‘Trumponomics’ writer Art Laffer: I am a ‘huge fan’ of Fed chief Powell’s handling of interest rates

Federal Reserve Chairman Jerome Powell, often criticized for increasing interest rates by President Donald Trump, has been effective at the helm of the nation’s central bank, conservative economist Art Laffer told CNBC on Wednesday. “I’m a huge fan of Powell’s,” said Laffer, formerly an economic advisor to presidents Trump and Ronald Reagan. The Fed later this month is expected to raise rates for the fourth time this year. Powell last Wednesday said that rates are “just below” neutral, perhaps i


Federal Reserve Chairman Jerome Powell, often criticized for increasing interest rates by President Donald Trump, has been effective at the helm of the nation’s central bank, conservative economist Art Laffer told CNBC on Wednesday. “I’m a huge fan of Powell’s,” said Laffer, formerly an economic advisor to presidents Trump and Ronald Reagan. The Fed later this month is expected to raise rates for the fourth time this year. Powell last Wednesday said that rates are “just below” neutral, perhaps i
‘Trumponomics’ writer Art Laffer: I am a ‘huge fan’ of Fed chief Powell’s handling of interest rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: matthew j belvedere
Keywords: news, cnbc, companies, fed, president, laffer, trumponomics, writer, powells, handling, fan, huge, told, powell, hes, rates, tax, trump, trade, interest


'Trumponomics' writer Art Laffer: I am a 'huge fan' of Fed chief Powell's handling of interest rates

Federal Reserve Chairman Jerome Powell, often criticized for increasing interest rates by President Donald Trump, has been effective at the helm of the nation’s central bank, conservative economist Art Laffer told CNBC on Wednesday.

“I’m a huge fan of Powell’s,” said Laffer, formerly an economic advisor to presidents Trump and Ronald Reagan. “I think he’s done a great job in normalizing interest rates.”

Trump, who actually appointed Powell as Fed chief, has repeatedly railed against hiking rates too aggressively, blaming Powell most recently in a Washington Post interview last week for stock market declines and GM’s planned plant closures and layoffs.

The Fed later this month is expected to raise rates for the fourth time this year. But the path next year is up for debate. After its September rate hike, the Fed projected three rate increases into 2019. The current target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent.

Trump’s Post interview on Nov. 27 came one day before Powell appeared to walk back his comments from Oct. 3 that rates were a “long way” from so-called neutral, which for October led to the worst monthly stock market losses in about seven years.

Powell last Wednesday said that rates are “just below” neutral, perhaps indicating that concerns about much higher rates may no longer be warranted. The market then rallied three out of the next four sessions.

On Monday, which saw stocks on a two-session winning streak, Treasury Secretary Steven Mnuchin told CNBC that the president was pleased with Powell’s latest speech.

However, on Tuesday, the Dow Jones Industrial Average tanked nearly 800 points, or 3 percent. It was the biggest decline since October’s rout as investors worried about a bond-market phenomenon that’s historically signaled a possible economic slowdown. Lingering worries around U.S.-China trade were also to blame. The Dow and S&P 500 were able to stay out of a correction. But Tuesday’s decline sent the Nasdaq back into correction territory.

Co-author of the book, “Trumponomics: Inside the America First Plan to Revive Our Economy,” Laffer said he’s “very optimistic” about the economy, describing the Trump tax cuts as “kicking in beautifully.” The Laffer Curve, named after the economist, is a theory that basically argues that increasing tax rates beyond a certain point becomes counter-productive for raising tax revenue — and that when taxes are too high, tax revenues actually sink.

Laffer said he hopes the administration tackles runway government spending as its next agenda item. “If it is, I don’t see any reason for a recession. I think we’re going to continue on a long prosperous path with the sky’s the limit.”

On CNBC Tuesday, Commerce Secretary Wilbur Ross said the U.S. economy is in good shape. He blamed the media for stoking worries about a slowdown.

