Latest news with #SummaryofEconomicProjections
Mint
5 hours ago
- Business
- Mint
Equally at sea: The US Federal Reserve has no more clarity than we do
The most powerful institution in global finance is as completely and utterly confused as the rest of us. At its monetary policy decision on Wednesday, the US Federal Reserve's rate-setting committee held rates at 4.25%-4.5%, but Chair Jerome Powell and his colleagues essentially acknowledged that they had no idea what would come next. They couldn't precisely project where US President Donald Trump's tariff rates would end up, much less how they would impact consumer inflation and the labour market. Nor could they confidently handicap jarring changes to immigration and fiscal policies and the evolving war between Israel and Iran. The big risk, of course, is that the uncertainty and indecision will make the Fed late to arrest a potential increase in unemployment. Also Read: The US-China trade truce doesn't solve the Fed's headache In the Summary of Economic Projections, the median member of the Federal Open Market Committee pencilled in two rate cuts this year. But that 'base case' constitutes a massive oversimplification of the outlook, and some investors may be underestimating just how fat the tails are in the distribution of potential outcomes, even over just the next three or four months. Of the 19 respondents, 14 policymakers thought the risks to their inflation forecasts were weighted to the upside—the same number that thought as much about the risks to their unemployment projections. In a nutshell, they don't pretend to know what's coming, but Chair Powell thinks we may find out relatively soon. Here's Powell at his post-decision press conference (emphasis mine): 'We feel like we're going to learn a great deal more over the summer on tariffs. We hadn't expected them to show up much by now, and they haven't. And we will see the extent to which they do over the coming months. And I think that's going to inform our thinking for one thing. In addition, we'll see how the labour market progresses." Also Read: The Fed's 'Mission Impossible' is now 'Mission Accomplished' Given all of the uncertainty, Powell is right to stay in wait-and-see mode, but he can't linger there too long once the data breaks. Meanwhile, those of us on the sidelines should prepare for the policy outlook to shift quite quickly, potentially as soon as the Fed's 16-17 September meeting. Maybe we really will get two rate cuts this year, but it's also perfectly plausible that we'll get 150 basis points worth—or none. It's a great environment for high-stakes gamblers—but not so much for American households. As Powell alluded to, it's largely trade policy that has put us all in this bind. In recent months, the disinflationary trends in housing and non-housing services have the core personal consumption expenditures deflator—the Fed's preferred inflation gauge—up around 2.6% in May from a year earlier (this is based on a Bloomberg Economics estimate from the consumer and producer price data). That's not at all terrible, and it would probably be poised to converge on the Fed's 2% target if not for Trump's extremely ill-timed and pointless trade wars. Without tariffs, the Fed would probably be cutting right now, providing ballast to a wobbly labour market and a housing market that's already seeing year-over-year price drops in some parts of the country. Unfortunately, the central bank has to play the hand it's dealt. In the immediate term, we still don't know if companies will pass on higher prices to consumers, accept narrower margins or manage their way to stable prices by laying off parts of their workforce—and maybe it will be a combination of all three. Also Read: Barry Eichengreen: Is the US Federal Reserve's independence at threat? The risks to both the Fed's stable prices and maximum employment mandates are substantial, and that's causing paralysis among policymakers—a weird 'calm before the storm" effect both at the Fed and in financial markets. But at some point before autumn, we are very likely to see something shatter that calm. An alarming jump in initial jobless claims could lead to rate cuts above and beyond any policymaker's base case. A jarring CPI report or two could keep the Fed on hold for longer and prompt a selloff in bonds. And a jump in realized inflation coupled with signs of unanchored inflation expectations could even put hikes back on the table. If they're late to mitigate the damage, Fed policymakers can take cover in blaming Trump's self-sabotaging trade policy. But they must prepare to act immediately and convincingly once the signals break in a particular direction. ©Bloomberg The author is a columnist focused on US markets and economics.
