REUTERS
"US manufacturing output increases in March; February data revised higher"
By Reuters
April 16, 2024
WASHINGTON, April 16 (Reuters) - Production at U.S. factories increased solidly in March as output at motor vehicle assembly plants and elsewhere rose, suggesting that manufacturing was turning the corner after being constrained by higher borrowing costs.
Manufacturing output rose 0.5% last month after an upwardly revised 1.2% rebound in the prior month, the Federal Reserve said on Tuesday.
Factory output was previously reported to have rebounded 0.8% in February.
Economists polled by Reuters had forecast factory output rising 0.3%.
Production at factories increased 0.8% year-on-year in March.
It edged down at a 0.1% annualized rate in the first quarter after contracting at a 0.9% pace in the October-December quarter.
Manufacturing accounts for 10.4% of the economy.
A survey from the Institute for Supply Management early this month showed manufacturing grew for the first time in 1-1/2 years in March.
But with the Federal Reserve expected to delay an anticipated rate cut this year amid stubbornly high inflation, manufacturing is not out of the woods yet.
Motor vehicle and parts output increased 3.1% last month after advancing 3.4% in February.
Durable goods manufacturing production rose 0.3%.
There were significant increases in the output of aerospace and miscellaneous transportation equipment, and wood products.
But output of nonmetallic mineral products, furniture as well as primary metals declined.
Production of nondurable goods rose 0.7% as gains in the output of petroleum and coal products and chemicals offset declines food, beverage and tobacco products.
Mining output dropped 1.4% after rebounding 3.0% in February.
Utilities production rose 2.0% after decreasing 7.6% in February.
Overall industrial production rose 0.4% in March after rising by the same margin in February.
Industrial production was unchanged year-on-year in March.
It contracted at a 1.8% pace in the January-March quarter after shrinking at a 1.9% rate in the fourth quarter.
Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, rose to 78.4% from 78.2% in February.
It is 1.2 percentage points below its 1972-2023 average.
The operating rate for the manufacturing sector increased 0.3 percentage point in March to 77.4%.
It is 0.8 percentage points below its long-run average.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
https://www.reuters.com/markets/us/us-m ... 024-04-16/
THE DAILY NEWS
Re: THE DAILY NEWS
REUTERS
"Fed could keep monetary policy tight for longer if needed, Jefferson says"
By Howard Schneider
April 16, 2024
WASHINGTON, April 16 (Reuters) - Federal Reserve Vice Chair Philip Jefferson, in remarks devoid of any mention of interest rate cuts, said on Tuesday "it will be appropriate to hold in place the current restrictive stance of policy for longer" if inflation fails to slow as expected.
"My baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labor market will remain strong, with labor demand and supply continuing to rebalance," Jefferson said in remarks prepared for a speech to a Fed research conference in Washington.
"Of course, the outlook is still quite uncertain, and if incoming data suggest that inflation is more persistent than I currently expect it to be, it will be appropriate to hold in place the current restrictive stance of policy for longer."
"I am fully committed to getting inflation back to 2%."
His comments did not include what has been a standard messaging point for Fed officials in recent months that rate cuts could begin once policymakers gained more confidence that inflation is still falling - a hurdle that's become steeper after inflation through the first quarter proved unexpectedly strong.
On Feb. 22, for example, Jefferson said "if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back our policy restraint later this year."
His remarks on Tuesday noted that while the baseline remained for inflation to slow, "inflation data over the past three months were above the low readings in the second half of last year," while job growth and retail spending remained stronger than expected.
"While we have seen considerable progress in lowering inflation, the job of sustainably restoring 2% inflation is not yet done," Jefferson said in his prepared remarks.
March, in fact, may prove another lost month for the Fed.
Jefferson said that staff estimates indicate the personal consumption expenditures price index, which the Fed uses to set its 2% inflation target, increased at a 2.7% annual rate in March, faster than in February.
The "core" rate excluding food and energy prices is estimated to have increased at a 2.8% rate, unchanged from the prior month.
The bulk of Jefferson's prepared remarks were devoted to a historical review of how policymakers deal with uncertainty, with just three paragraphs on the "current situation."
Fed Chair Jerome Powell is scheduled to field questions during an event in Washington at 1:15 p.m. EDT (1715 GMT) on Tuesday.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/markets/us/fed- ... 024-04-16/
"Fed could keep monetary policy tight for longer if needed, Jefferson says"
By Howard Schneider
April 16, 2024
WASHINGTON, April 16 (Reuters) - Federal Reserve Vice Chair Philip Jefferson, in remarks devoid of any mention of interest rate cuts, said on Tuesday "it will be appropriate to hold in place the current restrictive stance of policy for longer" if inflation fails to slow as expected.
"My baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labor market will remain strong, with labor demand and supply continuing to rebalance," Jefferson said in remarks prepared for a speech to a Fed research conference in Washington.
"Of course, the outlook is still quite uncertain, and if incoming data suggest that inflation is more persistent than I currently expect it to be, it will be appropriate to hold in place the current restrictive stance of policy for longer."
"I am fully committed to getting inflation back to 2%."
His comments did not include what has been a standard messaging point for Fed officials in recent months that rate cuts could begin once policymakers gained more confidence that inflation is still falling - a hurdle that's become steeper after inflation through the first quarter proved unexpectedly strong.
On Feb. 22, for example, Jefferson said "if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back our policy restraint later this year."
His remarks on Tuesday noted that while the baseline remained for inflation to slow, "inflation data over the past three months were above the low readings in the second half of last year," while job growth and retail spending remained stronger than expected.