However, Laffer said he’s concerned about the uncertainty surrounding U.S. trade relations with China. “Watching all this play out in real time is terrifying to me.”

Over the weekend, Trump and Chinese President Xi Jinping reached a truce in their bilateral trade war, agreeing to a 90-day period of no new tariffs on each other’s goods as talks continue.

Mnuchin told CNBC Monday he’s hopeful the Trump-Xi trade cease-fire can be turned into a “real agreement” to address what the president feels are unfair trade practices by the Chinese. Ross said on CNBC Tuesday that Trump got “very good” assurances from Xi on trade.

(The New York Stock Exchange and the Nasdaq were closed Wednesday for the funeral of George H.W. Bush, the nation’s 41st president. They reopen Thursday on a normal schedule. U.S. stocks futures, which closed at 9:30 a.m. ET, reopen Wednesday evening at 6 p.m. ET.)


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: matthew j belvedere
Keywords: news, cnbc, companies, fed, president, laffer, trumponomics, writer, powells, handling, fan, huge, told, powell, hes, rates, tax, trump, trade, interest


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Art Cashin: I’m ‘quite doubtful’ of the number of rate hikes the Fed projected for 2019

Closely followed trader Art Cashin said Monday that he’s “quite doubtful” of the number of interest rate hikes the Federal Reserve has projected for 2019. He argued the Fed will want to avoid appearing “bullied” by President Donald Trump, who has been critical of the central bank’s policies under Fed Chairman Jerome Powell. The target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most


Closely followed trader Art Cashin said Monday that he’s “quite doubtful” of the number of interest rate hikes the Federal Reserve has projected for 2019. He argued the Fed will want to avoid appearing “bullied” by President Donald Trump, who has been critical of the central bank’s policies under Fed Chairman Jerome Powell. The target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most
Art Cashin: I’m ‘quite doubtful’ of the number of rate hikes the Fed projected for 2019 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: berkeley lovelace jr, david a grogan
Keywords: news, cnbc, companies, number, banks, doubtful, week, rate, cashin, trump, hikes, president, fed, powell, quite, im, street, projected, rates, art


Art Cashin: I'm 'quite doubtful' of the number of rate hikes the Fed projected for 2019

Closely followed trader Art Cashin said Monday that he’s “quite doubtful” of the number of interest rate hikes the Federal Reserve has projected for 2019.

A rate hike in December is still “locked in,” the UBS director of floor operations at the New York Stock Exchange predicted in a “Squawk on the Street” interview. He argued the Fed will want to avoid appearing “bullied” by President Donald Trump, who has been critical of the central bank’s policies under Fed Chairman Jerome Powell.

The target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most recent hike, in September, the Fed projected three rate increases for next year. The Fed has already raised rates three times this year, and Wall Street expects another in December.

Stocks surged last week after Powell appeared to walk back comments on Oct. 3 that rates were a long way from so-called neutral. In a speech Wednesday, Powell said rates are “just below” neutral, perhaps indicting that concerns about a more aggressive path higher for rates may no longer be warranted. The S&P 500 had its best week in seven years.

Cashin also said market gains could be capped Monday due to “lack of clarity” on trade following President Donald Trump and Chinese Xi Jinping’s agreement over the weekend to halt new tariffs for a 90-day period while talks continue.


Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: berkeley lovelace jr, david a grogan
Keywords: news, cnbc, companies, number, banks, doubtful, week, rate, cashin, trump, hikes, president, fed, powell, quite, im, street, projected, rates, art


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

US factory activity jumps in November while construction spending falls for third month

A subindex of prices paid fell to 60.7 from 71.6 in October, coming in well below estimates for a reading of 70. Markit’s U.S. manufacturing PMI fell to 55.3 from 55.7 in October, the lowest since August and down slightly from Markit’s preliminary reading for November. Policymakers flagged issues including signs of slowing in interest-rate sensitive sectors, along with global risks and other factors. Data on Thursday showed U.S. consumer spending had risen by the most in seven months in October,


