James Bullard says Fed should cut rates because inverted yield curve is ‘not a good place to be’

That’s not a good place to be,” Bullard told CNBC’s Steve Liesman during an interview in Jackson Hole, Wyoming. There is concern that slower global growth and the trade war could drag down the U.S. economy. The Fed already cut rates in July by 25 basis points, citing “global developments” and “muted inflation.” So there is some downside risk, and I think you’d like to take out insurance against that downside risk, ” Bullard said. His comments come hours before a speech at the Fed symposium in Wy


That’s not a good place to be,” Bullard told CNBC’s Steve Liesman during an interview in Jackson Hole, Wyoming. There is concern that slower global growth and the trade war could drag down the U.S. economy. The Fed already cut rates in July by 25 basis points, citing “global developments” and “muted inflation.” So there is some downside risk, and I think you’d like to take out insurance against that downside risk, ” Bullard said. His comments come hours before a speech at the Fed symposium in Wy
James Bullard says Fed should cut rates because inverted yield curve is ‘not a good place to be’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: fred imbert
Keywords: news, cnbc, companies, fed, rates, cut, risk, james, yield, place, trade, war, curve, yieldcurve, come, bullard, week, global, inverted, good


James Bullard says Fed should cut rates because inverted yield curve is 'not a good place to be'

St. Louis Federal Reserve President James Bullard said Friday the central bank should continue to ease monetary policy because of the recession signal being flashed by the bond market.

“The yield curve is inverted here. We’ve got one of the higher rates on the yield curve here. That’s not a good place to be,” Bullard told CNBC’s Steve Liesman during an interview in Jackson Hole, Wyoming.

The so-called yield-curve inversion refers to the 10-year Treasury yield trading below its 2-year counterpart. This briefly happened this week and last week. Experts fear a yield-curve inversion because it has historically preceded a recession.

These moves in the bond market come as economic growth across the globe is slowing down while China and the U.S. remain engaged in a trade war. There is concern that slower global growth and the trade war could drag down the U.S. economy.

The Fed already cut rates in July by 25 basis points, citing “global developments” and “muted inflation.” Bullard said further cuts would help lift inflation in the U.S. and mitigate the impact of a global economic slowdown.

“The question is: Looking forward, how much risk are we facing from the fact that you’ve got a global manufacturing contraction going on and possibly more to come? So there is some downside risk, and I think you’d like to take out insurance against that downside risk, ” Bullard said. He added that the Fed could always “take back” an insurance rate cut.

His comments come hours before a speech at the Fed symposium in Wyoming from Fed Chairman Jerome Powell. Bullard is a voting member of the Federal Open Market Committee this year.

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Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: fred imbert
Keywords: news, cnbc, companies, fed, rates, cut, risk, james, yield, place, trade, war, curve, yieldcurve, come, bullard, week, global, inverted, good


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Trump’s trade threats increased the chances for a recession, but also a Fed rate cut

Trump, in a pair of tweets, criticized Powell for a lack of action, and asked who is a bigger enemy, the Fed chairman or the president of China? Trump then went on to tweet that the U.S. does not need China, China has been stealing from America, and that U.S. companies are “ordered” to look for alternatives. An inverted yield curve, where investors look for more yield on shorter term securities, has been a fairly reliable recession warning. “It’s almost like the administration was expecting the


Trump, in a pair of tweets, criticized Powell for a lack of action, and asked who is a bigger enemy, the Fed chairman or the president of China? Trump then went on to tweet that the U.S. does not need China, China has been stealing from America, and that U.S. companies are “ordered” to look for alternatives. An inverted yield curve, where investors look for more yield on shorter term securities, has been a fairly reliable recession warning. “It’s almost like the administration was expecting the
Trump’s trade threats increased the chances for a recession, but also a Fed rate cut Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: patti domm
Keywords: news, cnbc, companies, manufacturing, cut, increased, powell, trumps, threats, tariffs, trade, rate, recession, curve, chances, china, economy, president, fed


Trump's trade threats increased the chances for a recession, but also a Fed rate cut

The latest escalation in the trade war between the U.S. and China increases odds the U.S. economy will fall into recession— and that the Federal Reserve will try to stop it with more aggressive interest rate cuts.

President Donald Trump called on U.S. companies Friday to find alternatives to China, following a new round of Chinese tariffs on $75 billion in U.S. goods, including automobiles.

