All articles tagged with #rates
Economists in CNBC's Fed Survey expect oil to hold around $88 a barrel in six months and foresee roughly 1.8 Fed rate cuts this year, a dovish tilt versus futures; they anticipate modest inflation with growth dampened by oil shocks, a higher but still contained recession risk (~31%), and growing concern about private credit and systemic risk.
The piece outlines six trades to consider if/when the Iran conflict ends and Hormuz oil flow resumes: 1) short oil; 2) oil-sensitive equities (airlines, transports, cruises such as Carnival); 3) bet on disinflation and potential Fed rate cuts; 4) bet on global stocks (Japan, Germany) on energy stability; 5) short the USD; 6) trade gold depending on the outcome. The main driver is the oil price move, with a swift peace potentially pushing oil lower, while rates, currencies, and gold moves will hinge on the post-war macro backdrop.
A surge in oil prices is lifting inflation expectations and pushing markets to rethink the Fed’s rate-cut outlook. Futures now price in at most one rate cut in 2026 (with alignment to the Fed’s prior projections) and expect fewer cuts in 2027 as breakeven inflation rises and SOFR spreads tighten. If oil stays elevated, the narrative could shift from cutting rates to potential hikes to contain inflation.
Oil prices stay above $100 as the Iran war disrupts energy supplies, sparking inflation fears and a selloff in European stocks. The move has investors reevaluating central-bank paths, with Fed easing pricing trimming to about 20 basis points from last month’s expectations while markets await upcoming policy meetings; a stronger dollar and rising yields underscore the shift in risk sentiment and volatility ahead.
Trump publicly pressed Fed Chair Jerome Powell to cut interest rates immediately, even as bond-market expectations for Fed easing diminished amid oil-price-driven inflation fears; markets showed a shift in pricing for rate cuts and U.S. yields moved higher while leadership uncertainty at the Fed added to policy risk.
A Reuters poll of 96 economists shows the Fed is expected to cut rates in June after holding at 3.50%-3.75% in March, even as a surge in global oil prices from the U.S.-Israel war on Iran raises inflation risk; forecasts for year-end moves vary, with most predicting one or two reductions this year while the labor market remains steady and inflation stays above the 2% target.
Trump's escalation of global tariffs to 15% risks higher import prices and inflation, complicating the Fed's trajectory under Warsh and potentially denting his own hopes for substantial rate cuts.
The Federal Reserve is expected to keep interest rates unchanged as Chair Jerome Powell returns to emphasizing economic fundamentals and policy details.
Gold eased from its all-time high as traders weigh rate expectations, while silver surged above $89 per ounce, highlighting diverging moves within the precious metals complex amid shifting outlooks for interest rates.
Despite market volatility and ongoing trade tensions, U.S. stocks have reached record highs, supported by easy financial conditions, a lower dollar, and strong corporate health. The Federal Reserve has maintained its interest rate, even as inflation pressures from tariffs are expected to be modest and delayed. Rate cuts are unlikely unless the labor market weakens significantly, with upcoming employment data being closely watched. Overall, the market's resilience and the Fed's cautious stance highlight a complex economic landscape.
Bank of America analysts predict that gold will shine in the summer of 2024, with prices potentially reaching $2,400 per ounce if the Federal Reserve cuts rates earlier than expected. While geopolitical factors like the conflict in the Middle East have boosted gold in the short term, the analysts believe that rates remain the key driver for gold prices. They also highlight the potential impact of armed conflicts on gold prices through its relationship with oil, suggesting that if a broadening regional conflict damages Middle East energy infrastructure, gold could rally to all-time highs.
Analysis suggests that there is a high probability of an equities rally after the Jackson Hole symposium, with historical data showing that equities have risen in the week following the event in most cases. Despite concerns about rising rates, there are early signs of divergence between equities and higher rates, indicating that stocks may not be significantly impacted by the last push higher in rates. The market remains cautious due to the challenging month of August and the potential tightening of financial conditions. The Federal Reserve's balanced speech at Jackson Hole signals a hold in September and a flexible, data-driven approach to November's decision.
A study has found that school districts with higher levels of social vulnerability are experiencing higher rates of SARS-CoV-2 transmission. The research suggests that factors such as poverty, lack of access to healthcare, and crowded living conditions contribute to the increased spread of the virus in these communities. This highlights the need for targeted interventions and support in order to mitigate the impact of COVID-19 on vulnerable school districts.
A chart from EY Parthenon's Greg Daco illustrates how monthly US inflation numbers migrate into year-over-year data. May and June will see lower year-over-year readings with gasoline prices down 30% y/y, but even with +0.2% readings, inflation will stay close to 3%, rather than falling to the Fed's target of 2%. The Fed will be looking for numbers in the +0.1-+0.2% range for many months before they signal preparedness to cut rates.
Avista Utilities has filed a request to raise rates for customers, which if approved by the Washington Utilities and Transportation Commission, would increase the average household's monthly bill by around $5.60 or 6.3%.