Latest news with #PrincipalAssetManagement
BusinessToday
5 days ago
- Business
- BusinessToday
Oil Prices Surge To Five-Month High As Middle East Fears Mount
Oil prices rallied sharply on Tuesday, with West Texas Intermediate (WTI) crude rising 4.4% to settle at US$74.92 a barrel, hitting its highest level since January amid intensifying fears of a broader conflict in the Middle East. Traders rushed into energy markets following reports that the US could deepen its involvement in Israel's ongoing military strikes on Iran. Former President Donald Trump's public threats and a high-level national security meeting fuelled market speculation of imminent escalation. The geopolitical jitters also pushed up oil market volatility, with a key gauge jumping to a three-year high. Analysts noted that while the Federal Reserve is expected to keep rates steady at its upcoming policy meeting, elevated energy prices could complicate its efforts to maintain a disinflationary path. 'The Fed is walking a tightrope,' said Seema Shah of Principal Asset Management. 'Higher oil prices could become a risk factor if they feed into broader inflation.' Brent crude prices, while not detailed in this session, also saw significant upward movement in tandem with WTI. The crude market's rally comes at a time when economic data from the US is flashing early signs of strain, adding another layer of uncertainty heading into the second half of the year. Bloomberg Related
&w=3840&q=100)
Business Standard
7 days ago
- Business
- Business Standard
Fed pause leaves Wall Street guessing when rate cuts might finally come
With Federal Reserve officials signaling an extended hold on interest rates, investors and economists will look to Chair Jerome Powell this week for clues on what might eventually prompt the central bank to make a move, and when. A fourth straight meeting without a cut could provoke another tirade from President Donald Trump. But policymakers have been clear: Before they can make a move they need the White House to resolve the big question marks around tariffs, immigration and taxes. Israel's attacks on Iranian nuclear sites have also introduced another element of uncertainty for the global economy. At the same time, the generally healthy, if slowly cooling, US economy has few expecting a rate move any time soon. Investors are betting the central bank won't lower borrowing costs until September at the earliest, according to pricing in futures contracts. 'The safest path to take in that situation, when there is no urgency to cut rates right now, is to just sit on your hands,' said Seema Shah, chief global strategist at Principal Asset Management. Policymakers gather June 17-18. They'll release a statement at 2:00 PM Washington time, and Powell is scheduled to take questions from reporters 30 minutes later. Difficult choices The president's tariffs are widely expected to raise prices and slow growth, risks that officials flagged in their last post-meeting statement. That could eventually force the Fed to make a difficult choice as the economy pulls them in opposite directions. 'I don't think at this point there's anything to be alarmed about,' said David Hoag, fixed income portfolio manager at Capital Group. 'But the longer we have uncertainty — for the consumer, for companies in terms of planning — the more concerned I'll get about the fundamentals of the economy deteriorating.' So far, however, the economy isn't flashing warning signs that would prompt the Fed to intervene. The unemployment rate has held steady for three months even as job growth has slowed, in part because a sharp decline in immigration is also lowering the supply of workers. The longer the jobless rate remains stable, the longer the Fed can hold rates as a defense against potentially higher inflation. Yet price data has also provided little to worry about. Underlying inflation rose by less than expected in May for the fourth straight month. Treasuries rose last week on the news, bolstered by wagers on more than one rate cut this year. The yield on two-year notes, most sensitive to the Fed's policy, declined by more than seven basis points on the week to 3.96 per cent. Still, officials are likely to wait for additional months of data to understand how much of the tariffs are being passed on to consumers. Israel's airstrikes on Iran will raise additional questions. Fed officials traditionally look through energy price moves, but an oil price shock could affect inflation expectations. Fresh projections Fresh economic forecasts and rate projections this week could provide helpful guidance to how officials are thinking. They'll be the first since Trump's 'Liberation Day' announcement of sweeping tariffs on April 2. As analysts ponder the results, the range of possibilities is unusually large. If officials predict that unemployment will rise this year meaningfully above the 4.4 per cent they forecast in March, that would suggest policymakers may cut rates before the fourth quarter, said Shah. Some Fed officials, including Governor Christopher Waller, have already signaled an openness to cutting because they believe policymakers can view the expected impact of tariffs on consumer prices as temporary — as long as inflation expectations remain anchored. That aligns with market-based measures suggesting traders also believe the tariff price bump will be short-lived. But should officials raise their expectations for inflation, that could reduce the number of cuts they project this year to one, from the two seen in March, said Matthew Luzzetti, chief US economist for Deutsche Bank. Strategists at Barclays warned of just such a 'hawkish' surprise in a note to clients. Officials might also consider the substantial uncertainty over the final state of Trump's policies and simply leave their projections unchanged. 'I'd be surprised if the dots move much,' said Zachary Griffiths head of investment-grade and macroeconomic strategy at CreditSights. 'It's been a roller-coaster ride' since the Fed last released projections in March. 'On net, I think we're probably in a somewhat similar situation,' he said. Late support Some economists say the timing of the Fed's next moves will eventually come down to how long it takes for Trump's policies to show up in the economic data — and how strongly that raises concerns about a downturn.