Trump fired off an angry tweetstorm against China, shortly after he once more criticized Fed Chairman Jerome Powell, who gave a measured speech at the Fed’s annual Jackson Hole symposium Friday morning. Powell left the door open for more rate cuts but did not go so far as to promise any — clearly disappointing the president, as well as some market pros who wanted to hear a more dovish Fed.

Trump, in a pair of tweets, criticized Powell for a lack of action, and asked who is a bigger enemy, the Fed chairman or the president of China?

Trump then went on to tweet that the U.S. does not need China, China has been stealing from America, and that U.S. companies are “ordered” to look for alternatives. Treasury yields slid and stocks sold off, with companies doing business in China among the hardest hit.

“Chinese retaliation clearly shows they are making no progress on negotiations for a deal, and the president just upped the ante again. They are firing at each other without any restraint at this point. Recession odds are a lot higher. He’s about to push the economy off the rails. It’s very close,” said Mark Zandi, chief economist at Moody’s Analytics.

As the Dow lost 2% Friday afternoon, the 2-year to 10-year curve flattened and briefly inverted. An inverted yield curve, where investors look for more yield on shorter term securities, has been a fairly reliable recession warning.

“These are risk-off moments that we think do mean more tightening in financial conditions and increases in spikes and volatility, that tend to be unhelpful for the outlook,” said Michael Gapen, chief U.S. economist at Barclays. “It raises the amount of insurance the Fed needs to put into place to support the economy.”

Gapen said Powell indicated he could do more easing when he spoke Friday, and that there were more risks since the Fed met in July, including the protests in Hong Kong and risks around Italian politics. But the overriding concern he mentioned was trade uncertainties.

“I think the Fed was prepared to ease in September. This locks that in. I suppose if things deteriorate enough, we start asking do they do 50 basis points instead of 25,” said Gapen.

Art Hogan, chief market strategist at National Securities, said the tensions are now at a heightened level, creating an even more uncertain level for markets. “It’s almost like the administration was expecting the Fed to announce a rate cut at the Jackson Hole meeting. And since Powell did not deliver, he went to def-com 5, ” said Hogan.

Historically, the Fed does not act at its annual Jackson Hole retreat.

Gapen said the trade war is hurting global trade revenues. For the U.S., exports make up about 15% of GDP, but for other countries, the contribution is about twice as much. Trade issues are hitting economies globally, and Germany, for instance, has seen a modest contraction in growth while the U.S. is still growing at about 2%.

“The risk is it gives you the illusion the U.S. economy will do fine,” said Gapen, adding that there’ s a question of how long the U.S. can avoid also seeing a downturn.

Citigroup global economist Cesar Rojas said it’s possible Trump’s tweet threats could be a precursor to a much more intense phase of the trade wars, which would be even more damaging to both economies.

“To me that sounds like he will eventually announce that tariffs on China will be increased and companies will perhaps have six months, or a year, before these tariffs go up to these levels, or even that trade with China is blocked,” said Rojas.

Economists said the Chinese tariffs and Trump’s comments on Twitter raise the level of uncertainty for U.S.businesses, which already have curbed spending.

“I think businesses are already on the edge,” Zandi said. “If the president pushes this, they’ll go over the edge. It will be too much to bear. They are right now sitting on their hands. But if the president goes much further, they’re going to start cutting, and laying off workers. That’s recession. Manufacturers are already in recession.”

On Thursday, the IHS Markit Purchasing Managers Index showed that the U.S. manufacturing sector was in contraction in July, for the first time since the financial crisis. A weakening in services PMI showed that the manufacturing downturn may be spreading, but service PMI remained above 50, which means expansion..

Zandi said Moody’s Analytics has an indicator for daily recession odds based on financial inputs, like credit spreads, stock volatility. The indicator shows a 45% chance of recession in the next 12 months. That includes yield curve metrics so it rose, as the curve inverted this week.

