Gold rises as falling markets burnish appeal

Gold prices rose on Monday as Asian shares resumed their fall and investors grappled with the impact of the ongoing Sino-U.S. trade war and higher U.S. interest rates. When stock markets are not stable, there is some safe haven buying,” said Ronald Leung, chief dealer, Lee Cheong Gold Dealers, Hong Kong. Gold remains down by more than 10 percent from its April peak, pressured by a strong dollar as the U.S.-China trade war unfolds and higher U.S. interest rates. Gold speculators extended their ne


Gold prices rose on Monday as Asian shares resumed their fall and investors grappled with the impact of the ongoing Sino-U.S. trade war and higher U.S. interest rates. When stock markets are not stable, there is some safe haven buying,” said Ronald Leung, chief dealer, Lee Cheong Gold Dealers, Hong Kong. Gold remains down by more than 10 percent from its April peak, pressured by a strong dollar as the U.S.-China trade war unfolds and higher U.S. interest rates. Gold speculators extended their ne
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Gold rises as falling markets burnish appeal

Gold prices rose on Monday as Asian shares resumed their fall and investors grappled with the impact of the ongoing Sino-U.S. trade war and higher U.S. interest rates.

Spot gold was up 0.4 percent at $1,222.0 an ounce at 0417 GMT, and not far off last week’s two-month high of $1,226.70.

U.S. gold futures were up 0.2 percent at $1,225.60 an ounce.

“Gold is closely following the stock market. When stock markets are not stable, there is some safe haven buying,” said Ronald Leung, chief dealer, Lee Cheong Gold Dealers, Hong Kong.

“There are many uncertainties ahead for equities including the ongoing trade war, upcoming mid-term elections in the U.S., along with an expected interest rate hike in December … We will have to see how gold reacts to these.”

Asian shares slipped on Monday, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 1 percent.

“Gold is more appealing after the stock market crash. It has regained some of its safe haven lure,” said Brian Lan, managing director at Singapore dealer GoldSilver Central.

A sell-off in equities last week, helped gold break above the narrow trading range of the past 1-1/2 months, with the metal jumping as much as 2.5 percent on Thursday, its biggest one-day percentage gain in more than two years.

“Gold remains supported by escalating geopolitical tensions… Adding to the mix is the thought the FOMC may consider pausing their widely expected rate hike in December if global equity markets continue to falter,” said Stephen Innes, APAC trading head at OANDA in Singapore.

“An abrupt shift in Fed policy will likely lead to a lack of confidence in the world’s most important central bank and could destabilize markets further.”

The Fed hiked rates last month for the third time this year and is expected to raise them again in December.

Gold remains down by more than 10 percent from its April peak, pressured by a strong dollar as the U.S.-China trade war unfolds and higher U.S. interest rates.

China faced “tremendous uncertainties” due to the impact of tariffs and trade frictions, China central bank governor Yi Gang said on Sunday.

Gold speculators extended their net short position on Comex gold contracts by 29,881 contracts to 103,009 contracts in the week to Oct. 9, data showed.

Spot gold may edge up to $1,235 per ounce, as suggested by a Fibonacci ratio analysis, according to Reuters technical analyst Wang Tao.

Meanwhile, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.76 percent to 744.64 tonnes on Friday.

In other precious metals, palladium rose 0.5 percent to $1,071.10. Silver was up 0.6 percent at $14.63 and platinum gained 0.5 percent to $840.50.


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Netflix price target slashed by Goldman Sachs and Raymond James ahead of earnings Tuesday

Goldman Sachs and Raymond James have slashed their 12-month forecasts for Netflix on concern that rising interest rates will eat away at the valuation of the high-flying internet company, which reports earnings Tuesday after the bell. Goldman on Monday laid out a bullish case for the upcoming Netflix quarterly earnings but still lowered its “12-month price target from $470 to $430 to reflect the contraction in broader internet multiples.” Netflix shares fell 6.1 percent last week amid a broader


Goldman Sachs and Raymond James have slashed their 12-month forecasts for Netflix on concern that rising interest rates will eat away at the valuation of the high-flying internet company, which reports earnings Tuesday after the bell. Goldman on Monday laid out a bullish case for the upcoming Netflix quarterly earnings but still lowered its “12-month price target from $470 to $430 to reflect the contraction in broader internet multiples.” Netflix shares fell 6.1 percent last week amid a broader
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Company: cnbc, Activity: cnbc, Date: 2018-10-15  Authors: michael sheetz, joan cros garcia, corbis, getty images
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Netflix price target slashed by Goldman Sachs and Raymond James ahead of earnings Tuesday

Goldman Sachs and Raymond James have slashed their 12-month forecasts for Netflix on concern that rising interest rates will eat away at the valuation of the high-flying internet company, which reports earnings Tuesday after the bell.

