Core Viewpoint - The U.S. economy requires significant interest rate cuts to alleviate high borrowing costs and support labor market recovery [1][2][7]. Monetary Policy - Federal Reserve governor Stephen Miran advocates for large interest rate cuts to achieve a neutral monetary policy quickly, arguing that current rates are restrictive and detrimental to economic growth [2][5]. - The Federal Open Market Committee (FOMC) is divided on the necessity of further rate cuts, with discussions ongoing about the impact of a softening labor market and persistent inflation [2][3]. Interest Rate Cuts - Miran suggests a series of 50 basis point cuts, citing recent positive job data and low inflationary risks as justification for this approach [5][6]. - The Fed has already implemented two rate cuts this year, bringing the federal funds rate to a range of 3.75% to 4% [3]. Labor Market and Unemployment - The rising unemployment rate is attributed to tight monetary policy, and Miran expresses concern that failure to cut rates could hinder labor market recovery [6][7]. - Miran emphasizes the need for a forward-looking approach in policy-making to address the challenges in the labor market [7]. Housing Market - Miran highlights the importance of easing mortgage rates, noting that while financial conditions may appear loose due to the stock market, the housing market remains tight [8]. - He believes that cutting interest rates will eventually lead to improved financial conditions in the housing market [8].

Core Viewpoint - There is a strong possibility that President Trump will announce a new Federal Reserve Chair by Christmas, as indicated by Treasury Secretary Scott Bessent, who is leading the search for a replacement for Jerome Powell [1][3]. Group 1: Replacement Search - Bessent mentioned that he has one final interview left and is not ready to speculate on potential successors to Powell, who Trump has expressed a desire to fire [1][3]. - Finalists for the Fed Chair position reportedly include Kevin Hassett, Kevin Warsh, Christopher Waller, Michelle Bowman, and Rick Rieder [3]. Group 2: Trump's Criticism of Powell - Trump has been critical of Powell for not reducing interest rates quickly enough, stating that Powell has "mental problems" and expressing a desire to "fire his ass" [4][10]. - During a recent event, Trump humorously urged Bessent to address the issue of high rates, indicating urgency in the matter [5][7]. Group 3: Current Monetary Policy Context - The Federal Reserve has recently cut interest rates by a quarter-point in September and October, bringing rates to a range of 3.75% to 4% [7][10]. - Market expectations indicate an 83% probability of another quarter-point cut at the upcoming December 10 meeting [10]. - Fed officials are divided on the future direction of interest rates, with some advocating for a pause while others support further cuts [10][11]. Group 4: Future Vision for the Fed - Bessent expressed a desire for the next Fed Chair to simplify monetary policy and allow the Fed to take a less prominent role, focusing on serving the American people [11].

Economic Growth Projections - India's economic growth is projected to remain strong at 7.2% for the July-September quarter, down from 7.8% in the previous quarter, driven by improvements in rural activity and low inflation effects [1] - Economists forecast GDP growth in the range of 7% to 7.7% for the September quarter, with official data to be released soon [1] Inflation and Statistical Effects - The high projected growth is partly attributed to a low base effect, as GDP growth was only 5.6% in the same period last year [2] - Retail inflation decreased to 1.7% in Q2 from 2.7% in Q1, while wholesale inflation fell to 0.02% from 0.26%, positively impacting real GDP growth [2] Rural Demand and Economic Activity - High-frequency indicators indicate improved growth momentum, particularly in rural demand, supported by rising rural wages and favorable monsoon conditions [2] - Softer inflation, earlier monetary policy easing, and inventory build-up in anticipation of festive demand contributed to increased economic activity [3] Government Expenditure and Urban Indicators - Government capital expenditure growth slowed to 37% compared to 52% in the previous quarter, which may negatively impact overall growth [5] - Urban indicators, such as passenger vehicle sales and air travel, remained weak during the quarter [5] Export Performance - Exports rose by 8.7% during the quarter, contrasting with a 2.2% contraction in the previous quarter, due to front-loading of shipments and trade diversification efforts [6] Monetary Policy Considerations - If GDP growth meets projections, it will slightly exceed the Reserve Bank of India's (RBI) forecast of 7%, complicating potential rate cuts despite low inflation [8] - Weak nominal GDP growth, expected to be under 9%, may keep the door open for a rate cut by the RBI [8] - The rationale for monetary easing is not strong based on current growth trends, but a rate cut of 25-50 basis points may still be considered to prevent deeper economic sluggishness [9]

Group 1 - Global stock markets are experiencing strong gains, but there is a belief that the recent sell-off in stocks is not fully exhausted, particularly in the digital asset sector [1][2] - The Fed's potential rate cuts are expected to influence the stock market positively, but there is skepticism about whether this will be a game changer for investors [5][7] - The overall economic theme suggests that the Fed will provide easier monetary policy than traditional economics would indicate, which is supportive for the stock market [7][8] Group 2 - There is uncertainty regarding the impact of a potential rate cut in December on future cuts, with debates expected if a cut occurs [6] - The current economic growth is being driven by a capital expenditure (CapEx) boom, and if this boom falters, the economy may struggle to maintain its robustness [7] - The market's reaction to small moves in Fed policy indicates an outsized sensitivity, reflecting the importance of the Fed's decisions on market valuations [4][5]

