Live from Washington, D. C. Is balance of power with the Joe Matthew.Lower interest rates may require more than a new Fed chair. Welcome to the Friday edition of Balance of Power, as we focus on persistent questions surrounding President Trump's tariff program now that the regime is in place will be joined this hour by Bloomberg's Tom Auralic, one of the forces behind the new book, The Price of Money. Well, check new research on the tariff impacts with our trading partners with Ernie Tedeschi at the Yale Bu ...

America Movil is considering to issue euro-denominated debt to take advantage of lower rates as part of its refinancing efforts, its CFO said https://t.co/8u4kzS30uL ...

Taximony movers. The president announcing his nomination of CEA chair Steven Meyer to the Fed's board of governors after Adriana Cougler's resignation last week. Joining us to discuss this morning, former Federal Reserve Governor and economics professor at the University of Chicago, Randy Crosner is with us.Happy Friday, Randy. Good to see you. >> Great to be with you.>> So, what do you think uh the Myron news means for the Fed, for rates, for certainly Fed reform. >> Sure. So I think um I think it's clear ...

Interest Rates and Housing Affordability - Lowering interest rates by the Federal Reserve (Fed) does not inherently make housing more affordable; in some cases, it can make it less affordable [2][3] - Mortgage rates are more dependent on the long end of the yield curve (e.g., 10-year and 30-year yields) and typically trade 1.5% to 2% higher due to associated risks [6] - The Fed is projected to lower interest rates in September, but this may change based on labor market reports and inflation readings [7] - If the Fed cuts rates preemptively to avoid a recession, it can reignite "animal spirits," causing markets to rise and the bond market to reprice inflation risk, potentially increasing mortgage rates [12][13][14] - Cutting rates prematurely may worsen the real estate market [34] Asset Prices and Housing Market Improvement - Lower asset prices are needed to achieve a durable improvement in housing affordability [22][23][25] - Lower asset prices lead to a lower long end of the yield curve, which in turn leads to lower mortgage rates [39] - The market may take 6 to 12 months to accept the reality that lower asset prices are necessary to improve the real estate market [23] Market Dynamics and Future Outlook - The housing market is currently seeing a drop in new privately-owned housing units under construction due to unaffordability [20][21] - The author anticipates that after a second round of rate cuts, potentially starting in September, the long end of the yield curve will likely increase, leading to higher mortgage rates [29][30] - It may take a couple of years for the market to accept that lower asset prices are needed to improve the real estate market [33]

MATT: GOOD MORNING IT IS 5:00 A.M. WITH YOUR BLOOMBERG BRIEF. GOLD FUTURES JUMPED AS THE U.S. IS SAID TO HAVE PUT A TARIFF ON IMPORTS OF ONE KILOGRAM GOLD BARS. THE MOST TRADED IN THE FUTURES MARKET. PRESIDENT TRUMP SAID THAT HE WILL NOMINATE STEVE AND MY WRITTEN FOR A SEAT ON THE FED BOARD AND MET UP PIMCO AND BLUE OWL TO LEAD A 29 MILLION DOLLAR FINANCING FOR ITS DATA CENTER EXPANSION. IN TERMS OF WHAT WE ARE WATCHING ON MARKETS, GAINS FOR THE EQUITY INDEX AND S&P FUTURES UP .2 PERCENT AND NASDAQ FUTURES ...

The road to lower interest rates in the US is turning smoother, but some sizeable bumps remain https://t.co/8BMkoCFPj2 ...

The new chief of Japan’s financial regulator has a message for regional banks: don’t rely on rising interest rates to fix your problems https://t.co/khnoLCqwaJ ...

Summary of Key Points from the Conference Call Industry Overview - **Global Macro Outlook**: The conference call discusses the macroeconomic outlook, focusing on US rates, international rates, commodities, currencies, and emerging markets [3][4][5][6][7]. Key Insights US Rates - **Positioning Strategy**: The recommendation is to hold 5s20s steepeners as a low-beta strategy to benefit from lower front-end yields. Anticipation of a multi-quarter series of coupon auction size increases starting in May 2026 is noted [3][14]. - **Net T-Bill Issuance**: A projection of $587 billion in net T-bill issuance for the current quarter is made, as the Treasury aims to rebuild the Treasury General Account (TGA) following the passage of the OBBBA [3][23]. International Rates - **Market Volatility**: Developed market (DM) rates have experienced choppy trading, with a bearish repricing following the July ECB meeting and a rally after the latest US payrolls [4]. Commodities - **Russian Oil Exports**: The Trump Administration has warned that India and China may face penalties for purchasing Russian oil, potentially affecting 2.75 million barrels per day (mbd) of Russian seaborne oil exports. Russia may redirect 0.8 mbd to countries like Egypt and Malaysia [8][89]. - **Natural Gas Market**: US natural gas production is impacting market sentiment, with skepticism about the $750 billion energy purchases in the EU-US deal being deemed overly optimistic [90]. Currencies - **Dollar Positioning**: Pre-payroll price actions indicate a significant unwinding of dollar shorts. The bearish view on the dollar remains intact, with US data moderation being a key factor [6][56][57]. - **EUR/USD Outlook**: The bullish view on EUR/USD is supported by US economic moderation and currency hedge rebalancing. The fair value of EUR/USD has increased as US real yields have declined [59][76]. Emerging Markets - **Investment Strategy**: A cautious approach is recommended for emerging markets (EM), with a light set of recommendations favoring holding market weight (MW) in EM FX, EM rates, and EM corporate credit, while staying underweight (UW) in EM sovereign credit [9][110]. - **Market Conditions**: The EM FX risk appetite signals that the market is overbought, suggesting a potential correction [111]. Additional Important Points - **Treasury Funding**: The Treasury is well-funded through FY25, but a significant funding gap is expected to emerge in FY26, necessitating coupon size increases starting in May 2026 [20][21]. - **Trade Uncertainty in Agriculture**: Trade uncertainty is reaching a tipping point in agricultural markets, with volatility across ags markets at multi-year lows [103][105]. - **Gold Market**: Gold prices are awaiting a demand catalyst, with ETF inflows being crucial for a breakout, particularly in light of anticipated Fed cuts [98][102]. This summary encapsulates the critical insights and projections discussed during the conference call, providing a comprehensive overview of the current macroeconomic landscape and investment strategies.

And so it begins.Global economy cutting.Money printer goes brrrrPrices go up.Watcher.Guru (@WatcherGuru):JUST IN: 🏴󠁧󠁢󠁥󠁮󠁧󠁿 Bank of England cuts interest rates by 25bps to 4%. ...

The FED hasn't even cut rates yet.We're just getting started! 🚀 https://t.co/8gVQdKz3za ...