Goldman on Monday laid out a bullish case for the upcoming Netflix quarterly earnings but still lowered its “12-month price target from $470 to $430 to reflect the contraction in broader internet multiples.”

“While broader market performance and rising rates concerns have been more important factors for stock price performance, we believe that upside to consensus expectations and what the strength in subscriber net additions says about Netflix’s business, beyond just guidance for the next quarter, is likely to be a positive catalyst for the stock,” Goldman’s Heath Terry said in a note to clients.

Raymond James also lowered its expectation for Netflix stock to $400 a share from $445 a share, saying the streaming company’s growth will slow as interest rates continue to rise.

Netflix shares fell 6.1 percent last week amid a broader market sell-off from concerns over rising interest rates, escalating trade tensions and tighter monetary policy. The stock fell 0.5 percent in premarket trading Monday from its previous close of $339.56 a share.

“We have lowered our target price by 10% to $400 to reflect a rising interest rate environment,” Raymond James analyst Justin Patterson said in a note Monday.

Patterson said Raymond James remains “bullish” on Netflix “as upside drivers to revenue remain large” and “negative catalysts,” such as the competitive threat of other streaming services, “appear low.”

Citigroup on Friday called for investors to buy the dip, saying the stock’s tumble last week represents an entry point.

“We view the recent sell-off as an opportunity to own a high-quality, recurring revenue franchise with attractive upside potential,” Citi said.

Citi has a $375 a share price target on Netflix.


Company: cnbc, Activity: cnbc, Date: 2018-10-15  Authors: michael sheetz, joan cros garcia, corbis, getty images
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Dow futures point to more than 300-point jump, regaining some of this week’s steep losses

Futures climbed as tech shares rose sharply in the premarket. On Thursday, Wall Street closed sharply down, with the Dow falling over 540 points, bringing its two-day losses to more than 1,300 points. Sentiment was rocked around the globe in recent sessions, as investors grew nervous over the rise in interest rates and high valuations in tech shares. These losses have sent the major indexes down more than 5 percent, on pace for their biggest weekly declines since March. Sentiment was also lifted


Futures climbed as tech shares rose sharply in the premarket. On Thursday, Wall Street closed sharply down, with the Dow falling over 540 points, bringing its two-day losses to more than 1,300 points. Sentiment was rocked around the globe in recent sessions, as investors grew nervous over the rise in interest rates and high valuations in tech shares. These losses have sent the major indexes down more than 5 percent, on pace for their biggest weekly declines since March. Sentiment was also lifted
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Dow futures point to more than 300-point jump, regaining some of this week's steep losses

Futures climbed as tech shares rose sharply in the premarket. Amazon and Apple both rose more than 2 percent, while Netflix surged more than 3.5 percent. Facebook, meanwhile, gained 1.5 percent and Twitter jumped 2.6 percent.

The move higher on U.S. stock futures follows an uptick in global equities. In Europe, the German Dax gained half a percent while France’s CAC 40 climbed 0.7 percent. Asian equities also rose, with the Shanghai Composite surging 0.9 percent and Japan’s Nikkei 225 gaining 0.5 percent.

On Thursday, Wall Street closed sharply down, with the Dow falling over 540 points, bringing its two-day losses to more than 1,300 points. Sentiment was rocked around the globe in recent sessions, as investors grew nervous over the rise in interest rates and high valuations in tech shares.

President Donald Trump has recently criticized the U.S. Federal Reserve for the decline in stock markets, saying Wednesday that he wasn’t happy with how the central bank continued to raise interest rates.

