REUTERS
"Fed's Goolsbee keeps policy focus on PCE after high consumer price readings"
By Reuters
April 12, 2024
WASHINGTON, April 12 (Reuters) - Chicago Federal Reserve President Austan Goolsbee said on Friday continued high consumer price index readings were concerning, but he remains focused on how the Fed's targeted personal consumption price expenditures index behaves.
"We've had multiple inflation readings that were higher than we wanted" for the CPI, Goolsbee said on Fox Business, but PCE "is the better measure..."
"If we start getting better readings that show us that arc of inflation coming down...that will make us feel a lot better about where we are..."
"If PCE is reinflating - we will stabilize prices."
"One month is no months," Goolsbee said, reflecting Fed policymakers' reluctance to put too much weight on a single bad data point.
But the higher-than-expected CPI readings seen in January, February and March amount to "real months" of bad data that the Fed will now have to parse in deciding whether progress towards lower inflation has stalled or will continue.
The central bank sets its 2% inflation target using the separate PCE price index, which is based on the same consumption data used to calculate gross domestic product, and therefore weights things like housing and healthcare costs differently than the CPI, which is based on a survey of consumer spending on a defined basket of goods and services.
It tends to be lower than the CPI, and even after the jump in March consumer prices, analysts this week said it was still possible PCE inflation might show a small drop for the month when the next round of data is released on April 26.
Goolsbee did not detail his policy views or predict what the Fed might do in coming meetings after a week in which investors pounced on evidence of persistent inflation to push back their own expectations for rate cuts.
But his comments do show the influence coming data releases will have on Fed policy, even among those who tended to be more optimistic that inflation will continue falling.
Goolsbee repeated for example that he is closely watching housing costs, which have defied policymaker expectations that an easing in shelter inflation was imminent.
Shelter and rising fuel prices accounted for much of the higher-than-expected consumer inflation in March, and Goolsbee said the Fed's job of restoring price stability would be tough unless housing costs behave close to how they did before the pandemic.
"The most important number to be watching on the inflation front here in the immediate term is what is happening with housing," Goolsbee said.
"If that doesn't go down to something like it was pre-COVID we will have a hard time getting the overall back to target."
Shelter costs account for about a third of the CPI and were rising around 3.2% annually in the years before the pandemic; the figure in March was 5.7%.
The Fed next meets on April 30-May 1 and is now all but certain to keep the policy interest rate steady in the current 5.25% to 5.5% range.
Reporting by Howard Schneider, Editing by Franklin Paul and Andrea Ricci
https://www.reuters.com/markets/us/feds ... 024-04-12/
THE DAILY NEWS
Re: THE DAILY NEWS
REUTERS
"Exclusive: Fed's Collins eyes about two rate cuts this year"
By Michael S. Derby
April 12, 2024
NEW YORK, April 12 (Reuters) - Federal Reserve Bank of Boston President Susan Collins is eyeing a couple of interest rate cuts this year amid expectations it could still take some time to get inflation back to targeted levels.
“I am still expecting that we're going to see some slowing in demand start and continue into 2024, and that will help to bring inflation down later in the year,” Collins said in an interview with Reuters on Thursday.
Her remarks followed a speech in which she said the Fed is likely to cut its policy rate at some point this year but that uncertainties and risks around inflation mean that the Fed needs to take its time before doing so.
The strength of the job market and the broader economy allow time for that patience, she said.
When it comes to the number of rate cuts the central bank is likely to deliver, Collins told Reuters she was “in the range of two,” referencing the quarterly forecast she submitted for the Fed's meeting in March.
The median estimate among policymaker projections released in both March and December was for three cuts totaling 75 basis points in 2024, an amount Collins had said in a SiriusXM Radio interview in February was "similar" to her baseline expectation.
As for when the Fed starts cutting rates, “the data continue to be volatile and noisy and a lot of uncertainties” abound, Collins said.
“We don't have a crystal ball in terms of how things will come out” and that means it’s not possible to say when the Fed will cut its interest rate target.
Collins was interviewed at a time when inflation data over the start of the year has shown that after last year’s swift decline in price pressures, covering the final distance toward the 2% target is proving more challenging.
At the Fed’s March policy meeting officials kept rates target steady at between 5.25% and 5.5%, where they have been since July.
Until this week, the prevailing view on Wall Street had been for cuts to begin in June, but stronger-than-expected inflation data coupled with very robust hiring reports have triggered a reset of expectations to September.
Economists at some big banks, meanwhile, have either reduced or eliminated altogether forecasts of Fed rate cuts for 2024.
Fed officials themselves still largely see cuts, and in her speech, Collins said the data means the window for an easing is now more distant, noting “it may just take more time than previously thought for activity to moderate, and to see further progress in inflation returning durably to our target.”
Some in the Fed, notably Governor Michelle Bowman, have even argued that if inflation doesn’t fall or gets worse the Fed may have to hike rates again.
Collins said a move higher is “not part of my baseline.”
With monetary policy not on a pre-set path, however, she added: “I don't think you can take possibilities as not being on the table, it really depends on where the data take us.”
Collins also told Reuters the Fed is continuing to work to make sure banks are in position to use the Fed’s lender of last resort Discount Window facility now that the Bank Term Funding Program, stood up just over a year ago to provide liquidity to banks amid a period of stress, is no longer making loans.
Collins said stigma issues still dog the Discount Window - banks have historically shunned borrowing there lest they signal to other financial institutions and regulators they’re in trouble - but progress is being made in getting banks ready to use it if needed.
The Fed is promoting preparedness and there’s “mutual interest” on the part of banks to be ready to access the facility if needed, she said.
Reporting by Michael S. Derby; Editing by Dan Burns and Diane Craft
https://www.reuters.com/markets/rates-b ... 024-04-12/
"Exclusive: Fed's Collins eyes about two rate cuts this year"
By Michael S. Derby
April 12, 2024
NEW YORK, April 12 (Reuters) - Federal Reserve Bank of Boston President Susan Collins is eyeing a couple of interest rate cuts this year amid expectations it could still take some time to get inflation back to targeted levels.
“I am still expecting that we're going to see some slowing in demand start and continue into 2024, and that will help to bring inflation down later in the year,” Collins said in an interview with Reuters on Thursday.
Her remarks followed a speech in which she said the Fed is likely to cut its policy rate at some point this year but that uncertainties and risks around inflation mean that the Fed needs to take its time before doing so.
The strength of the job market and the broader economy allow time for that patience, she said.
When it comes to the number of rate cuts the central bank is likely to deliver, Collins told Reuters she was “in the range of two,” referencing the quarterly forecast she submitted for the Fed's meeting in March.
The median estimate among policymaker projections released in both March and December was for three cuts totaling 75 basis points in 2024, an amount Collins had said in a SiriusXM Radio interview in February was "similar" to her baseline expectation.
As for when the Fed starts cutting rates, “the data continue to be volatile and noisy and a lot of uncertainties” abound, Collins said.
“We don't have a crystal ball in terms of how things will come out” and that means it’s not possible to say when the Fed will cut its interest rate target.
Collins was interviewed at a time when inflation data over the start of the year has shown that after last year’s swift decline in price pressures, covering the final distance toward the 2% target is proving more challenging.
