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Federal Reserve

Yesterday

The US central bank continues to grapple with the impact of Trump administration tariff policies.

Trump pressures Fed to cut rates by ‘a full point’

The US president has continued his campaign of attacks against the Federal Reserve, insisting that the latest jobs data justifies a rate cut.

Wall Street views on how much Fed easing is likely to occur this year range from none to as much as 100 basis points. The most common forecast is for just one cut, in either September or December.

Traders reel in bets on US interest rate cuts and yields surge

The sell-off lifted yields across maturities by as much as 10 basis points, led by shorter-dated tenors more sensitive to Fed rate changes.

This Month

Syanley Fischer, who helped defuse financial crises dies at 81.

The enduring legacy of the late Stanley Fischer, a giant of macroeconomics

Stan was at the IMF during the Asian Financial Crisis and played the leading role in formulating the IMF’s response to the crisis.

Jerome Powell remains a key target for Donald Trump.

Trump renews call for Powell to cut rates as economy slows

Activity at US service providers unexpectedly contracted last month for the first time in almost a year and private companies throttled back hiring.

Interest rates

Why low interest rates aren’t coming back

Cheap money isn’t coming back. Bigger deficits, the energy transition and investment in AI mean the cost of borrowing will be higher in the years ahead.

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Stanley Fischer in 2017. He taught and mentored some of the world’s best-known economists and central bankers.

Stanley Fischer, who spread the macroeconomic gospel, dies at 81

Dispatched on several occasions to extinguish emergencies around the world, the esteemed economist drew academic lessons from his experience with countries in crisis.

May

The US central bank continues to grapple with the impact of Trump administration tariff policies.

Trump tells Powell he is making a mistake by not cutting rates

The president and the US Federal Reserve chairman met at the White House to discuss the nation’s growth, employment and inflation.

“The staff viewed the possibility that the economy would enter a recession to be almost as likely as the baseline forecast,” the minutes said.

Fed well positioned to wait for clarity on outlook, minutes say

Policymakers judged the risks of both higher unemployment and inflation had risen since their March meeting, primarily due to the potential impact of tariffs.

Tim Toohey was chief economist at Goldman Sachs Australia for more than a decade.

Former Goldman economist splits from market, predicts big rate cuts

Now at Yarra Capital, Tim Toohey says the RBA will slash interest rates more aggressively than expected. Other economists say there’s little chance of that.

In the 2024-25 school year, 27 per cent, or 6800, of Harvard’s student body were international students.

Trump’s tax bill a ‘ticking bomb’ for Republicans and investors

The president’s “big beautiful” bill narrowly passed the House, but its sweeping tax cuts and increased debt risk alienating voters and investors.

“I don’t think the American government wants to leave China,” Dimon said.

Dimon warns of US stagflation risk, says Fed right to hold rates

“I don’t agree that we’re in a sweet spot,” the JPMorgan Chase chief executive said, adding that the US central bank was right to wait and see.

Carne asada taco (grilled steak with citrus-habanero sauce and avo mojo) at Casa Merida.
For Good Food, Oct 26, 2021
Pic credit: Trent van der Jagt

The ‘Taco’ trade, and whether to take a bite or resist

The market is applying the rule that “Trump Always Chickens Out”, particularly over his beloved tariffs, and that risky assets rise in response.

The central bank has been criticised by Elon Musk — who is running the administration’s Department of Government Efficiency, or DOGE — for what he claimed is overstaffing.

Fed to shrink staff by about 10pc over next several years

The central bank has been criticised by Elon Musk — who is running Trump’s Department of Government Efficiency — for what he claimed is overstaffing.

Markets are pricing in slightly more than three RBA rate cuts this year, which would bring the total in 2025 to four.

All the ingredients are in place for an enduring housing recovery

As central banks ease monetary policy, default interest rates should fall. In Australia, markets are pricing in at least three RBA rate cuts this year.

The Trump administration’s undermining of the full faith and credit of the United States has raised the risk of a sovereign debt crisis.

Looming US fiscal crisis a cautionary tale for Australia

The lesson is clear. Short-term fiscal discipline, which might seem ignorable in the moment, is vital.

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Donald Trump and Jerome Powell are casting big shadows over markets.

Trump’s challenge: building a bridge to the future

The US president has shifted into uber-spruiker mode in a quest to build a bridge between his short-term pain trade and a more prosperous vision of the future.

RBA Michele Bullock will cut rates because Australia is a small economy exposed to global developments, say economists.

Why the RBA is set to break away from the Fed and cut rates

Australia can act more swiftly than the US, which typically sets the tone for global monetary policy.

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Kooyong race tightens; How Zoe Daniel lost; Fed’s game of chicken

Read everything that’s happened in the news so far today.

The US central bank continues to grapple with the impact of Trump administration tariff policies.

Fed warns of rising economic risks as it leaves rates steady

Chairman Jerome Powell said the large increases in tariffs would be “likely to generate a rise in inflation, a slowdown in economic growth” and a rise in unemployment.

Donald Trump and Jerome Powell are casting big shadows over markets.

Markets are playing a giant game of chicken. The Fed just joined in

Like investors, US Federal Reserve chairman Jerome Powell is refusing to alter course until he’s certain the trade war damage is real. It’s a risky strategy. 

Original URL: https://www.afr.com/topic/federal-reserve-1mzb