Fed's Powell bolsters rate cut view on trade, growth concerns

FedWatch expectations for September 18

"We are in the camp and have been all year, and arguably wrongly, that the Fed becoming more dovish and cutting rates is not good for risk assets", said Neil Dwane, global strategist and portfolio manager at Allianz Global Investors.

On Thursday morning, most US stock index futures were high.

The Fed chairman told Congress in his semi-annual report that many in the US central bank believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut.

Gus Faucher, chief economist at PNC bank, said there were sound economic reasons for a cut.

Trump has spoken out, both in public remarks and on Twitter, several times against the central bank, pressuring for lower interest rates.

Federal Reserve Chairman Jerome Powell says before the Senate Banking Committee that very low unemployment rates no longer necessarily push up inflation.

Prices ex-food and energy rose 0.3% between May and June, above 0.2% expected by market and 0.1% posted in May. The so-called core CPI was boosted by strong increases in the prices for apparel, used cars and trucks, as well as household furnishings. In the 12 months through June, the core CPI climbed 2.1% after advancing 2.0% in May.

The overall CPI edged up 0.1 per cent last month, held back by cheaper gasoline and food prices. "We have wages and benefits moving up at 3%, which is good because it was 2% a year ago, but 3% barely covers productivity increases and inflation... we haven't seen wages moving up as sharply as they have in the past".

More news: Willy Wonka And The Chocolate Factory actress Denise Nickerson dies aged 62

Meanwhile, used auto prices spiked 1.6 percent and an uptick in medical care costs also helped lift the index, according to the data. The Fed last month downgraded its inflation projection for 2019 to 1.5 per cent from the 1.8 per cent projected in March.

"What I have said is the law gives me a four-year term and I fully intend to serve it", Powell said in response to a question from committee chair Rep. Maxine Waters (D-Calif.).

"Our view is that down-side [negative] risks to the inflation outlook have continued to grow, with the New Zealand economy looking increasingly unlikely to be able to comfortably meet its inflation and labour market objectives", he said. Meanwhile, interest rate futures appeared to price in greater odds of an aggressive rate cut of half a percentage point in July. "I think this would be on the merits".

United States stock index futures gained early on Wednesday, turning positive after Powell's remarks were released, while the U.S. dollar fell against a basket of other currencies.

In Chinese stocks, mixed trends prevailed.

Economists polled by Reuters had forecast the CPI unchanged in June and rising 1.6% year-on-year.

Earlier rounds of U.S. tariffs on trading partners - including China - had been dismissed as of little macroeconomic importance, with the Fed in early May still anticipating its policy rate would remain unchanged for the rest of the year.

"The labor market has not weakened in a meaningful way since the escalations in trade policy a few months ago", said Daniel Silver, an economist at JPMorgan in NY.

Related News:

  • Bond yields up as markets await Fed signal

    Bond yields up as markets await Fed signal

    West Texas Intermediate crude climbed 0.2% to $60.56 a barrel, the highest in seven weeks.Gold dipped 0.3% to $1,415.26 an ounce. Traders will be eyeing that testimony for further clues after a measure of USA consumer prices rose more than forecast in June.
    Air Canada flight diverted to Hawaii after turbulence, minor injuries reported

    Air Canada flight diverted to Hawaii after turbulence, minor injuries reported

    The flight had originated from Toronto and was reportedly carrying 268 passengers and crew. Gregor says crew members asked for medical personnel to meet the plane at the gate.
    South Korea's Moon Denounces Japanese Comments Over Sanctions

    South Korea's Moon Denounces Japanese Comments Over Sanctions

    He told reporters he would meet officials from the White House and Congress to discuss issues that included Japan's export curbs. Japan's envoy in Geneva, Junichi Ihara, countered that the Japanese measures were just a "change of application of procedures".
  • Having too many sugary drinks linked to higher cancer risk

    Having too many sugary drinks linked to higher cancer risk

    But they said their findings showed an association and could not prove sugary drinks definitely caused cancer . Its director general, Gavin Partington, added: "Soft drinks are safe to consume as part of a balanced diet".
    Robinson jailed for contempt of court