“The problem I have is with the Fed. The Fed is going wild. I mean, I don’t know what their problem is that they are raising interest rates and it’s ridiculous,” Trump said during a telephone interview on Wednesday with Fox News. Trump went onto blame the Fed for the stock market decline on Thursday, but added that while he was disappointed, he wouldn’t remove Jay Powell as Fed chair.

Stocks have also fallen this week as tech — the biggest S&P 500 sector by market cap weight — has lost nearly 6.8 percent through Thursday’s close. These losses have sent the major indexes down more than 5 percent, on pace for their biggest weekly declines since March.

Sentiment was also lifted by stronger-than-expected third-quarter results from J.P. Morgan Chase, which sent the company’s stock up by more than 1 percent.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: fred imbert, alexandra gibbs, michael nagle, bloomberg, getty images
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US Treasury yields jump as stocks bounce back

The Dow Jones Industrial Average rose more than 250 points in volatile trading and gained as much as 414 points. Yields dipped from multiyear highs on Thursday, as investors sought safety from the stock market’s rout int he previous session. Slowing its rate hiking path would only increase the chances of entrenching inflation and, thus, force a more rapid rate rise down the road.” Sentiment around the globe was rocked in recent sessions, as investors grew nervous over the rise in interest rates.


The Dow Jones Industrial Average rose more than 250 points in volatile trading and gained as much as 414 points. Yields dipped from multiyear highs on Thursday, as investors sought safety from the stock market’s rout int he previous session. Slowing its rate hiking path would only increase the chances of entrenching inflation and, thus, force a more rapid rate rise down the road.” Sentiment around the globe was rocked in recent sessions, as investors grew nervous over the rise in interest rates.
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US Treasury yields jump as stocks bounce back

Equity markets reclaimed some ground after posting solid losses over the last two sessions. The Dow Jones Industrial Average rose more than 250 points in volatile trading and gained as much as 414 points.

Yields dipped from multiyear highs on Thursday, as investors sought safety from the stock market’s rout int he previous session.

Strategists at MRB Partners said in a note Friday that rates should continue to rise in the long term as “the cyclical bond outlook” is still bearish.

“Fed policy is a long way from being restrictive, but the U.S. economy is overheating: the rate hiking cycle will persist,” they said. “The U.S. is far ahead of the other major economies in terms of inflation risks. … Even with a firm dollar, the Fed has little leeway to pause its rate cycle absent a significant financial market debacle. Slowing its rate hiking path would only increase the chances of entrenching inflation and, thus, force a more rapid rate rise down the road.”

Sentiment around the globe was rocked in recent sessions, as investors grew nervous over the rise in interest rates. President Donald Trump has recently criticized the U.S. Federal Reserve for the decline in stock markets, saying on Wednesday that he wasn’t happy with how the central bank continued to raise interest rates.

“The problem I have is with the Fed. The Fed is going wild. I mean, I don’t know what their problem is that they are raising interest rates and it’s ridiculous,” Trump said during a telephone interview on Wednesday with Fox News. Trump went onto blame the Fed for the stock market decline on Thursday, but added that while he was disappointed, he wouldn’t remove Jay Powell as Fed chair.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: fred imbert, alexandra gibbs
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There’s another big reason why Trump could blame the Federal Reserve for rising interest rates

“Investors are starting to realize just how many bonds are coming at us in the year and two ahead. We had a budget deficit in the United States that went up from around $600 billion a couple of years ago to now the official number for fiscal ’18 in now over $900 billion. But that doesn’t really capture how much debt is really being added to the national debt in the United States,” said Jeff Gundlach, DoubleLine CEO on CNBC. Gundlach said there is also a loan to the Social Security system that ta


“Investors are starting to realize just how many bonds are coming at us in the year and two ahead. We had a budget deficit in the United States that went up from around $600 billion a couple of years ago to now the official number for fiscal ’18 in now over $900 billion. But that doesn’t really capture how much debt is really being added to the national debt in the United States,” said Jeff Gundlach, DoubleLine CEO on CNBC. Gundlach said there is also a loan to the Social Security system that ta
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Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: patti domm, getty images
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There's another big reason why Trump could blame the Federal Reserve for rising interest rates

“Investors are starting to realize just how many bonds are coming at us in the year and two ahead. And I’ve talked about this repeatedly over the last couple of years. We had a budget deficit in the United States that went up from around $600 billion a couple of years ago to now the official number for fiscal ’18 in now over $900 billion. But that doesn’t really capture how much debt is really being added to the national debt in the United States,” said Jeff Gundlach, DoubleLine CEO on CNBC.