"While we have seen considerable progress in lowering inflation, the job of sustainably restoring 2% inflation is not yet done," Jefferson said in his prepared remarks.
March, in fact, may prove another lost month for the Fed.
Jefferson said that staff estimates indicate the personal consumption expenditures price index, which the Fed uses to set its 2% inflation target, increased at a 2.7% annual rate in March, faster than in February.
The "core" rate excluding food and energy prices is estimated to have increased at a 2.8% rate, unchanged from the prior month.
The bulk of Jefferson's prepared remarks were devoted to a historical review of how policymakers deal with uncertainty, with just three paragraphs on the "current situation."
Fed Chair Jerome Powell is scheduled to field questions during an event in Washington at 1:15 p.m. EDT (1715 GMT) on Tuesday.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/markets/us/fed- ... 024-04-16/
Re: THE DAILY NEWS
REUTERS
"Yellen says US working to mitigate risks to global economy"
By Andrea Shalal
April 16, 2024
WASHINGTON, April 16 (Reuters) - U.S. Treasury Secretary Janet Yellen on Tuesday said a stronger-than-expected U.S. economic growth had helped power the global economy, and Washington was working to mitigate remaining risks to the global outlook and ensure sustainable long-term growth.
In remarks prepared for a news conference, Yellen said the U.S. labor market was remarkably healthy and inflation was down significantly from its peak, although there was more work to do.
She said she expected the U.S. economy to continue to underpin the global economy, but acknowledged that the global recovery had been uneven and risks remained.
"From the start of the administration, President (Joe) Biden has made clear that American isolationism was over," Yellen said.
"So while we expect that America’s economic strength will continue to underpin global growth, we’ve also been engaging with the world to mitigate short-term risks and support sustainable long-term growth."
That work will continue at this week's spring meetings of the International Monetary Fund and World Bank, where Yellen will meet with officials from China, South Korea, Japan, Britain and many other countries.
Yellen said she raised concerns with Chinese officials during her visit to Guangzhou and Beijing earlier this month about the risks that its manufacturing overcapacity posed to the United States and the global economy.
This week, she said U.S. and Chinese officials will hold the fourth meetings of the Economic and Financial Working Groups, which will focus on anti-money laundering and balanced growth.
Yellen said she also planned to work with Brazil, current president of the Group of Twenty (G20) major economies, including on a review of the global climate finance architecture.
The United States would also keep pushing for reforms at the World Bank and other multilateral development banks (MDBs) to expand their lending capacity to help developing countries deal with climate change, pandemics and other challenges that posed risks to global growth.
"No one country can tackle these issue alone, nor is bilateral action sufficient, so we've pushed for decisive and coordinated action," she said.
Yellen said the World Bank and other MDBs had made significant progress, boosting lending capacity over the next decade by $200 billion from responsibly stretching balance sheets and another $50 billion from capital increases at the European Bank for Reconstruction and Development and the Inter-American Development Bank.
At the IMF, she said, the United States was focused on strengthening the global lender's ability to respond to crises and was pushing the IMF to structure loans with "robust policy conditionality" to enable countries to restore stability.
Reporting by Andrea Shalal; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/yell ... 024-04-16/
"Yellen says US working to mitigate risks to global economy"
By Andrea Shalal
April 16, 2024
WASHINGTON, April 16 (Reuters) - U.S. Treasury Secretary Janet Yellen on Tuesday said a stronger-than-expected U.S. economic growth had helped power the global economy, and Washington was working to mitigate remaining risks to the global outlook and ensure sustainable long-term growth.
In remarks prepared for a news conference, Yellen said the U.S. labor market was remarkably healthy and inflation was down significantly from its peak, although there was more work to do.
She said she expected the U.S. economy to continue to underpin the global economy, but acknowledged that the global recovery had been uneven and risks remained.
"From the start of the administration, President (Joe) Biden has made clear that American isolationism was over," Yellen said.
"So while we expect that America’s economic strength will continue to underpin global growth, we’ve also been engaging with the world to mitigate short-term risks and support sustainable long-term growth."
That work will continue at this week's spring meetings of the International Monetary Fund and World Bank, where Yellen will meet with officials from China, South Korea, Japan, Britain and many other countries.
Yellen said she raised concerns with Chinese officials during her visit to Guangzhou and Beijing earlier this month about the risks that its manufacturing overcapacity posed to the United States and the global economy.
This week, she said U.S. and Chinese officials will hold the fourth meetings of the Economic and Financial Working Groups, which will focus on anti-money laundering and balanced growth.
Yellen said she also planned to work with Brazil, current president of the Group of Twenty (G20) major economies, including on a review of the global climate finance architecture.
The United States would also keep pushing for reforms at the World Bank and other multilateral development banks (MDBs) to expand their lending capacity to help developing countries deal with climate change, pandemics and other challenges that posed risks to global growth.
"No one country can tackle these issue alone, nor is bilateral action sufficient, so we've pushed for decisive and coordinated action," she said.
Yellen said the World Bank and other MDBs had made significant progress, boosting lending capacity over the next decade by $200 billion from responsibly stretching balance sheets and another $50 billion from capital increases at the European Bank for Reconstruction and Development and the Inter-American Development Bank.
At the IMF, she said, the United States was focused on strengthening the global lender's ability to respond to crises and was pushing the IMF to structure loans with "robust policy conditionality" to enable countries to restore stability.
