Core Viewpoint - The article discusses the potential replacement of Chair Jerome Powell and insights from former colleagues of the leading candidate [1] Group 1 - The leading candidate for the position has a strong background and is viewed positively by peers [1] - Insights from former colleagues highlight the candidate's leadership style and decision-making abilities [1] - The potential shift in leadership could impact monetary policy direction and market reactions [1]

Um, we're bringing bring in a a guest here that I think has been listening to everything. Dana Peterson is the conference board's uh chief economist. Where do you come down on I don't know.Pick pick your poison uh Dana on on those two gentlemen. They agree on some things, but not on everything. >> Well, I think it's a little bit of everything in terms of the outlook for the economy and concerns about Fed independence and interest rates.Um but you know just talking about today I think the Fed will just go ah ...

Economic Outlook - The Federal Reserve is expected to cut interest rates, but there will be significant dissent regarding the adequacy of a 25 basis point cut, with some arguing it is insufficient given ongoing inflation concerns [2][4] - Current inflation remains above the 2% target, and there are worries about the labor market not showing strong declines, indicating a mixed economic outlook [3][9] Fed Independence and Diverging Opinions - There are concerns about the independence of the Federal Reserve, with varying opinions among officials on the appropriate course of action regarding interest rates [4][6] - Divergent views on the economy lead to uncertainty, with some officials advocating for a more aggressive rate cut while others oppose any cuts [6][7] Inflation and Labor Market Dynamics - The last inflation reading showed a decline, but there are fears that higher inflation could return due to tariffs affecting consumers and businesses [8][10] - Wage growth has increased from an average of 1.5% before the pandemic to 2-3% now, influenced by the retirement of baby boomers, which may contribute to persistent inflationary pressures [11]

Economic Data and Labor Market - The jobs data presents a mixed picture, with initial claims decreasing by 27,000 to 191,000, but layoffs are still up 24% year-over-year according to the Challenger report, indicating a lack of demand and supply equilibrium in the job market [3][4][5] - Retail data from Black Friday showed year-over-year growth of around 4-5%, suggesting that consumer spending remains active despite mixed economic signals [7][8] Federal Reserve and Monetary Policy - The upcoming Federal Reserve meeting is expected to focus more on the communication and implications of monetary policy rather than immediate actions, with potential dissenting votes anticipated [10][11] - There is ongoing speculation regarding the nomination of Kevin Hassid as the successor to Jerome Powell, which could influence future Fed decisions [12][14] Market Dynamics - The stock market and bond market appear to be in conflict, with the stock market anticipating a reacceleration of growth while the bond market suggests inflationary pressures [15][16] - Stability in bond yields is seen as crucial for maintaining equity market momentum, with the Russell index showing a 3.5% increase over the past month [18][19] Legislative and Regulatory Environment - The government funding deal only extends through January 30, 2026, raising concerns about potential shutdowns and the urgency for bipartisan agreements on healthcare subsidies [23][24] - The level of dysfunction in Congress is highlighted by high-profile resignations, indicating potential challenges in governance and legislative effectiveness moving forward [25]

Well, let's get some more perspective on the fixed income markets now. And joining us from Hong Kong is Greg Peters, CIO for Public and Private Fixed income at PGIM. Greg, thanks so much for joining us today.And I do want to kick off with that data that we saw out of the US. The ADP November payrolls slipping pretty much seems to be the consensus that that's nailed on a Fed rate cut for next week. But what kind of commentary do you expect to hear now around further easing.Yeah, So I do think, you know, we w ...

Core Viewpoint - The potential appointment of Kevin Hassett as the next Federal Reserve Chair raises concerns about his ability to implement aggressive interest rate cuts desired by President Trump, as his influence within the committee may be limited [1][2][3]. Group 1: Appointment and Influence - Gregory Peters, co-chief investment officer at PGIM Fixed Income, expressed skepticism about Hassett's credibility within the Federal Reserve committee, questioning whether he can drive consensus for rate cuts [3]. - The bond market's reaction, indicated by rising Treasury yields, suggests a lack of confidence in Hassett's potential appointment and its implications for monetary policy [3][4]. Group 2: Market Reactions and Implications - The discussions around Hassett's candidacy have led bond traders and macro fund managers to assess the potential impact on global markets, highlighting the sensitivity of markets to changes in Fed leadership [4]. - Despite Hassett's coyness about his candidacy, market participants have begun to position themselves for a possible increase in the pace of rate cuts, reflecting a shift in sentiment following his emergence as a frontrunner [5].

Labor Market Insights - Jobless claims reported at 216,000, a decrease from the revised 222,000 the previous week, indicating a stable labor market with low unemployment rates [2] - Continuing claims slightly increased to 1,960,000 from the revised 1,953,000, suggesting that while new claims are low, there is a slight uptick in ongoing unemployment [2] Economic Indicators - Durable goods orders rose by 0.5%, aligning with expectations, while capital goods shipments and non-defense orders showed a significant increase of 0.9%, three times the anticipated growth [3][4] - The strong business spending reflected in the September report indicates resilience in the overall economy, with specific categories of spending yet to be detailed [4] Federal Reserve Dynamics - The market appears unconcerned about the Federal Reserve's independence despite ongoing discussions about presidential influence, as the current Fed leadership remains unchanged [5] - Future nominations for the Fed chair will be critical in determining whether the new appointee will prioritize presidential directives or economic stability, which may reignite debates on Fed independence [6]

Core Viewpoint - The discussion revolves around the Federal Reserve's approach to monetary policy, particularly the balance between addressing inflation and supporting the labor market, with a focus on potential leadership changes within the Fed. Group 1: Federal Reserve's Role and Policy - The Federal Reserve has become an activist institution over the past 25-30 years, and there is a desire for it to return to a more background role similar to the Alan Greenspan era [2][4] - Central bankers face a delicate balance between managing inflation and the jobs market, which can sometimes conflict with policy decisions [3] - Interest rates should ideally be above the rate of inflation to prevent long-term economic issues [4][6] Group 2: Inflation and Economic Conditions - The current economic environment has seen a sharp rise in inflation over the past five years, impacting small and medium-sized businesses significantly [5][13] - A softer labor market is viewed as a symptom of inflation rather than the primary issue, indicating that inflation should be prioritized in policy decisions [5][11] - The absolute level of inflation remains high, and addressing this is crucial for fostering a healthier economy and stronger job growth [13] Group 3: Leadership Changes and Candidates - Kevin Hasset is currently seen as a leading candidate to replace Jay Powell as Fed chairman, with discussions around the structure and independence of the Fed [9][10] - The qualifications of potential candidates, including Hasset, are acknowledged, but there is caution against slashing interest rates without considering the long-term implications [11][14] - The importance of maintaining an independent Fed is emphasized, as market reactions could reflect dissatisfaction with the Fed's direction [10][14]

Fed Independence & Political Influence - The president believes in Fed independence but will express his opinions freely [1] - Every president likely desires lower interest rates, even if higher rates benefit the long-term economy, due to potential negative impacts on the next election [2] Potential Future Actions - The market is waiting to see who the president will pick as Fed chair [1]

RT Bloomberg Opinion (@opinion)@JonathanJLevin @GregDaco “It’s a dangerous game they’re playing here in terms of Fed independence,” says @AllisonSchrager.“It really does open up the door to more yield-curve control, more financial repression and all of these things that can make the Fed a lot more political.” https://t.co/P24la0jgKR ...