Cramer to Fed’s Powell: Just admit you were wrong to hike rates so aggressively and move on

The central bank is expected to cut rates later this month for the second time this year. The Fed in July cut rates for the first time in more than 10 years. Cramer said Friday he’s not worried about a recession in the U.S. if the Fed cuts rates. President Donald Trump, who actually nominated Powell to lead the Fed, has been the chairman’s harshest critic, repeatedly tweeting that Powell should cut rates. Then later, the Fed chief pulled back the hike talk in favor patience in what’s become know


The central bank is expected to cut rates later this month for the second time this year. The Fed in July cut rates for the first time in more than 10 years. Cramer said Friday he’s not worried about a recession in the U.S. if the Fed cuts rates. President Donald Trump, who actually nominated Powell to lead the Fed, has been the chairman’s harshest critic, repeatedly tweeting that Powell should cut rates. Then later, the Fed chief pulled back the hike talk in favor patience in what’s become know
Cramer to Fed’s Powell: Just admit you were wrong to hike rates so aggressively and move on Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: matthew j belvedere
Keywords: news, cnbc, companies, rates, hike, feds, recession, wrong, weeks, cut, fed, yield, aggressively, market, admit, powell, cramer


Cramer to Fed's Powell: Just admit you were wrong to hike rates so aggressively and move on

CNBC’s Jim Cramer said Friday that Federal Reserve Chairman Jerome Powell should admit he was wrong to increase interest rates so aggressively last year, as the U.S.-China trade dispute was escalating, economic growth was starting to cool and the stock market was tanking.

Powell should acknowledge the mistake and change course, Cramer said.

“Why can’t the Fed chief say, ‘You know what? I was wrong.’ It turns out there’s a once-in-a-lifetime opportunity … to be able to make it so the Chinese have to play fair,” said Cramer. “Look, sometimes what you have to do is you say you’re wrong. I have said, for instance, I’m wrong on certain stocks.”

Cramer’s comments come less than two weeks before the Fed’s next meeting. The central bank is expected to cut rates later this month for the second time this year. Another quarter-point reduction in borrowing costs is the prevailing forecast among economists. The Fed in July cut rates for the first time in more than 10 years.

Cramer said Friday he’s not worried about a recession in the U.S. if the Fed cuts rates. He said rates are still too high after the 2018 moves. Recession worries emerged last month as the 10-year Treasury yield inverted, and briefly went lower than the 2-year yield for the first time since before the 2008 financial crisis and subsequent Great Recession. The inversion, seen as a front-running indicator of a recession, was on-and-off for weeks. Currently, it’s back to normal.

“The Fed chair should be bullied by the bond market. And the bond market is saying, ‘Whoa, are you wrong Jay.’ The big guy says, ‘I’ve been wrong. I got to make changes,'” said Cramer, host of “Mad Monday.”

President Donald Trump, who actually nominated Powell to lead the Fed, has been the chairman’s harshest critic, repeatedly tweeting that Powell should cut rates. On Friday, right before the government’s August jobs report was released, Trump slammed Powell again in a tweet that also mentioned Cramer.

Cramer has urged the president to lay off Powell. “I just don’t want Powell to be intransigent and wrong repeatedly in order to spite the president of the United States.”

Last year, Powell and his fellow monetary policymakers hiked rates four times. Ahead of the final 2018 increase, Powell had indicated a robust path of hikes into 2019. Those comments caused the stock market to tank. The Fed raised rates in December anyway. Then later, the Fed chief pulled back the hike talk in favor patience in what’s become known as the “Powell Pivot.”


Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: matthew j belvedere
Keywords: news, cnbc, companies, rates, hike, feds, recession, wrong, weeks, cut, fed, yield, aggressively, market, admit, powell, cramer


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Fed chief Powell says trade policy is weighing on investment decisions

Federal Reserve Chairman Jerome Powell said Friday that the trade war between China and the U.S. is weighing down companies’ investment decisions. “I think it is the case that uncertainty around trade policy is causing some companies to hold back now on investment,” Powell said in Switzerland. China and the U.S. have been engaged in a trade war that has rattled financial markets since last year. The uncertainty around trade has contributed to the Fed easing its stance on monetary policy, followi


Federal Reserve Chairman Jerome Powell said Friday that the trade war between China and the U.S. is weighing down companies’ investment decisions. “I think it is the case that uncertainty around trade policy is causing some companies to hold back now on investment,” Powell said in Switzerland. China and the U.S. have been engaged in a trade war that has rattled financial markets since last year. The uncertainty around trade has contributed to the Fed easing its stance on monetary policy, followi
Fed chief Powell says trade policy is weighing on investment decisions Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: fred imbert
Keywords: news, cnbc, companies, decisions, uncertainty, economy, trade, sector, weighing, fed, chief, war, investment, powell, policy, rates


Fed chief Powell says trade policy is weighing on investment decisions

Federal Reserve Chairman Jerome Powell said Friday that the trade war between China and the U.S. is weighing down companies’ investment decisions.

“I think it is the case that uncertainty around trade policy is causing some companies to hold back now on investment,” Powell said in Switzerland. “We’ve been hearing quite a bit about uncertainty. So for businesses, to particularly make longer-term investments in plants or equipment or software, they want some certainty that the demand will be there.”

China and the U.S. have been engaged in a trade war that has rattled financial markets since last year. In August, an escalation between the two countries led U.S. equities to their biggest one-month loss since May.

Tensions between China and the U.S. thawed slightly this week after Chinese trade officials said they would fly to Washington next month to continue negotiations. However, expectations of the two sides reaching a deal are low.

The uncertainty around trade has contributed to the Fed easing its stance on monetary policy, following other central banks overseas. The Fed cut rates by 25 basis points in July and is expected to trim rates again later this month.

Powell said lower rates are helping to keep the U.S. economy in a good place. The U.S. services sector expanded at a faster-than-expected rate in August, according to data from the Institute of Supply Management released Thursday. However, the U.S. manufacturing sector contracted for the first time since 2016 last month.

The chairman also said he does not expect the U.S. economy to fall into a recession.

—CNBC’s Tom Franck contributed to this report.

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Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: fred imbert
Keywords: news, cnbc, companies, decisions, uncertainty, economy, trade, sector, weighing, fed, chief, war, investment, powell, policy, rates


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The Fed’s efforts to stay out of politics just got a lot tougher this week

What results is that the Fed and its long-held independence crucial to its decision-making are facing a test perhaps like never before. “What I sense in the last few days is a growing desire among current and former Fed officials to fight back.” Reaction is swiftThe commentary drew widespread attention around Wall Street and on social media, most of it was negative. And Ed Yardeni, founder of Yardeni Research, marveled at just how far the public scrutiny of Fed actions has gone. Dudley, a regist


What results is that the Fed and its long-held independence crucial to its decision-making are facing a test perhaps like never before. “What I sense in the last few days is a growing desire among current and former Fed officials to fight back.” Reaction is swiftThe commentary drew widespread attention around Wall Street and on social media, most of it was negative. And Ed Yardeni, founder of Yardeni Research, marveled at just how far the public scrutiny of Fed actions has gone. Dudley, a regist
The Fed’s efforts to stay out of politics just got a lot tougher this week Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-28  Authors: jeff cox
Keywords: news, cnbc, companies, tougher, political, week, powell, yellen, fed, rate, central, public, commentary, feds, lot, trump, stay, politics, efforts, dudley


The Fed's efforts to stay out of politics just got a lot tougher this week

If there had been any doubt that the Federal Reserve is under unprecedented political pressure, this week’s incendiary commentary from former New York Fed President William Dudley cemented the notion. Where once the heat had been coming primarily from President Donald Trump and his demand for rate cuts, the latest round emanated from the other side — a prominent one-time central banker who urged defiance and even tried to nudge the central bank into a political fray that its members have been trying assiduously to avoid. What results is that the Fed and its long-held independence crucial to its decision-making are facing a test perhaps like never before.