At the Fed’s March policy meeting officials kept rates target steady at between 5.25% and 5.5%, where they have been since July.
Until this week, the prevailing view on Wall Street had been for cuts to begin in June, but stronger-than-expected inflation data coupled with very robust hiring reports have triggered a reset of expectations to September.
Economists at some big banks, meanwhile, have either reduced or eliminated altogether forecasts of Fed rate cuts for 2024.
Fed officials themselves still largely see cuts, and in her speech, Collins said the data means the window for an easing is now more distant, noting “it may just take more time than previously thought for activity to moderate, and to see further progress in inflation returning durably to our target.”
Some in the Fed, notably Governor Michelle Bowman, have even argued that if inflation doesn’t fall or gets worse the Fed may have to hike rates again.
Collins said a move higher is “not part of my baseline.”
With monetary policy not on a pre-set path, however, she added: “I don't think you can take possibilities as not being on the table, it really depends on where the data take us.”
Collins also told Reuters the Fed is continuing to work to make sure banks are in position to use the Fed’s lender of last resort Discount Window facility now that the Bank Term Funding Program, stood up just over a year ago to provide liquidity to banks amid a period of stress, is no longer making loans.
Collins said stigma issues still dog the Discount Window - banks have historically shunned borrowing there lest they signal to other financial institutions and regulators they’re in trouble - but progress is being made in getting banks ready to use it if needed.
The Fed is promoting preparedness and there’s “mutual interest” on the part of banks to be ready to access the facility if needed, she said.
Reporting by Michael S. Derby; Editing by Dan Burns and Diane Craft
https://www.reuters.com/markets/rates-b ... 024-04-12/
Re: THE DAILY NEWS
REUTERS
"US consumer sentiment slips; inflation expectations increase"
By Lucia Mutikani
April 12, 2024
Summary
* Consumer sentiment index falls to 77.9 in April
* One-year inflation expectations rise to 3.1% from 2.9%
* Import prices increase 0.4% in March; up 0.4% year-on-year
WASHINGTON, April 12 (Reuters) - U.S. consumer sentiment receded in April and households expected inflation to increase over the next 12 months and beyond, likely providing more ammunition for the Federal Reserve to delay cutting interest rates until September.
The survey from the University of Michigan on Friday followed data this week that showed consumer prices increased more than expected for a third straight month in March.
Stubbornly high inflation and a strong labor market prompted financial markets and most economists to sharply dial back their expectations for the first rate cut from the U.S. central bank to September from June.
They also have lowered the number of anticipated rate cuts to two from three.
But inflation is not spiraling out of control, with producer prices increasing moderately last month.
That was reinforced by other data on Friday showing import prices excluding fuels barely rose in March after surging at the start of the year.
"This increase in inflation expectations is not what the Fed wants to see, but despite the increase, they remain in line with the recent trend and are well-anchored," said Eugenio Aleman, chief economist at Raymond James.
The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 77.9 this month, compared to a final reading of 79.4 in March.
Since January, the sentiment index has remained within a narrow range 2.5 points, well under the 5 points which the University of Michigan said was necessary for a statistically significant difference.
Economists polled by Reuters had forecast a preliminary reading of 79.0.
The dip in sentiment likely reflected higher gasoline prices and occurred despite a rally on the stock market.
Democrats were more upbeat this month than Republicans and independents.
"Overall, consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy," said Joanne Hsu, the director of the University of Michigan's Surveys of Consumers.
The survey's reading of one-year inflation expectations increased to 3.1% in April from 2.9% in March, rising just above the 2.3%-3.0% range seen in the two years before the COVID-19 pandemic.
The survey's five-year inflation outlook rose to a five-month high of 3.0% from 2.8% in the prior month.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury yields fell.
IMPORT PRICES INCREASE
A report from the Labor Department's Bureau of Labor Statistics showed import prices rose 0.4% in March after an unrevised 0.3% gain in February.
Economists had expected import prices, which exclude tariffs, to rise 0.3%.
In the 12 months through March, import prices rebounded 0.4%.
That was the first year-on-year increase since January 2023, and followed a 0.9% decline in February.
Imported fuel prices increased 4.7% in March after rising 1.3% in February.
Petroleum prices surged 6.0%, but natural gas prices tumbled 31.9%.
The cost of imported food shot up 1.6% after climbing 0.3% in the prior month.
Excluding fuels and food, import prices were unchanged.
These so-called core import prices edged up 0.1% in February.
Core import prices fell 0.4% on a year-on-year basis in March.
Import prices excluding fuels edged up 0.1% after rising 0.2% in the prior month.
They were unchanged on a year-on-year basis.
"Fed officials cannot lower their guard and rate cuts this year may not be as numerous as earlier forecasts had projected," said Christopher Rupkey, chief economist at FWDBONDS.
"But at least the slower increase in import prices is good news, adding to the producer prices report yesterday, that inflation pressures may not be raging completely out of control."
Boston Fed President Susan Collins told Reuters on Friday that she is eyeing a couple of rate cuts this year.
The U.S. central bank has raised its benchmark overnight interest rate by 525 basis points since March of 2022 to the current 5.25%-5.50% range, where it has been since July.
Prices for imported capital goods dropped 0.3% last month, potentially pointing to a moderation in business investment.
The cost of motor vehicles, parts and engines rose 0.2%.
Imported consumer goods prices excluding automotives fell 0.3%.
The cost of imported goods from China slipped 0.1% for the second consecutive month.
They dropped 2.6% on a year-on-year basis in March.
But prices of goods imported from Canada and Mexico increased solidly.
"With market rate-cut expectations declining in recent weeks, the dollar has rallied and bucked previous expectations for a gradual weakening," said Matthew Martin, a U.S. economist at Oxford Economics.
"The benefit, from an importer's perspective, is that a stronger dollar makes imports relatively cheaper and would support lower import price inflation in the months ahead."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao
https://www.reuters.com/world/us/us-imp ... 024-04-12/
"US consumer sentiment slips; inflation expectations increase"
By Lucia Mutikani
April 12, 2024
Summary
* Consumer sentiment index falls to 77.9 in April
* One-year inflation expectations rise to 3.1% from 2.9%
* Import prices increase 0.4% in March; up 0.4% year-on-year
WASHINGTON, April 12 (Reuters) - U.S. consumer sentiment receded in April and households expected inflation to increase over the next 12 months and beyond, likely providing more ammunition for the Federal Reserve to delay cutting interest rates until September.
The survey from the University of Michigan on Friday followed data this week that showed consumer prices increased more than expected for a third straight month in March.
Stubbornly high inflation and a strong labor market prompted financial markets and most economists to sharply dial back their expectations for the first rate cut from the U.S. central bank to September from June.
They also have lowered the number of anticipated rate cuts to two from three.
But inflation is not spiraling out of control, with producer prices increasing moderately last month.
That was reinforced by other data on Friday showing import prices excluding fuels barely rose in March after surging at the start of the year.
"This increase in inflation expectations is not what the Fed wants to see, but despite the increase, they remain in line with the recent trend and are well-anchored," said Eugenio Aleman, chief economist at Raymond James.
The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 77.9 this month, compared to a final reading of 79.4 in March.
Since January, the sentiment index has remained within a narrow range 2.5 points, well under the 5 points which the University of Michigan said was necessary for a statistically significant difference.