Business Times
a day ago
- Business
- Business Times
The Fed is just as confused as the rest of us
THE most powerful institution in global finance is as completely and utterly confused as the rest of us. At its policy decision on Wednesday (Jun 18), the US Federal Reserve's rate-setting committee held rates at 4.25 to 4.5 per cent, but Chair Jerome Powell and his colleagues essentially acknowledged that they had no idea what would come next. They couldn't precisely project where US President Donald Trump's tariff rates would end up, much less how they would impact consumer inflation and the labour market. Nor could they confidently handicap jarring changes to immigration and fiscal policies and the evolving war between Israel and Iran. The big risk, of course, is that the uncertainty and indecision will make the Fed late to arrest a potential increase in unemployment. In the Summary of Economic Projections, the median member of the Federal Open Market Committee pencilled in two rate cuts this year. But that 'base case' constitutes a massive oversimplification of the outlook, and some investors may be underestimating just how fat the tails are in the distribution of potential outcomes, even over just the next three or four months. Of the 19 respondents, 14 policymakers thought the risks to their inflation forecasts were weighted to the upside — the same number that thought as much about the risks to their unemployment projections. In a nutshell, they don't pretend to know what's coming, but Powell thinks we may find out relatively soon. At his post-decision press conference, Powell said: 'We feel like we're going to learn a great deal more over the summer on tariffs. We hadn't expected them to show up much by now, and they haven't. And we will see the extent to which they do over coming months. And I think that's going to inform our thinking for one thing. In addition, we'll see how the labour market progresses.' 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 Given all the uncertainty, Powell is right to stay in wait-and-see mode, but he can't linger there too long once the data breaks. Meanwhile, those of us on the sidelines should prepare for the policy outlook to shift quite quickly, potentially as soon as the Fed's Sep 16-17 meeting. Maybe we really will get two rate cuts this year, but it's also perfectly plausible that we'll get 150 basis points worth – or none. It's a great environment for high-stakes gamblers – but not so much for American households. As Powell alluded to, it's largely trade policy that has put us all in this bind. In recent months, the disinflationary trends in housing and non-housing services have the core personal consumption expenditures deflator – the Fed's preferred inflation gauge – up around 2.6 per cent in May from a year earlier. That's not at all terrible, and it would probably be poised to converge on the Fed's 2 per cent target if not for Trump's extremely ill-timed and pointless trade wars. Without tariffs, the Fed would probably be cutting right now, providing ballast to a wobbly labour market and a housing market that's already seeing year-over-year price drops in some parts of the country. Unfortunately, the central bank has to play the hand it's dealt. In the immediate term, we still don't know if companies will pass on higher prices to consumers, accept narrower margins or manage their way to stable prices by laying off parts of their workforce – and maybe it will be a combination of all three. The risks to both the Fed's stable prices and maximum employment mandates are substantial, and that's causing paralysis among policymakers – a weird 'calm before the storm' effect both at the Fed and in financial markets. But at some point before autumn, we are very likely to see something shatter that calm. An alarming jump in initial jobless claims could lead to rate cuts above and beyond any policymaker's base case. A jarring CPI report or two could keep the Fed on hold for longer and prompt a selloff in bonds. And a jump in realised inflation coupled with signs of unanchored inflation expectations could even put hikes back on the table. If they're late to mitigate the damage, Fed policymakers can take cover in blaming Trump's self-sabotaging trade policy. But they must prepare to act immediately and convincingly once the signals break in a particular direction. BLOOMBERG
Yahoo
a day ago
- Business
- Yahoo
FTSE 100 LIVE: Stocks slip as Bank of England set to hold interest rates amid inflation fears
The FTSE 100 (^FTSE) and European stocks slipped on Thursday as traders await the latest decision on UK interest rates from the Bank of England (BoE), and weigh up the escalating conflict in the Middle East. Money markets believe there is a 96% chance that Threadneedle Street leaves rates on hold at 4.25% at noon on Thursday, and only a 4% possibility of a quarter-point cut. It comes as UK inflation fell last month from 3.5% to 3.4%, but remains above the BoE's 2% target, which could push higher if the Israel-Iran conflict drives up oil prices. Zara Nokes, global market analyst at JP Morgan Asset Management said: "Escalating tensions in the Middle East, and the upward pressure this is putting on oil prices, will only add to the Bank of England's concern about easing rates too quickly. "The Monetary Policy Committee will face a tougher choice when meeting again in August, given the combination of still-sticky inflation and evidence that the labour market is quite clearly cooling. "A deterioration in the labour market should, in theory, put downward pressure on inflation, but until there are clear signs of this in the hard data, the Bank should be careful not to claim victory over inflation quite yet, not least because of the uncertain geopolitical climate.' On Wednesday, the US Federal Reserve also kept rates unchanged at 4.25%-4.50% as widely expected. The updated Summary of Economic Projections (SEP) saw the median dot still projecting 50bps of cuts by year end, but with a hawkish shift in the distribution as seven officials now expect no cuts this year. In the press conference, Fed chair Jerome Powell highlighted that uncertainty remains historically elevated, even if it has diminished since the last meeting in early May. London's benchmark index (^FTSE) was 0.4% down in early trade. Germany's DAX (^GDAXI) dipped 0.7% and the CAC (^FCHI) in Paris also headed 0.7% into the red. The pan-European STOXX 600 (^STOXX) was down 0.6%. Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red. The pound was 0.1% down against the US dollar (GBPUSD=X) at 1.3412. Stocks: Create your watchlist and portfolio Follow along for live updates throughout the day: Stocks in Asia retreated overnight amid ongoing worries about conflict in the Middle East. The Nikkei (^N225) fell 1% on the day in Japan, while the Hang Seng (^HSI) fell 2% in Hong Kong on heavy selling of tech-related stocks. Shares in Japan's Nippon Steel rose 3% after it announced that its acquisition of US Steel, which met with American government opposition for more than a year, was finally completed. The Shanghai Composite ( was 0.8% down by the end of the session and in South Korea, the Kospi (^KS11) managed to add 0.2% on the day. Across the pond on Wall Street, US stocks drifted to a mixed finish after the Federal Reserve indicated it may cut interest rates twice this year, though it is far from certain about that. On Wall Street, the S&P 500 (^GSPC) was flat, at 5,980.87, the Dow Jones (^DJI) dropped 0.1%, to 42,171.66, and the Nasdaq (^IXIC) added 0.1%, to 19,546.27. President Donald Trump also increased tensions by warning that he may get directly involved in the conflict with Israel, however, Iran's supreme leader rejected US calls for surrender. In the bond market, the yield on 10-year US Treasury notes dipped to 4.396% from 4.405% a day earlier. US financial markets will be closed on Thursday for the Juneteenth holiday. Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy. In the day ahead we have rates decisions from the BoE, Norges, and SNB. We will also get ECB's President Lagarde, Villeroy, Nagel and Guindos speak. It's a quieter day for data releases, including Eurozone April construction output and the June Philadelphia Business Outlook in the US. Here's a quick snapshot of the agenda: 7am: Trading updates: Wise, Whitbread Plc, NCC, Urban Logistics REIT 8.30am: Swiss National Bank interest rate decision 9am: Norges Bank interest rate decision 12pm: Bank of England interest rate decision 12pm: Bank of Turkey interest rate decisionStocks in Asia retreated overnight amid ongoing worries about conflict in the Middle East. The Nikkei (^N225) fell 1% on the day in Japan, while the Hang Seng (^HSI) fell 2% in Hong Kong on heavy selling of tech-related stocks. Shares in Japan's Nippon Steel rose 3% after it announced that its acquisition of US Steel, which met with American government opposition for more than a year, was finally completed. The Shanghai Composite ( was 0.8% down by the end of the session and in South Korea, the Kospi (^KS11) managed to add 0.2% on the day. Across the pond on Wall Street, US stocks drifted to a mixed finish after the Federal Reserve indicated it may cut interest rates twice this year, though it is far from certain about that. On Wall Street, the S&P 500 (^GSPC) was flat, at 5,980.87, the Dow Jones (^DJI) dropped 0.1%, to 42,171.66, and the Nasdaq (^IXIC) added 0.1%, to 19,546.27. President Donald Trump also increased tensions by warning that he may get directly involved in the conflict with Israel, however, Iran's supreme leader rejected US calls for surrender. In the bond market, the yield on 10-year US Treasury notes dipped to 4.396% from 4.405% a day earlier. US financial markets will be closed on Thursday for the Juneteenth holiday. Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy. In the day ahead we have rates decisions from the BoE, Norges, and SNB. We will also get ECB's President Lagarde, Villeroy, Nagel and Guindos speak. It's a quieter day for data releases, including Eurozone April construction output and the June Philadelphia Business Outlook in the US. Here's a quick snapshot of the agenda: 7am: Trading updates: Wise, Whitbread Plc, NCC, Urban Logistics REIT 8.30am: Swiss National Bank interest rate decision 9am: Norges Bank interest rate decision 12pm: Bank of England interest rate decision 12pm: Bank of Turkey interest rate decision 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
The Star
2 days ago
- Business
- The Star
Roundup: U.S. stocks close mixed as Fed leaves interest rates unchanged
NEW YORK, June 18 (Xinhua) -- U.S. stocks ended mixed on Wednesday, following the Federal Reserve's latest policy update, where the central bank kept interest rates steady. The Dow Jones Industrial Average fell by 44.14 points, or 0.10 percent, to 42,171.66. The S&P 500 sank 1.85 points, or 0.03 percent, to 5,980.87. The Nasdaq Composite Index increased by 25.18 points, or 0.13 percent, to 19,546.27. Seven of the 11 primary S&P 500 sectors ended in red, with energy and communication services leading the laggards by losing 0.68 percent and 0.67 percent, respectively. Meanwhile, technology and utilities led the gainers by going up 0.36 percent and 0.25 percent, respectively. The Fed kept interest rates unchanged on Wednesday, leaving the federal funds rate in the 4.25 percent to 4.5 percent range, as policymakers continued to weigh the economic fallout from U.S. President Donald Trump's expanding tariff regime. In its latest policy statement, the central bank offered a sobering view of the economic landscape, acknowledging persistent inflation pressures even as growth slows. Fed officials now expect consumer prices to rise 3 percent in 2025, up from the previous estimate of 2.7 percent, while economic growth is projected to decline to 1.4 percent, down from 1.7 percent. Trump's tariff policy is undoubtedly a contributing factor. "What we are waiting for to reduce rates is to understand what will happen with the tariff inflation. There is a lot of uncertainty about that," Fed Chair Jerome Powell said. "Ultimately, the cost of the tariffs has to be paid." The Fed also released its latest Summary of Economic Projections (SEP), offering a glimpse into how policymakers see interest rates evolving over time. The widely watched "dot plot" showed that the median forecast for the federal funds rate at the end of 2025 remains at 3.9 percent, unchanged from the March estimate. Seven of the 19 participants indicated they wanted no cuts this year, up from four in March. "After the June meeting, we still don't expect any rate cuts this year. A large share of the committee has moved towards this view, and we expect the migration to continue as tariff-driven inflation starts to hit the data," said analysts from Bank of America Global Research later Wednesday. But central bankers appear torn between competing pressures: a job market that's clearly cooling and price increases that remain uncomfortably high. The Fed revised its 2025 unemployment forecast slightly higher to 4.5 percent, indicating growing concerns about a weakening job market. "The Fed is stuck," said one analyst. "They're being pulled in opposite directions -- inflation isn't falling fast enough, and the labor market is losing steam." One of the clearest signs of that softening is in continuing jobless claims, which track Americans receiving unemployment benefits for multiple weeks. Last week, that number climbed to just under 2 million, the highest level since November 2021. While still low by historical standards, the steady upward trend suggests more workers are struggling to find new jobs. "Uncertainty about the economic outlook has diminished but remains elevated. The (Federal Open Market) Committee is attentive to the risks to both sides of its dual mandate," the committee said. "People can look at the same data and they can evaluate the risks differently as you know," Powell added. "And that includes the risk of higher inflation, the risk that will be more persistent, the risk that the labor market will weaken. People are going to have different assessments of that risk." Markets remained jittery, not only from economic signals, but also from the growing geopolitical uncertainty in the Middle East. Stocks have swung sharply in recent days as investors try to gauge the risk of broader conflict. On Wednesday, Trump told reporters outside the White House that the Iranians had reached out and signaled that they would send a delegation to Washington for negotiations. Hostilities between Israel and Iran extended into a sixth consecutive day on Wednesday, as tensions escalated further with a stark warning from Iran's Supreme Leader Ayatollah Ali Khamenei who declared that Iran will not surrender and cautioned that any U.S. involvement in the conflict would "undoubtedly be met with irreparable damage." His remarks heightened global concern that the crisis could widen into a broader regional war, drawing in more international players and further rattling global markets.