Gundlach said there is also a loan to the Social Security system that takes the figure to $1.27 trillion. There are also pension liabilities and veterans benefits.

“On top of that you have the Fed now cranking up quantitative easing to $50 billion a month, which is another $600 billion for fiscal 2019 if they continue on that course. Which takes you to around $2.25 trillion of debt increase. And this is at a time where we’re supposedly in a good economy,” he said. The Fed’s $50 billion a month reduction includes both Treasurys and mortgages.

In an effort to help the economy and add liquidity to markets, the Fed loaded up on those securities during the financial crisis, in a then-controversial program, known as quantitative easing, or QE. The Fed’s balance sheet reached a whopping $4.5 trillion by late 2014, when former Fed Chair Janet Yellen announced an end to the program.

“Most people don’t understand the balance sheet because it’s never happened before. Equities went up because of the quantitative easing…Now they’re selling those assets, what do you think is going to happen now?” said Andrew Brenner of National Alliance.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: patti domm, getty images
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Thousands line up for zero-down-payment, subprime mortgages

Magdalene Altidor lost her home to foreclosure during the subprime mortgage crisis, but this week she was first in line at a four-day event in Miami where borrowers with poor credit were offered no-down payment, low interest rate loans. “It’s a national disgrace about the low amount of homeownership, mortgages for low- and moderate-income people and for minority homebuyers,” said Bruce Marks, CEO of NACA. Marks and NACA were front and center during the subprime mortgage crisis, holding mass mort


Magdalene Altidor lost her home to foreclosure during the subprime mortgage crisis, but this week she was first in line at a four-day event in Miami where borrowers with poor credit were offered no-down payment, low interest rate loans. “It’s a national disgrace about the low amount of homeownership, mortgages for low- and moderate-income people and for minority homebuyers,” said Bruce Marks, CEO of NACA. Marks and NACA were front and center during the subprime mortgage crisis, holding mass mort
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Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: diana olick, timothy trumble, naca online operations
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Thousands line up for zero-down-payment, subprime mortgages

Magdalene Altidor lost her home to foreclosure during the subprime mortgage crisis, but this week she was first in line at a four-day event in Miami where borrowers with poor credit were offered no-down payment, low interest rate loans.

“I left home, it was about 4 a.m.,” she laughed. “I’m ready to purchase a home.”

The event is one of several being held in cities across America this year, run by the nonprofit, Boston-based brokerage Neighborhood Assistance Corporation of America, or NACA.

“It’s a national disgrace about the low amount of homeownership, mortgages for low- and moderate-income people and for minority homebuyers,” said Bruce Marks, CEO of NACA. “In the loans that we’ve originated in the past 6 years, zero foreclosures.”

Marks and NACA were front and center during the subprime mortgage crisis, holding mass mortgage modification events across the country with banks and servicers. Bank of America was there then and the bank is with NACA now, backing the program with $10 billion in mortgage commitments.

“It’s total upside,” said AJ Barkley, senior vice president of consumer lending at BofA. “We have seen significant wins in this partnership. Just to be clear, when we get those loans with all the heavy lifting here, we’re over a 90 percent approval, meaning 90 percent of the people who go through this program that we actually underwrite the loans.”

Borrowers can have low credit scores, but have to go through an education session about the program and submit all necessary documents, from income statements to phone bills. Then they go through counseling to understand their monthly budget and ensure they can afford the mortgage payment. The loans are 15- or 30-year fixed with interest rates below market, about 4.5 percent.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: diana olick, timothy trumble, naca online operations
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Treasury Secretary Mnuchin: Two-day stock plunge a natural correction

Mnuchin: Stock market is seeing a natural correction 7:19 AM ET Fri, 12 Oct 2018 | 01:55Treasury Secretary Steven Mnuchin told CNBC on Friday this week’s stock market plunge was a “natural correction.” “The fundamentals are still very strong,” Mnuchin said in an interview with CNBC’s Geoff Cutmore from Bali, Indonesia, where the International Monetary Fund and World Bank were holding their annual meetings. This week’s decline in stocks, the worst since late March, was fueled by concern the Feder