A subindex of prices paid fell to 60.7 from 71.6 in October, coming in well below estimates for a reading of 70. Markit’s U.S. manufacturing PMI fell to 55.3 from 55.7 in October, the lowest since August and down slightly from Markit’s preliminary reading for November. Policymakers flagged issues including signs of slowing in interest-rate sensitive sectors, along with global risks and other factors. Data on Thursday showed U.S. consumer spending had risen by the most in seven months in October,
US factory activity jumps in November while construction spending falls for third month Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: waring abbott, getty images
Keywords: news, cnbc, companies, reading, jumps, falls, rate, fell, markits, construction, spending, month, activity, signs, showed, powell, fed, estimates, factory, orders


US factory activity jumps in November while construction spending falls for third month

A subindex of prices paid fell to 60.7 from 71.6 in October, coming in well below estimates for a reading of 70. Gauges of new orders and employment rose.

Separate figures on Monday from financial data firm Markit showed the pace of growth in the factory sector slipped to a three-month low, though a gauge of new orders ticked higher. Markit’s U.S. manufacturing PMI fell to 55.3 from 55.7 in October, the lowest since August and down slightly from Markit’s preliminary reading for November.

Financial markets were little moved by the data as investors focused on signs of progress in trade negotiations between the United States and China.

Minutes from the Federal Reserve’s November meeting released on Thursday showed nearly all Fed officials had agreed another rate hike was warranted soon but also opened debate on whether to pause further increases. Policymakers flagged issues including signs of slowing in interest-rate sensitive sectors, along with global risks and other factors.

Data on Thursday showed U.S. consumer spending had risen by the most in seven months in October, but that underlying price pressures slowed.

Testimony from Fed Chair Jerome Powell to Congress’s Joint Economic Committee about the economic outlook scheduled for Wednesday has been postponed due to a national day of mourning following the death of former President George H.W. Bush. No new date for the testimony has been announced. Powell last week had said the central bank’s policy rate was now “just below” estimates of a level that neither brakes nor boosts a healthy U.S. economy.


Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: waring abbott, getty images
Keywords: news, cnbc, companies, reading, jumps, falls, rate, fell, markits, construction, spending, month, activity, signs, showed, powell, fed, estimates, factory, orders


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Mnuchin says Trump ‘liked’ Fed chief Powell’s market-boosting speech

In a speech Wednesday, Powell appeared to walk back comments on Oct. 3 that rates were a long way from so-called neutral. “I do think the president was pleased with the speech last week,” Mnuchin said Monday in a “Squawk Box” interview. The Wall Street Journal reported last month that Trump had expressed dissatisfaction with Mnuchin for recommending the appointment of Powell. Mnuchin told CNBC he’s hopeful for a “real agreement” with China over trade. He said trade policy remains an important pi


In a speech Wednesday, Powell appeared to walk back comments on Oct. 3 that rates were a long way from so-called neutral. “I do think the president was pleased with the speech last week,” Mnuchin said Monday in a “Squawk Box” interview. The Wall Street Journal reported last month that Trump had expressed dissatisfaction with Mnuchin for recommending the appointment of Powell. Mnuchin told CNBC he’s hopeful for a “real agreement” with China over trade. He said trade policy remains an important pi
Mnuchin says Trump ‘liked’ Fed chief Powell’s market-boosting speech Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, trade, policy, liked, marketboosting, president, chief, rate, speech, fed, powell, rates, mnuchin, powells, trump


Mnuchin says Trump 'liked' Fed chief Powell's market-boosting speech

Mnuchin on trade policy as an economic driver and the job Fed’s Powell is doing 5 Hours Ago | 03:36

Treasury Secretary Steven Mnuchin told CNBC on Monday that President Donald Trump was pleased with Federal Reserve Chairman Jerome Powell’s speech that eased fears of a more aggressive policy on interest rate hikes.

