisis, but risk remains

IMF official Tobias Adrian says private credit is a key vulnerability but incentives today are better aligned and exposure to private debt is smaller for insurers and pension funds; he argues the private-credit boom isn’t expected to trigger a 2008-style financial crisis, though the IMF warns that a prolonged Middle East war could raise systemic risks and nonbanks could be forced to sell assets, so vigilance remains.

via MarketWatch|
#economy-and-politics#financial-crisis#financial-stability
PCE Inflation Jumps Ahead of Iran Conflict, Keeping Fed Hikes in Play
economy-and-politics1 month ago

PCE Inflation Jumps Ahead of Iran Conflict, Keeping Fed Hikes in Play

The Fed’s preferred inflation gauge rose 0.4% for a third straight month (core also +0.4%), lifting the year-over-year PCE to 2.8% and core PCE to 3.0%—still well above the Fed’s 2% target. Analysts expect near-term oil-price spikes linked to the Iran conflict to push prices higher and delay rate cuts, with the market reacting to higher rates and a softer economy if the conflict persists.

via MarketWatch|
#core-pce#economy-and-politics#federal-reserve
Powell Signals Rates Could Move Either Way Amid Mixed Economic Signals
economy-and-politics2 months ago

Powell Signals Rates Could Move Either Way Amid Mixed Economic Signals

Powell said the U.S. economy faces mixed signals: downside labor-market risks argue for keeping rates low, while upside inflation risks argue against simply staying accommodative. The Fed remains committed to returning inflation to 2%, inflation expectations look stable, and there’s no immediate rate decision due to unresolved effects from the Iran war. The Fed’s March dot plot still indicates one rate cut in 2026, underscoring uncertainty about the policy path amid opposing forces.

via MarketWatch|
#economy-and-politics#federal-reserve#inflation
Affluent Americans Grow More Pessimistic as Iran War Fuels Financial Anxiety
economy-and-politics2 months ago

Affluent Americans Grow More Pessimistic as Iran War Fuels Financial Anxiety

University of Michigan’s March reading shows U.S. consumer sentiment fell to 55.3 as the Iran war, higher gas prices and stock-market volatility spook households, with wealthier consumers posting the sharpest declines. Short-term inflation expectations jumped to 3.8% for the next year (vs 2.4% now), while long-run expectations eased to 3.2%. Economists warn that fading optimism among the affluent could translate into weaker spending, even as markets slid and the 10-year yield rose, signaling rising financial anxiety.

via MarketWatch|
#consumer-sentiment#economy#economy-and-politics
Trump’s Jones Act waiver tests energy markets and tanker stocks
economy-and-politics2 months ago

Trump’s Jones Act waiver tests energy markets and tanker stocks

President Trump issued a 60-day waiver of the Jones Act to allow foreign-flagged tankers to carry fuel to U.S. refineries, aiming to ease supply disruptions amid Iran-related tensions. The move is described by the White House as boosting flow of vital resources, and it is the broadest Jones Act waiver in years, but analysts say near-term price effects may be modest. Oil prices rose on geopolitical developments, while Kinder Morgan (KMI), the largest U.S. tanker operator, traded lower as investors reassessed the policy’s impact on shipping costs and contracts.

via MarketWatch|
#economy-and-politics#energy-markets#jones-act
March jobless claims hold near 213,000 as labor market stays sluggish but stable
economy-and-politics2 months ago

March jobless claims hold near 213,000 as labor market stays sluggish but stable

First-time unemployment claims held at 213,000 in the latest week, marking a third straight week with little change and suggesting a sluggish but generally stable labor market. Continuing claims fell to 1.85 million, and economists had expected a rise to 215,000, easing concerns prompted by February’s payroll weakness.

via MarketWatch|
#economy#economy-and-politics#employment
January data could redraw the Fed's roadmap on rates as inflation lingers
economy-and-politics3 months ago

January data could redraw the Fed's roadmap on rates as inflation lingers

Investors await January's jobs report and CPI to gauge whether inflation continues to cool while the labor market stays resilient. Economists anticipate about 55,000 new jobs with unemployment near 4.4%, a 0.3% rise in CPI (core also ~0.3%), and a 2.5% year-over-year inflation rate, possible signs the Fed could begin easing later in 2026. The Fed just left rates unchanged amid inflation concerns, but officials warn the path is uncertain, making the January data crucial for policy and markets.

via MarketWatch|
#economy#economy-and-politics#federal-reserve
Wholesale inflation sticks around as Warsh emerges as Fed chair prospect
economy-and-politics3 months ago

Wholesale inflation sticks around as Warsh emerges as Fed chair prospect

Wholesale prices jumped 0.5% in December, keeping the year-over-year wholesale inflation at 3% and signaling inflation will likely stay above the Fed’s 2% target into early 2026; core prices rose 0.4% for the month, leaving the 12-month core at 3.5%. With President Trump naming Kevin Warsh as his Fed chair pick, the central bank faces the challenge of cooling inflation while keeping policy rates steady.

via MarketWatch|
#donald-trump#economy-and-politics#federal-reserve
Tariffs Fall Short: U.S. Trade Deficit Stays Near Record High
economy-and-politics3 months ago

Tariffs Fall Short: U.S. Trade Deficit Stays Near Record High

The U.S. trade deficit remains near record highs despite tariffs, after a brief dip earlier in 2025; November alone showed a jump to $56.8 billion as imports rose and exports fell. Even when removing tariff effects and gold flows, deficits stay large, with 2025 tracking to one of the year’s largest gaps. Economists say tariffs and a cheaper dollar help, but persistent import demand (notably from Mexico and Vietnam) and AI-related equipment needs keep the deficit elevated, even as Q4 looks to be the year’s smallest deficit and could modestly boost GDP.

via MarketWatch|
#economy-and-politics#exports#gdp
Fed pause endures, but the big question is how long it lasts
economy-and-politics4 months ago

Fed pause endures, but the big question is how long it lasts

Federal Reserve officials are expected to hold rates this week, while markets price in the first potential cut around July and economists remain divided on whether there will be any cuts this year, with some predicting a June move and others forecasting none, all amid inflation stuck above target and a still-important role for the labor market in the trajectory.

via MarketWatch|
#economy-and-politics#federal-reserve#inflation
Trump hints Hassett stay, boosting Warsh's odds to chair the Fed
economy-and-politics4 months ago

Trump hints Hassett stay, boosting Warsh's odds to chair the Fed

President Trump signaled he may keep Kevin Hassett in his current White House role, sending the Fed chair race into a new phase as Kevin Warsh’s odds jumped. Prediction markets showed Warsh favored (Kalshi around 58%, Hassett about 17%), with Polymarket echoing the tilt, and markets reacting to the Trump remarks amid broader concerns tied to Powell’s situation and Senate confirmation dynamics. Analysts say Warsh would likely be dovish like Hassett but could shift if the economy strengthens, making the outcome contingent on political timing and Senate approvals.

via MarketWatch|
#donald-trump#economy-and-politics#fed-chair
Powell Likely to Stay at the Fed After Trump’s Push
economy-and-politics4 months ago

Powell Likely to Stay at the Fed After Trump’s Push

Powell’s term as Fed chair ends in May, but he can remain on the Fed board through 2028. Despite Trump’s attempt to push him out, a DOJ probe may actually increase Powell’s motivation to stay, preserving the central bank’s independence. Any replacement would require Senate confirmation, and if a chair isn’t confirmed by Powell’s departure, the Fed board could appoint a temporary chair. The outcome hinges on who Trump would nominate and the Senate’s actions.

via MarketWatch|
#economy-and-politics#fed#independence