Yahoo
2 days ago
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq stall as Fed holds rates steady, forecasts 2 cuts in 2025
US stocks were mixed on Wednesday, with the prospect of the US joining Israel-Iran hostilities keeping investors on edge as the Federal Reserve held interest rates steady while officials diverged over the ultimate path of interest rates this year. The Dow Jones Industrial Average (^DJI) fell 0.1% while the S&P 500 (^GSPC) slipped just below the flat line. Meanwhile, the Nasdaq Composite (^IXIC) rose about 0.1%. All three major averages had been up around 0.6% on the day earlier in the trading session. The central bank held rates steady for the fourth meeting in a row. It also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, which would likely represent two 25-basis-point cuts this year. However, officials were more divided on that path, with a handful forecasting no change to rates. Fed Chair Jerome Powell said the right move for the central bank at this juncture was to hold steady to study the near-term path of inflation. "What we are waiting for to reduce rates is to understand what will happen with the tariff inflation. There is a lot of uncertainty about that," Powell said, adding, 'Ultimately, the cost of the tariffs has to be paid." Read more: The latest on Trump's tariffs Markets are also on alert for any sign that the US has joined the Middle East conflict, which has swung stocks around since it broke out last week. President Trump demurred Wednesday when asked if he's moving closer to bombing Iran. "I may do it. I may not do it. I mean, nobody knows what I'm going to do," he said. Iran has warned it will respond firmly if the US crosses a red line into involvement and has reportedly readied missiles for strikes on US bases in the region if it does. Oil prices nudged higher. Brent futures (BZ=F), the international benchmark, were roughly flat above $76 a barrel while West Texas Intermediate (CL=F) crude traded just below $75. US stock and bond markets will be closed on Thursday, June 19, for Juneteenth National Independence Day. The stock market will reopen Friday at 9:30 a.m. ET. Following Juneteenth, the remaining holidays in 2025 observed by the New York Stock Exchange and Nasdaq are: Read more here about the 10 stock market holidays in 2025. US stocks were mixed on Wednesday, with the prospect of the US joining Israel-Iran hostilities keeping investors on edge as the Federal Reserve held interest rates steady while officials diverged over the ultimate path of interest rates this year. The Dow Jones Industrial Average (^DJI) fell 0.1% while the S&P 500 (^GSPC) slipped just below the flat line. Meanwhile, the Nasdaq Composite (^IXIC) rose about 0.1%. All three major averages had been up around 0.6% on the day earlier in the trading session. The central bank held rates steady for the fourth meeting in a row. It also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, unchanged from March. On June 4, The Wall Street Journal reported that a hiring freeze at the Bureau of Labor Statistics would force the federal agency to survey fewer businesses for its reports, such as the Consumer Price Index (CPI). When asked about these cutbacks on Wednesday, Powell said the cutback on survey size will "lead to more volatility in the surveys." To be clear, Powell said, "the data we get right now, we can do our jobs. I'm not concerned that we can't do our jobs." But the Fed chair did spend some time stressing the importance of accurate data. "Having really good data on the state of the economy at any given time is a huge public good," Powell said. "It helps. It doesn't just help the fed, it helps the government. It helps Congress. It helps the executive branch. More importantly, really, it helps businesses. They need to know what's going on in the economy." There was a clear divide in the June 2025 summary of economic projections. Seven officials see the Fed's benchmark interest rate not changing at all this year while eight officials see the central bank lowering the rate by a total of 50 basis points. When asked about the divergence, Fed Chair Jerome Powell said, "If you have a higher inflation forecast, you're going to be less likely to be writing down more cuts." "People can look at the same data and they can evaluate the risks differently, as you know," Powell said. "And that includes the risk of higher inflation, the risk that will be more persistent, the risk that the labor market will weaken. People are going to have different assessments of that risk." But Powell continued, adding that with elevated uncertainty about the economic outlook, "no one holds these rate paths [in the Fed's projections] with a lot of conviction." "As the data come in, you should see those differences diminish," Powell said. Federal Reserve Chair Jerome Powell acknowledged Wednesday that the housing market remains a weak spot in the broader economy — one the Fed is watching closely, but can do little to directly fix. "The housing market is a longer-run problem," Powell said, pointing to a mix of persistent supply shortages and still-elevated mortgage rates. It's both a short-term strain and a longer-term structural issue, he noted, and not something that can be resolved through monetary policy alone. "I think the best thing we can do for the housing market is to restore price stability in a sustainable way and create a strong labor market," Powell added. His comments come just hours after fresh data showed a sharp pullback in home construction. Housing starts and building permits for May both came in below expectations, with just 1.26 million new homes started, the lowest monthly total since the height of the pandemic. During his press conference on Wednesday, Federal Reserve Chair Jerome Powell highlighted a theme playing out in markets over the past two months: The economic outlook looks better than it did in early April, but not necessarily better than it was prior to the tariff whipsaw. "Estimates of where the tariffs will be have actually moved back down, although still at an elevated level," Powell said. As Powell pointed out, the peak