The US Federal Reserve's decision to cut rates by a big margin seven weeks before the vote has it fielding criticism from both political parties. It is in the fed's best interest to keep its distance from politics. However, the fed's daring move to boost the economy in the weeks leading up to a high-stakes election comes into the spotlight. Take a look at this report for more.

US: First Rate Cut in Four Years Comes Amid the Presidential Race

As the Federal Reserve navigates a complicated economic landscape, it has embarked on a significant recalibration of its monetary policy. This shift, articulated by Fed Chair Jerome Powell, is designed to address ongoing challenges such as inflation and economic growth. In a recently concluded Federal Open Market Committee (FOMC) meeting, Powell introduced the term "recalibration," signaling a careful approach to managing interest rates and monetary supply as detailed in a report by CNBC. <o:p></o:p>

The Fed's recalibration comes at a time when the US consumer price index (CPI) have slowed to 2.5 per cent in August from a year ago, down from 2.9 per cent in July and the lowest annual figure since February 2021, the Labor Department's Bureau of Labor Statistics stated on September 11.&nbsp;The central bank's objective is to maintain price stability while fostering sustainable economic growth, which necessitates a careful balance in its policy decisions.<o:p></o:p>

Powell emphasized that the Fed is not solely focused on raising interest rates but is instead adopting a more flexible stance. "We are looking at a range of factors," he stated, highlighting the importance of data-driven decision-making in setting future policy directions. This approach reflects an understanding that aggressive rate hikes could hamper economic recovery and negatively impact employment rates.<o:p></o:p>

The implications of this recalibration are significant for various sectors of the US economy. For consumers, a more measured approach to interest rate adjustments could mean more stable mortgage rates and borrowing costs. Businesses may also benefit from improved access to credit, allowing for continued investment and expansion.<o:p></o:p>

Furthermore, the Fed's strategy aims to reassure financial markets that it is committed to controlling inflation without derailing economic growth. By communicating its intentions clearly, the central bank hopes to foster confidence among investors and consumers alike. This transparency is crucial in an environment where market volatility can be worsened by uncertainty regarding monetary policy.<o:p></o:p>

In addition to addressing inflation, Powell noted that the Fed is also monitoring global economic conditions closely. Factors such as geopolitical tensions and supply chain disruptions can have far-reaching effects on domestic economic stability. As such, the recalibration of policy will take into account not only local data but also international developments that could impact the US economy.<o:p></o:p>

Looking ahead, analysts suggest that the Fed's recalibration may lead to a prolonged period of steady interest rates rather than aggressive hikes or cuts. This could create a more predictable environment for both consumers and businesses, allowing them to plan for the future with greater certainty.

Hence, as the Federal Reserve continues its efforts to navigate these complex challenges, the concept of recalibration will likely remain at the forefront of discussions surrounding monetary policy. By prioritising flexibility and data-driven decision-making, Powell and his team aim to strike a balance that supports economic growth while keeping inflation in check.<o:p></o:p>

<o:p>&nbsp;</o:p>

As the Federal Reserve navigates a complicated economic landscape, it has embarked on a significant recalibration of its monetary policy. This shift, articulated by Fed Chair Jerome Powell, is designed to address ongoing challenges such as inflation and economic growth.