Business Times
15-06-2025
- Business
- Business Times
Fed on hold leaves Wall Street asking what it will take to cut interest rates
[NEW YORK] With US Federal Reserve officials signalling an extended hold on interest rates, investors and economists will look to chair Jerome Powell this week for clues on what might eventually prompt the central bank to make a move, and when. A fourth straight meeting without a cut could provoke another tirade from US President Donald Trump. But policymakers have been clear: Before they can make a move they need the White House to resolve the big question marks around tariffs, immigration and taxes. Israel's attacks on Iranian nuclear sites have also introduced another element of uncertainty for the global economy. At the same time, the generally healthy, if slowly cooling, US economy has few expecting a rate move any time soon. Investors are betting the central bank will not lower borrowing costs until September at the earliest, according to pricing in futures contracts. 'The safest path to take in that situation, when there is no urgency to cut rates right now, is to just sit on your hands,' said Seema Shah, chief global strategist at Principal Asset Management. Policymakers gather Jun 17 to 18. They will release a statement at 2.00 pm Washington time, and Powell is scheduled to take questions from reporters 30 minutes later. Difficult choices The president's tariffs are widely expected to raise prices and slow growth, risks that officials flagged in their last post-meeting statement. That could eventually force the Fed to make a difficult choice as the economy pulls them in opposite directions. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'I don't think at this point there's anything to be alarmed about,' said David Hoag, fixed income portfolio manager at Capital Group. 'But the longer we have uncertainty – for the consumer, for companies in terms of planning – the more concerned I will get about the fundamentals of the economy deteriorating.' So far, however, the economy is not flashing warning signs that would prompt the Fed to intervene. The unemployment rate has held steady for three months even as job growth has slowed, in part because a sharp decline in immigration is also lowering the supply of workers. The longer the jobless rate remains stable, the longer the Fed can hold rates as a defence against potentially higher inflation. Yet price data has also provided little to worry about. Underlying inflation rose by less than expected in May for the fourth straight month. Treasuries rose last week on the news, bolstered by wagers on more than one rate cut this year. The yield on two-year notes, most sensitive to the Fed's policy, declined by more than seven basis points on the week to 3.96 per cent. Still, officials are likely to wait for additional months of data to understand how much of the tariffs are being passed on to consumers. Israel's airstrikes on Iran will raise additional questions. Fed officials traditionally look through energy price moves, but an oil price shock could affect inflation expectations. Fresh projections Fresh economic forecasts and rate projections this week could provide helpful guidance to how officials are thinking. They will be the first since Trump's 'Liberation Day' announcement of sweeping tariffs on Apr 2. As analysts ponder the results, the range of possibilities is unusually large. If officials predict that unemployment will rise this year meaningfully above the 4.4 per cent they forecast in March, that would suggest policymakers may cut rates before the fourth quarter, said Shah. Some Fed officials, including governor Christopher Waller, have already signalled an openness to cutting because they believe policymakers can view the expected impact of tariffs on consumer prices as temporary – as long as inflation expectations remain anchored. That aligns with market-based measures suggesting traders also believe the tariff price bump will be short-lived. But should officials raise their expectations for inflation, that could reduce the number of cuts they project this year to one, from the two seen in March, said Matthew Luzzetti, chief US economist for Deutsche Bank. Strategists at Barclays warned of just such a 'hawkish' surprise in a note to clients. Officials might also consider the substantial uncertainty over the final state of Trump's policies and simply leave their projections unchanged. 'I'd be surprised if the dots move much,' said Zachary Griffiths head of investment-grade and macroeconomic strategy at CreditSights. 'It's been a roller-coaster ride' since the Fed last released projections in March. 'On net, I think we are probably in a somewhat similar situation,' he said. Late support Some economists say the timing of the Fed's next moves will eventually come down to how long it takes for Trump's policies to show up in the economic data – and how strongly that raises concerns about a downturn. In a Bloomberg survey of economists conducted Jun 6 to 11, 42 per cent of respondents predicted the Fed will hold rates steady until there's more concrete weakness in the economy. Julia Coronado, founder of the research firm MacroPolicy Perspectives and a former Fed economist, said she expects rate cuts beginning in October or December in response to the more notable labour-market slowdown she estimates will materialise by then. BLOOMBERG
Yahoo
15-06-2025
- Business
- Yahoo
Fed on Hold Leaves Wall Street Asking What It Will Take to Cut Interest Rates