estimated effective tariff rate, as estimated by JPMorgan below, has been falling since early April. But the 14.4% estimated effective tariff rate remains well above the 2.5% seen entering this year and above the 10.3% seen before President Trump's "Liberation Day" tariff announcements in April. The Federal Reserve's latest "dot plot" outlining future interest rate moves suggests the central bank will still cut rates twice this year, unchanged from its March outlook, though June's forecasts shows a more divided Fed weighing its next move on interest rates. The Fed announced Wednesday that it held its benchmark interest rate in a range of 4.25%-4.5%, as expected. This marked the fourth straight meeting the Fed kept rates unchanged since cutting rates by 0.25% back in December. Along with its policy announcement, the Fed released updated economic forecasts in its Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The central bank raised its projections for inflation and unemployment at the end of this year while lowering its forecast for economic growth. Fed officials see the fed funds rate falling to 3.9% this year, on par with its previous March projection. Coming into the decision, markets had priced in one to two additional rate cuts this year, according to Bloomberg data. The central bank slashed interest rates by a total of 100 basis points in 2024. It is yet to deliver rate cuts so far this year. In 2026, officials see one additional cut; in March, the Fed expected to cut rates twice next year. Twelve officials predict a rate cut this year, with two officials seeing a decrease of more than 0.5%. Most notable in Wednesday's dot plot were forecasts that showed seven FOMC members see no change in rates this year, signaling a more hawkish stance compared to March when four officials saw no change. Two FOMC members expect only one interest rate cut this year. Read more here. The Federal Reserve held interest rates steady in a range of 4.25% to 4.5%. The central bank also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, which would likely represent two 25 basis points cuts this year. As part of the Fed's SEP, officials marked up their projections for core inflation and lowered their forecast for economic growth in 2025. The Fed now also sees the "core" PCE inflation hitting 3.1% in 2025 up from a prior forecast of 2.8%. Less than 30 minutes before the Federal Reserve is set to release its next policy update, the Dow Jones Industrial Average (^DJI) rose 0.1% and S&P 500 (^GSPC) added less than 0.1%. Meanwhile, the Nasdaq Composite (^IXIC) added about 0.2%. All three major averages had been up about 0.6% at one point in the trading day. The 10-year Treasury yield (^TNX) was down about three basis points to hover near 4.36%. As we often note, most of the stock swings on Fed days typically comes after Federal Reserve chair Jerome Powell's press conference starts at 2:30 p.m. ET. But specifically the last hour of trading has been where the market action is as of late. Research from Bespoke Investment Group shows that since all Fed meetings since 1994 the S&P 500 (^GSPC) has dropped an average of six basis points in the final hour of trading. But across the past 10 meetings, those losses have worsened with the S&P 500 falling more than 41 basis points on average. This included eight straight meetings that saw the S&P 500 fall in the final hour trading leading into the March meeting when the S&P 500 rose 10 basis points in the final hour of trading. Yahoo Finance's Claire Boston reports: Mortgage rates drifted slightly lower but remained above 6.8% for another week as the Treasury yields they closely track oscillated. The average 30-year mortgage rate was 6.81% for the week through Tuesday, down from 6.84% a week earlier, according to Freddie Mac data. The average 15-year mortgage rate was essentially unchanged at 5.96%, from 5.97%. This week's data collection period was a day shorter than normal to account for Thursday's Juneteenth holiday. This week's rate is the lowest in four weeks, but mortgage rates haven't been able to break out of a narrow range between 6.8% and 7% since April. This week, the 10-year Treasury yield, which closely tracks mortgage rates, whipsawed and, ultimately, dropped slightly in response to the Israel-Iran conflict and a contraction in retail sales in May as consumers remain jittery about tariffs and their financial positions. Read more here. Yahoo Finance's Jennifer Schonberger reports: The Federal Reserve is widely expected to hold rates steady at the conclusion of its policy meeting Wednesday, but the big question is whether Chairman Jerome Powell and his colleagues will stay committed to two rate cuts in 2025. The answer will come in the form of the "dot plot," a chart updated quarterly that shows each Fed official's prediction about the direction of the central bank's benchmark interest rate. The last dot plot, released in March, revealed a consensus among Fed officials for two cuts this year as some were already factoring the uncertainties of President Trump's economic policies into their projections. They made the same prediction last December. Many Fed watchers expect central bank officials to stick with what they have already signaled as they weigh numerous unknowns, including the ultimate outcome of trade policies and the ripple effects triggered by a new conflict between Israel and Iran. "I think they'll end up keeping two cuts, but will stick with narrative that they need more time to see effects of tariffs on inflation," Wilmington Trust senior bond fund manager Wilmer Stith said. Read more here. Circle (CRCL) stock rose 15% on Wednesday as the US Senate passed a bill to regulate the sector. The stablecoin issuer has now seen its shares soar more than 460% since its IPO in early June. Marvell Technology (MRVL) stock rose roughly 8% on Wednesday as investors digested the company's AI event. "We continue to like MRVL as the rising tide of AI capex can help drive potential upside for one of the few franchises with a singular data-center focus, and with breadth of leading IP across compute, XPU, networking, electro-optics, security, and