Mnuchin: Stock market is seeing a natural correction 7:19 AM ET Fri, 12 Oct 2018 | 01:55Treasury Secretary Steven Mnuchin told CNBC on Friday this week’s stock market plunge was a “natural correction.” “The fundamentals are still very strong,” Mnuchin said in an interview with CNBC’s Geoff Cutmore from Bali, Indonesia, where the International Monetary Fund and World Bank were holding their annual meetings. This week’s decline in stocks, the worst since late March, was fueled by concern the Feder
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Treasury Secretary Mnuchin: Two-day stock plunge a natural correction

Treasury Sec. Mnuchin: Stock market is seeing a natural correction 7:19 AM ET Fri, 12 Oct 2018 | 01:55

Treasury Secretary Steven Mnuchin told CNBC on Friday this week’s stock market plunge was a “natural correction.”

“Markets tend to go too far in both directions,” he said.

He also said the U.S. economic story is “incredibly positive” and inflation is under control.

“The fundamentals are still very strong,” Mnuchin said in an interview with CNBC’s Geoff Cutmore from Bali, Indonesia, where the International Monetary Fund and World Bank were holding their annual meetings.

“The U.S. economy is strong. U.S. earnings are strong. I see this as just a natural correction after the markets were up a lot.”

There’s really “no new information in the market” on inflation, interest rates or trade, he added in the interview, which aired on “Squawk Box.”

Global finance leaders are trying to make sense of the U.S. stock market rout that took the Dow Jones Industrial Average down another 545 points on Thursday for a two-day plunge of nearly 1,400 points or more than 5.2 percent.

The S&P 500 and Nasdaq suffered similar percentage declines.

In premarket trading Friday, the indexes were pointing to solid gains at the open.

This week’s decline in stocks, the worst since late March, was fueled by concern the Federal Reserve might raise interest rates more than forecast.

President Donald Trump has repeatedly slammed Fed Chairman Jerome Powell, saying the central bank is increasing rates too quickly and that stronger economic growth won’t lead to problematic inflation.

The Fed has not been damaged by any comments by Trump, Mnuchin said. “The president has been clear, he likes low rates,” the Treasury secretary added, stressing the White House respects the independence of the central bank.

“[Trump] doesn’t feel that he has to attack at all,” Mnuchin said. “The president is concerned about the Fed raising interest rates too much and slowing down the economy. And those are, obviously, natural concerns.”

Mnuchin said Powell is doing a “good job” and “understands the regulatory environment” around the financial industry. “We took bank regulations too far in the other direction” since the 2008 financial crisis.

In 2018, the Fed increased rates in three 0.25 percentage point moves in March, June, and September to a range of 2 to 2.25 percent. Another hike is expected in December.

After their September meeting, central bankers were projected on a path to raise rates to 3.4 percent, before pausing.

The current knock on stocks and the spike in bond yields can be traced back to remarks last week from Powell about monetary policy being a “long way” from neutral.

The recent rise in bond yields is a reflection of a “normalization in the yield curve,” Mnuchin told CNBC on Friday. It makes sense for that normalization to be happening “at the same time as a correction in the stock market,” he said.

As far as global demand for American bonds, Mnuchin said he’s not worried about China selling its stockpile of U.S. Treasurys in retaliation over trade. He said there’s plenty of demand for U.S. government debt.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: matthew j belvedere
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Trump doubles down on Fed attacks, saying it’s ‘going loco’

Saying he’s “not happy” with the Fed, Trump told Fox News he could’t understand why it was continuing to tighten U.S. monetary policy. The Fed is going loco and there’s no reason for them to do it. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them. I think the Fed has gone crazy,” the president told reporters. The Fed has raised interest rates three times this year an


Saying he’s “not happy” with the Fed, Trump told Fox News he could’t understand why it was continuing to tighten U.S. monetary policy. The Fed is going loco and there’s no reason for them to do it. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them. I think the Fed has gone crazy,” the president told reporters. The Fed has raised interest rates three times this year an
Trump doubles down on Fed attacks, saying it’s ‘going loco’ Cached Page below :
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Trump doubles down on Fed attacks, saying it's 'going loco'

U.S. President Donald Trump continued his tirade against the Federal Reserve in a late Wednesday television appearance, laying into the central bank’s policy decisions and suggesting it is to blame for Wednesday’s sharp market decline.