(Bloomberg) -- With Federal Reserve officials signaling an extended hold on interest rates, investors and economists will look to Chair Jerome Powell this week for clues on what might eventually prompt the central bank to make a move, and when. Shuttered NY College Has Alumni Fighting Over Its Future As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Do World's Fairs Still Matter? NYC Renters Brace for Price Hikes After Broker-Fee Ban As American Architects Gather in Boston, Retrofits Are All the Rage A fourth straight meeting without a cut could provoke another tirade from President Donald Trump. But policymakers have been clear: Before they can make a move they need the White House to resolve the big question marks around tariffs, immigration and taxes. Israel's attacks on Iranian nuclear sites have also introduced another element of uncertainty for the global economy. At the same time, the generally healthy, if slowly cooling, US economy has few expecting a rate move any time soon. Investors are betting the central bank won't lower borrowing costs until September at the earliest, according to pricing in futures contracts. 'The safest path to take in that situation, when there is no urgency to cut rates right now, is to just sit on your hands,' said Seema Shah, chief global strategist at Principal Asset Management. Policymakers gather June 17-18. They'll release a statement at 2:00 PM Washington time, and Powell is scheduled to take questions from reporters 30 minutes later. Difficult Choices The president's tariffs are widely expected to raise prices and slow growth, risks that officials flagged in their last post-meeting statement. That could eventually force the Fed to make a difficult choice as the economy pulls them in opposite directions. 'I don't think at this point there's anything to be alarmed about,' said David Hoag, fixed income portfolio manager at Capital Group. 'But the longer we have uncertainty — for the consumer, for companies in terms of planning — the more concerned I'll get about the fundamentals of the economy deteriorating.' So far, however, the economy isn't flashing warning signs that would prompt the Fed to intervene. The unemployment rate has held steady for three months even as job growth has slowed, in part because a sharp decline in immigration is also lowering the supply of workers. The longer the jobless rate remains stable, the longer the Fed can hold rates as a defense against potentially higher inflation. Yet price data has also provided little to worry about. Underlying inflation rose by less than expected in May for the fourth straight month. Treasuries rose last week on the news, bolstered by wagers on more than one rate cut this year. The yield on two-year notes, most sensitive to the Fed's policy, declined by more than seven basis points on the week to 3.96%. Still, officials are likely to wait for additional months of data to understand how much of the tariffs are being passed on to consumers. Israel's airstrikes on Iran will raise additional questions. Fed officials traditionally look through energy price moves, but an oil price shock could affect inflation expectations. Fresh Projections Fresh economic forecasts and rate projections this week could provide helpful guidance to how officials are thinking. They'll be the first since Trump's 'Liberation Day' announcement of sweeping tariffs on April 2. As analysts ponder the results, the range of possibilities is unusually large. If officials predict that unemployment will rise this year meaningfully above the 4.4% they forecast in March, that would suggest policymakers may cut rates before the fourth quarter, said Shah. Some Fed officials, including Governor Christopher Waller, have already signaled an openness to cutting because they believe policymakers can view the expected impact of tariffs on consumer prices as temporary — as long as inflation expectations remain anchored. That aligns with market-based measures suggesting traders also believe the tariff price bump will be short-lived. But should officials raise their expectations for inflation, that could reduce the number of cuts they project this year to one, from the two seen in March, said Matthew Luzzetti, chief US economist for Deutsche Bank. Strategists at Barclays warned of just such a 'hawkish' surprise in a note to clients. Officials might also consider the substantial uncertainty over the final state of Trump's policies and simply leave their projections unchanged. 'I'd be surprised if the dots move much,' said Zachary Griffiths head of investment-grade and macroeconomic strategy at CreditSights. 'It's been a roller-coaster ride' since the Fed last released projections in March. 'On net, I think we're probably in a somewhat similar situation,' he said. Late Support Some economists say the timing of the Fed's next moves will eventually come down to how long it takes for Trump's policies to show up in the economic data — and how strongly that raises concerns about a downturn. In a Bloomberg survey of economists conducted June 6-11, 42% of respondents predicted the Fed will hold rates steady until there's more concrete weakness in the economy. Julia Coronado, founder of the research firm MacroPolicy Perspectives and a former Fed economist, said she expects rate cuts beginning in October or December in response to the more notable labor-market slowdown she estimates will materialize by then. --With assistance from Amara Omeokwe. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P.