memory/storage," Bank of America analyst Vivek Arya analyst wrote in a note to clients on Wednesday while boosting his price target to $90 from $80. Housing activity remains in the doldrums. Privately owned housing starts declined 9.8% in May to hit 1.256 million, the lowest level in five years, according to data from the Census Bureau on Thursday. "Housing starts are running below the level of housing completions," Renaissance Macro head of economics Neil Dutta wrote in a note to clients on Wednesday. "This means that units under construction will continue to decline." Citi economist Veronica Clark pointed out in a note to clients that the weak housing starts data could also be a bad sign for future employment in the sector. "As construction declines, we continue to see downside risks to employment in this sector," Clark wrote. US stocks wavered on Wednesday, with the prospect of the US joining Israel-Iran hostilities keeping investors on edge as they braced for the Federal Reserve's interest rate decision later in the day. The Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC), and Nasdaq Composite (^IXIC) were all within less than 0.1% of the flat line at the open. Weekly claims for unemployment benefits remained near their highest level in eight months during the second full week of June, while the number of Americans filing for unemployment insurance on an ongoing basis also remained near the highest level since November 2021. Data from the Department of Labor released Thursday morning showed 245,000 initial jobless claims were filed in the week ending June 14, down from 250,000 seen the week prior and in line with economists' expectations. Meanwhile, 1.945 million continuing claims were filed. This marked a slight move down from 1.951 million the week prior, which had been the highest level since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs. Shares of the largest US stablecoin issuer, Circle (CRCL), popped 3% after the Senate passed new legislation that would establish a framework for dollar-backed cryptocurrencies known as stablecoins. The GENIUS Act still needs to move through the House and President Trump before it's signed into law, but the bill's passage in the Senate was heralded as a win for the crypto industry, which has been pushing for clearer and more positive regulation. 'I feel really good about [this bill],' Dante Disparte, chief strategy officer and head of global policy and operations at Circle, told Yahoo Finance's David Hollerith and Jennifer Schonberger. Circle stock debuted on the public markets on June 5 in an explosive IPO. Since its debut, Circle stock is up more than 380%. Read more here. Toymaker Hasbro (HAS) announced Tuesday it cut 3% of its global workforce, or about 150 employees, as part of a larger cost-cutting effort. The stock fell 3% in premarket trade on Wednesday. The Monopoly maker has been navigating President Trump's tariffs and trade war, especially with China, where it sources about half of its toys and games. The company is working to diversify its supply chain. and reduce its exposure to China. "Ultimately, tariffs translate into higher consumer prices, potential job losses as we adjust to absorb increased costs, and reduced profits for our shareholders," Hasbro's CEO Chris Cocks said during an earnings call in April, per Reuters. Read more here. Here are some top stocks trending on Yahoo Finance in premarket trading: AMD (AMD) stock rose over 1% in premarket trading on Wednesday, following the news it plans to partner with Microsoft to develop custom chips to power the next range of Xbox systems. Tesla (TSLA) stock was up before the bell today. A Bloomberg report on Wednesday said that Elon Musk's artificial intelligence startup xAI was burning through $1B a month as costs of building its AI models increased. Micron (MU) shares rose 1% today in premarket trading, following Wells Fargo analysts maintaining a Buy rating for the tech stock and a price target of $130.00. US stock and bond markets will be closed on Thursday, June 19, for Juneteenth National Independence Day. The stock market will reopen Friday at 9:30 a.m. ET. Following Juneteenth, the remaining holidays in 2025 observed by the New York Stock Exchange and Nasdaq are: Read more here about the 10 stock market holidays in 2025. US stocks were mixed on Wednesday, with the prospect of the US joining Israel-Iran hostilities keeping investors on edge as the Federal Reserve held interest rates steady while officials diverged over the ultimate path of interest rates this year. The Dow Jones Industrial Average (^DJI) fell 0.1% while the S&P 500 (^GSPC) slipped just below the flat line. Meanwhile, the Nasdaq Composite (^IXIC) rose about 0.1%. All three major averages had been up around 0.6% on the day earlier in the trading session. The central bank held rates steady for the fourth meeting in a row. It also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, unchanged from March. On June 4, The Wall Street Journal reported that a hiring freeze at the Bureau of Labor Statistics would force the federal agency to survey fewer businesses for its reports, such as the Consumer Price Index (CPI). When asked about these cutbacks on Wednesday, Powell said the cutback on survey size will "lead to more volatility in the surveys." To be clear, Powell said, "the data we get right now, we can do our jobs. I'm not concerned that we can't do our jobs." But the Fed chair did spend some time stressing the importance of accurate data. "Having really good data on the state of the economy at any given time is a huge public good," Powell said. "It helps. It doesn't just help the fed, it helps the government. It helps Congress. It helps the executive branch. More importantly, really, it helps businesses. They need to know what's going on in the economy." There was a clear divide in the June 2025 summary of economic projections. Seven officials see the Fed's benchmark interest rate not changing at all this year while eight officials see the central bank lowering the rate by a total of 50 basis points. When asked about the divergence, Fed Chair