Saying he’s “not happy” with the Fed, Trump told Fox News he could’t understand why it was continuing to tighten U.S. monetary policy. The president has previously expressed displeasure with the central bank, and that’s led some to fear the institution’s independence is at risk.

“The problem I have is with the Fed. The Fed is going wild. I mean, I don’t know what their problem is that they are raising interest rates and it’s ridiculous,” Trump said during a telephone interview with Fox host Shannon Bream. “The problem [causing the market drop] in my opinion is Treasury and the Fed. The Fed is going loco and there’s no reason for them to do it. I’m not happy about it.”

“Loco” means “crazy” in Spanish.

In recent months, U.S. officials have sought to emphasize that Trump would honor the Fed’s historic ability to make decisions independent of political interference. “We as an administration absolutely support the independence of the Fed,” Treasury Secretary Steven Mnuchin reportedly said in July.

As recently as Tuesday, Trump had signaled that he understood the importance of maintaining a firewall between the White House and the Fed. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them.

“I like to stay uninvolved with them. I have not spoken” to Powell all year, Trump said.

Trump’s attitude towards the Fed seemed to change Wednesday, however, as fears about rapidly rising rates helped cause the Dow Jones Industrial Average to drop more than 800 points by day’s end. The S&P 500 posted its worst day since February and clinched its first five-day losing streak since 2016.

Early on Wednesday afternoon, Trump knocked his central bank as he deplaned from Air Force One in Erie, Pennsylvania for a campaign rally. “I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” the president told reporters.

The Fed has raised interest rates three times this year and is largely expected to hike once more before year-end.

The most recent September rate hike drew criticism from Trump at the time, who said he was “worried about the fact that they seem to like raising interest rates, we can do other things with the money,” he said.

—CNBC’s Thomas Franck contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: christina wilkie, everett rosenfeld, nicholas kamm, afp, getty images
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The Fed hasn’t ‘gone crazy’ and Trump shouldn’t publicly diagnose: JP Morgan international chairman

Fed is doing the right thing by normalizing interest rates, says JP Morgan’s Jacob Frenkel 4 Hours Ago | 03:19The Federal Reserve’s policy of normalizing interest rates is appropriate because the U.S. economy has recovered on all fronts, according to the chairman of J.P. Morgan Chase International. Guidance was very clear and the Fed is doing the right thing.” The central bank has raised interest rates three times this year and is largely expected to hike once more before year-end. I think the F


Fed is doing the right thing by normalizing interest rates, says JP Morgan’s Jacob Frenkel 4 Hours Ago | 03:19The Federal Reserve’s policy of normalizing interest rates is appropriate because the U.S. economy has recovered on all fronts, according to the chairman of J.P. Morgan Chase International. Guidance was very clear and the Fed is doing the right thing.” The central bank has raised interest rates three times this year and is largely expected to hike once more before year-end. I think the F
The Fed hasn’t ‘gone crazy’ and Trump shouldn’t publicly diagnose: JP Morgan international chairman Cached Page below :
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The Fed hasn't 'gone crazy' and Trump shouldn't publicly diagnose: JP Morgan international chairman

Fed is doing the right thing by normalizing interest rates, says JP Morgan’s Jacob Frenkel 4 Hours Ago | 03:19

The Federal Reserve’s policy of normalizing interest rates is appropriate because the U.S. economy has recovered on all fronts, according to the chairman of J.P. Morgan Chase International.

In the U.S., inflation is at the Fed’s target, growth has recovered, labor markets are very good and unemployment is low, Jacob Frenkel told CNBC’s Nancy Hungerford at the IMF and World Bank annual meetings in Bali, Indonesia.

“That’s the time to normalize,” he said. “The Fed has announced it in advance, there are no surprises. Guidance was very clear and the Fed is doing the right thing.”

The central bank has raised interest rates three times this year and is largely expected to hike once more before year-end. Its most recent rate hike in September drew criticism from President Donald Trump at the time.

On Wednesday, the president doubled down on his criticism after walking off Air Force One in Erie, Pennsylvania for a rally. “I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy.”

Frenkel told CNBC that it is not up to the U.S. president to make such statements.