As the Federal Reserve navigates a complicated economic landscape, it has embarked on a significant recalibration of its monetary policy. This shift, articulated by Fed Chair Jerome Powell, is designed to address ongoing challenges such as inflation and economic growth. In a recently concluded Federal Open Market Committee (FOMC) meeting, Powell introduced the term "recalibration," signaling a careful approach to managing interest rates and monetary supply as detailed in a report by CNBC. The Fed's recalibration comes at a time when the US consumer price index (CPI) have slowed to 2.5 per cent in August from a year ago, down from 2.9 per cent in July and the lowest annual figure since February 2021, the Labor Department's Bureau of Labor Statistics stated on September 11. The central bank's objective is to maintain price stability while fostering sustainable economic growth, which necessitates a careful balance in its policy decisions. Powell emphasized that the Fed is not solely focused on raising interest rates but is instead adopting a more flexible stance. "We are looking at a range of factors," he stated, highlighting the importance of data-driven decision-making in setting future policy directions. This approach reflects an understanding that aggressive rate hikes could hamper economic recovery and negatively impact employment rates. The implications of this recalibration are significant for various sectors of the US economy. For consumers, a more measured approach to interest rate adjustments could mean more stable mortgage rates and borrowing costs. Businesses may also benefit from improved access to credit, allowing for continued investment and expansion. Furthermore, the Fed's strategy aims to reassure financial markets that it is committed to controlling inflation without derailing economic growth. By communicating its intentions clearly, the central bank hopes to foster confidence among investors and consumers alike. This transparency is crucial in an environment where market volatility can be worsened by uncertainty regarding monetary policy. In addition to addressing inflation, Powell noted that the Fed is also monitoring global economic conditions closely. Factors such as geopolitical tensions and supply chain disruptions can have far-reaching effects on domestic economic stability. As such, the recalibration of policy will take into account not only local data but also international developments that could impact the US economy. Looking ahead, analysts suggest that the Fed's recalibration may lead to a prolonged period of steady interest rates rather than aggressive hikes or cuts. This could create a more predictable environment for both consumers and businesses, allowing them to plan for the future with greater certainty. Hence, as the Federal Reserve continues its efforts to navigate these complex challenges, the concept of recalibration will likely remain at the forefront of discussions surrounding monetary policy. By prioritising flexibility and data-driven decision-making, Powell and his team aim to strike a balance that supports economic growth while keeping inflation in check.

The Fed's new strategy: Understanding the "Recalibration" of monetary policy

The US Federal Reserve is widely expected to cut interest rates by 0.25% in its upcoming meeting on September 17-18. This potential rate cut could mark the start of the fourth major rate-cutting cycle in 25 years. Historically, when the Fed lowers rates, it has generally been good news for stocks.

What the upcoming Fed policy could mean for you

Let’s take a quick look at today's market updates. Asian markets are mostly in positive territory, recovering from the previous session’s sell-off. Watch WION to know more.

Volatility to persist until Fed's policy decision: Experts

Now, we turn our focus to the minutes of the latest Federal Reserve meeting. During their meeting on July 30-31, several Fed members recognised a valid argument for lowering interest rates. However, the policy committee of the central bank ultimately decided to keep rates unchanged. Watch in for more details!

Minutes of Fed meeting in focus

Monday saw a rise in Asian stock prices as investors looked to this week's crucial US inflation data for fresh clues about the state of the world's largest economy. The Yen has fallen further after touching a seven-month high last week.

Will the FED make quick, sharp rate cuts?

The US economy grew more strongly than expected in the second quarter, at a robust annualised rate of 2.8 per cent, according to figures from the Commerce Department on Thursday.

This was a long way above expectations from economists who had been suggesting a 2.0 per cent growth rate, pointing to much more resilience than otherwise thought in the face of steep interest rate hikes that the Federal Reserve has applied over the past year.

That outperformance was all the more notable given the central bank's target of 1.8 per cent noninflationary growth.

But there was a silver lining for the Fed: the cooling of inflation, as measured by the core PCE price index—a key metric that strips out volatile food and energy components.

It decelerated to a 2.9 per cent rate from the previous quarter's 3.7 per cent, getting closer to the Fed's 2 per cent target.

One economist remarked, "The economy continues to outperform its global peers despite hefty rate hikes."

Resilience has been driven by a robust labour market, even as the unemployment rate edged up to a 2-1/2 year high of 4.1 per cent.

A combination of stronger-than-anticipated growth with softer core inflation set the stage for the Fed to lower interest rates as early as September.

There are now three full interest rate cuts priced into the financial market for the remainder of the year. The central bank gathers next week for its next policy meeting.

While the near-term economic outlook looks good, there are darker signs on the horizon. Indicators in the labour market show it cooling off, which could sap the steam of wage growth.

Also, the saving rate is still below its pre-pandemic levels, while the impact of the full force of the Fed's interest rate hikes remains in the future.

Economists also refer to the possibility of new tariffs in case of the re-election of former US President Donald Trump, which would disrupt the supply chains and discourage investment.