Reporting by Andrea Shalal; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/yell ... 024-04-16/
Re: THE DAILY NEWS
REUTERS
"Smaller US manufacturers warm to Biden's big industrial plan, survey shows"
By Timothy Aeppel
April 16, 2024
April 16 (Reuters) - America’s small and mid-sized manufacturers may be warming up to the Biden administration’s push for an aggressive industrial policy.
In a survey of 150 producers, nearly 49% said they thought President Joe Biden "is more likely to bring about an American manufacturing renaissance," while just over 31% gave that accolade to Republican candidate Donald Trump.
About 15% favor an unnamed third-party candidate to revitalize the sector, according to the survey conducted by polling company John Zogby Strategies on behalf of Xometry, a Maryland-based company that provides digital sourcing services for industrial producers.
Biden’s industrial policy, headlined by legislation passed in 2022 that sparked a surge of factory construction, is aimed at boosting semiconductors, electric vehicles and green technologies, as well as other sectors.
The efforts so far have not produced many manufacturing jobs.
And so, as the presidential campaign shifts into higher gear ahead of November’s election, Biden is touring factories to tout his accomplishments, especially to voters in battleground states.
"This is the first time in a long time that we’ve had a deliberate industrial strategy being pushed by the executive branch - that’s unique," said Randy Altschuler, chief executive of Xometry.
Altschuler said federal investments have yet to filter down to smaller producers, with many of the most high-profile projects favoring giants like Intel and Samsung, which are both planning new semiconductor plants.
"You’re going to see a bigger benefit (for smaller companies) further down the road," said Altschuler, as those projects create demand for the underlying pipeline of goods and services needed to complete and supply those factories.
Altschuler, who ran for Congress in New York in 2010 and lost and remains a registered Republican, said the political divide over industrial policy - which was once opposed by many Republicans as picking winners and losers - has narrowed sharply in recent years.
Republican Senator Marco Rubio of Florida, for instance, recently penned an essay for the conservative policy journal National Affairs that argued the U.S. needs a strong industrial policy while faulting the Biden initiatives.
Still, manufacturers favor Republicans by one key measure.
The National Association of Manufacturers Political Action Committee has so far directed nearly three-quarters of its contributions to Republican candidates in this election cycle, according to the nonprofit research group OpenSecrets.
Reporting by Timothy Aeppel; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/smal ... 024-04-16/
"Smaller US manufacturers warm to Biden's big industrial plan, survey shows"
By Timothy Aeppel
April 16, 2024
April 16 (Reuters) - America’s small and mid-sized manufacturers may be warming up to the Biden administration’s push for an aggressive industrial policy.
In a survey of 150 producers, nearly 49% said they thought President Joe Biden "is more likely to bring about an American manufacturing renaissance," while just over 31% gave that accolade to Republican candidate Donald Trump.
About 15% favor an unnamed third-party candidate to revitalize the sector, according to the survey conducted by polling company John Zogby Strategies on behalf of Xometry, a Maryland-based company that provides digital sourcing services for industrial producers.
Biden’s industrial policy, headlined by legislation passed in 2022 that sparked a surge of factory construction, is aimed at boosting semiconductors, electric vehicles and green technologies, as well as other sectors.
The efforts so far have not produced many manufacturing jobs.
And so, as the presidential campaign shifts into higher gear ahead of November’s election, Biden is touring factories to tout his accomplishments, especially to voters in battleground states.
"This is the first time in a long time that we’ve had a deliberate industrial strategy being pushed by the executive branch - that’s unique," said Randy Altschuler, chief executive of Xometry.
Altschuler said federal investments have yet to filter down to smaller producers, with many of the most high-profile projects favoring giants like Intel and Samsung, which are both planning new semiconductor plants.
"You’re going to see a bigger benefit (for smaller companies) further down the road," said Altschuler, as those projects create demand for the underlying pipeline of goods and services needed to complete and supply those factories.
Altschuler, who ran for Congress in New York in 2010 and lost and remains a registered Republican, said the political divide over industrial policy - which was once opposed by many Republicans as picking winners and losers - has narrowed sharply in recent years.
Republican Senator Marco Rubio of Florida, for instance, recently penned an essay for the conservative policy journal National Affairs that argued the U.S. needs a strong industrial policy while faulting the Biden initiatives.
Still, manufacturers favor Republicans by one key measure.
The National Association of Manufacturers Political Action Committee has so far directed nearly three-quarters of its contributions to Republican candidates in this election cycle, according to the nonprofit research group OpenSecrets.
Reporting by Timothy Aeppel; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/smal ... 024-04-16/
Re: THE DAILY NEWS
REUTERS
"US trade chief Tai says taking 'serious look' at tools to deal with China"
By David Lawder
April 16, 2024
WASHINGTON, April 16 (Reuters) - U.S. Trade Representative Katherine Tai will tell lawmakers on Tuesday that the Biden administration is "taking a serious look" at U.S. trade defense tools to deal with threats posed by China's trade and economic policies, including a review of Trump-era tariffs on Chinese imports.
In excerpts of testimony to the U.S. House of Representatives Ways and Means Committee released ahead of a hearing on Tuesday, Tai said that China's policies were causing "dependencies and vulnerabilities in multiple sectors, harming American workers and businesses and creating real risks for our supply chains."
"This is why we are taking a serious look at how our existing tools are addressing this problem, including through our four-year review of the China Section 301 tariffs," Tai said.
Tai's testimony on the Biden administration's 2024 trade agenda comes just a week after U.S. Treasury Secretary Janet Yellen issued a warning to Chinese leaders that their overinvestment in production capacity for electric vehicles, solar panels and other clean energy goods was threatening an unacceptable wave of exports that would hurt producers and workers in the United States and elsewhere.
