FED: Powell Doesn't Specify on Unemployment Rate Rise That Could be Tolerated
May-07 19:11
- Q: Congress is extending the tax cuts and I know you have talked many times about how the debt path is unsustainable but given that we are also talking right now about the economy slowing, potentially even recession, is there a danger that spending cuts now could slow growth a lot more?
- A: I don’t think they need our advice on fiscal policy any more than we need their advice on monetary policy.
- Q: In your Jackson Hole comments last year, you said you would not welcome further cooling in labor market conditions, the unemployment rate then was 4.2%, which is what it is now, forecasters, many forecasters now predict a higher jobless rate. How has your tolerance for weakening labor market conditions changed compared to a year ago?
- A: It was quite a different situation. What was happening last year is that over the space of six, eight, seven months, the unemployment rate went up by almost a full percentage point. At the same time, payroll job numbers were getting softer and softer so there was really obvious concern about downside risk to the labor market. And so at Jackson Hole and then in September, we wanted to address that forthrightly - it was important that we send that signal. Fortunately, since then, the unemployment rate has really been moving sideways at a level that is well in the range of mainstream estimates of maximum employment so that concern has gotten a lot less.
- Q: How much of a rise in the u/e rate could you tolerate?
- A: I won’t give a specific answer. We have to now be looking at both variables and which of them is demanding, if one of them is demanding our focus more than the other, that would tell us what to do with policy. If they are more or less equally distant and equally or not distant, then we don't have to make that assessment. The assessment is you wait.
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MNI: US FEB CONSUMER CREDIT -$0.8B
Apr-07 19:00
- MNI: US FEB CONSUMER CREDIT -$0.8B
- US FEB REVOLVING CREDIT +$0.1B
- US FEB NONREVOLVING CREDIT -$0.9B
EURJPY TECHS: Retracement Mode
Apr-07 19:00
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 161.39/164.19 20-day EMA / High Mar 18 and the bull trigger
- PRICE: 161.32 @ 16:56 GMT Apr 7
- SUP 1: 158.30 Intraday low
- SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle
- SUP 3: 155.60 Low Low Mar 4
- SUP 4: 154.80 Low Low Feb 28
EURJPY is trading in a volatile manner. The latest pullback still appears corrective, however, following recent weakness, a deeper retracement is likely. The 61.8% retracement point of the Feb 28 - Mar 18 bull cycle, at 158.39, has been pierced. A clear break of this level would open 157.02, the 76.4% retracement level. Initial resistance to watch is 161.39, the 20-day EMA. Key resistance is 164.19, the Mar 18 high.
US STOCKS: Late Equities Roundup: Interactive Media, Chip Stocks Outperforming
Apr-07 18:46
- Stocks continued to pare losses Monday, the Dow lagging modest gains in SPX eminis and Nasdaq indexes in the second half. Markets were cautious in reacting to tariff related headlines after reacting to unsubstantiated morning headlines that suggested Pres Trump was considering a 90 day pause in tariffs - stocks surged as wires reposted the false rumor but quickly retraced.
- Currently, the DJIA trades down down 216.96 points (-0.57%) at 38130.77, S&P E-Minis up 11 points (0.22%) at 5125.75, Nasdaq up 105.5 points (0.7%) at 15707.5.
- Communication Services and Information Technology sectors outperformed in late trade, interactive media and entertainment share buoyed the former: Meta Platforms +3.26%, Netflix +3.01%, Take-Two Interactive Software +2.88%, TKO Group Holdings +2.35% and Alphabet +1.86%.
- Semiconductor stocks Super Micro Computer surged 12.21%, Microchip Technology +7.26%, Lam Research +7.11%, KLA +6.55% and Arista Networks +6.51%.
- Materials and Energy sectors underperformed in late trade, Smurfit WestRock -3.21%, Dow and Amcor both -2.66%, International Flavors & Fragrances -2.61% led laggers in the Materials sector
- Meanwhile, oil and gas shares weighed on the Energy sector: Schlumberger -3.82%, Occidental Petroleum -3.50%, Devon Energy -2.01%, Chevron and APA Corp both -1.75%.