However, recession is not expected in the near time, and generally, the on-year outlook remains optimistic and underpinned by the easing of monetary policy anticipated this year.

(With inputs from Reuters)

The US economy grew more strongly than expected in the second quarter, at a robust annualised rate of 2.8 per cent, according to figures from the Commerce Department on Thursday.

The US economy grew more strongly than expected in the second quarter, at a robust annualised rate of 2.8 per cent, according to figures from the Commerce Department on Thursday. This was a long way above expectations from economists who had been suggesting a 2.0 per cent growth rate, pointing to much more resilience than otherwise thought in the face of steep interest rate hikes that the Federal Reserve has applied over the past year. That outperformance was all the more notable given the central bank's target of 1.8 per cent noninflationary growth. But there was a silver lining for the Fed: the cooling of inflation, as measured by the core PCE price index—a key metric that strips out volatile food and energy components. It decelerated to a 2.9 per cent rate from the previous quarter's 3.7 per cent, getting closer to the Fed's 2 per cent target. One economist remarked, "The economy continues to outperform its global peers despite hefty rate hikes." Resilience has been driven by a robust labour market, even as the unemployment rate edged up to a 2-1/2 year high of 4.1 per cent. A combination of stronger-than-anticipated growth with softer core inflation set the stage for the Fed to lower interest rates as early as September. There are now three full interest rate cuts priced into the financial market for the remainder of the year. The central bank gathers next week for its next policy meeting. While the near-term economic outlook looks good, there are darker signs on the horizon. Indicators in the labour market show it cooling off, which could sap the steam of wage growth. Also, the saving rate is still below its pre-pandemic levels, while the impact of the full force of the Fed's interest rate hikes remains in the future. Economists also refer to the possibility of new tariffs in case of the re-election of former US President Donald Trump, which would disrupt the supply chains and discourage investment. However, recession is not expected in the near time, and generally, the on-year outlook remains optimistic and underpinned by the easing of monetary policy anticipated this year. (With inputs from Reuters)

US economy surges in Q2, inflation eases, rate cut anticipation grows

Bond traders are increasingly betting that the Federal Reserve will cut interest rates by half a percentage point in September, breaking with the traditional quarter-point increment.

A shift in sentiment is evident in the federal fund's futures market, where softer-than-forecasted inflation data released Thursday unleashed a frenzy of buying of October contracts that spilt over into Friday.

Expiring Oct. 31, the contracts already fully price in a quarter-point rate cut at the Fed's September 18 meeting.

Any additional buying at higher price levels then indicates growing expectations that the Fed could start its first easing cycle in years with a more substantial move.

“The Fed is very well-placed to potentially cut in September,” said Marilyn Watson, head of global fundamental fixed-income strategy at BlackRock Inc., on Bloomberg TV. While she expects a quarter-point cut, “we think they’ll probably tee things up potentially in July. We know that the Fed has been very, very data dependent.”

The positions would also benefit if expectations for quarter-point rate cuts on both July 31 and September 18 rise. However, traders gave up hope for a July rate cut weeks ago, and no major Wall Street bank is currently predicting one.

According to data from CME Group Inc., Thursday's buying established new risk, with volume just shy of 260,000 contracts, the most ever for the October tenor. Buying interest remained lofty on Friday, with volume well over 150,000 by 1:30 p.m. New York time.

Market-implied expectations for Fed policy didn't change much Friday following a report on producer prices that did little to move the needle compared with Thursday's consumer price report.&nbsp;

The recent action in the bond market is just one part of a shift in trader bets for more aggressive Fed action on the economy. With inflation data continuing to swing market sentiment, attention will remain on the Fed's meetings ahead and possible rate cuts.

Bond traders are increasingly betting that the Federal Reserve will cut interest rates by half a percentage point in September, breaking with the traditional quarter-point increment.

