All articles tagged with #rate cuts
A strong May payrolls report (172,000 with revisions) muddles the case for near‑term rate cuts and tests new Fed Chair Kevin Warsh as peers publicly scrutinize his inflation framework and policy stance; markets push out easing expectations for June and price a higher likelihood of later-year moves amid persistent inflation and energy-price uncertainties.
Kevin Warsh begins as Fed chair facing stubborn inflation, an energy shock, and political pressure to cut rates, while Fed governor Christopher Waller signals a hawkish shift, making near-term easing unlikely as inflation and inflation expectations remain elevated.
Trump taps Kevin Warsh to chair the Fed hoping for lower borrowing costs, but rising bond yields and geopolitical tensions mean rate cuts may be off the table this year, testing Warsh’s independence.
The Senate confirmed Kevin Warsh as Fed chair in a 54-45 vote, delivering a win for Trump even as allies warn that rate cuts may have to wait amid stubborn inflation, while Warsh pledges to remake the central bank.
Incoming Fed chair Kevin Warsh faces Trump’s demand for rapid rate cuts even as Iran-related oil-price spikes and ongoing inflation complicate policy; investors have shifted to pricing little or no cuts this year, while some central bankers anticipate hikes instead. Warsh argues a productivity boost from AI could enable lower rates, but unwinding the Fed’s asset holdings would take time and policymakers remain divided on the path forward.
Powell’s last FOMC meeting kept rates at 3.50%–3.75% but showed a record dissent against easing, suggesting no rate cuts in 2026. With the market’s CAPE ratio around 40—the highest since 2000—stocks face downside risk if borrowing costs stay high and easing is off the table. The development marks a potentially dubious turning point for Wall Street as valuations remain historically stretched.
Gold futures slid to a 2026 low as investors priced in fewer near-term rate cuts and a stronger dollar amid Iran-related tensions and crude-energy concerns, despite Trump’s five‑day pause on strikes.
Gold edged up in European trading but remains on track for a deep weekly loss as the Iran conflict raises inflation worries and dents bets on near-term rate cuts; spot gold around $4,657/oz and futures near $4,658/oz, with the week’s decline about 8% as the dollar weakens and energy price pressures cloud central bank policy.
Fed Chair Powell rejects the stagflation label and says he’ll stay through an ongoing investigation as the Fed holds rates at 3.5%–3.75% and signals two potential cuts this year if inflation progresses. Oil-price shocks from the Iran war push near‑term inflation higher, though higher U.S. energy production could cushion some effects. Markets fell as investors weighed the policy stance against ongoing Middle East uncertainty.
A hotter-than-expected February producer price index dampens bets on near-term Fed easing, with December cuts priced in around 60% but not with strong conviction. Odds for June/July/September cuts have fallen as inflation stays elevated due to factors like tariffs, the Iran war, and higher services costs. Markets imply a higher-for-longer path, expecting the fed funds rate to end 2026 near 3.43% versus 3.64% now, as traders await the FOMC decision with hawkish expectations.
State Farm will issue an average $100 per vehicle cash-back dividend to auto policyholders this summer, totaling about $5 billion for more than 49 million vehicles, as auto rates were cut by roughly 10% in 40 states (about $4.6 billion in savings) — the largest dividend in State Farm's 103-year history.
Friday morning's release of the Fed's preferred inflation gauge, the PCE Price Index, could move U.S. markets as traders assess whether inflation is moderating and what that means for Fed rate cuts this year. If PCE confirms cooling inflation, markets could rise with bets of multiple rate cuts; futures currently price in about two 25bp cuts in 2026, potentially lifting to three if the data reinforces a softer inflation path.
Minutes from the Jan. 27-28 FOMC meeting show a clear split among policymakers on the path for rates: some want further cuts if inflation cools, others urge holding rates for now, and a few even floated hikes if inflation stays above target. The decision to hold was marked by dissent from two governors, even as most officials noted signs of labor-market stabilization. Recent data—strong job gains and a softer CPI—keep the outlook mixed. With Powell nearing the end of his term and Kevin Warsh eyed as a successor, the policy path remains unsettled ahead of upcoming meetings.
U.S. stocks fell more than 1% as January labor data showed rising job cuts, higher initial jobless claims, and softer job openings, fueling bets on Fed rate cuts; SPY and QQQ closed lower while odds of a 25-basis-point cut by the March FOMC rose to about 21%.
Federal Reserve Governor Stephen Miran has resigned as chair of the Council of Economic Advisers, a White House post he briefly held after joining the CEA in January 2025 and taking leave in September 2025 to join the Fed Board; his Fed term expired on January 31. At the Fed he pushed for aggressive rate cuts and voted against holds, advocating larger reductions than the 0.25% moves the Fed delivered. In a CNBC interview, he noted his vacancy could clear the way for Kevin Warsh’s nomination as Fed chair. Elizabeth Warren criticized the timing, and Barron’s was the first to report the departure while CNBC sought comment.