US STOCKS: Late Equities Roundup: Risk Sentiment Back on Track, Earnings Next Wk
Oct-17 18:48
* Stocks are trading near late session highs after losing midday momentum, focus back on trade aft...
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FED: Chair Powell Questioned on New Member Miran and Tariffs
Sep-17 18:43
- The first question is about new Gov Miran keeping his White House job while joining the Fed Board.
- Powell says that they welcomed him to the board. He says that the Fed is committed to maintaining its independence but he has nothing further to say about the matter.
- On whether the Fed sees tariffs as the reason why the labor market is slowing, as opposed to merely inflation effects:
- "We have begun to see goods prices showing through into higher inflation. And actually, the increase in goods prices accounts for most of the increase in inflation, or perhaps all of the increase in inflation over the course of this year. Those are not very large effects at this point, and we do expect them to to continue to build over the course of of the rest of the year and into next year. And you know it's also possible and that there may be effects on unemployment, but that, I would say, if you're looking at why employment is doing what it's doing, that's much more about the changing immigration so the supply of workers has obviously come way down, there's very little growth, if any, in the supply of workers and at the same time, demand for workers has also come down quite sharply, to the point where we see what I've called a curious balance."
US TSYS: Reversing Course, Testing Lows
Sep-17 18:43
- Treasury futures have completely reversed the initial annc move - to weaker across the board with Dec'25 10Y futures just through early session low of 113-08 ti 113-04 (-13.5), 10Y yield +.0401 4.0680%.
- Initial firm support to watch is 112-28, the 20-day EMA.
FED: Chair Powell Begins September FOMC Press Conference
Sep-17 18:38
- Powell begins with the usual description of current economic conditions, and walks through the latest economic projections.
- "Recent indicators suggest that growth of economic activity has moderated. "
- "the recent pace of job creation appears to be running below the break even rate needed to hold the unemployment rate constant...Overall, the market slowing in both the supply of and demand for workers is unusual in this less dynamic and somewhat softer labor market."
- "Inflation has eased significantly from its Highs in mid 2022 but remains somewhat elevated relative to our 2% longer run goal estimates ... [PCE} readings are higher than earlier in the year, as inflation for goods has picked up. In contrast, disinflation appears to be continuing for services."
- Powell repeats language relating to the uncertainty of the inflation impact of tariffs:
- "Higher tariffs have begun to push up prices in some categories of goods, but their overall effects on economic activity and inflation remain to be seen. A reasonable base case is that the effects on inflation will be relatively short lived a one time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed. Our obligation is to ensure that a one time increase in the price level does not become an ongoing inflation problem in the near term. Risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation when our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate with downside risks to employment having increased the balance of risks has shifted."
- He says that "We judged appropriate at this meeting to take another step toward more new a more neutral policy stance. With today's decision, we remain well positioned to respond in a timely way to potential economic developments, we will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook and the balance of risks."
- And "policy is not on a preset course".
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