US STOCKS: Late Equities Roundup: Off New Highs Ahead Heavy Earning Next Week
Jul-18 18:48
* Stocks hold near steady to moderately weaker late Friday - after the SPX emini and Nasdaq indexe...
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FED: Powell Questioned on Rate Medians in the Dot Plot, Plays Down Increases
Jun-18 18:46
- A couple of questions on the rate medians in the Dot Plot - Powell appears to downplay the 2026-27 increases:
- Q: How should we interpret the rate cuts in the SEP?
- Powell: "You will see that people do generally expect inflation to move up and then to come back down. But we can't just assume that. Of course, we don't know that. And you know, one of our jobs to make sure that a one-time increase in inflation doesn't turn into an inflation problem, and that again that will depend on the size of the effects how long it takes for them to come in and ultimately on on keeping inflation expectations anchored."
- Q: Why on a slower path now?
- Powell: "I would focus most on the on the nearer term, as you get out to the to the later years, it's it's hard for anybody to know where the economy's going. You didn't see people moving their longer term, estimate of the neutral rate, for example, at this meeting. So, and those things are probably slow moving. Since March, you see little slower growth, just a tiny 1/10 tick up in unemployment, and you see inflation moving up three tenths. And by the way, it was, it was a similar move from the December SEP to the March. So that's what you see. You see the effects of tariffs. I think we learned in April after the March meeting that substantially higher tariffs were likely. And then since then, the estimates of where the tariffs will be have actually moved back down, although still at an elevated level, so we're adapting in real time. And what you see isn't, you know, a accumulation of individual assessments."
FED: Question on How Tariff Developments Are Affecting FOMC's Thinking
Jun-18 18:43
- On how tariff developments have affected the Fed's thinking about the economic outlook:
- Notes 3 months of "favorable" inflation readings since February - both housing and non-housing services have been "grinding" down toward levels consistent with 2% inflation target.
- Says "it takes some time" for tariffs to be seen in prices. "We're beginning to see some effects, and we do expect to see more of them over coming months. "
- "Many, many companies do expect to to put all, or some, or all of the effect of tariffs through to the next, next person in that in the chain, and ultimately, to the consumer. today. You know the amount of these, the amount of the tariff effects, the size of the a tariff effects their duration, and the time it will take are all highly uncertain, so that that is why we think the appropriate thing to do is to hold where we are as we learn more. And we think our policy stance is in a good place where we're well positioned to react to incoming developments"
FED: Powell Frames SEP Dots as "A Little Higher"
Jun-18 18:40
- Powell also comments re potential for inflation and employment being in tension (again, he's said this before):
- "We may find ourselves in the challenging scenario in which our dual mandate goals are in tension. If that were to occur, we would consider how far the economy is from the goal, and the different time horizons over which the gaps would be anticipated to close. For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance."
- He calls the higher SEP dots for 2026-27 "a little higher" than March's projections.
- On the framework review: "we intend to wrap up any modifications to our statement on longer run goals and monetary policy strategy by late summer."
- Q&A begins
