US futures point to higher open ahead of Powell’s speech

U.S. stock index futures were higher Friday morning, as market participants awaited a key speech from the Federal Reserve’s top official. ET, Dow futures rose 108 points, indicating a positive open of more than 92 points. Futures on the S&P and Nasdaq were both slightly higher. Powell faces the tough challenge of presenting a unified voice on Fed policy from the most divided U.S. central bank in years. In corporate news, Foot Locker, Buckle and Red Robin Gourmet Burgers are expected to report th


U.S. stock index futures were higher Friday morning, as market participants awaited a key speech from the Federal Reserve’s top official. ET, Dow futures rose 108 points, indicating a positive open of more than 92 points. Futures on the S&P and Nasdaq were both slightly higher. Powell faces the tough challenge of presenting a unified voice on Fed policy from the most divided U.S. central bank in years. In corporate news, Foot Locker, Buckle and Red Robin Gourmet Burgers are expected to report th
US futures point to higher open ahead of Powell’s speech Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: sam meredith
Keywords: news, cnbc, companies, futures, powells, central, powell, points, market, point, higher, ahead, fed, expected, rate, open, speech, morning


US futures point to higher open ahead of Powell's speech

U.S. stock index futures were higher Friday morning, as market participants awaited a key speech from the Federal Reserve’s top official.

At around 03:00 a.m. ET, Dow futures rose 108 points, indicating a positive open of more than 92 points. Futures on the S&P and Nasdaq were both slightly higher.

Market focus is largely attuned to the U.S. central bank’s annual Jackson Hole symposium, with Fed Chairman Jerome Powell expected to address an audience of policymakers and economists at around 10:00 a.m. ET.

Powell faces the tough challenge of presenting a unified voice on Fed policy from the most divided U.S. central bank in years.

It comes as both the Fed and Powell are under an unprecedented siege from an angry president, while a speech that fails to assure investors the U.S. central bank will continue to cut interest rates could create even more market volatility.

As of Friday morning, Fed funds futures were pricing a likelihood of almost 90% for a 25 basis point rate cut at the September meeting, and between one or two further quarter-point rate cuts between then and the end of the year.

On the data front, new home sales for July will be released at around 10:00 a.m. ET.

In corporate news, Foot Locker, Buckle and Red Robin Gourmet Burgers are expected to report their latest quarterly results before the opening bell.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: sam meredith
Keywords: news, cnbc, companies, futures, powells, central, powell, points, market, point, higher, ahead, fed, expected, rate, open, speech, morning


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Powell says there’s no ‘rulebook’ for trade war, pledges to ‘act as appropriate’ to sustain economy

Federal Reserve Chairman Jerome Powell repeated his pledge Friday to keep the economic expansion going while acknowledging that tariffs and other factors are causing growth to slow. Less than an hour after the speech, President Donald Trump blasted Powell on Twitter, referring to him as “our enemy.” Powell, while not saying specifically where he thought rates should go, promised that the Fed “will act as appropriate to sustain the expansion,” a phrase he has used several times in the recent past


Federal Reserve Chairman Jerome Powell repeated his pledge Friday to keep the economic expansion going while acknowledging that tariffs and other factors are causing growth to slow. Less than an hour after the speech, President Donald Trump blasted Powell on Twitter, referring to him as “our enemy.” Powell, while not saying specifically where he thought rates should go, promised that the Fed “will act as appropriate to sustain the expansion,” a phrase he has used several times in the recent past
Powell says there’s no ‘rulebook’ for trade war, pledges to ‘act as appropriate’ to sustain economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: jeff cox
Keywords: news, cnbc, companies, appropriate, pledges, fed, powell, policy, used, trade, war, remarks, monetary, rulebook, theres, recent, economy, times, sustain, expansion, act


Powell says there's no 'rulebook' for trade war, pledges to 'act as appropriate' to sustain economy

Federal Reserve Chairman Jerome Powell repeated his pledge Friday to keep the economic expansion going while acknowledging that tariffs and other factors are causing growth to slow. Less than an hour after the speech, President Donald Trump blasted Powell on Twitter, referring to him as “our enemy.”

Powell, while not saying specifically where he thought rates should go, promised that the Fed “will act as appropriate to sustain the expansion,” a phrase he has used several times in the recent past.

Powell also said in his annual remarks at the central bank’s Jackson Hole symposium that the “economy is close to both goals” of the Fed’s dual mandate of full employment and price stability.

“Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent.”

He also outlined the challenges the Fed faces and indicated that for he and his fellow officials there are “no recent precedents to guide any policy response to the current situation.”

“While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade,” he said in prepared remarks. “We can, however, try to look through what may be passing events, focus on how trade developments are affecting the outlook, and adjust policy to promote our objectives.”

He did say the Fed is looking at ways to address developments in a landscape that has changed significantly since the expansion began a decade ago.