CNBC
12-06-2025
- Business
- CNBC
CNBC Daily Open: There's progress on trade and U.S. inflation — but it's harder to rely on such news
Consumer prices in the U.S. have been benign since February, and the May reading continues that trend, according to the Bureau of Labor Statistics' consumer price index report released Wednesday. Meanwhile, the May jobs report, while better than expected, revised downward the figures for March and April, exposing some weaknesses in the labor market. In ordinary times, the scenario of muted inflation and a job market that's starting to wobble would make cutting interest rates — a move that tends to boost the economy, sending prices and job openings higher — an easy decision for any central bank. But we aren't living in ordinary times, as CNBC's Jeff Cox pointed out. Global trade is still snarled by U.S. President Donald Trump's tariffs. Even though the United States and China seem to have reached an agreement on upholding their earlier trade pact in Geneva, there's no telling if tariff numbers will change, despite reassurances from the White House that they wouldn't. The fact that the S&P 500 fell despite the reaffirmed framework between U.S. and China is another sign investors are growing wary of taking trade pronouncements at face value. The volatile tariff situation also means that data since April, and for the foreseeable future, could be fuzzy. "Today's below forecast inflation print is reassuring – but only to an extent," said Seema Shah, chief global strategist at Principal Asset Management. "Tariff-driven price increases may not feed through to the CPI data for a few more months yet, so it is far too premature to assume that the price shock will not materialize." When it's hard to rely on official communication and hard numbers, we might just have to navigate the path ahead a little blinder than usual. S&P breaks streak and FTSE 100 hits recordU.S. stocks fell Wednesday despite positive news on trade and inflation. The S&P 500 lost 0.27% and the Nasdaq Composite retreated 0.5%, with both snapping a three-day win streak. The Dow Jones Industrial Average was flat. The pan-European Stoxx 600 shed 0.27%, but the U.K.'s FTSE 100 climbed 0.13% to close at a record level. U.S. tariffs on China won't change again: LutnickTrump said in a Truth Social post Wednesday that U.S. duties on China will total 55% — but a White House official clarified with CNBC that the figure comprises the existing 30% blanket tariffs and an additional 25% on specific products. Asked on CNBC's "Money Movers" if the current U.S. tariffs on China are not going to shift again, Commerce Secretary Howard Lutnick replied, "You can definitely say that." Consumer prices in U.S. muted in May The U.S. consumer price index for May came in at 0.1% for the month, putting the annual inflation rate at 2.4%. Economists surveyed by Dow Jones had been looking for respective readings of 0.2% and 2.4%. Excluding food and energy, the core CPI came in respectively at 0.1% and 2.8%, compared with forecasts for 0.3% and 2.9%. Following the release, U.S. Vice President JD Vance wrote on X that "the refusal by the Fed to cut rates is monetary malpractice." Jamie Dimon sees U.S. economy decliningThe impacts of the pandemic-era government spending and monetary policy that helped support the U.S. economy have faded, and that makes the country vulnerable to a downturn in the coming months, according to JPMorgan Chase CEO Jamie Dimon. "I think there's a chance real numbers will deteriorate soon," Dimon said at a Morgan Stanley conference Tuesday, according to a transcript from FactSet. Musk makes a U-turn"I regret some of my posts about President @realDonaldTrump last week. They went too far," Elon Musk on Wednesday wrote on X. Both men's public feud was sparked by Musk's opposition to Trump's "One Big Beautiful Bill Act." But tensions seem to have cooled. Musk appears to have deleted some of his social media posts, while Trump said Monday he was planning to retain Musk's Starlink technology at the White House. [PRO] Who could a 'shadow' Fed chair be?Trump might already be eyeing a replacement for the chair of the Federal Reserve. That said, Jerome Powell's term doesn't end until May 2026, so any pick would serve as a "shadow" chair who watches over the central bank and telegraphs the moves that the White House wants regarding monetary policy. CNBC's Jeff Cox breaks down the possible candidates and how they might influence markets. Dollar divorce? Asia's shift away from the U.S. dollar is picking up pace Asia is progressively moving away from the U.S. dollar, as a mix of geopolitical uncertainties, monetary shifts and currency hedging prompt de-dollarization across the region. Recently, the Association of Southeast Asian Nations, or ASEAN, committed to boosting the use of local currencies in trade and investment as part of its newly released Economic Community Strategic Plan for 2026 to 2030. The plan outlined efforts to reduce shocks associated with exchange rate fluctuations by promoting local currency settlements and strengthening regional payment connectivity. Although the shift is more pronounced in Asia, the world has also been cutting its reliance on the greenback, with the share of the dollar in global foreign exchange reserves declining from over 70% in 2000 to 57.8% in 2024.