Bond traders are increasingly betting that the Federal Reserve will cut interest rates by half a percentage point in September, breaking with the traditional quarter-point increment. A shift in sentiment is evident in the federal fund's futures market, where softer-than-forecasted inflation data released Thursday unleashed a frenzy of buying of October contracts that spilt over into Friday. Expiring Oct. 31, the contracts already fully price in a quarter-point rate cut at the Fed's September 18 meeting. Any additional buying at higher price levels then indicates growing expectations that the Fed could start its first easing cycle in years with a more substantial move. “The Fed is very well-placed to potentially cut in September,” said Marilyn Watson, head of global fundamental fixed-income strategy at BlackRock Inc., on Bloomberg TV. While she expects a quarter-point cut, “we think they’ll probably tee things up potentially in July. We know that the Fed has been very, very data dependent.” The positions would also benefit if expectations for quarter-point rate cuts on both July 31 and September 18 rise. However, traders gave up hope for a July rate cut weeks ago, and no major Wall Street bank is currently predicting one. According to data from CME Group Inc., Thursday's buying established new risk, with volume just shy of 260,000 contracts, the most ever for the October tenor. Buying interest remained lofty on Friday, with volume well over 150,000 by 1:30 p.m. New York time. Market-implied expectations for Fed policy didn't change much Friday following a report on producer prices that did little to move the needle compared with Thursday's consumer price report. The recent action in the bond market is just one part of a shift in trader bets for more aggressive Fed action on the economy. With inflation data continuing to swing market sentiment, attention will remain on the Fed's meetings ahead and possible rate cuts.

Bond traders bet big on bold fed rate cuts

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts.

The Bureau of Labor Statistics reported Thursday that the all-items seasonally adjusted consumer price index dropped 0.1 per cent in June after it was unchanged the previous month.

It's the second month in a row with low readings in core CPI, boosting confidence among Federal Reserve officials that inflation is finally cooling.

The broad CPI rose 3.0 per cent in the 12 months through June, compared with a 3.3 per cent increase in May.

It is the weakest annual rise in a year. Economists surveyed by Reuters had expected a 0.1 per cent gain for June and a year-over-year increase of 3.1 per cent, showing how much of a surprise came in the figures.

The annual rise in consumer prices was at 9.1 per cent in June 2022, but the CPI remains significantly higher than measures monitored by the Federal Reserve for its 2 per cent inflation goal.

Other important measures for the Fed, PCE price indexes, climbed 2.6 per cent in May.

This also comes a few days after news that the unemployment rate ticked higher to 4.1 per cent in June from 4.0 per cent in May, which has not been this high since March 2020.

At the same time, economic growth has cooled in response to aggressive rate hikes by the Fed in 2022 and 2023.

Second-quarter gross domestic product is forecasted to rise at an annualised 1.8 per cent, well below the level concluded as strong enough to increase inflation, as considered by policymakers.

Although Federal Reserve Chair Jerome Powell acknowledged recent positive trends in price pressures, he remained cautious.

He told lawmakers this week that he wouldn't declare victory over inflation, saying "more good data would strengthen" the case for rate cuts.

With financial markets and many economists now considering that labour markets are cooling down and that the economy is slowing, they expect the Federal Reserve to kick off its easing cycle in September.

The central bank has left its benchmark overnight interest rate in the 5.25 per cent-5.50 per cent range since last July, following a 525 basis point hike to its policy rate since 2022.

Excluding food and energy—the two most volatile components—the CPI rose 0.1 per cent, following a 0.2 per cent increase in May.

A year ago, core CPI rose 3.3 per cent versus a 3.4 per cent increase in May, underscoring expectations that underlying inflationary pressures are continuing to cool.

(With inputs from Reuters)

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts.