“Everything they say and everything they do is going to be viewed through the prism of this titanic battle,” said Greg Valliere, chief global strategist at AGF and a veteran markets and politics analyst. “What I sense in the last few days is a growing desire among current and former Fed officials to fight back.” Dudley’s comments came amid a series of public statements that are out of character for normally staid central bankers who have a long history of not using public forums to tell each other what to do. For instance, former Fed Chair Janet Yellen, Powell’s immediate predecessor, recently said the Fed should consider a rate cut, just days before Powell and Co. did just that. Earlier this month, Yellen and former chairmen, Alan Greenspan Ben Bernanke and Paul Volcker penned a remarkable op-ed for the Wall Street Journal stressing the need for an independent Fed free of political pressure. While the missive did not mention Trump and his criticisms specifically, the intention was clear. Of course, it’s also unusual for presidents to criticize the Fed as forcefully as Trump has, though his frequent tweets hammering at Fed Chairman Jerome Powell and his colleagues have quickly become routine. But Dudley’s commentary for Bloomberg Opinion seemed to put the dialogue on a different plane. He is someone who held one of the Fed’s most influential positions and not only stated a position on rate cuts — he’s against — but also encouraged holding the line as a way to spite Trump and perhaps torpedo his re-election chances next year. “After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020,” he wrote.

Reaction is swift

The commentary drew widespread attention around Wall Street and on social media, most of it was negative. Hedge fund titan Kyle Bass called Dudley “rogue.” Bear Traps Report founder Lawrence McDonald wondered if Dudley was speaking for more than himself and perhaps was representing the sentiment of Powell and others at the Fed. And Ed Yardeni, founder of Yardeni Research, marveled at just how far the public scrutiny of Fed actions has gone. “I am almost speechless,” he wrote in his morning note to clients Wednesday. “Dudley may be calling on the Fed to join the resistance and to fight fire with fire, but that would be playing with fire for the Fed. Welcome to the New Abnormal, where everyone loses their minds! Trump has the amazing ability to make sane people go insane.” The essay also elicited a rare public response from the Fed to criticism, with a spokesman saying that “political considerations play absolutely no role” in making monetary policy. Dudley, a registered Democrat and former Goldman Sachs economist, did not respond to a request for further comment.

Powell ‘just has to blow it off’


Company: cnbc, Activity: cnbc, Date: 2019-08-28  Authors: jeff cox
Keywords: news, cnbc, companies, tougher, political, week, powell, yellen, fed, rate, central, public, commentary, feds, lot, trump, stay, politics, efforts, dudley


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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
Keywords: news, cnbc, companies, powells, fed, rates, powell, tax, trump, rate, reportedly, governor, discussed, report, presidents, house, white, curb, power, rotation


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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Gold soars 2% after Powell speech, Trump tweets

Spot gold rose 2% at $1,528.53 an ounce, shaking off slight headwinds ahead of the Fed Chair’s speech. Prices earlier rose to $1,528.50, the highest since Aug. 13, when it had scaled a six-year peak of $1,534.31. “The fact that he (Powell) said that they (the Fed) will act appropriately to sustain expansion is pretty bullish for gold. “The move this morning is just more people buying gold simply with the expectations that interest rates will be lower by year-end.” Powell’s speech prompted a back


Spot gold rose 2% at $1,528.53 an ounce, shaking off slight headwinds ahead of the Fed Chair’s speech. Prices earlier rose to $1,528.50, the highest since Aug. 13, when it had scaled a six-year peak of $1,534.31. “The fact that he (Powell) said that they (the Fed) will act appropriately to sustain expansion is pretty bullish for gold. “The move this morning is just more people buying gold simply with the expectations that interest rates will be lower by year-end.” Powell’s speech prompted a back
Gold soars 2% after Powell speech, Trump tweets Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23
Keywords: news, cnbc, companies, powell, speech, trump, trade, ounce, gold, tweets, china, tools, fed, straight, rose, senior, soars


Gold soars 2% after Powell speech, Trump tweets

Gold surged 2% on Friday as investors interpreted U.S. Federal Reserve Chair Jerome Powell’s speech as leaning towards a dovish monetary policy stance and President Donald Trump’s latest comments exacerbated trade tensions with China.