The central bank has already raised rates three times this year, and another hike is expected in December. The target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most recent hike, in September, the Fed projected three rate increases for next year.

In a speech Wednesday, Powell appeared to walk back comments on Oct. 3 that rates were a long way from so-called neutral. He said rates are “just below” neutral, perhaps indicting that concerns about a more aggressive path higher for rates may no longer be warranted. That sparked a strong rally on Wall Street, with the S&P 500 having its best week in seven years.

“I do think the president was pleased with the speech last week,” Mnuchin said Monday in a “Squawk Box” interview. “I will continue to give the president my best advice.”

Trump had been critical of the Fed’s policies under Powell, blaming the Fed chief for the stock market’s recent declines and even General Motors’ plan to cut production at several U.S. plants. The Wall Street Journal reported last month that Trump had expressed dissatisfaction with Mnuchin for recommending the appointment of Powell.

Mnuchin on Monday responded by saying there are issues the president and he don’t agree on but “I tell him what I think.” Trump is “the president. He was elected. These are his decisions,” he added.

The Treasury secretary joined CNBC after Trump and Chinese President Xi Jinping reached a truce over the weekend in their bilateral trade war, agreeing to a 90-day period of no new tariffs as talks continue. Stocks rose more than 1 percent Monday on the news. Mnuchin told CNBC he’s hopeful for a “real agreement” with China over trade. He said trade policy remains an important pillar of the Trump administration’s goal of delivering economic growth of 3 percent or better.


Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, trade, policy, liked, marketboosting, president, chief, rate, speech, fed, powell, rates, mnuchin, powells, trump


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

The Fed is being ‘judiciously cautious,’ says Daiwa strategist

The Fed is being ‘judiciously cautious,’ says Daiwa strategist11 Hours AgoFederal Reserve Chairman Jerome Powell said he considers the fed funds rate to be near a neutral level. Paul Kitney of Daiwa Capital Markets says this is because the central bank’s own internal projection of expected inflation has dropped.


The Fed is being ‘judiciously cautious,’ says Daiwa strategist11 Hours AgoFederal Reserve Chairman Jerome Powell said he considers the fed funds rate to be near a neutral level. Paul Kitney of Daiwa Capital Markets says this is because the central bank’s own internal projection of expected inflation has dropped.
The Fed is being ‘judiciously cautious,’ says Daiwa strategist Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-02
Keywords: news, cnbc, companies, strategist11, daiwa, paul, fed, cautious, strategist, powell, rate, reserve, judiciously, neutral, projection, near


The Fed is being 'judiciously cautious,' says Daiwa strategist

The Fed is being ‘judiciously cautious,’ says Daiwa strategist

11 Hours Ago

Federal Reserve Chairman Jerome Powell said he considers the fed funds rate to be near a neutral level. Paul Kitney of Daiwa Capital Markets says this is because the central bank’s own internal projection of expected inflation has dropped.


Company: cnbc, Activity: cnbc, Date: 2018-12-02
Keywords: news, cnbc, companies, strategist11, daiwa, paul, fed, cautious, strategist, powell, rate, reserve, judiciously, neutral, projection, near


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Powell shouldn’t follow Greenspan’s example at Fed, veteran economist says

Federal Reserve Chairman Jay Powell would be wrong to copy the playbook of his predecessor Alan Greenspan, according to a Yale lecturer and former Morgan Stanley executive. In the 1990s, then Fed-chair Greenspan took a watch-and-wait policy, keeping rates low to see if inflation would materialize in the face of a growing economy. At the Federal Reserve’s annual retreat to Jackson Hole, Wyoming, in August, Powell praised Greenspan’s do-nothing stance as sound risk management. But Stephen Roach, a