“We are examining the monetary policy tools we have used both in calm times and in crisis, and we are asking whether we should expand our toolkit,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: jeff cox
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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
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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
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White House has reportedly discussed a Fed governor rotation to curb Powell’s power

The White House is reportedly discussing a variety of options to try to juice U.S. economic growth ahead of the 2020 election, including a rotation of Federal Reserve governors that would make it easier to check the power of Chairman Jerome Powell . The White House did not immediately respond to CNBC’s request for comment. The Post said White House aides do not have a firm idea of which of these policies President Donald Trump would seriously consider. Central to the president’s criticism of the


The White House is reportedly discussing a variety of options to try to juice U.S. economic growth ahead of the 2020 election, including a rotation of Federal Reserve governors that would make it easier to check the power of Chairman Jerome Powell . The White House did not immediately respond to CNBC’s request for comment. The Post said White House aides do not have a firm idea of which of these policies President Donald Trump would seriously consider. Central to the president’s criticism of the
White House has reportedly discussed a Fed governor rotation to curb Powell’s power Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: thomas franck
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White House has reportedly discussed a Fed governor rotation to curb Powell's power

Other ideas pitched by top economic advisors range from a currency transaction tax that could devalue the dollar and make U.S. exports less expensive as well as reducing the corporate tax rate to 15%, according to interviews with more than 25 current and former administration officials conducted by The Washington Post .

The White House is reportedly discussing a variety of options to try to juice U.S. economic growth ahead of the 2020 election, including a rotation of Federal Reserve governors that would make it easier to check the power of Chairman Jerome Powell .

The proposals come as top administration officials grow nervous about a growing number of internal reports suggesting that the American economy could pull back over the next 12 months and hamper the president’s path to reelection, the report said.

The White House did not immediately respond to CNBC’s request for comment. The report came just before Powell was set to give a major policy speech on Friday from Jackson Hole, Wyoming, where investors are hoping the Fed chief will signal further rate cuts are ahead.

The Post said White House aides do not have a firm idea of which of these policies President Donald Trump would seriously consider.

The chance to check the Fed chair’s influence over the U.S. economy could be especially enticing to Trump, who appointed Powell and has used Twitter to lambaste him for almost his entire tenure.

Central to the president’s criticism of the Fed is the level of interest rates in the U.S., which remain high when compared with those of several European countries like Germany. Trump argues that lower interest rates abroad help weaken foreign currencies and make imports more attractive to American consumers, accentuating the current U.S. trade deficit.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: thomas franck
Keywords: news, cnbc, companies, powells, fed, rates, powell, tax, trump, rate, reportedly, governor, discussed, report, presidents, house, white, curb, power, rotation


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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
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Dallas Fed’s Kaplan says he’d like to avoid cutting rates again in September, but has ‘open mind’

Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an “open mind.” Kaplan said the Fed’s GDP forecast of 2% growth this year has risks to the “downside.” Holding up is the consumer economy, the biggest part of the economy. Kaplan also addressed concerns about the inverted yield curve. Earlier on Thursday, Kansas City Fed President Esther George said the July rate cut “wasn’t required ” and Philadelphia Fed President Patrick Harker said he doesn’t see the ca


Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an “open mind.” Kaplan said the Fed’s GDP forecast of 2% growth this year has risks to the “downside.” Holding up is the consumer economy, the biggest part of the economy. Kaplan also addressed concerns about the inverted yield curve. Earlier on Thursday, Kansas City Fed President Esther George said the July rate cut “wasn’t required ” and Philadelphia Fed President Patrick Harker said he doesn’t see the ca
Dallas Fed’s Kaplan says he’d like to avoid cutting rates again in September, but has ‘open mind’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, dallas, fed, yield, rates, hed, open, feds, rate, president, consumer, cutting, kaplan, economy, curve, months, avoid, growth, mind


Dallas Fed's Kaplan says he'd like to avoid cutting rates again in September, but has 'open mind'

Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an “open mind.”

“I’d like to avoid having to take further action but I think I’m going to have an open mind about taking action over the next number of months if we need to,” Kaplan told CNBC’s Steve Liesman on Thursday from the Federal Reserve’s economic policy symposium in Jackson Hole, Wyoming.

Kaplan said the Fed’s GDP forecast of 2% growth this year has risks to the “downside.”

“Even though the consumer is very strong and a key underpinning to the economy, manufacturing sector is weak and probably weakening and global growth decelerating is probably finding its way to seep into the U.S. economy,” said Kaplan.

U.S. manufacturer growth slowed to the lowest level in almost 10 years in August, according to data released Thursday. The U.S. manufacturing PMI (purchasing managers’ index) was 49.9 in August, down from 50.4 in July and below the neutral 50.0 threshold for the first time since September 2009, according to IHS Markit.

Holding up is the consumer economy, the biggest part of the economy. In the second-quarter, personal consumption expenditures rose 4.3%, the best performance in six quarters.