Economists polled by Reuters had forecast a preliminary reading of 79.0.
The dip in sentiment likely reflected higher gasoline prices and occurred despite a rally on the stock market.
Democrats were more upbeat this month than Republicans and independents.
"Overall, consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy," said Joanne Hsu, the director of the University of Michigan's Surveys of Consumers.
The survey's reading of one-year inflation expectations increased to 3.1% in April from 2.9% in March, rising just above the 2.3%-3.0% range seen in the two years before the COVID-19 pandemic.
The survey's five-year inflation outlook rose to a five-month high of 3.0% from 2.8% in the prior month.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury yields fell.
IMPORT PRICES INCREASE
A report from the Labor Department's Bureau of Labor Statistics showed import prices rose 0.4% in March after an unrevised 0.3% gain in February.
Economists had expected import prices, which exclude tariffs, to rise 0.3%.
In the 12 months through March, import prices rebounded 0.4%.
That was the first year-on-year increase since January 2023, and followed a 0.9% decline in February.
Imported fuel prices increased 4.7% in March after rising 1.3% in February.
Petroleum prices surged 6.0%, but natural gas prices tumbled 31.9%.
The cost of imported food shot up 1.6% after climbing 0.3% in the prior month.
Excluding fuels and food, import prices were unchanged.
These so-called core import prices edged up 0.1% in February.
Core import prices fell 0.4% on a year-on-year basis in March.
Import prices excluding fuels edged up 0.1% after rising 0.2% in the prior month.
They were unchanged on a year-on-year basis.
"Fed officials cannot lower their guard and rate cuts this year may not be as numerous as earlier forecasts had projected," said Christopher Rupkey, chief economist at FWDBONDS.
"But at least the slower increase in import prices is good news, adding to the producer prices report yesterday, that inflation pressures may not be raging completely out of control."
Boston Fed President Susan Collins told Reuters on Friday that she is eyeing a couple of rate cuts this year.
The U.S. central bank has raised its benchmark overnight interest rate by 525 basis points since March of 2022 to the current 5.25%-5.50% range, where it has been since July.
Prices for imported capital goods dropped 0.3% last month, potentially pointing to a moderation in business investment.
The cost of motor vehicles, parts and engines rose 0.2%.
Imported consumer goods prices excluding automotives fell 0.3%.
The cost of imported goods from China slipped 0.1% for the second consecutive month.
They dropped 2.6% on a year-on-year basis in March.
But prices of goods imported from Canada and Mexico increased solidly.
"With market rate-cut expectations declining in recent weeks, the dollar has rallied and bucked previous expectations for a gradual weakening," said Matthew Martin, a U.S. economist at Oxford Economics.
"The benefit, from an importer's perspective, is that a stronger dollar makes imports relatively cheaper and would support lower import price inflation in the months ahead."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao
https://www.reuters.com/world/us/us-imp ... 024-04-12/
Re: THE DAILY NEWS
REUTERS
"Fed's Daly: absolutely no urgency to cut US interest rates"
By Reuters
April 12, 2024
April 12 (Reuters) - San Francisco Federal Reserve President Mary Daly said on Friday there is still "a lot of work to do" to make sure inflation is on track to the Fed's 2% goal, and there is "absolutely" no urgency to cut rates.
"Policy's in a good place right now, and I need to be fully confident that inflation is on track to come down to 2%, which is our definition of price stability, before we would consider a rate cut," Daly said at an event at the regional Fed bank.
With the labor market strong and inflation falling more slowly than it did last year, she said, the Fed will maintain its current stance "as long as necessary" to bring down inflation.
"There's absolutely, in my mind, no urgency to adjust the policy rate," she said, echoing a sentiment also expressed by several of her colleagues this week.
A government report earlier this week showed consumer price inflation was stronger than expected in March, a third upside monthly surprise this year that prompted traders and economists to pare their expectations for how soon the Fed will cut rates, and how deeply.
In March Fed policymakers generally anticipated three rate cuts, suggesting a June start to what many analysts had thought would be once-per-quarter rate reductions through year end.
After this week's inflation data financial markets are pricing in just two rate cuts.
Daly declined to say how the data affects her assessment of the number of rate cuts that will eventually be needed.
"I actually think there's too much discussion about is it going to be two or three or four or one, and not enough discussion on what are we trying to accomplish and are we still committed to accomplishing it?" she said.
Inflation's progress downward was always going to be bumpy she said, but "the commitment we have remains the same: restore price stability as gently as we can and maintain our policy stance as long as is necessary to be fully confident that we're on that path.
Reporting by Ann Saphir; editing by Diane Craft
https://www.reuters.com/markets/us/feds ... 024-04-12/
"Fed's Daly: absolutely no urgency to cut US interest rates"
By Reuters
April 12, 2024
April 12 (Reuters) - San Francisco Federal Reserve President Mary Daly said on Friday there is still "a lot of work to do" to make sure inflation is on track to the Fed's 2% goal, and there is "absolutely" no urgency to cut rates.
"Policy's in a good place right now, and I need to be fully confident that inflation is on track to come down to 2%, which is our definition of price stability, before we would consider a rate cut," Daly said at an event at the regional Fed bank.
With the labor market strong and inflation falling more slowly than it did last year, she said, the Fed will maintain its current stance "as long as necessary" to bring down inflation.
"There's absolutely, in my mind, no urgency to adjust the policy rate," she said, echoing a sentiment also expressed by several of her colleagues this week.
A government report earlier this week showed consumer price inflation was stronger than expected in March, a third upside monthly surprise this year that prompted traders and economists to pare their expectations for how soon the Fed will cut rates, and how deeply.
In March Fed policymakers generally anticipated three rate cuts, suggesting a June start to what many analysts had thought would be once-per-quarter rate reductions through year end.
After this week's inflation data financial markets are pricing in just two rate cuts.
Daly declined to say how the data affects her assessment of the number of rate cuts that will eventually be needed.
"I actually think there's too much discussion about is it going to be two or three or four or one, and not enough discussion on what are we trying to accomplish and are we still committed to accomplishing it?" she said.
Inflation's progress downward was always going to be bumpy she said, but "the commitment we have remains the same: restore price stability as gently as we can and maintain our policy stance as long as is necessary to be fully confident that we're on that path.
Reporting by Ann Saphir; editing by Diane Craft
https://www.reuters.com/markets/us/feds ... 024-04-12/
Re: THE DAILY NEWS
The Washington Post
"Biden has a story to tell about the economy. Inflation gets in the way."
Story by Dan Balz
14 APRIL 2024
President Biden has a story he wants to tell voters about the economy, one of consistent job growth over the course of his presidency and of a pandemic recovery that has led the world.
Inflation keeps getting in the way.
Last week’s inflation report showed consumer prices rising 3.5 percent from March 2023 to March 2024.
This continued a string of surprises this year, suggesting a resurgence in inflation after signs had pointed in the other direction.
Biden administration officials have noted that the inflation rate has fallen since its earlier peak, but the latest numbers show it has not fully cooled.
For now, it is moving in the wrong direction and remains above the Federal Reserve’s target of 2 percent.
Despite unemployment at a half-century low, the president’s economic job approval is net negative by a significant margin.