“What we’re seeing right now is it’s going to hurt both economies,” said Rojas. “Basically, the extent of where we are in the U.S. economy is that external factors are already weighing on manufacturing and agriculture.” He said the manufacturing PMI confirmed that the U.S. will become more sensitive to tariffs and trade wars.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: patti domm
Keywords: news, cnbc, companies, manufacturing, cut, increased, powell, trumps, threats, tariffs, trade, rate, recession, curve, chances, china, economy, president, fed


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Bullard says Fed should ‘take out the insurance’ with a rate cut and can always take it back

St. Louis Fed President James Bullard likes the idea of an “insurance” rate cut from the Federal Reserve. Insurance cuts were used in 1995 and 1998 by the Alan Greenspan-led Fed to combat an economic slowdown and successfully prolong the expansion that wound up being the second longest in U.S. history. “I think that’s a good model or baseline case for what could happen here,” said Bullard. “There’s some downside risk, and I think you’d like to take out some insurance against that downside risk a


St. Louis Fed President James Bullard likes the idea of an “insurance” rate cut from the Federal Reserve. Insurance cuts were used in 1995 and 1998 by the Alan Greenspan-led Fed to combat an economic slowdown and successfully prolong the expansion that wound up being the second longest in U.S. history. “I think that’s a good model or baseline case for what could happen here,” said Bullard. “There’s some downside risk, and I think you’d like to take out some insurance against that downside risk a
Bullard says Fed should ‘take out the insurance’ with a rate cut and can always take it back Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, cut, think, risk, rates, thats, yield, rate, cuts, bullard, insurance, inverted, fed


Bullard says Fed should 'take out the insurance' with a rate cut and can always take it back

St. Louis Fed President James Bullard likes the idea of an “insurance” rate cut from the Federal Reserve.

“You take out the insurance, if nothing happens you take it back,” Bullard told CNBC’s Steve Liesman on Friday from the Fed’s economic policy symposium in Jackson Hole, Wyoming.

“It’s always the case with insurance that you can say: ‘Well, you made these cuts and it turned out the economy continued to grow.’ That’s OK, you can just come back and take the cuts back,” he said.

Insurance cuts were used in 1995 and 1998 by the Alan Greenspan-led Fed to combat an economic slowdown and successfully prolong the expansion that wound up being the second longest in U.S. history. The central bank slashed interest rates three times, a total of 75 basis points, during both periods against risks stemming from Mexican and Russian defaults and the collapse of hedge fund Long-Term Capital Management.

“I think that’s a good model or baseline case for what could happen here,” said Bullard.

A global manufacturing contraction and a U.S.-China trade war are weighing on global growth, said Bullard.

“There’s some downside risk, and I think you’d like to take out some insurance against that downside risk and I’d like to take out more insurance,” said Bullard. “We can take the insurance back next year if it turns out that this is all going to blow over.”

Bullard, who is a voting member of the Federal Open Market Committee this year, also said the Fed should cut rates because inverted yield curve is “not a good place to be.”

The bond market’s main yield curve inverted briefly for the third time in less than two weeks on Thursday.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, cut, think, risk, rates, thats, yield, rate, cuts, bullard, insurance, inverted, fed


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The Fed didn’t need to cut rates in July, Kansas City Fed president says

Kansas City Federal Reserve President Esther George disagrees with the U.S. central bank’s move to cut interest rates last month, saying the economy is still strong. “My sense was we’ve added accommodation, and it wasn’t required in my view,” George told CNBC’s Steve Liesman in an interview that aired Thursday. The Fed cut interest rates by 25 basis points at its July meeting, citing “global developments ” and “muted inflation.” The central bank cut rates as China and the U.S. remain engaged in


Kansas City Federal Reserve President Esther George disagrees with the U.S. central bank’s move to cut interest rates last month, saying the economy is still strong. “My sense was we’ve added accommodation, and it wasn’t required in my view,” George told CNBC’s Steve Liesman in an interview that aired Thursday. The Fed cut interest rates by 25 basis points at its July meeting, citing “global developments ” and “muted inflation.” The central bank cut rates as China and the U.S. remain engaged in
The Fed didn’t need to cut rates in July, Kansas City Fed president says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: fred imbert
Keywords: news, cnbc, companies, trade, fed, george, rates, need, president, city, interview, didnt, look, war, cut, think, rate, kansas, united


The Fed didn't need to cut rates in July, Kansas City Fed president says

Kansas City Federal Reserve President Esther George disagrees with the U.S. central bank’s move to cut interest rates last month, saying the economy is still strong.

“My sense was we’ve added accommodation, and it wasn’t required in my view,” George told CNBC’s Steve Liesman in an interview that aired Thursday. “With this very low unemployment rate, with wages rising, with the inflation rate staying close to the Fed’s target, I think we’re in a good place relative to the mandates that we’re asked to achieve.”