Jerome Powell said, "If you have a higher inflation forecast, you're going to be less likely to be writing down more cuts." "People can look at the same data and they can evaluate the risks differently, as you know," Powell said. "And that includes the risk of higher inflation, the risk that will be more persistent, the risk that the labor market will weaken. People are going to have different assessments of that risk." But Powell continued, adding that with elevated uncertainty about the economic outlook, "no one holds these rate paths [in the Fed's projections] with a lot of conviction." "As the data come in, you should see those differences diminish," Powell said. Federal Reserve Chair Jerome Powell acknowledged Wednesday that the housing market remains a weak spot in the broader economy — one the Fed is watching closely, but can do little to directly fix. "The housing market is a longer-run problem," Powell said, pointing to a mix of persistent supply shortages and still-elevated mortgage rates. It's both a short-term strain and a longer-term structural issue, he noted, and not something that can be resolved through monetary policy alone. "I think the best thing we can do for the housing market is to restore price stability in a sustainable way and create a strong labor market," Powell added. His comments come just hours after fresh data showed a sharp pullback in home construction. Housing starts and building permits for May both came in below expectations, with just 1.26 million new homes started, the lowest monthly total since the height of the pandemic. During his press conference on Wednesday, Federal Reserve Chair Jerome Powell highlighted a theme playing out in markets over the past two months: The economic outlook looks better than it did in early April, but not necessarily better than it was prior to the tariff whipsaw. "Estimates of where the tariffs will be have actually moved back down, although still at an elevated level," Powell said. As Powell pointed out, the peak estimated effective tariff rate, as estimated by JPMorgan below, has been falling since early April. But the 14.4% estimated effective tariff rate remains well above the 2.5% seen entering this year and above the 10.3% seen before President Trump's "Liberation Day" tariff announcements in April. The Federal Reserve's latest "dot plot" outlining future interest rate moves suggests the central bank will still cut rates twice this year, unchanged from its March outlook, though June's forecasts shows a more divided Fed weighing its next move on interest rates. The Fed announced Wednesday that it held its benchmark interest rate in a range of 4.25%-4.5%, as expected. This marked the fourth straight meeting the Fed kept rates unchanged since cutting rates by 0.25% back in December. Along with its policy announcement, the Fed released updated economic forecasts in its Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The central bank raised its projections for inflation and unemployment at the end of this year while lowering its forecast for economic growth. Fed officials see the fed funds rate falling to 3.9% this year, on par with its previous March projection. Coming into the decision, markets had priced in one to two additional rate cuts this year, according to Bloomberg data. The central bank slashed interest rates by a total of 100 basis points in 2024. It is yet to deliver rate cuts so far this year. In 2026, officials see one additional cut; in March, the Fed expected to cut rates twice next year. Twelve officials predict a rate cut this year, with two officials seeing a decrease of more than 0.5%. Most notable in Wednesday's dot plot were forecasts that showed seven FOMC members see no change in rates this year, signaling a more hawkish stance compared to March when four officials saw no change. Two FOMC members expect only one interest rate cut this year. Read more here. The Federal Reserve held interest rates steady in a range of 4.25% to 4.5%. The central bank also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, which would likely represent two 25 basis points cuts this year. As part of the Fed's SEP, officials marked up their projections for core inflation and lowered their forecast for economic growth in 2025. The Fed now also sees the "core" PCE inflation hitting 3.1% in 2025 up from a prior forecast of 2.8%. Less than 30 minutes before the Federal Reserve is set to release its next policy update, the Dow Jones Industrial Average (^DJI) rose 0.1% and S&P 500 (^GSPC) added less than 0.1%. Meanwhile, the Nasdaq Composite (^IXIC) added about 0.2%. All three major averages had been up about 0.6% at one point in the trading day. The 10-year Treasury yield (^TNX) was down about three basis points to hover near 4.36%. As we often note, most of the stock swings on Fed days typically comes after Federal Reserve chair Jerome Powell's press conference starts at 2:30 p.m. ET. But specifically the last hour of trading has been where the market action is as of late. Research from Bespoke Investment Group shows that since all Fed meetings since 1994 the S&P 500 (^GSPC) has dropped an average of six basis points in the final hour of trading. But across the past 10 meetings, those losses have worsened with the S&P 500 falling more than 41 basis points on average. This included eight straight meetings that saw the S&P 500 fall in the final hour trading leading into the March meeting when the S&P 500 rose 10 basis points in the final hour of trading. Yahoo Finance's Claire Boston reports: Mortgage rates drifted slightly lower but remained above 6.8% for another week as the Treasury yields they closely track oscillated. The average 30-year mortgage rate was 6.81% for the week through Tuesday, down from 6.84% a week earlier, according to Freddie Mac data. The average 15-year mortgage rate was essentially unchanged at 5.96%, from 5.97%. This week's data collection period was a day shorter than normal to account for Thursday's Juneteenth holiday. This week's rate is the lowest in four weeks, but mortgage rates haven't been able to break out of a narrow range between 6.8% and 7% since