Latest news with #LorettaMester
CNBC
4 days ago
- Business
- CNBC
Fed made right move by doing nothing, says former Fed president Loretta Mester
Loretta Mester, former Cleveland Fed president, joins 'Power Lunch' to discuss the former President's expectation for rate cuts, the Fed's latest decision and more.
Yahoo
15-06-2025
- Business
- Yahoo
'It makes sense to be on hold': Why Wall Street strategists think Fed rate cuts aren't coming anytime soon
It's been an encouraging week for economic data, with inflation showing signs of moderation and consumer sentiment rebounding for the first time this year. The labor market remains broadly stable, with the unemployment rate holding at a healthy 4.2%, although a recent uptick in continuing jobless claims suggests some signs of cooling. Altogether, the backdrop appears supportive of the Federal Reserve's path toward easing. But Wall Street watchers say policymakers may need more convincing before delivering any cuts. Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments "We don't know really how the second half of the year is going to play out," Loretta Mester, former Cleveland Fed president, told Yahoo Finance on Thursday. Mester added that although the "hard" economic data, like the recent labor and inflation reports, have been encouraging, "the real question is what is going to happen in the second half of the year and [if] those trends continue. That's where the high level of uncertainty still is with us." The uncertainty centers on the scope and scale of President Trump's tariffs in the aftermath of his April "Liberation Day" announcements, which sent shockwaves through markets and businesses. Since then, many of those "reciprocal" tariffs have been paused, but the 10% baseline duties for most countries remain in place. The president is set to notify US trading partners of their respective unilateral tariff rates in the coming weeks. Read more: The latest news and updates on Trump's tariffs In the meantime, Mexico and Canada continue to face fentanyl-related tariffs, and industry-specific tariffs on steel, aluminum, and autos remain unchanged. Earlier this week, the US and China agreed to a framework and implementation plan aimed at easing tariff and trade tensions. President Trump signaled his approval, saying the deal was "done," pending final sign-off from him and Chinese President Xi Jinping. As part of the agreement, Trump said the US would impose a total of 55% tariffs on Chinese goods. Many market observers said the deal was sparse on details. Outside analysts like the budget lab at Yale have calculated the effective tariff rate on China overall to be around 33%. "The Fed is on hold until we get a little more clarity about not only the magnitude of the tariffs and the breadth of the tariffs, but what effect they all have on inflation and what effect the tariffs and other policies, including the budget bill, will have on growth and employment," Mester said. Despite the words of caution, markets are increasingly confident that rate relief is on the horizon, with nearly 70% now betting the Fed begins easing in September, up from 60% a week ago. Investors are putting a roughly 25% chance on the first cut arriving as soon as July, according to CME Fed projections as of Friday afternoon. Still, markets have almost fully priced in that the Fed will hold rates steady at next week's policy meeting. Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, said any rate cuts before September would likely require significant labor market deterioration. He also cautioned that the inflation threat hasn't disappeared, especially with tariff effects still uncertain. "People are suggesting that maybe the tariffs won't have an inflationary impact. I think it's too early to decipher that," Schutte said. "All the inventories that have been pulled forward by importers, by consumers, by businesses to actually steady and ready themselves for the tariffs may be impacting the inflation data right now. It often has taken time in the past for that to show up in the actual numbers." He added that the Fed is in a "wait-and-see time period." "That's where I don't think the Fed likely cuts until September, unless you see significant weakening in the labor market, and then the question is always: Is it too late or not?" HSBC US economist Ryan Wang acknowledged the "double-sided risks" tariffs pose, noting that while goods prices will likely continue to rise through the rest of the year, early signs of a cooling labor market could help offset that by exerting downward pressure on inflation. But while markets may be betting on a smooth path to cuts, Wang warned the Fed will need confidence that inflation isn't rising in an "uncontrolled fashion" and that activity in the broader economy isn't slipping too quickly. "The benign version of rate cuts will take time to develop," he said. For now, the Fed appears firmly in a holding pattern — acknowledging the encouraging data, but not yet convinced it's time to shift course. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
03-06-2025
- Business
- CNBC
Former Cleveland Fed President Mester: The Fed should be waiting right now
Former Cleveland Fed President Loretta Mester joins 'Squawk Box' to discuss the challenges facing the Federal Reserve, state of the economy, rate path outlook, and more.