Treasury yields ticked up after George’s comments aired.

The Fed cut interest rates by 25 basis points at its July meeting, citing “global developments ” and “muted inflation.” George, however, was one of two policymakers who voted to keep rates unchanged.

The central bank cut rates as China and the U.S. remain engaged in a trade war while economic activity outside of the United States slows. These dynamics have raised worries about the U.S. falling into a recession.

George said in the interview risks are now tilting to the downside. “As you look at global growth weakening and as you look at the amount of uncertainty associated with some of these trade issues, I think both of those are weighing on the outlook. Whether they spill over in a way that we see in the real economy is what I’m watching for.”

She added the U.S.-China trade war, which started last year, is impacting business investment in the United States.

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Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: fred imbert
Keywords: news, cnbc, companies, trade, fed, george, rates, need, president, city, interview, didnt, look, war, cut, think, rate, kansas, united


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Fed’s Harker doesn’t see need for another rate cut, says central bank should stay here ‘for a while’

Philadelphia Fed President Patrick Harker said Thursday that while he went along with the central bank’s rate cut in July, he doesn’t see the case for additional stimulus. And I think we should stay here for a while and see how things play out,” Harker told CNBC’s Steve Liesman from the central bank’s annual symposium in Jackson Hole, Wyoming. This marked the first rate cut since the start of the financial crisis more than a decade ago. Bonds ticked up after Kansas City Fed President Esther Geor


Philadelphia Fed President Patrick Harker said Thursday that while he went along with the central bank’s rate cut in July, he doesn’t see the case for additional stimulus. And I think we should stay here for a while and see how things play out,” Harker told CNBC’s Steve Liesman from the central bank’s annual symposium in Jackson Hole, Wyoming. This marked the first rate cut since the start of the financial crisis more than a decade ago. Bonds ticked up after Kansas City Fed President Esther Geor
Fed’s Harker doesn’t see need for another rate cut, says central bank should stay here ‘for a while’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: thomas franck
Keywords: news, cnbc, companies, doesnt, fed, yield, stay, basis, need, feds, neutral, central, harker, cut, rate, banks, markets, bank


Fed's Harker doesn't see need for another rate cut, says central bank should stay here 'for a while'

Philadelphia Fed President Patrick Harker said Thursday that while he went along with the central bank’s rate cut in July, he doesn’t see the case for additional stimulus.

“We’re roughly where neutral is. It’s hard to know exactly where neutral is, but I think we’re roughly where neutral is right now. And I think we should stay here for a while and see how things play out,” Harker told CNBC’s Steve Liesman from the central bank’s annual symposium in Jackson Hole, Wyoming.

At its July policy meeting the Federal Reserve appeased markets by cutting the target range for its overnight lending rate 25 basis points, to a target range of 2% to 2.25%. This marked the first rate cut since the start of the financial crisis more than a decade ago.

Harker, who isn’t a voting member of the Federal Open Market Committee, said that while he offered tepid support for the central bank’s 25 basis point cut in July, he’d prefer to wait and see before advocating for more easing.

Asked if he sees a case for further stimulus, Harker replied “No. Not right now.”

“The labor markets are strong, inflation is moving up slowly — but with the last CPI print, it was a good print,” he said.

Following Harker’s comments, the bond market’s main yield curve inverted for the third time in less than two weeks. The yield on the 2-year Treasury was at 1.601% while the 10-year yield was below at 1.597%.

Harker was not the only central banker commenting on the level of interest rates Thursday morning. Bonds ticked up after Kansas City Fed President Esther George said the July rate cut was not “required. ”

Though investors remained confident on Thursday that the central bank will cut again in September, those expectations waned after the Fed commentary.