The RealClearPolitics average shows that he is net negative by 18 percentage points on his handling of the economy and by 27 percentage points on how he’s dealt with inflation.
Political strategists in both parties have reported that voters repeatedly point to higher prices as a source of their unhappiness about the state of the country.
The cost of everyday items — gasoline, food, housing — hits them constantly.
It’s hard to persuade voters to look on the sunny side when they are feeling the squeeze of higher prices on their household budgets.
Voters’ common refrain is summed up as: Things cost too much.
Gasoline prices are rising once again, a typical occurrence as summer approaches.
Although they are below their peak during the Biden presidency, they are significantly higher than when he took office.
In early 2021, average gas price was $2.42.
Today it is about $3.50, according to the U.S. Energy Information Agency.
Food prices are taking another bite out of household incomes.
From 2019 to 2023, food prices rose by 25 percent, according to the U.S. Department of Agriculture.
Food costs accounted for 11.3 percent of disposable income in 2022, according to the most recent USDA analysis.
That is the highest it has been since 1991, when families spent 11.4 percent of disposable income on food.
A dozen eggs now cost, on average, about $2.99, according to one indicator.
That compares to an inflation-adjusted $2.09 per dozen in 2020.
Higher interest rates have meant more costly home mortgages.
Mortgage rates began to ease but that has stalled or even begun to reverse.
The Wall Street Journal carried a story on Friday that looked at the impact on middle-income families.
The headline read: “Stay Put or Pay Up: Home Buyers Lose Hope for Lower Rates.”
The story said that, in March, a median-income family could afford a house costing no more than $416,000, given current interest rates and assuming a down payment of 20 percent.
Three years ago, when mortgage rates were lower, that family could have bought a house valued at $561,000.
Other unexpected and unavoidable costs are hitting family pocketbooks.
Car insurance is one example, with rates up 22.2 percent in the past year, the biggest increase since 1976.
In Nevada, a presidential battleground state, auto insurance rates were up 38 percent over the previous year, according to a CNN report.
My colleague Heather Long posted on X earlier this year that, as of February, household repair costs had risen 18 percent over the previous year and nonprescription drugs were up 9 percent.
Both, she noted on the social media platform formerly known as Twitter, were the highest such increases ever recorded.
Biden issued a statement last week after the March consumer price index report.
He stressed that inflation had declined by more than 60 percent from its peak but said, “We have more to do to lower costs for hard-working families.”
He added, “Fighting inflation remains my top economic priority.”
But presidents have few weapons in the fight against inflation.
Jason Furman, an economist at Harvard University and chairman of the Council of Economic Advisers in the Obama administration, said 90 percent of controlling inflation is the job of the Federal Reserve.
“The White House mostly has to figure out the best message to get through it, without a lot of tools to change the reality,” he said.
Biden has pushed policies aimed at lowering the cost of prescription drugs and he has gone after junk fees that companies add to things like airline tickets, car rentals and event tickets.
He announced initiatives to provide assistance for home buyers in his State of the Union address, but they are going nowhere.
Twice this past week, the administration announced actions to reduce student debt, efforts aimed to shore up support among younger voters.
But those policies affect the pocketbooks only of those who qualify while adding future costs to the government.
And they have drawn criticism for helping some who went to college at the expense of others who never went to college.
The Fed would cut interest rates for two reasons — to head off a recession if one was looming or because inflation had eased enough to give officials confidence that lower rates would not reignite another inflationary round.
Neither condition exists right now.
There is no recession on the horizon, after a long period of predictions that interest rate hikes could or would bring about a recession.
And now prices are rising more rapidly than expected.
Economists think it’s doubtful there will be a rate cut in June, as had been assumed a few months ago.
A reduction in rates in September, though perhaps warranted economically by then, could be too close to the election, leaving Federal Reserve Board Chair Jerome H. Powell open to criticism that the Fed was acting to help Biden politically.
The 2024 election will be fought over more than economic issues.
The biggest political story of the past week was the decision by the Arizona Supreme Court to resurrect an 1864 law that bans abortions except in the case of a danger to the life of the mother and that imposes penalties on those who provide abortions.
The decision will ensure that abortion will be a key issue in one of the most important battlegrounds in November, with the likelihood of an abortion referendum on the ballot.
Vice President Harris, who has led the administration’s messaging on abortion for the past two years, flew to Arizona on Friday to highlight the state court action.
Biden has also made clear he will continue to focus on former president Donald Trump as a threat to democracy.
Trump has said a second term would be an opportunity for retribution against his adversaries, and he has never retreated from his false claim that the 2020 election was stolen.
In the 2022 midterm elections, pre-election polls suggested that inflation and the economy were the biggest issues on the minds of voters, which led to predictions of sweeping Republican gains.
In the end, however, abortion and threats to democracy combined to motivate Democratic voters.
Republicans came out of the midterms disappointed, gaining only a tiny majority in the House, failing to take control of the Senate and losing several contested elections for governor.
Biden hopes that may be the case again this November.
But for him, the uptick in the inflation rate has come at just the wrong moment.
Many Americans are saying they think things were better economically under Trump.
The current president doesn’t have much time to change those perceptions — even as he tries to force the election onto other terrain.
https://www.msn.com/en-us/money/markets ... 7f47&ei=26
"Biden has a story to tell about the economy. Inflation gets in the way."
Story by Dan Balz
14 APRIL 2024
President Biden has a story he wants to tell voters about the economy, one of consistent job growth over the course of his presidency and of a pandemic recovery that has led the world.
Inflation keeps getting in the way.
Last week’s inflation report showed consumer prices rising 3.5 percent from March 2023 to March 2024.
This continued a string of surprises this year, suggesting a resurgence in inflation after signs had pointed in the other direction.
Biden administration officials have noted that the inflation rate has fallen since its earlier peak, but the latest numbers show it has not fully cooled.
For now, it is moving in the wrong direction and remains above the Federal Reserve’s target of 2 percent.
Despite unemployment at a half-century low, the president’s economic job approval is net negative by a significant margin.
The RealClearPolitics average shows that he is net negative by 18 percentage points on his handling of the economy and by 27 percentage points on how he’s dealt with inflation.
Political strategists in both parties have reported that voters repeatedly point to higher prices as a source of their unhappiness about the state of the country.
The cost of everyday items — gasoline, food, housing — hits them constantly.
It’s hard to persuade voters to look on the sunny side when they are feeling the squeeze of higher prices on their household budgets.
Voters’ common refrain is summed up as: Things cost too much.
Gasoline prices are rising once again, a typical occurrence as summer approaches.
Although they are below their peak during the Biden presidency, they are significantly higher than when he took office.
In early 2021, average gas price was $2.42.
Today it is about $3.50, according to the U.S. Energy Information Agency.
Food prices are taking another bite out of household incomes.
From 2019 to 2023, food prices rose by 25 percent, according to the U.S. Department of Agriculture.
Food costs accounted for 11.3 percent of disposable income in 2022, according to the most recent USDA analysis.
That is the highest it has been since 1991, when families spent 11.4 percent of disposable income on food.
A dozen eggs now cost, on average, about $2.99, according to one indicator.
That compares to an inflation-adjusted $2.09 per dozen in 2020.
Higher interest rates have meant more costly home mortgages.
Mortgage rates began to ease but that has stalled or even begun to reverse.