Yellen on Tuesday will commence a new dialogue with Chinese officials on "balanced growth" at the Treasury, but China trade experts say her message to Beijing on excess capacity may be an initial step toward a new "Section 301" unfair trade practices investigation that could impose new tariffs on EVs, solar panels and other imports.
Former President Donald Trump used Section 301 of the Trade Act of 1974, to impose tariffs on hundreds of billions of dollars worth of Chinese imports in 2018.
The Biden administration is now nearing completion of a lengthy review of whether to renew those duties.
Tai also will tell lawmakers that she is closely reviewing a petition from five U.S. unions to open a new Section 301 investigation into China's allegedly unfair acts, policies and practices in the maritime logistics and shipbuilding sector.
"Our economic relationship with the PRC is complex, and as the President said, we want competition with China, not conflict," Tai said in her excerpts.
A major goal of the Biden administration's work on supply chains has been aimed at reducing dependence on China and diversifying sources of supply to avoid bottlenecks like those that occurred at the end of the COVID-19 pandemic, Tai said
"Reducing dependencies and vulnerabilities and strengthening supply chains is a major priority for USTR this year, which informs our work as part of the President’s Council on Supply Chain Resilience," Tai said.
The U.S. trade chief has put workers at the center of U.S. trade policy, seeking to build higher labor standards in trade negotiations with other countries.
She said this includes prioritizing strong labor commitments in negotiations with Kenya and Taiwan.
Reporting by David Lawder; Editing by Michael Perry
https://www.reuters.com/world/us-trade- ... 024-04-16/
"US trade chief Tai says taking 'serious look' at tools to deal with China"
By David Lawder
April 16, 2024
WASHINGTON, April 16 (Reuters) - U.S. Trade Representative Katherine Tai will tell lawmakers on Tuesday that the Biden administration is "taking a serious look" at U.S. trade defense tools to deal with threats posed by China's trade and economic policies, including a review of Trump-era tariffs on Chinese imports.
In excerpts of testimony to the U.S. House of Representatives Ways and Means Committee released ahead of a hearing on Tuesday, Tai said that China's policies were causing "dependencies and vulnerabilities in multiple sectors, harming American workers and businesses and creating real risks for our supply chains."
"This is why we are taking a serious look at how our existing tools are addressing this problem, including through our four-year review of the China Section 301 tariffs," Tai said.
Tai's testimony on the Biden administration's 2024 trade agenda comes just a week after U.S. Treasury Secretary Janet Yellen issued a warning to Chinese leaders that their overinvestment in production capacity for electric vehicles, solar panels and other clean energy goods was threatening an unacceptable wave of exports that would hurt producers and workers in the United States and elsewhere.
Yellen on Tuesday will commence a new dialogue with Chinese officials on "balanced growth" at the Treasury, but China trade experts say her message to Beijing on excess capacity may be an initial step toward a new "Section 301" unfair trade practices investigation that could impose new tariffs on EVs, solar panels and other imports.
Former President Donald Trump used Section 301 of the Trade Act of 1974, to impose tariffs on hundreds of billions of dollars worth of Chinese imports in 2018.
The Biden administration is now nearing completion of a lengthy review of whether to renew those duties.
Tai also will tell lawmakers that she is closely reviewing a petition from five U.S. unions to open a new Section 301 investigation into China's allegedly unfair acts, policies and practices in the maritime logistics and shipbuilding sector.
"Our economic relationship with the PRC is complex, and as the President said, we want competition with China, not conflict," Tai said in her excerpts.
A major goal of the Biden administration's work on supply chains has been aimed at reducing dependence on China and diversifying sources of supply to avoid bottlenecks like those that occurred at the end of the COVID-19 pandemic, Tai said
"Reducing dependencies and vulnerabilities and strengthening supply chains is a major priority for USTR this year, which informs our work as part of the President’s Council on Supply Chain Resilience," Tai said.
The U.S. trade chief has put workers at the center of U.S. trade policy, seeking to build higher labor standards in trade negotiations with other countries.
She said this includes prioritizing strong labor commitments in negotiations with Kenya and Taiwan.
Reporting by David Lawder; Editing by Michael Perry
https://www.reuters.com/world/us-trade- ... 024-04-16/
Re: THE DAILY NEWS
RIGZONE
"Oil Plummets Over 3% to Three Week Low"
by Bloomberg | Julia Fanzeres and Alex Longley
Wednesday, April 17, 2024
Oil fell more than 3% to a three-week low as trend-following algorithms accelerated the day’s selloff.
US crude inventories swelling to a nine-month high, combined with weaker Chinese industrial data, pushed West Texas Intermediate futures to settle at $82.69 — below the key $84 support level, according to Fawad Razaqzada, a market analyst at City Index and Forex.com.
“This gave rise to further technical selling,” he said.
While markets are still waiting for Israel to respond to Iran’s weekend attack, with the US urging restraint, traders are returning their focus to market fundamentals.
Key timespreads have weakened in recent days, pointing to softening sentiment.
Yet the downside could be limited, with the next key support level at $82, Razaqzada said.
Crude has surged this year on the back of upheavals in the Middle East and Russia, and OPEC+ output cuts.
Potentially tightening the market further, the US plans to reimpose oil sanctions on Venezuela if Nicolas Maduro’s regime doesn’t take steps in the next two days to allow a fairer vote in elections this year, Bloomberg reported Wednesday.