Federal Reserve Chairman Jay Powell would be wrong to copy the playbook of his predecessor Alan Greenspan, according to a Yale lecturer and former Morgan Stanley executive. In the 1990s, then Fed-chair Greenspan took a watch-and-wait policy, keeping rates low to see if inflation would materialize in the face of a growing economy. At the Federal Reserve’s annual retreat to Jackson Hole, Wyoming, in August, Powell praised Greenspan’s do-nothing stance as sound risk management. But Stephen Roach, a
Powell shouldn’t follow Greenspan’s example at Fed, veteran economist says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: david reid, adam jeffery, john duricka
Keywords: news, cnbc, companies, economist, fed, greenspan, veteran, bubbles, follow, powell, shouldnt, stanley, greenspans, example, yale, morgan, chairman, jay, federal


Powell shouldn't follow Greenspan's example at Fed, veteran economist says

Federal Reserve Chairman Jay Powell would be wrong to copy the playbook of his predecessor Alan Greenspan, according to a Yale lecturer and former Morgan Stanley executive.

Powell has been criticized by some market players, as well as by Donald Trump, who believe the central banker risks triggering a U.S. economic contraction by enforcing multiple rate rises next year.

In the 1990s, then Fed-chair Greenspan took a watch-and-wait policy, keeping rates low to see if inflation would materialize in the face of a growing economy. At the Federal Reserve’s annual retreat to Jackson Hole, Wyoming, in August, Powell praised Greenspan’s do-nothing stance as sound risk management.

But Stephen Roach, a senior fellow at Yale University and former chairman of Morgan Stanley Asia, told CNBC’s “Squawk Box Europe” on Friday that Powell would do well to learn from Greenspan’s mistakes.

“The Greenspan ‘put’ supported markets a lot, but he also gave us lots of bubbles and crises that were spawned by those bubbles which I think history does not treat kindly at all,” he said.

The veteran economist added that it was not “such a bad thing that Jay Powell is not a clone of Alan Greenspan.”


Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: david reid, adam jeffery, john duricka
Keywords: news, cnbc, companies, economist, fed, greenspan, veteran, bubbles, follow, powell, shouldnt, stanley, greenspans, example, yale, morgan, chairman, jay, federal


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Siegel: Trump cannot blame Powell for bad market if Xi talks go awry

President Donald Trump can’t blame Jerome Powell for a bad stock market now that the Federal Reserve chairman has appeared to walk back his comments on interest rate hikes, Wharton School finance professor Jeremy Siegel told CNBC on Friday. “[Trump] doesn’t want to be the cause of a bear market in 2019.” Wall Street doesn’t expect the U.S. to reach a breakthrough agreement with China and neither does Siegel. Powell’s Oct. 3 comments that rates were a long way from neutral slammed the market last


President Donald Trump can’t blame Jerome Powell for a bad stock market now that the Federal Reserve chairman has appeared to walk back his comments on interest rate hikes, Wharton School finance professor Jeremy Siegel told CNBC on Friday. “[Trump] doesn’t want to be the cause of a bear market in 2019.” Wall Street doesn’t expect the U.S. to reach a breakthrough agreement with China and neither does Siegel. Powell’s Oct. 3 comments that rates were a long way from neutral slammed the market last
Siegel: Trump cannot blame Powell for bad market if Xi talks go awry Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, president, siegel, trade, talks, bad, trump, tariffs, powell, china, market, blame, xi, rates, awry, worth


Siegel: Trump cannot blame Powell for bad market if Xi talks go awry

President Donald Trump can’t blame Jerome Powell for a bad stock market now that the Federal Reserve chairman has appeared to walk back his comments on interest rate hikes, Wharton School finance professor Jeremy Siegel told CNBC on Friday.

The pressure is on Trump “more than ever” to reach a trade agreement with China as he meets Saturday with Chinese President Xi Jinping at the G-20 summit in Buenos Aires, Argentina, Siegel said. “[Trump] doesn’t want to be the cause of a bear market in 2019.”

Wall Street doesn’t expect the U.S. to reach a breakthrough agreement with China and neither does Siegel. But analysts hope the Trump-Xi talks prove positive in preventing the U.S.-China trade war from escalating further.