Spot gold rose 2% at $1,528.53 an ounce, shaking off slight headwinds ahead of the Fed Chair’s speech.

Prices earlier rose to $1,528.50, the highest since Aug. 13, when it had scaled a six-year peak of $1,534.31.

U.S. gold futures were up 2% to $1,538.6.

“The fact that he (Powell) said that they (the Fed) will act appropriately to sustain expansion is pretty bullish for gold. The two primary tools they have are quantitative easing (QE) or lower rates – both those tools will cause gold to go higher,” said Bob Haberkorn, senior market strategist at RJO Futures.

“The move this morning is just more people buying gold simply with the expectations that interest rates will be lower by year-end.”

Powell said the U.S. economy is in a “favorable place,” but gave few clues about interest rate cuts at its next meeting. However, he listed a series of economic and geopolitical risks the Fed is monitoring, noting these were linked to the trade spat.

“We shouldn’t be surprised if we see the Fed deliver a full percentage point in rate cuts over the next 12 months and a new QE program as we may only need a couple of the following macro events to blow up: trade uncertainties, weakness in China and Germany, Brexit, Hong Kong, and the dissolution of the Italian government,” Edward Moya, a senior market analyst at OANDA, said in a note.

Powell’s speech prompted a backlash from Trump on Twitter, asking whether the Fed Chair was a greater “enemy” than China’s leader Xi Jinping.

Trump also ratcheted up the rhetoric on China, ordering U.S. companies to look at ways to close operations in the country, which sent equities tumbling and drove further inflows into safe-haven gold.

This came after China unveiled retaliatory tariffs against about $75 billion worth of U.S. goods.

“This means there is no resolution, the escalation continues. Investors are selling the risk and buying gold,” said SP Angel analyst Sergey Raevskiy.

Gold has risen nearly 8% so far this month and about 19% this year, and was set for a fourth straight week of gains.

Elsewhere, silver gained 2.4% to $17.41 an ounce, while platinum was unchanged at $857.28.

Palladium fell 1.8% to $1,460.83 an ounce, but the auto catalyst metal remained on track for a third straight weekly gain of about 0.8%.


Company: cnbc, Activity: cnbc, Date: 2019-08-23
Keywords: news, cnbc, companies, powell, speech, trump, trade, ounce, gold, tweets, china, tools, fed, straight, rose, senior, soars


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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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Trump says he’s ordering American companies to immediately start looking for an alternative to China

President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).” And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. good


President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).” And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. good
Trump says he’s ordering American companies to immediately start looking for an alternative to China Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: kevin breuninger
Keywords: news, cnbc, companies, postal, respond, american, companies, powell, trump, orders, immediately, tweets, ups, start, china, looking, president, ordering, hes, alternative


Trump says he's ordering American companies to immediately start looking for an alternative to China

President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).”

And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. goods.

The White House did not immediately respond when asked if the announcement, delivered in a four-part Twitter thread Friday morning, constituted an official order from the president.

It was not immediately clear how, or under what authority, the president could implement these declared orders, or whether he had already done so.

Stocks sank to session lows shortly after Trump’s tweets. The Dow Jones Industrial Average fell more than 435 points, or 1.6%, while the S&P 500 slid 1.7% and the Nasdaq Composite dove 2%.

In a statement, UPS said that it “follows all applicable laws and administrative orders of the governments in the countries where we do business. We work closely with regulatory authorities to monitor for prohibited substances.”

FedEx also responded: “FedEx already has extensive security measures in place to prevent the use of our networks for illegal purposes. We follow the laws and regulations everywhere we do business and have a long history of close cooperation with authorities.”

Amazon and the Postal Service were not immediately available for comment.

Trump’s tweets followed another missive against Federal Reserve Chairman Jay Powell, who had just pledged to “act as appropriate” to sustain the U.S. economy amid the “deteriorating” global economic outlook.

In an apparent response, Trump tweeted: “Who is our bigger enemy,” Powell or Chinese President Xi Jinping?


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: kevin breuninger
Keywords: news, cnbc, companies, postal, respond, american, companies, powell, trump, orders, immediately, tweets, ups, start, china, looking, president, ordering, hes, alternative


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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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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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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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