The Wall Street Journal carried a story on Friday that looked at the impact on middle-income families.
The headline read: “Stay Put or Pay Up: Home Buyers Lose Hope for Lower Rates.”
The story said that, in March, a median-income family could afford a house costing no more than $416,000, given current interest rates and assuming a down payment of 20 percent.
Three years ago, when mortgage rates were lower, that family could have bought a house valued at $561,000.
Other unexpected and unavoidable costs are hitting family pocketbooks.
Car insurance is one example, with rates up 22.2 percent in the past year, the biggest increase since 1976.
In Nevada, a presidential battleground state, auto insurance rates were up 38 percent over the previous year, according to a CNN report.
My colleague Heather Long posted on X earlier this year that, as of February, household repair costs had risen 18 percent over the previous year and nonprescription drugs were up 9 percent.
Both, she noted on the social media platform formerly known as Twitter, were the highest such increases ever recorded.
Biden issued a statement last week after the March consumer price index report.
He stressed that inflation had declined by more than 60 percent from its peak but said, “We have more to do to lower costs for hard-working families.”
He added, “Fighting inflation remains my top economic priority.”
But presidents have few weapons in the fight against inflation.
Jason Furman, an economist at Harvard University and chairman of the Council of Economic Advisers in the Obama administration, said 90 percent of controlling inflation is the job of the Federal Reserve.
“The White House mostly has to figure out the best message to get through it, without a lot of tools to change the reality,” he said.
Biden has pushed policies aimed at lowering the cost of prescription drugs and he has gone after junk fees that companies add to things like airline tickets, car rentals and event tickets.
He announced initiatives to provide assistance for home buyers in his State of the Union address, but they are going nowhere.
Twice this past week, the administration announced actions to reduce student debt, efforts aimed to shore up support among younger voters.
But those policies affect the pocketbooks only of those who qualify while adding future costs to the government.
And they have drawn criticism for helping some who went to college at the expense of others who never went to college.
The Fed would cut interest rates for two reasons — to head off a recession if one was looming or because inflation had eased enough to give officials confidence that lower rates would not reignite another inflationary round.
Neither condition exists right now.
There is no recession on the horizon, after a long period of predictions that interest rate hikes could or would bring about a recession.
And now prices are rising more rapidly than expected.
Economists think it’s doubtful there will be a rate cut in June, as had been assumed a few months ago.
A reduction in rates in September, though perhaps warranted economically by then, could be too close to the election, leaving Federal Reserve Board Chair Jerome H. Powell open to criticism that the Fed was acting to help Biden politically.
The 2024 election will be fought over more than economic issues.
The biggest political story of the past week was the decision by the Arizona Supreme Court to resurrect an 1864 law that bans abortions except in the case of a danger to the life of the mother and that imposes penalties on those who provide abortions.
The decision will ensure that abortion will be a key issue in one of the most important battlegrounds in November, with the likelihood of an abortion referendum on the ballot.
Vice President Harris, who has led the administration’s messaging on abortion for the past two years, flew to Arizona on Friday to highlight the state court action.
Biden has also made clear he will continue to focus on former president Donald Trump as a threat to democracy.
Trump has said a second term would be an opportunity for retribution against his adversaries, and he has never retreated from his false claim that the 2020 election was stolen.
In the 2022 midterm elections, pre-election polls suggested that inflation and the economy were the biggest issues on the minds of voters, which led to predictions of sweeping Republican gains.
In the end, however, abortion and threats to democracy combined to motivate Democratic voters.
Republicans came out of the midterms disappointed, gaining only a tiny majority in the House, failing to take control of the Senate and losing several contested elections for governor.
Biden hopes that may be the case again this November.
But for him, the uptick in the inflation rate has come at just the wrong moment.
Many Americans are saying they think things were better economically under Trump.
The current president doesn’t have much time to change those perceptions — even as he tries to force the election onto other terrain.
https://www.msn.com/en-us/money/markets ... 7f47&ei=26
Re: THE DAILY NEWS
Axios
"Biden's new take on inflation: Trump would be worse"
Story by Hans Nichols
14 APRIL 2024
The White House is rolling out its latest response to high inflation: It will be much worse if former President Trump is elected.
Why it matters:
President Biden and his top economic advisers know that inflation has given voters bad vibes that have become a hurdle to his re-election — and that there's not a lot they can do to lower it before November.
So they're turning to a new line of attack: warning voters how much higher inflation could climb if Trump imposes new tariffs on China and gives more tax cuts to the wealthiest Americans.
"MAGAnomics is inflation-feeding welfare for the rich that raises taxes," White House deputy press secretary Andrew Bates writes in a new memo to Biden allies, out this morning.
"Not only will Bidenomics lower costs even more, but it will also attack inflation by undoing tax giveaways for rich special interests," Bates wrote.
Driving the news:
March's Consumer Price Index was full of bad news for Biden.
The headline number — inflation rising at a rate of 3.5% over 12 months — was higher than expected, undercutting Biden's argument that his policies are continuing to lower prices.
It also gave Trump an opening to attack Biden and the Federal Reserve.
"INFLATION is BACK—and RAGING!," the former president wrote in a Truth Social post.
Between the lines:
Perhaps a bigger concern for Biden: Oil prices have been creeping up all year — and could jump higher if Iran attacks Israel and Middle East supply routes are disrupted.
That would lead to high gas prices, an inflation reading the White House dreads.
Voters see it every day.
In swing states such as Nevada, average gas prices are at $4.62 per gallon, up 50 cents over the last month.
In Arizona, it's $4.14 per gallon, up 58 cents.
What they are saying:
After Wednesday's reading, Biden reiterated that "fighting inflation remains my top economic priority."
"We have a plan to deal with it, whereas the opposition ... talks about two things," he said.
"They just want to cut taxes for the wealthy and raise taxes on other people."
But Biden also acknowledged that March's CPI reading will delay the Fed's plan to start cutting interest rates.
That will translate into higher borrowing costs for consumers for longer.
Zoom out:
Throughout his presidency, Biden has adopted different approaches to inflation.
At first, he and his economic advisers insisted it was "transitory" and would naturally recede by itself.
He also blamed others for prices, first starting with snarled supply chains, then moving on to Putin's invasion of Ukraine, and most recently hitting corporations for so-called "shrinkflation."
Zoom in:
Economists fiercely debate how much Biden's first stimulus package, the $1.9 trillion American Rescue Plan, contributed to inflation.
Biden's main legislative attack on high prices — the Inflation Reduction Act (IRA) — included provisions to lower out-of-pocket costs for prescription drugs for seniors.
Policymakers generally agree that deficit spending leads to higher inflation.
The skyrocketing price tag of the IRA — its climate provisions could end up costing $1.2 trillion, three times higher than the original estimate — could end up increasing inflation, not reducing it.
What we're watching:
When inflation was spiking in the spring of 2022, the Biden administration hotly debated whether to lower some of Trump's China tariffs on some $300 billion consumer goods.
Biden is expected to formally extend most of Trump's tariffs this spring, but he can still tinker with the list and take some consumer goods off of it.
That could provide relief on some products.
https://www.msn.com/en-us/news/politics ... 7f47&ei=54
"Biden's new take on inflation: Trump would be worse"
Story by Hans Nichols
14 APRIL 2024
The White House is rolling out its latest response to high inflation: It will be much worse if former President Trump is elected.