Federal Reserve Chair Jerome Powell’s comments Tuesday, however, signaled policymakers will wait longer than previously anticipated to cut US interest rates, potentially providing a headwind for wider energy demand.
Prices:
WTI for May delivery retreated 3.1% to settle at $82.69 a barrel in New York.
Brent for June settlement fell 3% to $87.29 a barrel.
https://www.rigzone.com/news/wire/oil_p ... 4-article/
"Oil Plummets Over 3% to Three Week Low"
by Bloomberg | Julia Fanzeres and Alex Longley
Wednesday, April 17, 2024
Oil fell more than 3% to a three-week low as trend-following algorithms accelerated the day’s selloff.
US crude inventories swelling to a nine-month high, combined with weaker Chinese industrial data, pushed West Texas Intermediate futures to settle at $82.69 — below the key $84 support level, according to Fawad Razaqzada, a market analyst at City Index and Forex.com.
“This gave rise to further technical selling,” he said.
While markets are still waiting for Israel to respond to Iran’s weekend attack, with the US urging restraint, traders are returning their focus to market fundamentals.
Key timespreads have weakened in recent days, pointing to softening sentiment.
Yet the downside could be limited, with the next key support level at $82, Razaqzada said.
Crude has surged this year on the back of upheavals in the Middle East and Russia, and OPEC+ output cuts.
Potentially tightening the market further, the US plans to reimpose oil sanctions on Venezuela if Nicolas Maduro’s regime doesn’t take steps in the next two days to allow a fairer vote in elections this year, Bloomberg reported Wednesday.
Federal Reserve Chair Jerome Powell’s comments Tuesday, however, signaled policymakers will wait longer than previously anticipated to cut US interest rates, potentially providing a headwind for wider energy demand.
Prices:
WTI for May delivery retreated 3.1% to settle at $82.69 a barrel in New York.
Brent for June settlement fell 3% to $87.29 a barrel.
https://www.rigzone.com/news/wire/oil_p ... 4-article/
Re: THE DAILY NEWS
CNBC
"Treasury yields fall as investors digest remarks from Fed officials"
Alex Harring @ALEX_HARRING Sophie Kiderlin @IN/SOPHIE-KIDERLIN-B327B914A/ @SKIDERLIN
PUBLISHED WED, APR 17 2024
U.S. Treasury yields pulled back on Wednesday as investors digested comments from Federal Reserve policymakers about the state of the economy and monetary policy outlook.
The yield on the 10-year Treasury fell almost 8 basis points to 4.581%.
The 2-year Treasury was last at 4.928% after retreating by nearly 4 basis points — trading below the key 5% mark it briefly crossed on Tuesday.
Yields and prices have an inverted relationship.
One basis point equals 0.01%.
Investors considered the path ahead for interest rates after comments from Federal Reserve officials, including Chairman Jerome Powell.
On Tuesday, he said there has been a “lack of further progress” on inflation so far this year.
Recent economic data has also shown growth and strength in the labor market, he added.
The Fed has repeatedly said that it is looking for data to show that inflation is easing sustainably, and the overall economy is cooling before starting to cut interest rates.
But Powell on Tuesday indicated that policymakers had not yet reached this point.
“The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said.
Earlier in the week, San Francisco Federal Reserve Bank President Mary Daly said there was “no urgency” for rate cuts to begin.
The comments fueled questions about whether there may be fewer rate cuts than expected this year and whether they may begin later than anticipated.
Data also provided by Reuters
https://www.cnbc.com/2024/04/17/us-trea ... cials.html
"Treasury yields fall as investors digest remarks from Fed officials"
Alex Harring @ALEX_HARRING Sophie Kiderlin @IN/SOPHIE-KIDERLIN-B327B914A/ @SKIDERLIN
PUBLISHED WED, APR 17 2024
U.S. Treasury yields pulled back on Wednesday as investors digested comments from Federal Reserve policymakers about the state of the economy and monetary policy outlook.
The yield on the 10-year Treasury fell almost 8 basis points to 4.581%.
The 2-year Treasury was last at 4.928% after retreating by nearly 4 basis points — trading below the key 5% mark it briefly crossed on Tuesday.
Yields and prices have an inverted relationship.
One basis point equals 0.01%.
Investors considered the path ahead for interest rates after comments from Federal Reserve officials, including Chairman Jerome Powell.
On Tuesday, he said there has been a “lack of further progress” on inflation so far this year.
Recent economic data has also shown growth and strength in the labor market, he added.
The Fed has repeatedly said that it is looking for data to show that inflation is easing sustainably, and the overall economy is cooling before starting to cut interest rates.
But Powell on Tuesday indicated that policymakers had not yet reached this point.
“The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said.
Earlier in the week, San Francisco Federal Reserve Bank President Mary Daly said there was “no urgency” for rate cuts to begin.
The comments fueled questions about whether there may be fewer rate cuts than expected this year and whether they may begin later than anticipated.
Data also provided by Reuters
https://www.cnbc.com/2024/04/17/us-trea ... cials.html
Re: THE DAILY NEWS
REUTERS
"Stocks decline as interest rate uncertainty, earnings weigh"
By Chuck Mikolajczak
April 17, 2024
Summary
* United Airlines gains on upbeat Q2 profit forecast
* Travelers falls after Q1 profit miss
* Fed's Beige Book shows slight expansion in economic activity
* Indexes off: Dow 0.12%, S&P 500 0.58%, Nasdaq 1.15%
NEW YORK, April 17 (Reuters) - U.S. stocks fell in choppy trading on Wednesday as investors assessed the Federal Reserve's interest rate stance and a batch of soft earnings early in the financial reporting season.