Traders were pricing in a 90% probability of a 25 basis point cut following Harker’s and George’s comments, according to the CME’s FedWatch Tool, down about 8 percentage points from the prior session.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: thomas franck
Keywords: news, cnbc, companies, doesnt, fed, yield, stay, basis, need, feds, neutral, central, harker, cut, rate, banks, markets, bank


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Larry Kudlow says there could be a tax cut before Election Day

Top White House economic advisor Larry Kudlow said Thursday that President Donald Trump could put forward a tax cut before the 2020 presidential election. “You very may well see a new rollout of additional middle-class tax relief and small-business tax relief,” Kudlow said in an interview on Fox Business Network. On Wednesday, Trump said that he’s “not looking at a tax cut now. When asked Thursday to provide more details about the possible preelection tax cut, Kudlow said, “I don’t want to get i


Top White House economic advisor Larry Kudlow said Thursday that President Donald Trump could put forward a tax cut before the 2020 presidential election. “You very may well see a new rollout of additional middle-class tax relief and small-business tax relief,” Kudlow said in an interview on Fox Business Network. On Wednesday, Trump said that he’s “not looking at a tax cut now. When asked Thursday to provide more details about the possible preelection tax cut, Kudlow said, “I don’t want to get i
Larry Kudlow says there could be a tax cut before Election Day Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: kevin breuninger
Keywords: news, cnbc, companies, tax, white, kudlow, washington, election, scott, day, trump, house, cut, payroll, taxes, larry


Larry Kudlow says there could be a tax cut before Election Day

Top White House economic advisor Larry Kudlow said Thursday that President Donald Trump could put forward a tax cut before the 2020 presidential election.

“You very may well see a new rollout of additional middle-class tax relief and small-business tax relief,” Kudlow said in an interview on Fox Business Network.

Kudlow stressed that “there is nothing in the near term” because “we believe the economy is quite healthy.” “But longer run, why not?” he added.

Kudlow also confirmed to CNBC that he supported a tax cut proposal floated earlier Thursday by Sen. Rick Scott, R-Fla.

“Had a great conversation with my friend @larry_kudlow yesterday about our economy,” Scott tweeted Thursday morning.

“When we get back from recess, we should immediately start working on a plan to reduce taxes for middle-class families & workers by the amount the Treasury is collecting in tariffs,” the senator said.

In a text message, Kudlow told CNBC, “I do support the proposal” put forward by Scott in their meeting. Kudlow did not say if he had asked the president about the plan.

A spokeswoman for the Florida senator said that Scott “has not yet spoken to the president on this proposal, but is urging the Administration to start immediately cutting fees to help American families.”

Kudlow made similar comments to reporters at the White House shortly after his television interview.

Kudlow also told Fox that he still expected Chinese negotiators to meet with Trump administration officials in Washington in September to continue trade talks.

The deputies for Washington and Beijing had a “productive conference call” Wednesday, he said.

The remarks from the top economic aide came amid a week of mixed messaging from the White House about possible tax cuts and other proposals to stimulate the economy.

On Wednesday, Trump said that he’s “not looking at a tax cut now. We don’t need it.”

That statement appeared to be completely at odds with the president’s comments from just a day earlier, when he said in the Oval Office that he has “been thinking about payroll taxes for a long time.”

Less than a day before those comments, a White House official had denied that a payroll tax cut was being considered: “More tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time.”

And that denial came in response to The Washington Post’s report that White House officials have been floating a payroll tax cut as a way to head off a possible economic slowdown.

When asked Thursday to provide more details about the possible preelection tax cut, Kudlow said, “I don’t want to get in a lot of detail on this because, I don’t want to get ahead of the curve.”

But he did say that “the idea of some short-term payroll tax cut fix — it doesn’t work, it never works, it has no lasting impact.”

He added: “The personal tax rates could easily be lowered, and probably the brackets could be shrunk. That’s a thought.”

And “we might even kind of work through a way to help our friends in some of the state who are concerned about the shrinkage of the tax deductions there … the SALT taxes,” Kudlow said.

But he cautioned not to take those suggestions as promises. “I’m just — these are for examples, OK? For examples,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: kevin breuninger
Keywords: news, cnbc, companies, tax, white, kudlow, washington, election, scott, day, trump, house, cut, payroll, taxes, larry


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There is enough economic data for the Fed to warrant a rate cut, Jim Cramer says

CNBC’s Jim Cramer on Thursday insisted that there is enough economic data that warrant the Federal Reserve to “take preemptive action here and cut interest rates.” “In that case, the Fed needs to cut rates as insurance, bringing our short-term interest rates closer to the rest of the world’s.” “One reason we’re in this position is that the Fed tightened too aggressively late last year,” Cramer said. In July, the Federal Reserve instituted a quarter-point interest rate cut to a target range of 2%