In the latest trade moves, the United States levied 10 percent duties on $200 billion worth of goods from China, prompting Beijing to put tariffs on $60 billion worth of U.S. goods. Trump is expected to hike those U.S. tariffs from 10 percent to 25 percent on Jan. 1. The president has also threatened to put tariffs on the rest of Chinese imports.

Stocks were mixed Friday ahead of Saturday’s Trump-Xi meeting. However, the Dow and S&P 500 were on pace to post weekly gains after Powell said Wednesday that rates are “just below” neutral, perhaps indicting that concerns about a more aggressive path higher for rates may no longer be warranted. Powell’s Oct. 3 comments that rates were a long way from neutral slammed the market last month with rampant rate fears.

Trump had been critical of the Fed’s policies on rates in recent months, and blamed the central bank under Powell for the stock market’s declines and General Motors’ plan to cut product at several U.S. plants.

The market ultimately expects a resolution on trade, Siegel said on CNBC Friday, adding that a deal with China is already about 80 to 90 percent baked in to the market. “Any adverse developments … would be a great disappointment,” he said.


Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, president, siegel, trade, talks, bad, trump, tariffs, powell, china, market, blame, xi, rates, awry, worth


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Fed’s Kashkari says rates should not go up when job creation is strong and inflation is tame

Minneapolis Federal Reserve President Neel Kashkari told CNBC on Friday that central bankers should not be raising rates while job creation continues to be strong and inflation remains tame. Furthering his case for holding rates steady, Kashkari said “there’s still slack” in the labor market. Unless wages really go up or inflation spikes, a wait-and-see posture at the Fed makes sense, he suggested. Trump told The Washington Post Tuesday that he blames Fed policies for the stock market declines a


Minneapolis Federal Reserve President Neel Kashkari told CNBC on Friday that central bankers should not be raising rates while job creation continues to be strong and inflation remains tame. Furthering his case for holding rates steady, Kashkari said “there’s still slack” in the labor market. Unless wages really go up or inflation spikes, a wait-and-see posture at the Fed makes sense, he suggested. Trump told The Washington Post Tuesday that he blames Fed policies for the stock market declines a
Fed’s Kashkari says rates should not go up when job creation is strong and inflation is tame Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: matthew j belvedere
Keywords: news, cnbc, companies, job, powell, tame, central, rates, strong, inflation, economy, stock, fed, creation, market, feds, president, kashkari, rate


Fed's Kashkari says rates should not go up when job creation is strong and inflation is tame

Minneapolis Federal Reserve President Neel Kashkari told CNBC on Friday that central bankers should not be raising rates while job creation continues to be strong and inflation remains tame.

“For the three years since I’ve been at the Fed, we have been surprised by the labor market. We keep thinking we’re at maximum employment. And then wage growth is tepid. And the headline unemployment rate drops further. Inflation has been well under control,” he said. “If the U.S. economy is creating 200,000 a jobs a month, month-after-month, we’re not at maximum employment.”

With neither pillar of the Fed’s dual mandate from Congress — to promote maximum employment and keep inflation from getting too high — throwing off warnings signs, the Fed should pause on rate increases at this point, Kashkari said. He added that hiking too forcefully before necessary could risk causing a recession in the U.S. economy. He believes rates are “close to neutral.”

Furthering his case for holding rates steady, Kashkari said “there’s still slack” in the labor market. Unless wages really go up or inflation spikes, a wait-and-see posture at the Fed makes sense, he suggested.

Kashkari is not a voting member on the central bank’s policymaking committee this year or next year. But as a voter in 2017, he was against all three rate hikes last year, saying at the time there was no need to move because inflation wasn’t a problem.

Over the long term, he thinks the economy won’t grow much more than 2 percent. While that’s been seen as a base case for some time, he said Friday that 2 percent growth at the near zero percent rates of the past is far more difficult to maintain with rates so much higher nowadays.