Travelers tumbled 7.41% and was among the biggest drags on the S&P 500 and largest on the Dow Industrials after the insurance giant missed Wall Street expectations for first-quarter profit.
Also weighing on the benchmark S&P index after quarterly results were Prologis, with the warehouse-focused real estate investment trust dropping 7.19%, and Abbott Laboratories, which fell 3.03% after topping quarterly estimates but disappointing on its annual forecast.
After a rally in the last two months of 2023 that extended into the first quarter, equities have struggled with the S&P 500 registering its fourth straight session of declines.
The index is on pace for its third straight weekly loss as investors have dialed back expectations for the timing and size of the Fed's rate cuts.
On Tuesday, U.S. central bank officials including Fed Chair Jerome Powell backed away from providing guidance on when rates may be cut, saying instead that monetary policy needs to be restrictive for longer.
"The markets are dealing with a couple things - inflation is hotter than most expect, rate cut expectations are coming down and we've had a ramp higher in geopolitical tensions, particularly out of the Middle East," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
"It's just an excuse for traders to kind of move to the sidelines and markets to kind of take a breath after a really, really strong five months of gains."
The Dow Jones Industrial Average fell 45.66 points, or 0.12%, to 37,753.31, the S&P 500 lost 29.20 points, or 0.58%, to 5,022.21 and the Nasdaq Composite lost 181.88 points, or 1.15%, to 15,683.37.
The four-session S&P 500 sell-off is the longest in just over four months, matching a four-day run of declines ended on Jan. 4.
Fed Board Governor Michelle Bowman and Cleveland Fed President Loretta Mester are scheduled to speak later in the day.
The Fed's Beige Book survey of economic activity showed a slight expansion from late February through early April and companies feared that progress in lowering inflation would stall.
After the market began to largely price in a June cut from the Fed earlier this year, expectations for a cut of at least 25 basis points have shriveled to 16.8%, and for a July cut to 46%, CME'sFedWatch Tool, showed.
Stocks pared losses as U.S. Treasury yields eased further from the previous day's multi-month highs following a strong auction of 20-year bonds, with the 10-year note last around 4.59%.
Among gainers, United Airlines surged 17.45% after it forecast stronger-than-expected current-quarter numbers, helping to boost the NYSE Arca airline index by 3.82%. its biggest daily percentage jump since Feb. 6.
JB Hunt Transport Services slumped 8.12% as the worst performer on the S&P 500 after the trucking firm missed Wall Street estimates for first-quarter results.
U.S. Bancorp dropped 3.61% after the lender cut its forecast for full-year interest income and reported a 22% fall in first-quarter profit.
On the NYSE declining issues outnumbered advancers by a 1.1-to-1 ratio and a 1.54-to-1 ratio on the Nasdaq.
The NYSE had 21 new highs and 103 new lows.
On the Nasdaq, there were 27 new highs and 240 new lows.
Volume on U.S. exchanges was 10.8 billion shares, compared with the 11.05 billion average for the full session over the last 20 trading days.
Reporting by Chuck Mikolajczak; Editing by Richard Chang
https://www.reuters.com/markets/us/futu ... 024-04-17/
"Stocks decline as interest rate uncertainty, earnings weigh"
By Chuck Mikolajczak
April 17, 2024
Summary
* United Airlines gains on upbeat Q2 profit forecast
* Travelers falls after Q1 profit miss
* Fed's Beige Book shows slight expansion in economic activity
* Indexes off: Dow 0.12%, S&P 500 0.58%, Nasdaq 1.15%
NEW YORK, April 17 (Reuters) - U.S. stocks fell in choppy trading on Wednesday as investors assessed the Federal Reserve's interest rate stance and a batch of soft earnings early in the financial reporting season.
Travelers tumbled 7.41% and was among the biggest drags on the S&P 500 and largest on the Dow Industrials after the insurance giant missed Wall Street expectations for first-quarter profit.
Also weighing on the benchmark S&P index after quarterly results were Prologis, with the warehouse-focused real estate investment trust dropping 7.19%, and Abbott Laboratories, which fell 3.03% after topping quarterly estimates but disappointing on its annual forecast.
After a rally in the last two months of 2023 that extended into the first quarter, equities have struggled with the S&P 500 registering its fourth straight session of declines.
The index is on pace for its third straight weekly loss as investors have dialed back expectations for the timing and size of the Fed's rate cuts.
On Tuesday, U.S. central bank officials including Fed Chair Jerome Powell backed away from providing guidance on when rates may be cut, saying instead that monetary policy needs to be restrictive for longer.
"The markets are dealing with a couple things - inflation is hotter than most expect, rate cut expectations are coming down and we've had a ramp higher in geopolitical tensions, particularly out of the Middle East," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
"It's just an excuse for traders to kind of move to the sidelines and markets to kind of take a breath after a really, really strong five months of gains."
The Dow Jones Industrial Average fell 45.66 points, or 0.12%, to 37,753.31, the S&P 500 lost 29.20 points, or 0.58%, to 5,022.21 and the Nasdaq Composite lost 181.88 points, or 1.15%, to 15,683.37.
The four-session S&P 500 sell-off is the longest in just over four months, matching a four-day run of declines ended on Jan. 4.
Fed Board Governor Michelle Bowman and Cleveland Fed President Loretta Mester are scheduled to speak later in the day.