Yahoo
28-05-2025
- Business
- Yahoo
Citi hosts the Citi Singapore Macro and Pan Asia Investor Conference from 28 to 30 May
SINGAPORE, May 28, 2025 /PRNewswire/ -- Citi hosts the Citi Singapore Macro and Pan Asia Investor Conference from 28 to 30 May The conference brings together distinguished political and economic experts for a series of multi-dimensional discussions focused on the latest geopolitical developments, economic outlook and topical investment themes impacting the financial industry. Over the next three days, Citi is expecting over 1,500 delegates including clients, investors, corporates, family offices, and private bankers to attend the conference, which includes over 20 panels and presentations and almost 7,000 meetings between corporates and experts. Key speakers include: Robert Lighthizer, Chair of the Center for American Trade at AFPI and Former United States Trade Representative and Senior Advisor to Citi's clients on global trade, Loretta Mester, Former President and CEO, Federal Reserve Bank of Cleveland, and Dr Lawrence Summers, Former United States Secretary of the Treasury. Sue Lee, Head of Markets for Asia South at Citi, said, "We are entering a new era of trade policy and globalization, marking a deep structural shift in how markets move and how businesses operate. Citi's leading Markets franchise with a wide global footprint uniquely positions us to support our clients as they navigate this new environment." Citi's Markets business serves corporates, institutional investors, and governments from trading floors in almost 80 countries. The strength of our underwriting, sales and trading and distribution capabilities span asset classes (Commodities, Equities, Rates, Spread Products and FX), providing us with an unmatched ability to meet the needs of our clients. View original content to download multimedia: SOURCE Citi Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
France 24
04-05-2025
- Business
- France 24
US Fed expected to pause cuts again and wait for clarity on tariffs
Trump has imposed steep levies on China, and lower "baseline" levies of 10 percent on goods from most other countries, along with 25 percent duties on specific items like steel, automobiles and aluminum. The president has also paused higher duties on dozens of other trading partners until July to give them time to renegotiate existing arrangements with the United States. Most economists expect the tariffs introduced since January to push up prices and cool economic growth -- at least in the short run -- potentially keeping the Fed on hold for longer. "The Fed has to be very focused on maintaining inflation so that it doesn't start moving back up in a more persistent way," said Loretta Mester, who recently stepped down after a decade as president of the Cleveland Fed. "That would undermine all the work that was done over the last three years of getting inflation down," she told AFP. - 'Good place to be' - The Fed has held its key interest rate at between 4.25 percent and 4.50 percent since December, as it continues its plan to bring inflation to the bank's long-term target of two percent, with another eye firmly fixed on keeping unemployment under control. Recent data points to inflation hitting that target ahead of the introduction of Trump's "Liberation Day" tariffs, while unemployment has remained relatively stable, hugging close to historic lows. At the same time, various "softer" data points such as consumer confidence surveys have pointed to a sharp decline in optimism about the health of the US economy -- and growing concerns about inflation. "Whether the economy enters a recession or not, it's hard to say at this point," said Mester, now an adjunct professor of finance at the Wharton School of the University of Pennsylvania. "I think the committee remains in good condition here, and most likely they'll remain on hold at this meeting," said Jim Bullard, the long-serving former president of the St. Louis Fed. "I think it's a good place for them to be while there's a lot of turbulence in the trade war," added Bullard, now dean of the Daniels School of Business at Purdue University. Financial markets overwhelmingly expect the Fed to announce another rate cut pause on Wednesday, according to data from CME Group. Pushing back rate cuts US hiring data for April published last week came in better than expected, lowering anxiety about the health of the labor market -- and reducing pressure on the Fed's rate-setting committee to reach for rate cuts. Economists at several large banks including Goldman Sachs and Barclays subsequently delayed their expectations for rate cuts from June to July. "Cutting in late July allows the committee to see more data on the evolution of the labor market, and should benefit from resolving uncertainty about tariffs and fiscal policy," economists at Barclays wrote in a note to clients published Friday. Other analysts see rate cuts happening even later, depending on the effects of the tariffs. The rise in longer-run inflation expectations in the survey data points to growing concerns that tariff-related price pressures could become embedded in the US economy, even as the market-based measures have remained close to the two percent target. "I would be sort of in the camp (saying) prove to me that they're (tariffs are) not going to be inflationary," Mester said, adding it would be "unwise" to assume that inflation expectations were stable given the recent survey data. But Bullard from Purdue took a different view, stressing the stability of the market-based measures. "I haven't liked the survey-based measures of inflation expectations, because they seem to be partly about inflation, but partly about many other issues, maybe, including politics," he said. "This is a moment where you might want to look through the survey-based measures that are talking about very extreme levels of inflation that don't seem likely to develop near-term," he added.