CNBC’s Jim Cramer on Thursday insisted that there is enough economic data that warrant the Federal Reserve to “take preemptive action here and cut interest rates.” “In that case, the Fed needs to cut rates as insurance, bringing our short-term interest rates closer to the rest of the world’s.” “One reason we’re in this position is that the Fed tightened too aggressively late last year,” Cramer said. In July, the Federal Reserve instituted a quarter-point interest rate cut to a target range of 2%
There is enough economic data for the Fed to warrant a rate cut, Jim Cramer says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: tyler clifford
Keywords: news, cnbc, companies, warrant, cramer, host, data, economic, fed, united, rate, rates, ton, economy, cut, interest, jim


There is enough economic data for the Fed to warrant a rate cut, Jim Cramer says

CNBC’s Jim Cramer on Thursday insisted that there is enough economic data that warrant the Federal Reserve to “take preemptive action here and cut interest rates.”

The comments come a day prior to a speech Fed Chairman Jerome Powell is expected to deliver at an annual meeting of central bankers and economists in Jackson Hole, Wyoming on Friday.

“The economy may be in good shape now, but if we keep getting more and more tariffs it could deteriorate,” the “Mad Money” host said. “In that case, the Fed needs to cut rates as insurance, bringing our short-term interest rates closer to the rest of the world’s.”

In the face of a global economic slowdown, the American consumer remains strong, Cramer said pointing to the low unemployment rate in the country and sales growth at large retailers like Target and Walmart. Still, there’s more to the U.S. economy than spending, he added.

Furthermore, Cramer said challenges in Europe, particularly in British, French and German economies, could begin to bleed into the United States. Germany’s government bond yields are negative, a situation where issuers of debt are paid to borrow.

“Can we shrug off this worldwide weakness? I wouldn’t bet on it if I were the Fed,” the host said. “Now we have a global slowdown where the United States seems like the rare exception—the Fed should make sure it stays that way.”

While the retail giants are doing well, Cramer noted that troubled department stores are expected to cut a lot of jobs in the coming future. Boeing’s 737 Max issues could put a dent in U.S. GDP growth, the host said. Low mortgage rates should boost housing, but homebuilder Toll Brothers revealed that demand for new houses dropped more than 3% in its latest quarter.

Business has also slowed down in lumber, natural gas, autos, rail traffic and freight costs, Cramer said.

“There isn’t a commodity I follow that’s going up in price, unless you count gold,” he said. “Some of that’s because the auto market is in rough shape and lots of the stuff goes into cars.”

President Donald Trump, who planned a series of new tariffs on Chinese imports to go into effect Sept. 1 and Dec. 15, this week ordered the independent Fed to slash the benchmark interest rate by 100 basis points.

“One reason we’re in this position is that the Fed tightened too aggressively late last year,” Cramer said. “Given all the pessimism and fear that the president’s errant tweets instill, it makes a ton of sense for Jay Powell to give the economy some leeway here.”

In July, the Federal Reserve instituted a quarter-point interest rate cut to a target range of 2% to 2.5%. It marked the first interest rate reduction since the financial crisis more than a decade ago.

Investors want to see the central bank change monetary policy to allow for cheaper borrowing and boost business investing.

“You could easily argue that there’s enough good here to offset the bad. Honestly, I’m not going disagree with that,” Cramer said, “but I’ve done a ton of work on the trade war itself … and I think it would be nuts to get your hopes up about a deal any time soon.”


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: tyler clifford
Keywords: news, cnbc, companies, warrant, cramer, host, data, economic, fed, united, rate, rates, ton, economy, cut, interest, jim


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Bond market yield curve inverts, signaling Fed may be too slow to cut rates, risks recession

It then briefly inverted later Wednesday afternoon, with the 2-year yield rising above the 10-year yield . Other parts of the yield curve have inverted and remain that way, but the 2-year-to-10-year spread is the most widely watched. An inverted yield curve, if it stays inverted for awhile, is considered a strong recession warning. “Looks like the Fed is going to be stubborn, and the yield curve is starting to price that in,” noted Andy Brenner of National Alliance. The Federal Open Market Commi