The Fed's Beige Book survey of economic activity showed a slight expansion from late February through early April and companies feared that progress in lowering inflation would stall.
After the market began to largely price in a June cut from the Fed earlier this year, expectations for a cut of at least 25 basis points have shriveled to 16.8%, and for a July cut to 46%, CME'sFedWatch Tool, showed.
Stocks pared losses as U.S. Treasury yields eased further from the previous day's multi-month highs following a strong auction of 20-year bonds, with the 10-year note last around 4.59%.
Among gainers, United Airlines surged 17.45% after it forecast stronger-than-expected current-quarter numbers, helping to boost the NYSE Arca airline index by 3.82%. its biggest daily percentage jump since Feb. 6.
JB Hunt Transport Services slumped 8.12% as the worst performer on the S&P 500 after the trucking firm missed Wall Street estimates for first-quarter results.
U.S. Bancorp dropped 3.61% after the lender cut its forecast for full-year interest income and reported a 22% fall in first-quarter profit.
On the NYSE declining issues outnumbered advancers by a 1.1-to-1 ratio and a 1.54-to-1 ratio on the Nasdaq.
The NYSE had 21 new highs and 103 new lows.
On the Nasdaq, there were 27 new highs and 240 new lows.
Volume on U.S. exchanges was 10.8 billion shares, compared with the 11.05 billion average for the full session over the last 20 trading days.
Reporting by Chuck Mikolajczak; Editing by Richard Chang
https://www.reuters.com/markets/us/futu ... 024-04-17/
Re: THE DAILY NEWS
REUTERS
"US economic activity expanded slightly in recent weeks, Fed says"
By Reuters
April 17, 2024
April 17 (Reuters) - U.S. economic activity expanded slightly from late February through early April and firms signaled they expect inflation pressures to hold steady, a Federal Reserve survey showed on Wednesday, continuing recent trends that have kept the central bank from being able to cut interest rates.
The U.S. central bank released its latest snapshot on the health of the economy a day after Fed Chair Jerome Powell ditched previous guidance on when its benchmark interest rate may be cut and instead said monetary policy needs to be restrictive for longer due to a string of stronger-than-expected inflation readings.
"Overall economic activity expanded slightly ..."
"Ten out of twelve Districts experienced either slight or modest economic growth," the Fed said in the survey known as the "Beige Book," which polled business contacts across the central bank's 12 districts through April 8.
"The economic outlook among contacts was cautiously optimistic, on balance."
Up until the turn of the year, Powell and his colleagues had been buoyed by data that showed inflation, which spiked to a 40-year high two years ago, drifting downwards toward the Fed's 2% target rate, even amid strong economic growth and a low unemployment rate.
However, that momentum has stalled and even reversed, calling into question whether the Fed, which in March provisionally penciled in three rate cuts this year, will be able to cut its policy rate in the coming months.
Investors now only expect a first cut in September and the odds of a second cut are dwindling.
INFLATION TO HOLD STEADY
In the Fed's survey, the pace of price increases was described overall by firms as modest on average, but six of the central bank's districts noted moderate increases in energy prices and contacts in a few of them, mostly manufacturers, saw upside risks in the near-term in both input and output prices.
"On balance, contacts expected that inflation would hold steady at a slow pace moving forward," the survey noted, even as firms frequently said their ability to pass cost increases on to consumers "had weakened considerably" in recent months.
The Fed is expected at the end of its April 30-May 1 policy meeting to leave its policy rate in the current 5.25%-5.50% range, where it has been since last July.
By the Fed's preferred measure, inflation in February ticked up to a 2.5% annual rate, while a gauge that strips out more volatile food and energy components, rose at a 2.8% annual rate.
Employment rose at a slight pace overall too, the Fed survey showed.
Despite more available workers, many Fed districts continued to see persistent shortages of qualified applicants for certain positions, but multiple districts said that annual wage growth rates had recently returned to historical averages.
One restaurateur, for instance, told the Cleveland Fed "we've seen wages stabilize and haven't had to escalate wages to hire good people."
Reporting by Lindsay Dunsmuir and Ann Saphir; Editing by Paul Simao
https://www.reuters.com/markets/us/us-e ... 024-04-17/
"US economic activity expanded slightly in recent weeks, Fed says"
By Reuters
April 17, 2024
April 17 (Reuters) - U.S. economic activity expanded slightly from late February through early April and firms signaled they expect inflation pressures to hold steady, a Federal Reserve survey showed on Wednesday, continuing recent trends that have kept the central bank from being able to cut interest rates.
The U.S. central bank released its latest snapshot on the health of the economy a day after Fed Chair Jerome Powell ditched previous guidance on when its benchmark interest rate may be cut and instead said monetary policy needs to be restrictive for longer due to a string of stronger-than-expected inflation readings.
"Overall economic activity expanded slightly ..."
"Ten out of twelve Districts experienced either slight or modest economic growth," the Fed said in the survey known as the "Beige Book," which polled business contacts across the central bank's 12 districts through April 8.
"The economic outlook among contacts was cautiously optimistic, on balance."
Up until the turn of the year, Powell and his colleagues had been buoyed by data that showed inflation, which spiked to a 40-year high two years ago, drifting downwards toward the Fed's 2% target rate, even amid strong economic growth and a low unemployment rate.
However, that momentum has stalled and even reversed, calling into question whether the Fed, which in March provisionally penciled in three rate cuts this year, will be able to cut its policy rate in the coming months.
Investors now only expect a first cut in September and the odds of a second cut are dwindling.