Kashkari appeared on “Squawk Box” as debate raged in the investment community on whether Fed Chairman Jerome Powell’s speech this week really departed materially from the comments he made last month that led to widespread concern about the path higher next year for interest rates and an October market rout.

In Wednesday’s address to the Economic Club of New York, Powell said rates are “just below” neutral, which appeared to be a sharp turn from his Oct. 3 remarks that rates were long way from neutral, a level neither stimulative nor restrictive to the economy.

The stock market ripped higher Wednesday on the thought that Powell softened his stance and thus signaled that the Fed may not be as aggressive as feared on rates. Stocks pulled back slightly Thursday. While U.S. stock futures were lower Friday, on the last day of the month, the market stands a chance at holding on to the small gains made in volatile trading in November.

Despite the initial optimism in the market, some prominent Wall Street economists said they did not see a major difference in what Powell said this week compared to last month.

The central bank has already increased rates three times this year, with one more expected in December. The target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most recent hike, in September, the Fed projected three rate increases for next year.

In recent months, Powell has been under constant pressure from President Donald Trump to halt rate hikes. Trump told The Washington Post Tuesday that he blames Fed policies for the stock market declines and General Motors’ plan to cut production at several U.S. plants.

Kashkari on CNBC Friday defended the Fed’s independence.

“Inflation expectations are so anchored because of the political independence of the Fed, because the Fed has done a good job over the last 20 or 30 years. That to me is something that is enabling this economy to continue strengthen, enabling the job market to continue to strengthen without inflation taking off. And so, let’s let it continue.”

Kashkari, who unsuccessfully ran as a Republican for governor of California in 2014, served as the administrator of TARP, the Troubled Asset Relief Program, at the Treasury Department during the financial crisis. After leaving Washington, he joined Pimco as a managing director and head of global equities. Before his time at Treasury, he was a vice president at Goldman Sachs.


Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: matthew j belvedere
Keywords: news, cnbc, companies, job, powell, tame, central, rates, strong, inflation, economy, stock, fed, creation, market, feds, president, kashkari, rate


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Fed Chair Jerome Powell survives a critical week, faces bigger tests

Minutes from the November Federal Open Market Committee meeting further indicated that officials will stress the importance of data. “In fact, he walked back what he said on Oct. 3,” said Quincy Krosby, chief market strategist at Prudential Financial. “He speaks very clearly, so it is not an issue of the market misunderstanding what he said. Less definitive is what Powell meant when he said interest rates “remain just below the broad range of estimates of the level that would be neutral for the


Minutes from the November Federal Open Market Committee meeting further indicated that officials will stress the importance of data. “In fact, he walked back what he said on Oct. 3,” said Quincy Krosby, chief market strategist at Prudential Financial. “He speaks very clearly, so it is not an issue of the market misunderstanding what he said. Less definitive is what Powell meant when he said interest rates “remain just below the broad range of estimates of the level that would be neutral for the
Fed Chair Jerome Powell survives a critical week, faces bigger tests Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: jeff cox, andrew harrer, bloomberg, getty images, adam jeffery
Keywords: news, cnbc, companies, market, critical, bigger, faces, survives, neutral, meant, powell, indicated, fed, week, chair, tests, range, forecast, estimates, jerome, economists


Fed Chair Jerome Powell survives a critical week, faces bigger tests

But the perception that Powell does not hold reflexively hawkish views, and is willing to adapt as the data roll in, seemed enough to convince investors that — at least for now — they don’t have to fear the Fed.

Minutes from the November Federal Open Market Committee meeting further indicated that officials will stress the importance of data.

“In fact, he walked back what he said on Oct. 3,” said Quincy Krosby, chief market strategist at Prudential Financial. “He speaks very clearly, so it is not an issue of the market misunderstanding what he said. He said that.”

Less definitive is what Powell meant when he said interest rates “remain just below the broad range of estimates of the level that would be neutral for the economy.”