Why it matters:
President Biden and his top economic advisers know that inflation has given voters bad vibes that have become a hurdle to his re-election — and that there's not a lot they can do to lower it before November.
So they're turning to a new line of attack: warning voters how much higher inflation could climb if Trump imposes new tariffs on China and gives more tax cuts to the wealthiest Americans.
"MAGAnomics is inflation-feeding welfare for the rich that raises taxes," White House deputy press secretary Andrew Bates writes in a new memo to Biden allies, out this morning.
"Not only will Bidenomics lower costs even more, but it will also attack inflation by undoing tax giveaways for rich special interests," Bates wrote.
Driving the news:
March's Consumer Price Index was full of bad news for Biden.
The headline number — inflation rising at a rate of 3.5% over 12 months — was higher than expected, undercutting Biden's argument that his policies are continuing to lower prices.
It also gave Trump an opening to attack Biden and the Federal Reserve.
"INFLATION is BACK—and RAGING!," the former president wrote in a Truth Social post.
Between the lines:
Perhaps a bigger concern for Biden: Oil prices have been creeping up all year — and could jump higher if Iran attacks Israel and Middle East supply routes are disrupted.
That would lead to high gas prices, an inflation reading the White House dreads.
Voters see it every day.
In swing states such as Nevada, average gas prices are at $4.62 per gallon, up 50 cents over the last month.
In Arizona, it's $4.14 per gallon, up 58 cents.
What they are saying:
After Wednesday's reading, Biden reiterated that "fighting inflation remains my top economic priority."
"We have a plan to deal with it, whereas the opposition ... talks about two things," he said.
"They just want to cut taxes for the wealthy and raise taxes on other people."
But Biden also acknowledged that March's CPI reading will delay the Fed's plan to start cutting interest rates.
That will translate into higher borrowing costs for consumers for longer.
Zoom out:
Throughout his presidency, Biden has adopted different approaches to inflation.
At first, he and his economic advisers insisted it was "transitory" and would naturally recede by itself.
He also blamed others for prices, first starting with snarled supply chains, then moving on to Putin's invasion of Ukraine, and most recently hitting corporations for so-called "shrinkflation."
Zoom in:
Economists fiercely debate how much Biden's first stimulus package, the $1.9 trillion American Rescue Plan, contributed to inflation.
Biden's main legislative attack on high prices — the Inflation Reduction Act (IRA) — included provisions to lower out-of-pocket costs for prescription drugs for seniors.
Policymakers generally agree that deficit spending leads to higher inflation.
The skyrocketing price tag of the IRA — its climate provisions could end up costing $1.2 trillion, three times higher than the original estimate — could end up increasing inflation, not reducing it.
What we're watching:
When inflation was spiking in the spring of 2022, the Biden administration hotly debated whether to lower some of Trump's China tariffs on some $300 billion consumer goods.
Biden is expected to formally extend most of Trump's tariffs this spring, but he can still tinker with the list and take some consumer goods off of it.
That could provide relief on some products.
https://www.msn.com/en-us/news/politics ... 7f47&ei=54
Re: THE DAILY NEWS
The Daily Mail
"US sends in amphibious warship USS Bataan and support vessels with 2,500 Marines on board into the Eastern Mediterranean and places military bases in Iraq on full alert as Iran attacks Israel"
Story by Joe Hutchison For Dailymail.Com and Bill Lowther In Washington For The Mail On Sunday
14 APRIL 2024
The US have sent the war ship Bataan as well as two support ships with 2,500 Marines onboard into the Eastern Mediterranean after Iran launched a drone attack on Israel.
US Congressional sources say the amphibious war ship Bataan is leading a US naval task force in the Eastern Mediterranean.
The Bataan has two support ships and together they have about 2,500 Marines onboard.
The US also has several guided missile destroyers including the Carney in the area.
US bases in Iraq have been placed on full alert and will also attempt to shoot down missiles and drones aimed at Israel.
In addition, the US has two destroyers and a Cruiser in the Red Sea that are fully armed with anti-missile weapons and they too are under orders to shoot down any Israeli bound missiles or drones.
Iran launched the drones Saturday afternoon Eastern Standard Time, and they are expected to take hours to reach their target.
President Joe Biden said on Friday he expects Iran to attack Israel 'sooner than later' and said his message to Tehran was 'don't.'
'We are devoted to the defense of Israel.'
'We will support Israel and help defend Israel and Iran will not succeed,' Biden said after addressing a gathering of black leaders.
On Saturday afternoon, President Biden rushed back from Delaware for an emergency national security meeting on the matter.
Israel has an 'iron dome' security system which can shoot down enemy missiles, although it is unclear if it will be able to fend off the full force of Iran's attack.
Dozens of drones were seen flying from Iran over neighboring Iraq's Sulaymaniya province, according to three security sources.
Iran's Islamic Revolutionary Guard Corps said via state media that it had 'launched extensive drone strikes against targets in occupied territories.'
Iranian media reported that a second wave of drones has been launched, though details on their current location are not yet known.
The IDF's spokesperson, Rear Admiral Daniel Hagari, said it would take several hours for the drones to arrive in Israel, adding that sirens would be sounded in threatened areas.
The IDF said: 'The air defense array is on high alert at the same time as the Air Force planes and Navy ships that are on a mission to protect the country’s skies."
"The IDF is monitoring all targets.
'We ask the public to adhere to and follow the instructions of the Home Front Command and the official IDF announcements regarding the matter.'
Iran had threatened to hit back at Israel over an attack in Syria, which Tehran say was an Israeli airstrike on a Iranian diplomatic building in Damascus.
Iran's Supreme Leader Ali Khamenei vowed retribution in the wake of the Damascus attack, for which Tel-Aviv has yet to take responsibility.
The April 1 attack destroyed Iran's consulate building in the city and killed seven Revolutionary Guards, including the two generals.
Iran's supreme leader, Ayatollah Ali Khamenei, warned Wednesday that Israel 'must be punished and will be punished', days after one of his advisers said Israeli embassies are 'no longer safe'.
https://www.msn.com/en-us/news/world/us ... 7f47&ei=69
"US sends in amphibious warship USS Bataan and support vessels with 2,500 Marines on board into the Eastern Mediterranean and places military bases in Iraq on full alert as Iran attacks Israel"
Story by Joe Hutchison For Dailymail.Com and Bill Lowther In Washington For The Mail On Sunday
14 APRIL 2024
The US have sent the war ship Bataan as well as two support ships with 2,500 Marines onboard into the Eastern Mediterranean after Iran launched a drone attack on Israel.
US Congressional sources say the amphibious war ship Bataan is leading a US naval task force in the Eastern Mediterranean.
The Bataan has two support ships and together they have about 2,500 Marines onboard.
The US also has several guided missile destroyers including the Carney in the area.
US bases in Iraq have been placed on full alert and will also attempt to shoot down missiles and drones aimed at Israel.
In addition, the US has two destroyers and a Cruiser in the Red Sea that are fully armed with anti-missile weapons and they too are under orders to shoot down any Israeli bound missiles or drones.
Iran launched the drones Saturday afternoon Eastern Standard Time, and they are expected to take hours to reach their target.