INFLATION TO HOLD STEADY
In the Fed's survey, the pace of price increases was described overall by firms as modest on average, but six of the central bank's districts noted moderate increases in energy prices and contacts in a few of them, mostly manufacturers, saw upside risks in the near-term in both input and output prices.
"On balance, contacts expected that inflation would hold steady at a slow pace moving forward," the survey noted, even as firms frequently said their ability to pass cost increases on to consumers "had weakened considerably" in recent months.
The Fed is expected at the end of its April 30-May 1 policy meeting to leave its policy rate in the current 5.25%-5.50% range, where it has been since last July.
By the Fed's preferred measure, inflation in February ticked up to a 2.5% annual rate, while a gauge that strips out more volatile food and energy components, rose at a 2.8% annual rate.
Employment rose at a slight pace overall too, the Fed survey showed.
Despite more available workers, many Fed districts continued to see persistent shortages of qualified applicants for certain positions, but multiple districts said that annual wage growth rates had recently returned to historical averages.
One restaurateur, for instance, told the Cleveland Fed "we've seen wages stabilize and haven't had to escalate wages to hire good people."
Reporting by Lindsay Dunsmuir and Ann Saphir; Editing by Paul Simao
https://www.reuters.com/markets/us/us-e ... 024-04-17/
Re: THE DAILY NEWS
REUTERS
"US trade chief calls for 'decisive' action to shield EV sector from China"
By David Lawder
April 17, 2024
WASHINGTON, April 17 (Reuters) - The U.S. must take "decisive" action to protect electric vehicles (EVs) from subsidized Chinese competition, U.S. Trade Representative Katherine Tai said on Wednesday as she completes a review of Trump-era China tariffs and considers President Joe Biden's call for higher tariffs on imports of Chinese steel.
Tai told a U.S. Senate Finance Committee hearing that the U.S. needed to create a level playing field for U.S. workers and that Biden's call for higher "Section 301" tariffs on Chinese steel imports means that "we are in very, very advanced stages of our interagency work, and I expect that we will come to conclusion very soon."
She said that China's "anti-competitive practices," including "enormous amounts of state support," had fostered overproduction of solar panels a decade ago that devastated U.S. producers.
Tai said the U.S. was now facing a similar situation with EVs and the automotive sector, and leaving Chinese competition unchecked would cause the U.S. to lose the ability to produce those products.
"So we have to take early action, decisive action and we have to be really clear about why we're taking the action," she said.
"We are looking for a level playing field because the current playing field is not level, for all the talk about free trade."
Tai added that the current dynamics in the global EV industry is a significant factor in the Biden administration's examination of its trade tools.
USTR announced on Wednesday that it had opened a new unfair trade practices investigation into China's "acts, policies and practices" to dominate the maritime, logistics and shipbuilding sectors.
The probe, which accepts a petition from five U.S. labor unions, will be conducted under Section 301 of the Trade Act of 1974, the same statute used by former President Donald Trump to impose tariffs on hundreds of billions of dollars of Chinese imports in 2018.
Some senators have urged Tai to use the Section 301 tariff review, launched in September 2022, to take actions to impose higher tariffs on Chinese-made EVs.
Tai told the panel that the completion of the review and any adjustments would be presented as a "complete package" and that she had a high degree of confidence it would be completed soon.
Reporting by David Lawder; Editing by Franklin Paul and Paul Simao
https://www.reuters.com/business/autos- ... 024-04-17/
"US trade chief calls for 'decisive' action to shield EV sector from China"
By David Lawder
April 17, 2024
WASHINGTON, April 17 (Reuters) - The U.S. must take "decisive" action to protect electric vehicles (EVs) from subsidized Chinese competition, U.S. Trade Representative Katherine Tai said on Wednesday as she completes a review of Trump-era China tariffs and considers President Joe Biden's call for higher tariffs on imports of Chinese steel.
Tai told a U.S. Senate Finance Committee hearing that the U.S. needed to create a level playing field for U.S. workers and that Biden's call for higher "Section 301" tariffs on Chinese steel imports means that "we are in very, very advanced stages of our interagency work, and I expect that we will come to conclusion very soon."
She said that China's "anti-competitive practices," including "enormous amounts of state support," had fostered overproduction of solar panels a decade ago that devastated U.S. producers.
Tai said the U.S. was now facing a similar situation with EVs and the automotive sector, and leaving Chinese competition unchecked would cause the U.S. to lose the ability to produce those products.
"So we have to take early action, decisive action and we have to be really clear about why we're taking the action," she said.
"We are looking for a level playing field because the current playing field is not level, for all the talk about free trade."
Tai added that the current dynamics in the global EV industry is a significant factor in the Biden administration's examination of its trade tools.
USTR announced on Wednesday that it had opened a new unfair trade practices investigation into China's "acts, policies and practices" to dominate the maritime, logistics and shipbuilding sectors.
The probe, which accepts a petition from five U.S. labor unions, will be conducted under Section 301 of the Trade Act of 1974, the same statute used by former President Donald Trump to impose tariffs on hundreds of billions of dollars of Chinese imports in 2018.
Some senators have urged Tai to use the Section 301 tariff review, launched in September 2022, to take actions to impose higher tariffs on Chinese-made EVs.
Tai told the panel that the completion of the review and any adjustments would be presented as a "complete package" and that she had a high degree of confidence it would be completed soon.
Reporting by David Lawder; Editing by Franklin Paul and Paul Simao
https://www.reuters.com/business/autos- ... 024-04-17/