“As long as the consumer stays strong we are going to have solid growth,” said Kaplan.

Kaplan also addressed concerns about the inverted yield curve. He said he is less “obsessed” with the little movements in the curves “back and forth.”

“I’m more focused on the fact that the whole curve has moved down over the last three and a half months and the fed funds rate at two to two and a quarter is now above every rate along the curve which to me is a bit of a reality check that says it’s possible our monetary policy stays a little tighter than I would have thought three or four months ago,” he said.

Earlier on Thursday, Kansas City Fed President Esther George said the July rate cut “wasn’t required ” and Philadelphia Fed President Patrick Harker said he doesn’t see the case for additional stimulus.

Following their comments, the bond market’s main yield curve inverted briefly for the third time in less than two weeks on concern that maybe the Fed wouldn’t do enough to save the economy from a recession.

Kaplan is a nonvoting member this year of the Fed’s Open Market Committee.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, dallas, fed, yield, rates, hed, open, feds, rate, president, consumer, cutting, kaplan, economy, curve, months, avoid, growth, mind


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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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Analyst who turned heads by predicting a ‘Lehman-like’ plunge says we’re not out of the woods yet

A trader works at the New York Stock Exchange in New York, the United States, on Aug. 5, 2019. Nomura macro and quant strategist Masanari Takada made waves earlier this month with his prediction of a crisis-level plunge to arrive as soon as late August. The imminent risk for the market meltdown is Fed Chair Jerome Powell’s speech on Friday at the central bank’s annual Jackson Hole, Wyoming, symposium, the strategist said. “Investors should be on their guard until it becomes clear just how dovish


A trader works at the New York Stock Exchange in New York, the United States, on Aug. 5, 2019. Nomura macro and quant strategist Masanari Takada made waves earlier this month with his prediction of a crisis-level plunge to arrive as soon as late August. The imminent risk for the market meltdown is Fed Chair Jerome Powell’s speech on Friday at the central bank’s annual Jackson Hole, Wyoming, symposium, the strategist said. “Investors should be on their guard until it becomes clear just how dovish
Analyst who turned heads by predicting a ‘Lehman-like’ plunge says we’re not out of the woods yet Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: yun li
Keywords: news, cnbc, companies, predicting, risk, fed, analyst, woods, strategist, takada, recession, chair, market, points, speech, plunge, lehmanlike, dow, turned, heads


Analyst who turned heads by predicting a 'Lehman-like' plunge says we're not out of the woods yet

A trader works at the New York Stock Exchange in New York, the United States, on Aug. 5, 2019. U.S. stocks plunged on Monday as investors worry that U.S. President Donald Trump’s threatened new tariffs on Chinese imports will worsen trade prospects. The Dow Jones Industrial Average decreased 767.27 points, or 2.90 percent, to 25,717.74. The S&P 500 fell 87.31 points, or 2.98 percent, to 2,844.74. The Nasdaq Composite Index was down 278.03 points, or 3.47 percent, to 7,726.04. (Photo by Guo Peiran/Xinhua via Getty Images)

The market rebound this week hasn’t convinced the strategist who predicted a “Lehman-like” sell-off for late August or early September that the risk is completely off the table.

Nomura macro and quant strategist Masanari Takada made waves earlier this month with his prediction of a crisis-level plunge to arrive as soon as late August. With a key speech from the Federal Reserve’s chairman on deck and the bond market’s repeated recession warnings, the likelihood of a sell-off that catastrophic is still not zero, according to the strategist.

“Although the likely magnitude of any second bottoming looks to have declined, the risk of a vol-up scenario playing out at the end of August or early September has not been completely eliminated, in our view,” Takada said in a note to clients Thursday.

The market took a huge beating last week with the Dow Jones Industrial Average suffering its worst day of the year on Aug. 14 when the yield curve briefly inverted, fueling worries of a recession. Stocks have rebounded since but the Dow is still down more than 2% in August. The imminent risk for the market meltdown is Fed Chair Jerome Powell’s speech on Friday at the central bank’s annual Jackson Hole, Wyoming, symposium, the strategist said.

“The current equity rally seems largely driven by wishful thinking,” Takada said. “Investors should be on their guard until it becomes clear just how dovish Fed Chair Jerome Powell will lean in his comments at Jackson Hole.”

Stocks turned lower Thursday in a sharp move after a third trigger of the recession indicator and weak U.S. manufacturing data. The major averages then recovered as traders decided to wait for Powell’s remarks.

If the speech from the Fed chair turns out to be a disappointment, global macro hedge funds would start fleeing the market again, stopping the S&P 500 from breaking above 2,960, the strategist said. The benchmark closed Thursday’s trading at 2,924.43.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: yun li
Keywords: news, cnbc, companies, predicting, risk, fed, analyst, woods, strategist, takada, recession, chair, market, points, speech, plunge, lehmanlike, dow, turned, heads


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