President Joe Biden said on Friday he expects Iran to attack Israel 'sooner than later' and said his message to Tehran was 'don't.'
'We are devoted to the defense of Israel.'
'We will support Israel and help defend Israel and Iran will not succeed,' Biden said after addressing a gathering of black leaders.
On Saturday afternoon, President Biden rushed back from Delaware for an emergency national security meeting on the matter.
Israel has an 'iron dome' security system which can shoot down enemy missiles, although it is unclear if it will be able to fend off the full force of Iran's attack.
Dozens of drones were seen flying from Iran over neighboring Iraq's Sulaymaniya province, according to three security sources.
Iran's Islamic Revolutionary Guard Corps said via state media that it had 'launched extensive drone strikes against targets in occupied territories.'
Iranian media reported that a second wave of drones has been launched, though details on their current location are not yet known.
The IDF's spokesperson, Rear Admiral Daniel Hagari, said it would take several hours for the drones to arrive in Israel, adding that sirens would be sounded in threatened areas.
The IDF said: 'The air defense array is on high alert at the same time as the Air Force planes and Navy ships that are on a mission to protect the country’s skies."
"The IDF is monitoring all targets.
'We ask the public to adhere to and follow the instructions of the Home Front Command and the official IDF announcements regarding the matter.'
Iran had threatened to hit back at Israel over an attack in Syria, which Tehran say was an Israeli airstrike on a Iranian diplomatic building in Damascus.
Iran's Supreme Leader Ali Khamenei vowed retribution in the wake of the Damascus attack, for which Tel-Aviv has yet to take responsibility.
The April 1 attack destroyed Iran's consulate building in the city and killed seven Revolutionary Guards, including the two generals.
Iran's supreme leader, Ayatollah Ali Khamenei, warned Wednesday that Israel 'must be punished and will be punished', days after one of his advisers said Israeli embassies are 'no longer safe'.
https://www.msn.com/en-us/news/world/us ... 7f47&ei=69
Re: THE DAILY NEWS
RIGZONE
"Oil Falls as Traders Anticipate Israeli Retaliation Against Iran"
by Bloomberg | Julia Fanzeres and Alex Longley
Monday, April 15, 2024
Oil retreated from session lows as traders await Israel’s response to an unprecedented attack from Iran.
West Texas Intermediate closed above $85 a barrel, erasing earlier losses, on reports that Israeli officials are vowing to retaliate against Iran.
Ahead of the strike on Israel this weekend, crude surged to a five-month high but fell as much as 2% after most of the 300 drones and missiles fired by Iran were intercepted.
“At this juncture, the outlook for oil seems to hinge on Israeli response to the attack,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients.
“Nevertheless, with bellicose rhetoric coming from both sides, markets might continue to place a sizeable premium on the price of oil in the immediate term.”
Oil has been one of the strongest performers in commodities this year as OPEC+ keeps a tight rein on supply to drain inventories and support prices.
The increase in Middle East tensions has boosted prices in recent weeks, with analysts highlighting the possibility oil could once again hit $100 a barrel.
Societe Generale SA revised its forecast notably higher, saying in a note that direct military action between the US and Iran could send Brent to $140.
Shipping risks have also been in focus after Iran seized a vessel, the MSC Aries, near the key Strait of Hormuz shortly before the strikes against Israel.
The ship’s beneficial owner is part of Israel-linked Zodiac Group, according to data compiled by Bloomberg.
The move raises fresh concerns over the safety of vessels in the region, adding to previous logistical disruptions.
Prices:
WTI for May delivery declined 0.3% to settle at $85.41 a barrel.
Brent for June settlement fell 0.4% to $90.10 a barrel.
https://www.rigzone.com/news/wire/oil_f ... 1-article/
"Oil Falls as Traders Anticipate Israeli Retaliation Against Iran"
by Bloomberg | Julia Fanzeres and Alex Longley
Monday, April 15, 2024
Oil retreated from session lows as traders await Israel’s response to an unprecedented attack from Iran.
West Texas Intermediate closed above $85 a barrel, erasing earlier losses, on reports that Israeli officials are vowing to retaliate against Iran.
Ahead of the strike on Israel this weekend, crude surged to a five-month high but fell as much as 2% after most of the 300 drones and missiles fired by Iran were intercepted.
“At this juncture, the outlook for oil seems to hinge on Israeli response to the attack,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients.
“Nevertheless, with bellicose rhetoric coming from both sides, markets might continue to place a sizeable premium on the price of oil in the immediate term.”
Oil has been one of the strongest performers in commodities this year as OPEC+ keeps a tight rein on supply to drain inventories and support prices.
The increase in Middle East tensions has boosted prices in recent weeks, with analysts highlighting the possibility oil could once again hit $100 a barrel.
Societe Generale SA revised its forecast notably higher, saying in a note that direct military action between the US and Iran could send Brent to $140.
Shipping risks have also been in focus after Iran seized a vessel, the MSC Aries, near the key Strait of Hormuz shortly before the strikes against Israel.
The ship’s beneficial owner is part of Israel-linked Zodiac Group, according to data compiled by Bloomberg.
The move raises fresh concerns over the safety of vessels in the region, adding to previous logistical disruptions.
Prices:
WTI for May delivery declined 0.3% to settle at $85.41 a barrel.
Brent for June settlement fell 0.4% to $90.10 a barrel.
https://www.rigzone.com/news/wire/oil_f ... 1-article/
Re: THE DAILY NEWS
CNBC
"10-year Treasury yield jumps above 4.6% after hot retail sales, foiled Iran attack"
Alex Harring @ALEX_HARRING Yun Li @YUNLI626 Sophie Kiderlin @IN/SOPHIE-KIDERLIN-B327B914A/ @SKIDERLIN
PUBLISHED MON, APR 15 2024
Treasury yields jumped Monday as investors reacted to a hotter-than-expected retail sales report and rising geopolitical tensions.
The yield on the 10-year Treasury rose by more than 11 basis points to 4.612%, at one point touching its highest level since mid-November.
The 2-year Treasury yield last added more than 3 basis points, sitting at 4.912%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Data released Monday showed retail sales increased 0.7% for the month of March, considerably faster than the Dow Jones consensus forecast for a 0.3% increase.
Consumers continued shopping at a more brisk pace than anticipated even as inflation remained sticky.
The Labor Department reported last week that the consumer price index increased 0.4% in March, higher than expected.
Elsewhere, traders considered the potential market impact of growing tensions in the Middle East after Iran launched several hundred missiles and drones on Israel over the weekend.
Market expectations about when the first rate cut will take place moved back following last week’s inflation data, with traders now anticipating the first rate cut to come in July or September rather than June, CME Group’s FedWatch tool showed.
https://www.cnbc.com/2024/04/15/us-trea ... tlook.html
"10-year Treasury yield jumps above 4.6% after hot retail sales, foiled Iran attack"
Alex Harring @ALEX_HARRING Yun Li @YUNLI626 Sophie Kiderlin @IN/SOPHIE-KIDERLIN-B327B914A/ @SKIDERLIN
PUBLISHED MON, APR 15 2024
Treasury yields jumped Monday as investors reacted to a hotter-than-expected retail sales report and rising geopolitical tensions.