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts. The Bureau of Labor Statistics reported Thursday that the all-items seasonally adjusted consumer price index dropped 0.1 per cent in June after it was unchanged the previous month. It's the second month in a row with low readings in core CPI, boosting confidence among Federal Reserve officials that inflation is finally cooling. The broad CPI rose 3.0 per cent in the 12 months through June, compared with a 3.3 per cent increase in May. It is the weakest annual rise in a year. Economists surveyed by Reuters had expected a 0.1 per cent gain for June and a year-over-year increase of 3.1 per cent, showing how much of a surprise came in the figures. The annual rise in consumer prices was at 9.1 per cent in June 2022, but the CPI remains significantly higher than measures monitored by the Federal Reserve for its 2 per cent inflation goal. Other important measures for the Fed, PCE price indexes, climbed 2.6 per cent in May. This also comes a few days after news that the unemployment rate ticked higher to 4.1 per cent in June from 4.0 per cent in May, which has not been this high since March 2020. At the same time, economic growth has cooled in response to aggressive rate hikes by the Fed in 2022 and 2023. Second-quarter gross domestic product is forecasted to rise at an annualised 1.8 per cent, well below the level concluded as strong enough to increase inflation, as considered by policymakers. Although Federal Reserve Chair Jerome Powell acknowledged recent positive trends in price pressures, he remained cautious. He told lawmakers this week that he wouldn't declare victory over inflation, saying "more good data would strengthen" the case for rate cuts. With financial markets and many economists now considering that labour markets are cooling down and that the economy is slowing, they expect the Federal Reserve to kick off its easing cycle in September. The central bank has left its benchmark overnight interest rate in the 5.25 per cent-5.50 per cent range since last July, following a 525 basis point hike to its policy rate since 2022. Excluding food and energy—the two most volatile components—the CPI rose 0.1 per cent, following a 0.2 per cent increase in May. A year ago, core CPI rose 3.3 per cent versus a 3.4 per cent increase in May, underscoring expectations that underlying inflationary pressures are continuing to cool. (With inputs from Reuters)

US consumer prices decline, bringing Fed closer to rate cuts

Is the worst of inflation behind us? The latest US inflation report suggests a notable shift in the right direction, offering cautious optimism amidst ongoing economic uncertainties.

Is the US FED ready to start cutting rates?

Now, we look at what the US Federal reserve's latest policy means to the world. The US Federal reserve kept rates on hold, given the last leg of the inflation fight is not done. Their updated forecasts leave 2024 growth and unemployment unchanged. But inflation projections are higher than previously thought.

How does US Fed policy affect the rest of the world?

Now, we turn our attention to market moves this morning. Asian stocks tracked US peers higher as the federal reserve's cautious outlook on interest rates did little to alter wall street bulls. Cooling US inflation also swayed traders' sentiment.

Fed's hawkish tone offset by cooling US inflation

Now, let's look at how markets opened this morning. Asian stocks declined to shrug off a positive session on wall street, with the S&P 500 hitting a fresh record high. Reason: A double-whammy of the US inflation report and the federal reserve decision landing later in the day kept traders on edge.

'Set the Alarm' rings across Asia ahead of FED & inflation

Investors will watch the Federal Reserve's meeting this week for clues on the central bank's view on rate cuts.

Broadly, the Fed is expected to keep policy rates on hold for a seventh consecutive meeting. However, there needs to be more certainty in officials' rate projections.

On Wednesday, US Fed officials will update their interest rate forecasts for the first time in three months, giving investors more information on the Fed's resolve to cut interest rates.

The central bank raised the benchmark federal funds rate by more than five percentage points starting in March 2022. Since July last year, they have kept the cost of borrowing at its highest level in twenty years.

Rate cuts anytime soon?

Over 40% of economists in a Bloomberg survey called the closely watched "dot plot" to show two rate cuts this year. A similar number of economists in the survey think it will show only one cut or none.

In the past few weeks, a host of Fed policymakers have said that they don't think it's necessary to cut rates right now.

The reason is that inflation is still high, and growth is expected to be strong.

However, since the previous Fed meeting, the latest growth indicators have consistently surprised to the downside, and inflation data have also met expectations.

The Fed's preferred measure of inflation was 2.7% in the year ended April, compared to the central bank's 2% target. Data released on Friday showed a surge in payrolls last month and accelerating wages, prompting traders to dial back expectations on rate cuts this year.

"Another very strong jobs report has cast further doubt on the prospect of interest rate cuts this year," said James Knightley, Chief International Economist at ING.

"In terms of what this means for the Fed next week - well, it confirms that the Fed will be pushing back rate cut projections from 3 cuts this year and 3 cuts next year to most probably 2 cuts this year and 4 next, but we can't rule them out saying just one for this year," added Knightley.

Growing divergence?

The Bank of Canada became the first G7 country to cut rates in this current cycle, followed by the European Central Bank.

While the ECB rate cut before the Fed is nothing short of historic, the real question is whether there is a growing monetary policy divergence or if this will only be a short-term situation.

