Group 1 - The outlook for equities and risk assets is assessed through the lens of US and global business cycles, corporate earnings, monetary policy, liquidity, and positioning [1] - The investment research approach focuses on leveraging the business cycle and incorporates macro, fundamentals, technicals, sentiment, and market structure [2]

🚨 POWELL: Fed faces “no risk-free path”, warned against easing too fast or staying tight too long, noting inflation at 2.7%. https://t.co/SxP9BCfCXl ...

Economic Sentiment and Labor Market - Consumer and business sentiment measures have declined sharply in spring but have since improved, remaining low compared to the start of the year [1] - The unemployment rate increased to 4.3% in August, with payroll job gains slowing to an average of 29,000 per month over the past three months, below the break-even rate needed to maintain the unemployment rate [1] - Job openings remain stable, with the ratio of job openings to unemployment near one, indicating a less dynamic labor market [1] Inflation Trends - Total PCE prices rose by 2.7% over the 12 months ending in August, up from 2.3% in August 2024, while core PCE prices increased by 2.9% [1] - Goods prices are driving inflation increases, primarily due to higher tariffs rather than broader price pressures, while disinflation in services continues [2] - Near-term inflation expectations have risen due to tariff news, but longer-term expectations remain aligned with the 2% inflation goal [2] Monetary Policy Adjustments - The Federal Reserve lowered the target range for the federal funds rate by 25 basis points to 4 to 4.25%, reflecting a shift towards a more neutral policy stance [3][6] - The current economic environment presents a challenging situation with upside risks to inflation and downside risks to employment, necessitating a balanced approach to monetary policy [3][6] - The Fed's policy decisions will be based on incoming data and evolving economic conditions, with a commitment to supporting maximum employment and sustainable inflation [3][6] Labor Market Dynamics - There is significant uncertainty in the labor market, with companies hesitant to hire due to unclear public policy directions, leading to a low hiring rate [11][13] - The decline in immigration has contributed to a reduced supply of workers, compounding the challenges in the labor market [18] - The balance of risks has shifted, with increased downside risks to employment and a stable but low unemployment rate [18] Impact of Technology and AI - The emergence of AI is seen as a potential disruptor, but its long-term effects on the labor market and productivity remain uncertain [9][10] - Historical patterns suggest that technological advancements typically raise productivity and create new job opportunities, though the timing and balance of these changes are difficult to predict [10][12] - The importance of educational attainment and skills development is emphasized as a key factor in benefiting from technological advancements [13][14]

Economic Outlook - The U.S. economy has shown resilience despite substantial changes in trade, immigration, fiscal, regulatory, and geopolitical policies, with their long-term implications still emerging [5] - Recent data indicates a moderation in economic growth, with GDP rising at approximately 1.5% in the first half of the year, down from 2.5% growth last year, primarily due to a slowdown in consumer spending [6][7] - The unemployment rate edged up to 4.3% in August, with payroll job gains slowing sharply to an average of 29,000 per month over the past three months, indicating a less dynamic labor market [9] Inflation Trends - Inflation has eased from its highs in 2022 but remains elevated, with total PCE prices rising 2.7% over the 12 months ending in August, up from 2.3% in August 2024 [10] - Core PCE prices rose 2.9% last month, driven by increases in goods prices, which reflect higher tariffs rather than broader price pressures [10][11] - There is uncertainty regarding the path of inflation, with a reasonable expectation that tariff-related effects will be short-lived, leading to a one-time shift in the price level [11][12] Monetary Policy - The balance of risks has shifted, with increased downside risks to employment and upside risks to inflation, prompting a move towards a more neutral policy stance [14][15] - The target range for the federal funds rate was lowered by 25 basis points to 4 to 4¼ percent, which is still considered modestly restrictive [15] - The policy approach will remain flexible, adapting to incoming data and evolving economic conditions while aiming to support maximum employment and achieve the 2% inflation goal [16][17]

💥BREAKING:POWELL SAYS RATE CUT WAS ANOTHER STEP TOWARD A MORE NEUTRAL POLICY STANCE. https://t.co/LBdhYWh6YR ...

And joining us right now to talk about the Fed's recent quarter rate point rate cut, the central bank's future rate path and much more. We want to bring in Jim Bullard. He is the former St.Louis Fed president who's now dean of the business school at Purdue University. He's also in the running as the next Fed chair and as we heard from Treasury Secretary Scott Bessant last week. They had a very good and productive meeting recently.Jim, thanks for being here this morning. Um, good to see you. What did you thi ...

Gold climbed to a fresh record, with traders weighing China’s plan to become a custodian of foreign sovereign gold reserves in a bid to strengthen its standing in the global bullion market. The People’s Bank of China is using the Shanghai Gold Exchange to court central banks in friendly countries to buy bullion and store it within the country’s borders, according to people familiar with the matter. The Asian nation is the world’s biggest producer and consumer of the precious metal, and the country taking ...

LIVE Dow Set to Open Up Ahead of Powell's Fed Speech Last Updated: Traders are pricing in a 73% chance that borrowing costs fall half a point by the end of 2025, according to the CME FedWatch tool. That likely implies further quarter-point cuts at the Fed's next two meetings, in October and December. The central bank lowered rates by a quarter of a point last week, although Powell described it as a "risk- management cut," which implies that policymakers will only carry on easing monetary policy if the labor ...

Core Viewpoint - Stephen Miran, a member of the Federal Reserve Board, advocates for aggressive interest rate cuts, arguing that the current monetary policy is "very restrictive" [1][2]. Interest Rate Perspective - Miran believes the appropriate federal funds rate should be in the "mid-2 percent area," which is nearly two percentage points lower than the current rate, warning that inaction could jeopardize the Fed's employment mandate [2][6]. - He asserts that the real neutral rate of interest is "near zero," indicating that current policies are tighter than they appear due to various nonmonetary factors [3][5]. Economic Landscape Changes - Miran highlights recent policy changes, particularly in U.S. border policy, which he claims have reduced population growth and exerted downward pressure on rent inflation and the neutral rate [4]. - He also points to new tax and trade policies, including increased tariff revenue, which he estimates are enhancing national savings and consequently lowering the neutral rate [5]. Employment and Inflation Debate - Miran frames the discussion as a choice between maintaining the Fed's credibility in fighting inflation and protecting American jobs, warning that keeping interest rates too tight could lead to unnecessary layoffs and higher unemployment [6].

We will cut the R and policy rate. We will also cut central bank policy rate to seven day repo rate. At the same time, we will guide the LPR and the deposit rate downward.We will also set up a special re lending program for increasing the holding of shares. We will enhance the quality and value for investment of listed companies to better serve investors. We will make use of stocks, bonds and futures, among other capital market tools, to invigorate the restructurings and M&A market.Yeah, that was a throwbac ...