The yield on the 10-year Treasury rose by more than 11 basis points to 4.612%, at one point touching its highest level since mid-November.
The 2-year Treasury yield last added more than 3 basis points, sitting at 4.912%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Data released Monday showed retail sales increased 0.7% for the month of March, considerably faster than the Dow Jones consensus forecast for a 0.3% increase.
Consumers continued shopping at a more brisk pace than anticipated even as inflation remained sticky.
The Labor Department reported last week that the consumer price index increased 0.4% in March, higher than expected.
Elsewhere, traders considered the potential market impact of growing tensions in the Middle East after Iran launched several hundred missiles and drones on Israel over the weekend.
Market expectations about when the first rate cut will take place moved back following last week’s inflation data, with traders now anticipating the first rate cut to come in July or September rather than June, CME Group’s FedWatch tool showed.
https://www.cnbc.com/2024/04/15/us-trea ... tlook.html
Re: THE DAILY NEWS
CNBC
"Retail sales jumped 0.7% in March, much higher than expected"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED MON, APR 15 2024
Rising inflation in March didn’t deter consumers, who continued shopping at a more rapid pace than anticipated, the Commerce Department reported Monday.
Retail sales increased 0.7% for the month, considerably faster than the Dow Jones consensus forecast for a 0.3% rise though below the upwardly revised 0.9% in February, according to Census Bureau data that is adjusted for seasonality but not for inflation.
The consumer price index increased 0.4% in March, the Labor Department reported last week in data that also was higher than the Wall Street outlook.
That means consumers more than kept up with the pace of inflation, which ran at a 3.5% annual rate for the month, below the 4% retail sales increase.
Excluding auto-related receipts, retail sales jumped 1.1%, also well ahead of the estimate for a 0.5% advance.
The core control group, which strips out several volatile measures and is in the formula to determine gross domestic product, also increased 1.1%
A rise in gas prices helped push the headline retail sales number higher, with sales up 2.1% on the month at service stations.
However, the biggest growth area for the month was online sales, up 2.7%, while miscellaneous retailers saw an increase of 2.1%.
Multiple categories did report declines in sales for the month: Sporting goods, hobbies, musical instruments and books posted a 1.8% decrease, while clothing stores were off 1.6%, and electronics and appliances saw a 1.2% drop.
Stock market futures added to gains following the report, while Treasury yields also pushed sharply higher.
The upbeat outlook for the Wall Street open came despite an escalation over the weekend in Middle East tensions as Iran launched aerial strikes on Israel.
Stocks surrendered gains later in the session as yields surged.
“Strong sales growth in March salvaged an otherwise mediocre quarter for retailers,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“Q1 growth isn’t going to generate a round of high fives, but closing out the quarter on a strong note should allow them to breathe a sigh of relief and a glimmer of hope that momentum could carry through into the coming months.”
Resilient consumer spending has helped keep the economy afloat despite higher interest rates and concerns over stubborn inflation.
Consumer spending accounts for nearly 70% of U.S. economic output so it is critical to continued growth in gross domestic product.
Monday’s data comes with market concerns elevated over the path of monetary policy.
Federal Reserve officials have expressed caution about cutting interest rates while inflation pressures continue, and investors have been forced to reduce their expectation for easing in policy this year.
Stronger consumer spending could cause the Fed to hold off longer on cuts, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.
“Alongside the recent resurgence in employment growth, the continued resilience of consumption is another reason to suspect the Fed will wait longer before starting to cut interest rates, which now we think won’t happen until September,” Hunter said in a note after the retail sales release.
Market pricing, which has been highly volatile over the past several weeks, also is pointing to the first cut coming in September, according to the CME Group’s FedWatch gauge of futures prices.
In other economic news Monday, the Empire State Manufacturing index, which gauges activity in the New York region, increased in April from a month ago but remained in contraction territory.
The index hit -14.3, better than the -20.9 reading for March but below the Dow Jones estimate for -10.
The index measures the percentage of firms reporting expansion against contraction, so anything below zero represents contraction.
Shipments and delivery time readings saw a decline, while prices paid increased.
https://www.cnbc.com/2024/04/15/retail- ... ected.html
"Retail sales jumped 0.7% in March, much higher than expected"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED MON, APR 15 2024
Rising inflation in March didn’t deter consumers, who continued shopping at a more rapid pace than anticipated, the Commerce Department reported Monday.
Retail sales increased 0.7% for the month, considerably faster than the Dow Jones consensus forecast for a 0.3% rise though below the upwardly revised 0.9% in February, according to Census Bureau data that is adjusted for seasonality but not for inflation.
The consumer price index increased 0.4% in March, the Labor Department reported last week in data that also was higher than the Wall Street outlook.
That means consumers more than kept up with the pace of inflation, which ran at a 3.5% annual rate for the month, below the 4% retail sales increase.
Excluding auto-related receipts, retail sales jumped 1.1%, also well ahead of the estimate for a 0.5% advance.
The core control group, which strips out several volatile measures and is in the formula to determine gross domestic product, also increased 1.1%
A rise in gas prices helped push the headline retail sales number higher, with sales up 2.1% on the month at service stations.
However, the biggest growth area for the month was online sales, up 2.7%, while miscellaneous retailers saw an increase of 2.1%.
Multiple categories did report declines in sales for the month: Sporting goods, hobbies, musical instruments and books posted a 1.8% decrease, while clothing stores were off 1.6%, and electronics and appliances saw a 1.2% drop.
Stock market futures added to gains following the report, while Treasury yields also pushed sharply higher.
The upbeat outlook for the Wall Street open came despite an escalation over the weekend in Middle East tensions as Iran launched aerial strikes on Israel.
Stocks surrendered gains later in the session as yields surged.
“Strong sales growth in March salvaged an otherwise mediocre quarter for retailers,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“Q1 growth isn’t going to generate a round of high fives, but closing out the quarter on a strong note should allow them to breathe a sigh of relief and a glimmer of hope that momentum could carry through into the coming months.”
Resilient consumer spending has helped keep the economy afloat despite higher interest rates and concerns over stubborn inflation.
Consumer spending accounts for nearly 70% of U.S. economic output so it is critical to continued growth in gross domestic product.
Monday’s data comes with market concerns elevated over the path of monetary policy.
Federal Reserve officials have expressed caution about cutting interest rates while inflation pressures continue, and investors have been forced to reduce their expectation for easing in policy this year.
Stronger consumer spending could cause the Fed to hold off longer on cuts, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.
“Alongside the recent resurgence in employment growth, the continued resilience of consumption is another reason to suspect the Fed will wait longer before starting to cut interest rates, which now we think won’t happen until September,” Hunter said in a note after the retail sales release.
Market pricing, which has been highly volatile over the past several weeks, also is pointing to the first cut coming in September, according to the CME Group’s FedWatch gauge of futures prices.
In other economic news Monday, the Empire State Manufacturing index, which gauges activity in the New York region, increased in April from a month ago but remained in contraction territory.
The index hit -14.3, better than the -20.9 reading for March but below the Dow Jones estimate for -10.
The index measures the percentage of firms reporting expansion against contraction, so anything below zero represents contraction.
Shipments and delivery time readings saw a decline, while prices paid increased.
https://www.cnbc.com/2024/04/15/retail- ... ected.html