It then briefly inverted later Wednesday afternoon, with the 2-year yield rising above the 10-year yield . Other parts of the yield curve have inverted and remain that way, but the 2-year-to-10-year spread is the most widely watched. An inverted yield curve, if it stays inverted for awhile, is considered a strong recession warning. “Looks like the Fed is going to be stubborn, and the yield curve is starting to price that in,” noted Andy Brenner of National Alliance. The Federal Open Market Commi
Bond market yield curve inverts, signaling Fed may be too slow to cut rates, risks recession Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: patti domm
Keywords: news, cnbc, companies, powell, curve, yield, slow, inverted, rates, recession, fed, inverts, feds, signaling, meeting, rate, cut, risks, market


Bond market yield curve inverts, signaling Fed may be too slow to cut rates, risks recession

Soon after the Fed’s 2 p.m. ET release of its minutes, the curve between the 2-year note and the 10-year note flattened. It then briefly inverted later Wednesday afternoon, with the 2-year yield rising above the 10-year yield . That also occurred briefly last week, but did not hold on a closing basis. Other parts of the yield curve have inverted and remain that way, but the 2-year-to-10-year spread is the most widely watched.

Market moves were modest after the Fed released minutes of its last meeting, but the message was clear — the market still fears the Federal Reserve will not be aggressive enough in its rate cutting to save the economy.

Fed Chairman Jerome Powell speaks Friday, and the pressure is on him to clarify the central bank’s current stance on policy. Market pros are looking for Powell to resolve a debate within the market, over whether the Fed is going to cut just a few times or is embarking a longer running rate cutting cycle.

Powell speaks at 10 a.m. ET at the Fed’s annual Jackson Hole, Wyoming, symposium.

An inverted yield curve, if it stays inverted for awhile, is considered a strong recession warning.

“Looks like the Fed is going to be stubborn, and the yield curve is starting to price that in,” noted Andy Brenner of National Alliance.

The Fed, in the minutes of its last meeting, called its first rate cut in more than a decade a “recalibration,” emphasizing it is not on a “pre-set course” for future cuts. The Federal Open Market Committee cut rates by a quarter point on July 31, and following its meeting, Powell called the cut a “midcycle adjustment,” a term also used in the meeting minutes.

“If midcyle adjustment is not in the Jackson Hole speech, people will interpret that as opening the door for more cuts as opposed to two or three,” said Michael Gapen, chief U.S. economist at Barlcays. Since the Fed’s last meeting, bond yields, which move opposite price, have dropped or moved deeper into negative territory.

The U.S. 10-year was at 2.07% ahead of the Fed’s last meeting, and was at 1.58% Wednesday afternoon. The 2-year was at about the same rate, but was fluctuating, having hit a high of 1.58%.


Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: patti domm
Keywords: news, cnbc, companies, powell, curve, yield, slow, inverted, rates, recession, fed, inverts, feds, signaling, meeting, rate, cut, risks, market


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Fed says July rate cut was ‘recalibration’ and not part of ‘pre-set course’ for more easing

Federal Reserve officials who voted to lower interest rates three weeks ago agreed that the move shouldn’t be viewed as an indication that there is a “pre-set course” for future cuts, according to meeting minutes released Wednesday. Markets have been pricing in a series of rate cuts, so Powell’s use of the term spread concern that the Fed might not be as accommodative with policy as anticipated. Ultimately, the Federal Open Market Committee, which sets monetary policy, voted to lower the central


Federal Reserve officials who voted to lower interest rates three weeks ago agreed that the move shouldn’t be viewed as an indication that there is a “pre-set course” for future cuts, according to meeting minutes released Wednesday. Markets have been pricing in a series of rate cuts, so Powell’s use of the term spread concern that the Fed might not be as accommodative with policy as anticipated. Ultimately, the Federal Open Market Committee, which sets monetary policy, voted to lower the central
Fed says July rate cut was ‘recalibration’ and not part of ‘pre-set course’ for more easing Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: jeff cox
Keywords: news, cnbc, companies, voted, policy, recalibration, federal, outlook, market, viewed, fed, preset, course, minutes, easing, meeting, cut, rate, participants


Fed says July rate cut was 'recalibration' and not part of 'pre-set course' for more easing

Federal Reserve officials who voted to lower interest rates three weeks ago agreed that the move shouldn’t be viewed as an indication that there is a “pre-set course” for future cuts, according to meeting minutes released Wednesday. The summary indicated that policymakers viewed the move as a “mid-cycle adjustment,” an expression Chairman Jerome Powell used in a news conference afterward that was seen as contributing to a stock market sell-off after the July 30-31 meeting. Markets have been pricing in a series of rate cuts, so Powell’s use of the term spread concern that the Fed might not be as accommodative with policy as anticipated. Ultimately, the Federal Open Market Committee, which sets monetary policy, voted to lower the central bank’s benchmark rate by 25 basis points to a target range of 2% to 2.5%. It was the first rate cut in 11 years, dating to the financial crisis. However, members did not commit to future cuts.

