The Market Isn’t Worried About Fed Independence https://t.co/v2f7BJ6GSO ...

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 ...

The dollar index (DXY00) on Monday fell to a 2-week low and finished down by -0.05%.  The yen’s strength is weighing on the dollar on Monday after BOJ Governor Ueda signaled a possible interest rate hike at this month’s policy meeting.  Also, Monday’s weaker-than-expected Nov US ISM manufacturing index is bearish for the dollar.  In addition, the dollar is under pressure amid expectations for a Fed rate cut at next week’s FOMC meeting, as the swaps market now discounts a 96% chance of a rate cut at the Dec ...

So, it's time for the big picture now. Let's welcome in Cooper Howard, director of fixed income research and strategy, Schwab Center for Financial Research. Very good morning to you, Cooper.Hope you had a great weekend. Look, let's just talk about what's happening with these JGB yields over in Japan right now given the renewed expectations of a a potential rate hike come this December from the BOJ. just talk us through whether we're actually seeing any sort of correlation here with respect to the 17-year hi ...

The dollar index (DXY00) on Wednesday gave up an early advance and finished down by -0.08%.  The dollar fell slightly on Wednesday after the Nov MNI Chicago PMI posted a 17-month low. Also, strength in stocks on Wednesday has curbed liquidity demand for the dollar.  The dollar initially moved higher on Wednesday on better-than-expected US economic news, with weekly jobless claims unexpectedly falling to a 7-month low and Sep capital goods new orders rising more than expected. The dollar is also under pres ...

Core Points - President Donald Trump is pressuring the Federal Reserve to lower interest rates, threatening to fire Fed Chair Jerome Powell and Treasury Secretary Scott Bessent if they do not act quickly [2][6] - Trump's criticism of the Fed's current interest rate policy reflects his desire to stimulate the economy by reducing borrowing costs and the interest on national debt [3][4] - The Federal Reserve's independence is at risk if Trump follows through on his threats, which could lead to significant implications for financial markets and the economy [3][7] Economic Implications - Trump argues that lower interest rates would help reduce mortgage rates and boost economic activity, although some experts are skeptical about the effectiveness of such cuts [4][6] - The Fed has maintained a flat rate throughout the year, only recently cutting it by 0.25 percentage points in its last two meetings [3] - There is a division among Fed officials regarding further rate cuts, with some concerned about inflation driven by Trump's tariffs [4][8] Federal Reserve Independence - The Federal Reserve was established as an independent entity to resist political pressures that could lead to unnecessary rate cuts, which might provide short-term economic boosts but could also trigger inflation [8] - Powell's term as Fed Chair is set to end in May, and he does not report to Trump or Bessent, highlighting the central bank's autonomy [5][6]

Core Viewpoint - JPMorgan highlights that the U.S. faces a significant challenge with its $38.15 trillion national debt and a debt-to-GDP ratio of approximately 120%, suggesting that the real risk lies in a gradual policy shift rather than an immediate crisis in U.S. Treasury buyers [1][2] Group 1: Debt and Economic Context - The debt-to-GDP ratio indicates that the U.S. owes considerably more than it produces annually, raising concerns about the government's ability to manage and refinance this debt without alarming investors [2] - The potential solutions to reduce the debt-to-GDP ratio are limited, as political challenges hinder cuts to Social Security and Medicare, and the current tax revenue is low compared to OECD standards [2] Group 2: Financial Repression Strategy - JPMorgan proposes a strategy of financial repression, where policymakers may accept higher nominal growth and inflation while maintaining low real interest rates, allowing the real value of debt to decrease over time [3][6] - This approach would require a compromise on Federal Reserve independence, as it would necessitate prioritizing debt sustainability over strict price stability [6] Group 3: Market Implications - The current market environment is already tense, with global crypto markets valued around $3 trillion experiencing significant downturns, affecting various risk assets [7] - Recent market activity has seen approximately 159,562 traders liquidated, totaling around $842.60 million in liquidations, indicating a broader risk-off sentiment [7]

Speaking publicly for the first time since President Donald Trump declared he had dismissed her, Federal Reserve Governor Lisa Cook on Monday briefly alluded to her ongoing legal fight over her position on the central bank’s board. "I would like to briefly address an issue that may be on some of your minds," Cook told an audience at the Brookings Institution."As many of you know, I am involved in an ongoing legal case. There are a number of people in this room and in this building who have reached out and b ...

Group 1 - The Bank of England (BoE) warns that global financial markets could face significant downturns if investor sentiment regarding artificial intelligence (AI) or the independence of the U.S. Federal Reserve deteriorates [1][2] - The BoE's Financial Policy Committee (FPC) highlights an increased risk of a sharp market correction, particularly due to potential AI-related market declines, which could have material spillover effects on the British financial system [2][3] - Concerns are raised about the potential loss of Federal Reserve independence, which could lead to a sudden change in perceptions of its credibility, resulting in increased volatility and risk premiums in U.S. dollar assets [3] Group 2 - British government borrowing costs are closely linked to U.S. Treasury yields, indicating that a decline in U.S. bond prices could raise the cost of servicing new British public debt [4] - The BoE notes that the increase in borrowing costs reflects challenges in managing high debt levels across advanced economies, exacerbated by political uncertainties in France and Japan [5] Group 3 - The BoE points out that 30% of the U.S. S&P 500's valuation is concentrated in the five largest companies, marking the highest concentration in 50 years, with significant investments in AI from companies like Nvidia, Microsoft, Apple, Google-parent Alphabet, Amazon, and Facebook-parent Meta [6] - Current share valuations based on past earnings are reported to be the most stretched since the dotcom bubble, although they appear less stretched when considering future profit expectations [6][7] - The increasing concentration within market indices makes markets particularly vulnerable if expectations regarding AI's impact become less optimistic [7]

want to get his take on the markets, treasuries, the economy amid this government shutdown. I want to bring in Drew Mattis. He's the chief market strategist at Metife Investment Management.Uh we keep uh we keep moving higher. Are we moving too high or you know, you can only get higher if you go higher. So where are we.>> Well, I think that's a great point. When you compare what earnings expectations are and you compare it to growth expectations among economists, you know, there's a gap there. uh and if you' ...