“There are two issues: Have they gone crazy? And is it up to the president to declare this medical situation? I think that the answer is ‘no’ to both,” he said.

“It’s not a good idea for the president to get into these details because at the end of the day, the Fed is a very professional entity. It has the data, it has made the analysis, it has the reputation and it is moving forward and serving the United States and the world economy,” Frenkel added.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, morgan, diagnose, shouldnt, trump, gone, fed, president, frenkel, publicly, rates, told, international, think, recovered, jp, world, interest, crazy, right


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Bond yields sink after consumer prices reading is lighter than expected, quelling inflation fears

That could be a worry for the Federal Reserve trying to keep a lid on inflation. Though consumer prices came in softer than expected, the print is unlikely to impact market expectations for a fourth rate hike from the Federal Reserve before the end of the year. Markets have been jittery as interest rates continue to climb. Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary pol


That could be a worry for the Federal Reserve trying to keep a lid on inflation. Though consumer prices came in softer than expected, the print is unlikely to impact market expectations for a fourth rate hike from the Federal Reserve before the end of the year. Markets have been jittery as interest rates continue to climb. Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary pol
Bond yields sink after consumer prices reading is lighter than expected, quelling inflation fears Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: thomas franck
Keywords: news, cnbc, companies, reserve, inflation, interest, continue, quelling, consumer, sink, treasury, yields, lighter, hike, expected, rates, prices, fears, market, federal, reading, neutral, fed


Bond yields sink after consumer prices reading is lighter than expected, quelling inflation fears

Recent employment reports have added to the now-widespread view that the labor market is near or beyond full employment and have started to show acceleration in wage growth. That could be a worry for the Federal Reserve trying to keep a lid on inflation.

Though consumer prices came in softer than expected, the print is unlikely to impact market expectations for a fourth rate hike from the Federal Reserve before the end of the year.

“CPI was a miss, but it doesn’t necessarily portend broader inflation trends,” said George Goncalves, head of fixed-income strategy at Nomura Securities International. “As the Fed is watching this information come in over the months, you get mixed reads, so this does not stop them. They’re making their way to their neutral rate.”

As of 9:26 a.m. ET, expectations for a hike at its December meeting held around 78 percent, according to the CME Group’s FedWatch tool.

Equity markets around the world slumped Thursday. Asia-Pacific stocks saw sharp declines by the region’s market close, while European shares tumbled in its morning trade. In the U.S., futures tanked following on from a sharp drop seen in the previous session where the Dow closed more than 800 points down.

Markets have been jittery as interest rates continue to climb. While Treasury yields inched lower on Wednesday, this comes after the benchmark 10-year Treasury yield clinched a fresh seven-year high and the 30-year bond yield reached a high not seen since 2014 during the course of Tuesday’s trade.

Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary policy and therefore the economy.

On the auction front, the U.S. Treasury is set to auction $15 billion in 29-year and 10 month bonds.

Following the central bank’s move to hike rates a third time this year, Fed Chair Jerome Powell said in an interview with PBS that U.S. monetary policy is “far from neutral,” suggesting front-end rates have further room to rise.

“Interest rates are still accommodative, but we’re gradually moving to a place where they will be neutral,” Powell said added. “We may go past neutral, but we’re a long way from neutral at this point, probably.”

In the latest surrounding the topic, President Donald Trump criticized the Federal Reserve on Wednesday, saying that the U.S. central bank was “making a mistake” for continuing to increase interest rates.

“The problem [causing the market drop] in my opinion is Treasury and the Fed. The Fed is going loco and there’s no reason for them to do it. I’m not happy about it,” Trump went on to say in a separate telephone interview with Fox host Shannon Bream.

“Loco” means “crazy” in Spanish.

“The loco part: that was a new one,” Nomura’s Goncalves added. “I don’t place much value in it; the Fed will continue to do what’s necessary to keep in the economy from overheating. They’re just trying to get the frothiness out.”

“If they don’t lean against it, it can be much worse later on.”

— CNBC’s Alexandra Gibbs contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: thomas franck
Keywords: news, cnbc, companies, reserve, inflation, interest, continue, quelling, consumer, sink, treasury, yields, lighter, hike, expected, rates, prices, fears, market, federal, reading, neutral, fed


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