Recalibration

“In their discussion of the outlook for monetary policy beyond this meeting, participants generally favored an approach in which policy would be guided by incoming information and its implications for the economic outlook and that avoided any appearance of following a pre-set course,” the minutes stated. The document went on to say that “most participants” saw the quarter-point cut “as part of a recalibration of the stance of policy, or mid-cycle adjustment” in response to changing conditions. “A number of participants suggested that the nature of many of the risks they judged to be weighing on the economy, and the absence of clarity regarding when those risks might be resolved, highlighted the need for policymakers to remain flexible and focused on the implications of incoming data for the outlook,” the minutes said.

US Federal Reserve Chairman Jerome Powell speaks during a press conference after a Federal Open Market Committee meeting in Washington, DC on July 31, 2019. Andrew Caballero-Reynolds | AFP | Getty Images


Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: jeff cox
Keywords: news, cnbc, companies, voted, policy, recalibration, federal, outlook, market, viewed, fed, preset, course, minutes, easing, meeting, cut, rate, participants


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What a payroll tax cut would actually mean for your wallet

RyanJLane | Getty ImagesPresident Donald Trump has considered new payroll tax cuts to let American workers take home bigger pay checks. The president told reporters on Tuesday that he is “thinking about” cutting payroll taxes. How payroll taxes workPayroll taxes are withheld from workers’ wages and are used to fund government programs, notably Social Security and Medicare. Jeffrey Levine CEO, BluePrint Wealth AllianceFor Social Security, employee wages are currently subject to a 6.2% tax up to $


RyanJLane | Getty ImagesPresident Donald Trump has considered new payroll tax cuts to let American workers take home bigger pay checks. The president told reporters on Tuesday that he is “thinking about” cutting payroll taxes. How payroll taxes workPayroll taxes are withheld from workers’ wages and are used to fund government programs, notably Social Security and Medicare. Jeffrey Levine CEO, BluePrint Wealth AllianceFor Social Security, employee wages are currently subject to a 6.2% tax up to $
What a payroll tax cut would actually mean for your wallet Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: lorie konish
Keywords: news, cnbc, companies, tax, payroll, taxes, security, social, pay, trump, wallet, mean, wages, workers, medicare, cut, actually


What a payroll tax cut would actually mean for your wallet

RyanJLane | Getty Images

President Donald Trump has considered new payroll tax cuts to let American workers take home bigger pay checks. But such a move could have negative consequences for both individuals and the economy, a number of experts warn. The president told reporters on Tuesday that he is “thinking about” cutting payroll taxes. The move, however, would have nothing to do with talk of a looming downturn, he said. “Payroll tax is something we think about, and a lot of people would like to see that, and that very much affects the workers of our country,” Trump said. On Wednesday, however, the president said the economy is still too strong to warrant such a move.

How payroll taxes work

Payroll taxes are withheld from workers’ wages and are used to fund government programs, notably Social Security and Medicare.

You don’t use your best play in the second quarter. You wait until you really need it at the end of the game. Jeffrey Levine CEO, BluePrint Wealth Alliance

For Social Security, employee wages are currently subject to a 6.2% tax up to $132,900. Workers also pay a Medicare tax of 1.45%. Employers match what workers contribute by also kicking in 6.2% toward Social Security and 1.45% for Medicare. Workers who earn more than $200,000 individually, or $250,000 if they are married and filing jointly, pay an additional 0.9% Medicare tax. Self-employed individuals pay 12.4% toward Social Security and 2.9% for Medicare. They also are subject to the Medicare surtax for wages over $200,000.

What a tax cut would mean


Company: cnbc, Activity: cnbc, Date: 2019-08-21  Authors: lorie konish
Keywords: news, cnbc, companies, tax, payroll, taxes, security, social, pay, trump, wallet, mean, wages, workers, medicare, cut, actually


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