Market Overview - The tech-heavy Nasdaq Composite rose approximately 2.4%, leading major indexes higher after a week of volatility, with significant gains in AI stocks and chipmakers like Broadcom (AVGO) and Micron (MU), both up over 7% [1][6] - Retail investors contributed to the market rebound by aggressively buying the dip, as indicated by a sharp increase in S&P 500 ETF inflows during the previous week's decline [1][6] Investor Sentiment - There are signs of improving investor sentiment, particularly among retail investors, as they often reflect market sentiment and their behavior can drive stock market returns [2] - The AAII Sentiment Survey indicated a slightly more optimistic outlook among individual investors compared to the previous week, when nearly half were bearish [9] Economic Concerns - Concerns about an AI bubble and uncertainty regarding monetary policy have weighed on market sentiment, with the S&P 500 and Nasdaq dropping nearly 2% and 2.7% respectively last week [3] - Investors are particularly focused on whether the Federal Reserve will cut interest rates next month, with mixed signals from the labor market and inflation data influencing expectations [4][7] Volatility and Market Indicators - The Cboe Volatility Index (VIX) stood at about 21, indicating a level above which stocks typically experience smoother trading conditions [8] - CNN's Fear & Greed index showed less pessimism after recording its most negative reading since early April, suggesting a potential shift in market sentiment [8]

Federal Reserve Policy Outlook - The New York Fed President's comments significantly influenced market expectations, with Fed futures nearly doubling after his strong support for a 25 basis point cut in December [2][3] - There is speculation that dissenting votes may arise, with some presidents likely opposing any cuts, while others may support a pause in policy changes until more data is available [4][8] Labor Market Concerns - The labor market has shown signs of weakness, with the unemployment rate at 4.4% and payroll employment growth at 119,000, raising concerns about potential further deterioration [6][7] - Inflation remains a critical issue, currently at 3%, which affects affordability and complicates the Fed's decision-making process regarding interest rates [7][9] Economic Indicators and Risks - The Fed's current stance is influenced by a combination of weak labor data and elevated inflation, leading to discussions about the need for potential policy adjustments [8][14] - There are concerns about the impact of labor supply shocks and the slow growth of the labor force due to immigration policies, which could affect payroll employment growth [11][12]

Federal Reserve and Economic Outlook - Federal Reserve Governor Waller indicates a potential shift towards a more accommodative monetary policy, advocating for a rate cut at the upcoming December meeting due to concerns over a weak labor market [2][9] - Waller estimates ex-tariff inflation to be around 2.4% or 2.5%, suggesting that inflation is not a major problem given the weak labor market [3][9] - A more meeting-by-meeting approach is expected by January, with Waller acknowledging the challenges posed by new data influencing future rate decisions [3] Geopolitical Developments - Ukraine's delegation for peace plan talks is returning from Geneva, following discussions between Russian President Putin and Turkish President Erdogan regarding a potential peace plan [4][9] - Erdogan has expressed readiness to mediate in the conflict, indicating broader international engagement on the issue [5] US Agriculture Sector - US Agriculture Secretary Rollins announces that aid for farmers is expected to be unveiled in the week following Thanksgiving, with a formal announcement anticipated soon [6] - China has resumed purchasing US soybeans, which could significantly boost US agricultural exports and farmer incomes [7][9] Market Movements - Spot gold prices have surged past the $4,080/oz mark, climbing 0.36% intraday, reflecting investor uncertainty or a flight to safety [10][9] - In US pre-market trading, major indices show gains, with tech giants like Google and Tesla leading the pack with increases of 3.5% and 2.1% respectively [11][9] Housing Market Imbalance - The US housing market experienced a significant imbalance in October, with home sellers exceeding buyers by 37%, marking the widest gap recorded since 2013 [13][9] - A report from the San Francisco Federal Reserve suggests that tariffs contribute to lower inflation and weaker aggregate demand, leading to higher unemployment [14]

19 November 2025 China Macro Tracker Economics Not yet at the finishing line Policy support: Slowing activity should prompt further policy support China's economic activity slowed in October, with investment, consumption, and industrial production softening due to subdued external demand and weaker domestic momentum (see China activity, 14 November). This should prompt a strong policy response on both the fiscal and monetary fronts to meet this year's growth targets and ensure a strong start for the 15th Fi ...

Core Viewpoint - The President of the Federal Reserve Bank of Boston, Susan Collins, is currently not in favor of cutting the U.S. central bank's interest rate target in the upcoming month due to persistent risks related to inflation and employment mandates [1] Group 1 - Susan Collins emphasizes the ongoing risks to inflation that the Federal Reserve is facing [1] - The job mandates are also a significant concern for the Federal Reserve, influencing the decision on interest rates [1]

Group 1 - The monetary policy is focused on balancing downside risks to maximum employment and upside risks to price stability, with increased downside risks to employment as the labor market cools [1] - The Federal Open Market Committee (FOMC) has reduced the target range for the federal funds rate by 25 basis points in its last two meetings to restore inflation to a sustained 2% goal [2] - The current monetary policy is viewed as modestly restrictive, with potential for further adjustments to align the policy stance closer to neutral, maintaining a balance between employment and price stability goals [3] Group 2 - Future policy decisions will be based on the evolution of data, economic outlook, and the balance of risks related to maximum employment and price stability [4]