BULLISH: 🇺🇸 96.7% chance the FED will cut interest rates again in 15 days. https://t.co/3aCgkClIyj ...

Newly installed Fed Governor Stephen Miran took his seat just in time for the central bank’s first interest rate cut since President Trump’s second inauguration. At least one more cut is expected before the end of the year, but evidence of dissent among members and the government shutdown make the web of issues the Fed is wrestling with even more complex. We discuss how the Fed fits into the "Invest in America" game plan. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx ...

Core Viewpoint - A significant slowdown in hiring is raising concerns for the US economy, leading to expectations that the Federal Reserve will likely cut its key interest rate two more times this year [1][2]. Economic Outlook - Despite the federal government shutdown affecting the availability of official economic data, the outlook for employment and inflation remains largely unchanged since the Fed's September meeting [1][4]. - The Fed's preferred measure of inflation has risen to 2.9% due to tariffs, but there are no broader inflationary pressures expected to keep prices elevated [5]. Interest Rate Policy - The Federal Reserve is anticipated to reduce its key interest rate twice more this year and once in 2026 [2]. - Lower interest rates could decrease borrowing costs for mortgages, car loans, and business loans, potentially stimulating economic activity [4]. Balance Sheet Management - The Fed may soon halt the reduction of its approximately $6.6 trillion balance sheet, which has involved allowing around $40 billion of Treasuries and mortgage-backed securities to mature each month without replacement [6]. - This shift could impact longer-term Treasury interest rates [6]. Criticism of Past Actions - The Fed's previous purchases of longer-term Treasury bonds and mortgage-backed securities during the pandemic have faced criticism for exacerbating inequality and failing to provide significant economic benefits [8][12]. - Critics argue that the Fed maintained low interest rates for too long, contributing to inflation spikes that began in late 2021 [9]. - Powell acknowledged that the Fed could have stopped asset purchases sooner, indicating that decisions were made to mitigate downside risks [11].

Economic Outlook - A sharp slowdown in hiring poses a growing risk to the U.S. economy, leading to expectations of two more interest rate cuts by the Federal Reserve this year [1][2] - The Fed's outlook for employment and inflation has not changed significantly since the September meeting, where the key rate was reduced for the first time this year [1][3] Interest Rate Projections - Fed officials forecast two additional rate cuts this year and one in 2026, which could lower borrowing costs for mortgages, car loans, and business loans [2][3] - Powell indicated that the central bank may soon halt the reduction of its $6.6 trillion balance sheet, which could impact long-term Treasury interest rates [4] Inflation and Employment Concerns - Powell expressed increased concern about the job market compared to inflation, noting that tariffs have raised the Fed's preferred inflation measure to 2.9%, but there are no broader inflationary pressures [3][6] - Rising downside risks to employment have shifted the Fed's assessment of the balance of risks [3] Criticism of Past Policies - Powell defended the Fed's bond purchases during the pandemic, which aimed to lower long-term interest rates and support the economy, despite facing criticism from Treasury Secretary Scott Bessent and others [5][6] - Critics argue that these bond purchases exacerbated inequality and delayed necessary rate increases as inflation began to rise in late 2021 [6]

The Federal Reserve’s top bank cop said she soon intends to unveil additional changes to stress tests, a move that Wall Street lenders are likely to cheer https://t.co/8meQ0aQcFD ...

Core Insights - U.S. consumer sentiment remained stable in October at a reading of 55, despite economists expecting a decline to 54.2, indicating persistent concerns about the labor market and inflation amid a government shutdown [1][2][7] Consumer Sentiment - The University of Michigan's preliminary consumer sentiment survey showed little change from September's reading of 55.1, with the index holding steady at 55 for October [1][7] - Consumers expressed ongoing worries about high prices and weakening job prospects, with inflation expectations for the next year slightly decreasing from 4.7% to 4.6% [2][5] Labor Market Concerns - The labor market showed signs of softening, with job growth nearly stalling in the three months leading up to August, contributing to consumer pessimism regarding personal finances and buying conditions for durable goods [5][10] Economic Outlook - The survey was conducted during a period of government funding lapse, and historical data suggests that consumer sentiment typically declines during government shutdowns. Economists anticipate a potential downgrade in the final sentiment data for October unless the shutdown is resolved quickly [7] - Despite high inflation expectations, economists predict that the Federal Reserve will implement another interest rate cut at its upcoming meeting on October 28-29, following a previous cut in September [10]

The economies of more than 20 states are either in a recession or are on the brink of slipping into one, according to an analysis by Moody's Analytics chief economist Mark Zandi. Zandi's analysis found that as of late August, 21 states and the District of Columbia were either in recession or at high risk of entering recession. It also found that 13 states were "treading water" while another 15 states' economies are expanding."State-level data makes it clear why the U.S. economy is on the edge of recession," ...