April. This week, the 10-year Treasury yield, which closely tracks mortgage rates, whipsawed and, ultimately, dropped slightly in response to the Israel-Iran conflict and a contraction in retail sales in May as consumers remain jittery about tariffs and their financial positions. Read more here. Yahoo Finance's Jennifer Schonberger reports: The Federal Reserve is widely expected to hold rates steady at the conclusion of its policy meeting Wednesday, but the big question is whether Chairman Jerome Powell and his colleagues will stay committed to two rate cuts in 2025. The answer will come in the form of the "dot plot," a chart updated quarterly that shows each Fed official's prediction about the direction of the central bank's benchmark interest rate. The last dot plot, released in March, revealed a consensus among Fed officials for two cuts this year as some were already factoring the uncertainties of President Trump's economic policies into their projections. They made the same prediction last December. Many Fed watchers expect central bank officials to stick with what they have already signaled as they weigh numerous unknowns, including the ultimate outcome of trade policies and the ripple effects triggered by a new conflict between Israel and Iran. "I think they'll end up keeping two cuts, but will stick with narrative that they need more time to see effects of tariffs on inflation," Wilmington Trust senior bond fund manager Wilmer Stith said. Read more here. Circle (CRCL) stock rose 15% on Wednesday as the US Senate passed a bill to regulate the sector. The stablecoin issuer has now seen its shares soar more than 460% since its IPO in early June. Marvell Technology (MRVL) stock rose roughly 8% on Wednesday as investors digested the company's AI event. "We continue to like MRVL as the rising tide of AI capex can help drive potential upside for one of the few franchises with a singular data-center focus, and with breadth of leading IP across compute, XPU, networking, electro-optics, security, and memory/storage," Bank of America analyst Vivek Arya analyst wrote in a note to clients on Wednesday while boosting his price target to $90 from $80. Housing activity remains in the doldrums. Privately owned housing starts declined 9.8% in May to hit 1.256 million, the lowest level in five years, according to data from the Census Bureau on Thursday. "Housing starts are running below the level of housing completions," Renaissance Macro head of economics Neil Dutta wrote in a note to clients on Wednesday. "This means that units under construction will continue to decline." Citi economist Veronica Clark pointed out in a note to clients that the weak housing starts data could also be a bad sign for future employment in the sector. "As construction declines, we continue to see downside risks to employment in this sector," Clark wrote. US stocks wavered on Wednesday, with the prospect of the US joining Israel-Iran hostilities keeping investors on edge as they braced for the Federal Reserve's interest rate decision later in the day. The Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC), and Nasdaq Composite (^IXIC) were all within less than 0.1% of the flat line at the open. Weekly claims for unemployment benefits remained near their highest level in eight months during the second full week of June, while the number of Americans filing for unemployment insurance on an ongoing basis also remained near the highest level since November 2021. Data from the Department of Labor released Thursday morning showed 245,000 initial jobless claims were filed in the week ending June 14, down from 250,000 seen the week prior and in line with economists' expectations. Meanwhile, 1.945 million continuing claims were filed. This marked a slight move down from 1.951 million the week prior, which had been the highest level since November 2021. Economists see an increase in continuing claims as a sign that those out of work are taking longer to find new jobs. Shares of the largest US stablecoin issuer, Circle (CRCL), popped 3% after the Senate passed new legislation that would establish a framework for dollar-backed cryptocurrencies known as stablecoins. The GENIUS Act still needs to move through the House and President Trump before it's signed into law, but the bill's passage in the Senate was heralded as a win for the crypto industry, which has been pushing for clearer and more positive regulation. 'I feel really good about [this bill],' Dante Disparte, chief strategy officer and head of global policy and operations at Circle, told Yahoo Finance's David Hollerith and Jennifer Schonberger. Circle stock debuted on the public markets on June 5 in an explosive IPO. Since its debut, Circle stock is up more than 380%. Read more here. Toymaker Hasbro (HAS) announced Tuesday it cut 3% of its global workforce, or about 150 employees, as part of a larger cost-cutting effort. The stock fell 3% in premarket trade on Wednesday. The Monopoly maker has been navigating President Trump's tariffs and trade war, especially with China, where it sources about half of its toys and games. The company is working to diversify its supply chain. and reduce its exposure to China. "Ultimately, tariffs translate into higher consumer prices, potential job losses as we adjust to absorb increased costs, and reduced profits for our shareholders," Hasbro's CEO Chris Cocks said during an earnings call in April, per Reuters. Read more here. Here are some top stocks trending on Yahoo Finance in premarket trading: AMD (AMD) stock rose over 1% in premarket trading on Wednesday, following the news it plans to partner with Microsoft to develop custom chips to power the next range of Xbox systems. Tesla (TSLA) stock was up before the bell today. A Bloomberg report on Wednesday said that Elon Musk's artificial intelligence startup xAI was burning through $1B a month as costs of building its AI models increased. Micron (MU) shares rose 1% today in premarket trading, following Wells Fargo analysts maintaining a Buy rating for the tech stock and a price target of $130.00. 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