The market immediately took “just below” to mean that the current benchmark Fed rate — targeted at 2 percent to 2.25 percent — is near neutral, and the central bank may want to halt or slow the pace of increases. A closer reading, though, indicated that the chairman only meant it was below the lower end of estimates from Fed policymakers, who put neutral in a range of 2.5 to 3 percent.

Distinguishing the remarks could be key for the market as the calendar turns to 2019.

Goldman Sachs economists said the market “misleadingly shortened Powell’s formulation” on neutral. Still, the bank conceded that its 2019 forecast might be in some jeopardy.

“Looking beyond the next few weeks, recent events have increased the downside risks to our baseline forecast of quarterly hikes through end-2019,” wrote economists Daan Struyven and Jan Hatzius.


Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: jeff cox, andrew harrer, bloomberg, getty images, adam jeffery
Keywords: news, cnbc, companies, market, critical, bigger, faces, survives, neutral, meant, powell, indicated, fed, week, chair, tests, range, forecast, estimates, jerome, economists


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Europe rallies after Fed chair signals rates are nearing neutral; Britvic shares up 6%

Basic resources led the gains, up by more than 2 percent as investors wait for a G-20 summit due to start Friday. President Donald Trump and China President Xi Jinping are due to meet on the sidelines in an attempt to improve their trade relations. But the biggest driver of the stock market on Thursday was a highly-anticipated speech from the chair of the Federal Reserve. The expectation that the Fed is likely to raise rates to a lower level than previously expected is a positive for shares. In


Basic resources led the gains, up by more than 2 percent as investors wait for a G-20 summit due to start Friday. President Donald Trump and China President Xi Jinping are due to meet on the sidelines in an attempt to improve their trade relations. But the biggest driver of the stock market on Thursday was a highly-anticipated speech from the chair of the Federal Reserve. The expectation that the Fed is likely to raise rates to a lower level than previously expected is a positive for shares. In
Europe rallies after Fed chair signals rates are nearing neutral; Britvic shares up 6% Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-29  Authors: silvia amaro, alexandra gibbs
Keywords: news, cnbc, companies, rate, president, rallies, interest, stocks, fed, chair, powell, neutral, europe, nearing, rose, shares, britvic, signals, uk, level, rates


Europe rallies after Fed chair signals rates are nearing neutral; Britvic shares up 6%

The pan-European Stoxx 600 index rose 0.6 percent with nearly every sector in the black. Basic resources led the gains, up by more than 2 percent as investors wait for a G-20 summit due to start Friday. President Donald Trump and China President Xi Jinping are due to meet on the sidelines in an attempt to improve their trade relations.

But the biggest driver of the stock market on Thursday was a highly-anticipated speech from the chair of the Federal Reserve. Speaking in New York on Wednesday, Jerome Powell said that he deems the Fed’s benchmark interest rate to be close to a neutral level; which marks a step away from comments made in recent months.

Back in October, Powell stated that the U.S. was a “long way” from hitting neutral, when it came to interest rates — which indicated to markets at the time that more rate hikes were on the horizon. Following Powell’s comments on Wednesday, Wall Street saw stocks leap with the Dow seeing its biggest rally in eight months, closing up over 600 points up and supported Asian trading too. The expectation that the Fed is likely to raise rates to a lower level than previously expected is a positive for shares.

Sticking with central banking news, the Bank of England claimed that a “disorderly” departure from the European Union, would put the U.K. economy under severe pressure and could be more painful for the U.K. than the global financial crisis was.

In individual stocks news, Britvic shares rose more than 6 percent after it said its sugarless drinks had boosted sales.


Company: cnbc, Activity: cnbc, Date: 2018-11-29  Authors: silvia amaro, alexandra gibbs
Keywords: news, cnbc, companies, rate, president, rallies, interest, stocks, fed, chair, powell, neutral, europe, nearing, rose, shares, britvic, signals, uk, level, rates


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post