The Fed is closing in on a rate cut, but more importantly, global inflation is still elevated, and it is at risk from the chaos in West Asia. The war on the edge of Europe is not helping either.

Will the BOC and the ECB be able to follow through with more rate cuts this year?

"The ECB's June decision was sewn up weeks ago and long before the past few weeks' less-than-helpful wage and inflation data releases. The Bank is visibly much more confident in the visions coming from its inflation crystal ball. But hindsight would say the ECB was too quick to lock in expectations for a rate cut this week. And judging from President Lagarde's words, it's a tactic she isn't keen to repeat as we go into the summer," said Carsten Brzeski, Global Head of Macro at ING.

"Markets are slowly taking notice. Investors seem less convinced about where the easing cycle goes from here," added Brzeski.

Major global central banks are miffed in making a mistake again after the high inflation is "transitory" narrative back in 2020.

The final leg of the inflation fight is taking longer than expected, with the Fed wanting to feel rock-solid in its outlook for price pressures to fall to its target.

Investors will watch the Federal Reserve's meeting this week for clues on the central bank's view on rate cuts. Broadly, the Fed is expected to keep policy rates on hold for a seventh consecutive meeting.

Investors will watch the Federal Reserve's meeting this week for clues on the central bank's view on rate cuts. Broadly, the Fed is expected to keep policy rates on hold for a seventh consecutive meeting. However, there needs to be more certainty in officials' rate projections. On Wednesday, US Fed officials will update their interest rate forecasts for the first time in three months, giving investors more information on the Fed's resolve to cut interest rates. The central bank raised the benchmark federal funds rate by more than five percentage points starting in March 2022. Since July last year, they have kept the cost of borrowing at its highest level in twenty years. Rate cuts anytime soon? Over 40% of economists in a Bloomberg survey called the closely watched "dot plot" to show two rate cuts this year. A similar number of economists in the survey think it will show only one cut or none. In the past few weeks, a host of Fed policymakers have said that they don't think it's necessary to cut rates right now. The reason is that inflation is still high, and growth is expected to be strong. However, since the previous Fed meeting, the latest growth indicators have consistently surprised to the downside, and inflation data have also met expectations. The Fed's preferred measure of inflation was 2.7% in the year ended April, compared to the central bank's 2% target. Data released on Friday showed a surge in payrolls last month and accelerating wages, prompting traders to dial back expectations on rate cuts this year. "Another very strong jobs report has cast further doubt on the prospect of interest rate cuts this year," said James Knightley, Chief International Economist at ING. "In terms of what this means for the Fed next week - well, it confirms that the Fed will be pushing back rate cut projections from 3 cuts this year and 3 cuts next year to most probably 2 cuts this year and 4 next, but we can't rule them out saying just one for this year," added Knightley. Growing divergence? The Bank of Canada became the first G7 country to cut rates in this current cycle, followed by the European Central Bank. While the ECB rate cut before the Fed is nothing short of historic, the real question is whether there is a growing monetary policy divergence or if this will only be a short-term situation. The Fed is closing in on a rate cut, but more importantly, global inflation is still elevated, and it is at risk from the chaos in West Asia. The war on the edge of Europe is not helping either. Will the BOC and the ECB be able to follow through with more rate cuts this year? "The ECB's June decision was sewn up weeks ago and long before the past few weeks' less-than-helpful wage and inflation data releases. The Bank is visibly much more confident in the visions coming from its inflation crystal ball. But hindsight would say the ECB was too quick to lock in expectations for a rate cut this week. And judging from President Lagarde's words, it's a tactic she isn't keen to repeat as we go into the summer," said Carsten Brzeski, Global Head of Macro at ING. "Markets are slowly taking notice. Investors seem less convinced about where the easing cycle goes from here," added Brzeski. Major global central banks are miffed in making a mistake again after the high inflation is "transitory" narrative back in 2020. The final leg of the inflation fight is taking longer than expected, with the Fed wanting to feel rock-solid in its outlook for price pressures to fall to its target.

All eyes on the Federal Reserve meeting

Let's look at what to watch this week for cues on the US Federal reserve's rate path. The Fed's favourite inflation measure is expected to show a little respite from stubborn price pressures. This supports central bankers' caution in lowering interest rates.