Market Trends & Global Economy - China is intensifying its scrutiny of American tech firms, initiating an anti-monopoly probe into Qualcomm, leading to a stock decrease of over 2% [2] - The US government shutdown continues, impacting federal employees (around 750,000 furloughed) and potentially delaying key economic reports [3][11] - Middle East peace deal impacts oil prices, with a decrease of around 16% due to fading risk premiums, while gold prices recovered to above $4,000 [6][7] - The dollar is near a two-month high, despite a decline earlier in the year, with analysts at ING suggesting this rally isn't justified by US fundamentals [11][12][13] Monetary Policy & Economic Indicators - The Federal Reserve is under scrutiny, with investors awaiting insights from Chicago Fed President Austin Goulby regarding potential rate cut adjustments due to recent data or the government shutdown [8][9] - Preliminary consumer sentiment for October is expected to decrease to 54, indicating reduced confidence in personal finances due to inflation and job market concerns [10] - The market is pricing in Fed rate cuts, potentially weakening the dollar further, with Euro dollar target by the end of the year is 120 [16] Earnings Season & Financial Metrics - Earnings season is approaching, emphasizing the importance of understanding key financial terms like revenue, net income, EPS, GAAP, non-GAAP, and free cash flow [19][20][21][22] - Companies exceeding analyst expectations (a beat) isn't always bullish, and future guidance often matters more than historical performance [23][24] - Bullish signals include beating revenue and EPS with healthy margins, positive cash flows, stock buyback announcements, and increasing orders [25][26] - Bearish signals include missing sales or EPS targets, cutting future guidance, shrinking margins, and questionable non-GAAP adjustments [27][28] Trending Stocks & AI Bubble Concerns - Levi Strauss's stock is falling despite raising its full-year outlook due to margin pressure and potential tariff costs, down over 6% [32] - BBVA Argentina is rising after the US Treasury confirmed a $20 billion program to buy Argentinian pesos [33][34] - Rigetti is surging as speculative AI names rebound, up over 80% this quarter, but analysts remain cautious due to cash burn [35] - SoftBank is in the red, down over 3%, after announcing a $54 billion deal to buy ABB's robotics unit, raising concerns about leveraged debt and high valuations in the AI sector [37] AI Market Dynamics - Concerns are rising about an AI bubble, with companies like Oracle taking on debt to fuel growth and OpenAI aggressively pursuing deals despite negative free cash flow [41][42][43] - Potential triggers for the AI bubble to burst include smaller entities in the AI ecosystem (neoclouds, special purpose vehicles) facing financial difficulties due to debt [44] Consumer Trends & Commodity Prices - Chocolate prices are increasing due to rising cocoa prices, driven by weather-related production issues in West Africa, US tariffs (up to 25% on key producers), and rising demand [45][46] - Bitcoin is sliding, trading around $1215,000 after being above $126,000 earlier in the week [48]

Fed Policy & Inflation - Fed governor Michael Bar suggests caution regarding policy adjustments, a sentiment echoed in recent Fed minutes [1] - Bar expresses skepticism about overlooking higher inflation resulting from tariffs, emphasizing the significant risk to the Fed's price stability goal [1] - The Fed is projected to miss the 2% inflation target for 6 and a half years, potentially until 2027, marking the longest period since 1993 [2] - The Fed acknowledges the possibility of a softening labor market and is prepared for potential deterioration [2] Labor Market & Economic Impact - The labor market is considered more vulnerable to shocks [3] - A Dallas Fed paper indicates a new break-even rate of 30,000 for payroll numbers to maintain a stable unemployment rate [4] - The government shutdown is expected to negatively impact GDP in the short term, with a subsequent rebound [3][4]

Michael Bar, the Fed governor, saying the Fed should be cautious about adjusting policy. And I'm making a point of this, Scott, because there's a contingent of people out there, Fed, Fed folks, who have been using this term cautious approach. And it was in the minutes yesterday.Lori Logan, he used it. Bar saying Feds the Fed's price stability goal faces significant risk. He's skeptical the Fed should look through higher inflation from tariffs.A quote from his speech that he's giving right now says there has ...