Fed Rate Cut Hopes Fade as Strong US Economic Data Boosts Uncertainty  Expectations for swift interest rate cuts by the US Federal Reserve are once again facing challenges, bringing renewed uncertainty to stock markets. Recent strong economic data from the US has pushed the 10-year Treasury yield above 4%, its highest level since early August....

Powell to Address Fed's Unexpected Rate Cut and Economic Outlook  Since the Federal Open Market Committee (FOMC) meeting in July, U.S. macroeconomic data has consistently exceeded expectations, signaling a strengthening economy. However, despite the positive outlook, the Federal Reserve made a surprising move on September 18, cutting interest ...

The Fragile US Economy: Front-Running the Fed and Neofeudal Inequality  The contemporary economy is precariously reliant on the continual rise of the stock market, with much of its success driven by investors attempting to predict the Federal Reserve's next move. This tactic, known as "front-running" the Fed, involves buying stocks in anticipa...

Key Events This Week : Fed Commentary Dominates Ahead of Core PCE Inflation Report Release  After a fast-paced week packed with significant economic data and multiple central bank activities, the focus shifts to Federal Reserve commentary, leading up to Friday's core PCE inflation report. Fed official Bostic (a dovish voter) kicks off the week...

Global Markets Surge as Fed Cuts Rates for First Time in Four Years  The Federal Reserve recently made a significant decision to lower interest rates by 50 basis points, despite Chairman Powell's assertion that the U.S. economy is "solid," with a strong labor market and "no risk of a recession." This move comes after years of the Fed largely d...

Federal Reserve Faces Pressure as Inflation and Debt Concerns Mount  Last week, GnS Economics predicted that the Federal Reserve would implement a 25 basis points (bps) rate cut. Our reasoning behind this forecast is grounded in recent economic indicators. Specifically, the 'super-core' inflation, which measures services inflation excluding en...

Fed Faces Rising Inflation Risk as Expectations Show Signs of Rebound  With the Federal Reserve now focused on employment under the belief that inflation has been controlled even though this may not be true as we discussed in Powell Vows To Cut Rates With Stocks Home Prices Rents And Food At All-Time Highs there is a rising risk that the Fed w...

Fed Rate Cuts Won't Prevent Rising Government Debt and Interest Costs  Even if the Federal Reserve implements the over 200 basis points of interest-rate cuts anticipated by the market, it won't significantly reduce the rapidly increasing interest payments on government debt. This makes it more likely that the government will issue more debt an...

Global Markets Weekly Wrap KW 34 : U.S. Investors Anticipate Rate Cuts , European Stocks Surge  U.S. Markets:Investors welcomed Federal Reserve Chair Jerome Powell's indication of impending interest rate cuts, pushing the Dow Jones Industrial Average and the S&P 500 Index closer to record levels. The market rally was broad-based, with smal...

Powell Signals Dovish Shift as Markets React to Cooling Labor Data  Powell has made his move, and it's a stark contrast to two years ago when he warned of impending "pain" amid soaring inflation. This time, his tone is much more dovish. With inflation now seemingly behind us, Powell has completed his pivot, emphasizing that the labor market is...

Global Central Bank Leaders to Join Jackson Hole, Powell's Speech Key  The Jackson Hole schedule was released last night, revealing that Norges Bank Governor Ida Wolden Bache and Bank of Brazil Governor Roberto Campos Neto will join ECB Board Member Philip Lane on the Saturday panel discussion. Both Wolden Bache and Campos Neto have recently e...

Fed's Jackson Hole: Powell's Speech to Highlight Inflation, Labor Risks  The Federal Reserve's annual Jackson Hole conference will be held from Thursday to Saturday, focusing on the theme "Reassessing the Effectiveness and Transmission of Monetary Policy." The main event is Chair Jerome Powell's speech on the economic outlook, scheduled for Fr...

Fed Keeps Rates Steady in July, Hints at Possible September Rate Cut  In July, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged, but subtly adjusted its statement to leave open the possibility of a rate cut in September. Unlike June's statement, which emphasized a strong focus on inflation risks, the Committee ...

Markets are still reeling, with the likelihood of a recession implied by the US market rising sharply compared to the UK or Europe. If the Federal Reserve follows through with the rate cuts that the market is anticipating, then current rates in the UK (Sonia) and Europe (Euribor) appear too high. Although last week's employment data was the catalys...

Market Breadth Improvement: Bull Market Health and Sustainability  Last Friday  a few "Mega-Capitalization" stocks have heavily influenced market returns, fueling the bull market. In that discussion, we questioned whether a small group of stocks could continue to sustain this trend. Additionally, the breadth of the market rally has b...

Goldman Sachs Suggests Fed Rate Cut in July Amid Rising Confidence  After Powell predictably avoided giving any clues about the timing of the Federal Reserve's next move, he did note that the last three inflation reports had "added to confidence." Speculation is now focused on when, not if, action will be taken. Goldman Sachs chief economist J...

Fed Signals September Rate Cut Amid CPI Expectations  Nick Timiraos has published two previews of a September rate cut within 24 hours, just as expected, following the guidance of his Federal Reserve sources. The message is clear: while the Fed may not cut rates at the July FOMC meeting, it will strongly indicate that a cut in September is imm...

Fed Minutes Reveal Inflation Concerns, Divided Views on Rate Hikes  Since the last FOMC statement on June 12, prices for oil, gold, stocks, the dollar, and parts of the bond market have increased. The shorter end of the yield curve has decreased in yield since the last FOMC meeting, but the longer end remains higher despite today's drop in yie...

Election Risk Creeps into Markets: Investors Brace for Volatility  In a year marked by complacency and widespread option selling, the S&P 500 has enjoyed an almost uninterrupted rise, nearing 400 trading days without a 2% drop. It's no wonder that the upcoming elections haven't garnered much attention, despite their potential significant i...

Fed Reduces 2024 Rate Cut Projections Despite Softer April Inflation  U.S. inflation eased in April according to the Consumer Price Index (CPI) data released on Wednesday. Despite this softer inflation data, Federal Reserve policymakers reduced their expectations for interest rate cuts this year. The new dot plot published on Wednesday showed ...