Timing of Fed's interest-rate cuts on knife's edge

The growing divide between the haves and the have-nots is clearly visible in the United States. The Federal Reserve's indecision is not helping the cause. Watch in for more details!

Near-unprecedented pace of wealth creation in US stocks

US consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.

US inflation resumes downward trend, boosts rate cut hopes

Federal Reserve Chair Jerome Powell said the US central bank needs to be patient as it awaits more evidence that high interest rates are curbing inflation, doubling-down on the need to keep borrowing costs elevated. Watch in for more details!

US Fed likely to keep rates higher for longer to curb inflation

The Reserve Bank of India is likely to delay cutting interest rates, until the last three months of the year. High inflation and the US FED rate policy will determine the policy trajectory of India's Central Bank.

High inflation and the US FED rate to determine policy

The US Federal Reserve on Wednesday held interest rates for the sixth straight time. The biggest takeaway from fed chief Jerome Powell's press conference was rate cuts were not around the corner. He flagged the 'lack of further progress' in curbing inflation as the main reason for the delay in rate cuts.

Jerome Powell flags 'lack of further progress' on inflation

Let's look at how markets opened this morning. Markets looked directionless, with Asian benchmarks range-bound after wall street stocks extended their longest losing streak since January.

Dollar takes a breather as investors reassess FED's rate path

US core CPI exceeded forecasts for the third consecutive month, rising 0.4% from February and 3.8% year-over-year, likely postponing Fed rate cuts. Watch in for more details!

US inflation comes in at 0.4% for third consecutive month

As the US Presidential race intensifies, the Federal Reserve finds itself at a critical juncture. With mounting concerns over inflation and housing costs, the FED is considering a move to cut interest rates. Data suggests that Americans rank the economy among their top concerns during election years. The decision to cut rates could potentially influence voter perceptions of economic stability and impact President Joe Biden's reelection prospects.

FED's policies may shape voter sentiment & presidential race dynamics

The Federal Reserve is likely to maintain current interest rates this week, despite a recent uptick in inflation. Economists surveyed by Bloomberg News predict the first rate reduction will occur in June, potentially followed by two more cuts throughout 2024.

U.S. FED: modest rate cuts possible in 2024, eyes balance sheet

Jamie Dimon, CEO of JPMorgan Chase, has advised the Federal Reserve to exercise prudence before considering any interest rate cuts, urging the central bank to uphold its credibility in combating inflation.

Speaking at the Australian Financial Review business summit via livestream from New York, Dimon emphasised the importance of data dependency in monetary policy decisions.

He suggested that the Fed should delay rate cuts until after June to assess the evolving economic landscape.

Dimon expressed concern about the potential impact on the central bank's credibility, stating, "Their credibility is a little bit at stake here."

Market expectations currently indicate an 84 per cent probability of rate cuts in June, with 90 basis points of cuts anticipated for the year.

Dimon conveyed a positive outlook on the U.S. economy, describing it as almost reaching a state of boom.

However, he cautioned against unbridled optimism, warning against the widespread acceptance of the soft landing narrative in financial markets.

While acknowledging the strength of the economy, Dimon assessed the likelihood of a recession at about 65 per cent and did not rule out the possibility of stagflation.

He attributed the surge in debt and equity markets since late 2023 to the lingering effects of pandemic-era fiscal and monetary stimulus, cautioning against complacency.

Regarding cryptocurrencies, Dimon reiterated his skepticism, particularly towards bitcoin, highlighting its association with illegal activities such as sex trafficking, fraud, and terrorism.

Regardless of defending individuals' rights to engage in bitcoin transactions, Dimon clarified that he personally has no intention to invest in the digital currency.

He highlighted the need for regulatory scrutiny and cautioned against the potential risks associated with cryptocurrencies.

Dimon also discussed the role of artificial intelligence (AI) in banking, revealing that JPMorgan has dedicated significant resources to explore various applications of AI technology.

He disclosed that the bank currently has two thousand employees working on 400 different AI use cases.

Dimon also shared his personal use of AI for summarising books he lacks time to read.

Beyond AI, Dimon expressed concerns about the upcoming U.S. presidential election, anticipating a contentious campaign.

He expressed hopes for a more thoughtful and rational approach to foreign policy from presidential candidates, particularly regarding geopolitical tensions.

(With inputs from Reuters)

Jamie Dimon, CEO of JPMorgan Chase, has advised the Federal Reserve to exercise prudence before considering any interest rate cuts, urging the central bank to uphold its credibility in combating inflation.

Jamie Dimon, CEO of JPMorgan Chase, has advised the Federal Reserve to exercise prudence before considering any interest rate cuts, urging the central bank to uphold its credibility in combating inflation. Speaking at the Australian Financial Review business summit via livestream from New York, Dimon emphasised the importance of data dependency in monetary policy decisions. He suggested that the Fed should delay rate cuts until after June to assess the evolving economic landscape. Dimon expressed concern about the potential impact on the central bank's credibility, stating, "Their credibility is a little bit at stake here." Market expectations currently indicate an 84 per cent probability of rate cuts in June, with 90 basis points of cuts anticipated for the year. Dimon conveyed a positive outlook on the U.S. economy, describing it as almost reaching a state of boom. However, he cautioned against unbridled optimism, warning against the widespread acceptance of the soft landing narrative in financial markets. While acknowledging the strength of the economy, Dimon assessed the likelihood of a recession at about 65 per cent and did not rule out the possibility of stagflation. He attributed the surge in debt and equity markets since late 2023 to the lingering effects of pandemic-era fiscal and monetary stimulus, cautioning against complacency. Regarding cryptocurrencies, Dimon reiterated his skepticism, particularly towards bitcoin, highlighting its association with illegal activities such as sex trafficking, fraud, and terrorism. Regardless of defending individuals' rights to engage in bitcoin transactions, Dimon clarified that he personally has no intention to invest in the digital currency. He highlighted the need for regulatory scrutiny and cautioned against the potential risks associated with cryptocurrencies. Dimon also discussed the role of artificial intelligence (AI) in banking, revealing that JPMorgan has dedicated significant resources to explore various applications of AI technology. He disclosed that the bank currently has two thousand employees working on 400 different AI use cases. Dimon also shared his personal use of AI for summarising books he lacks time to read. Beyond AI, Dimon expressed concerns about the upcoming U.S. presidential election, anticipating a contentious campaign. He expressed hopes for a more thoughtful and rational approach to foreign policy from presidential candidates, particularly regarding geopolitical tensions. (With inputs from Reuters)

JPMorgan CEO Jamie Dimon urges Fed caution on interest rate cuts

The focus this week shifts to the US Federal Reserve Chief's monetary policy testimony on Capitol Hill. FED Chief Jerome Powell will face severe pressure from Congress to cut rates to keep the economy humming during an election year.

FED's Powell to reinforce 'no rush to cut'

Easing inflation optimism has traders increasing their bets that the U.S. Central Bank will act on its pivot to rate cuts sooner than expected. The U.S. Inflation rate has been on a downward trend in recent months. That has fueled hopes the Federal Reserve would be more amenable to cutting interest rates in the months to come.

US: Fed rate cut bets rise on easing inflation optimism

Easing inflation optimism has traders increasing their bets that the US Central Bank will act on its pivot to rate cuts sooner than expected. The US inflation rate has been on a downward trend in recent months. That has fueled hopes the federal reserve would be more amenable to cutting interest rates in the months to come.

Fed rate cut bets rise on easing inflation optimism

After recent strong jobs and growth data saw markets push back bets on the timing of federal reserve interest rate cuts, all eyes will be on Tuesday's US inflation report for January.

US January inflation data expected this week

Traders are betting that the Federal Reserve won't ease policy until may, as stronger-than-expected economic data and comments from central bankers diminish confidence in earlier interest-rate cuts.

US: Inflation concerns resurface

The U.S. Fed will begin cutting rates this year. But the timeline is not yet clear. The i-n-g group believes that the fed must wait until may, before starting with the rate cut cycle. The group argues that the U.S. Job market remains tight, pointing to the low unemployment, sticky wages and the job creation data.

ING: U.S. Fed must wait until May to cut interest rates

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