    Robinson jailed for contempt of court

    The video lasted an hour-and-a-half and was viewed online 250,000 times , after being live-streamed on Facebook. Police were then pelted with cans and plastic bottles as the group began chanting "we want Tommy out".
    7-Eleven to offer free slurpees today

    7-Eleven to offer free slurpees today

    Participating locations are giving customers a free small Slurpee on July 11, from 11 a.m.to 7 p.m. If one Slurpee isn't enough for you, then you can grab one more Slurpee for free on the next day.
  • Goodbye, 'Love Bug': the Volkswagen Beetle is going extinct

    Goodbye, 'Love Bug': the Volkswagen Beetle is going extinct

    It's available in convertible or hardtop, with base prices of $23,045 for a coupe and $27,295 for a convertible. As a side note, Wolfsburg was founded in 1938 by the Nazi regime to house the German automaker's workforce.
    More quakes rattle Ridgecrest area

    More quakes rattle Ridgecrest area

    It would be the first death linked to the magnitude 6.4 quake near Ridgecrest that was felt far and wide. The NASA satellite images are not the only views of the earthquakes visible from space.
    Day for Stoinis to prove Cup fitness

    Day for Stoinis to prove Cup fitness

    However, the team need the approval of the ICC's event technical committee for the replacement of Khawaja with Wade in the squad. He said: "Playing well against England a couple of weeks ago obviously will give us some confidence going into that game".
  • Does Amazon Prime Day deliver for investors? It's complicated

    Does Amazon Prime Day deliver for investors? It's complicated

    However, Amazon underperformed the broader market every year in the one day following the event. Amazon's Prime membership in India is relatively more reasonable and offers many benefits.
    Arsenal captain Laurent Koscielny refuses to go on US  soccer tour

    Arsenal captain Laurent Koscielny refuses to go on US soccer tour

    Koscielny's future at Arsenal is reportedly in doubt after entering the final year of his contract with no sign of a new deal. The Gunners have released a statement after the refusal of the Skipper Laurent Koscielny to involve in the pre-season tour.
    New Zealand stun India by 18 runs to reach World Cup final

    New Zealand stun India by 18 runs to reach World Cup final

    Speaking after the game, Trent Boult explained as to how he planned to get Kohli out and thereby stamp his authority in the game.

Most liked

Fans are heartbroken seeing MS Dhoni cry after India's failed run chase
With Ambati Rayudu and Vijay Shankar doing the fix work, India had gone on to post 252 and then win the match by 35 runs. And New Zealand knew how to trigger the great Indian collapse having done that, time and again.

Rampant England end Australia's title defence to roar into final
England opener Jason Roy smashed three sixes in a row in his 85 off 65 balls, helping England reach its target in just 32.1 overs. England enjoyed a sensational start to proceedings at a rocking Edgbaston as they reduced Australia to 14-3 in 6.1 overs.

Firefighters tackle blaze at Warner Bros studios
Firefighters were called to reports of a blaze in one of the stages at Leavesden, Hertfordshire, late on Wednesday night. Replace: Firefighters have now put out the blaze that broke at Warner Bros. studios in Leavesden in a single day.

How the Black Caps turned around their World Cup losing streak
Then too, the Men in Blue had advanced to the final after a almost spotless campaign only to falter when it mattered most. New Zealand bowled themselves into the World Cup with a superb second innings fielding performance here on Wednesday.

SpaceX wins contract to launch NASA’s new X-Ray observatory in 2021
The observatory will be launched aboard a Falcon 9 from Launch Complex 39A in Florida , and liftoff is planned for April 2021. NASA has awarded the launch services contract for the agency's Imaging X-Ray Polarimetry Explorer (IXPE) mission to SpaceX.

Man, 22, arrested after climbing Buckingham Palace fence at 2am
The intruder was not carrying any weapons and the incident is not being treated as terror-related, according to Scotland Yard. Buckingham Palace has confirmed that a man was detained in the early hours of this morning in Buckingham Palace's forecourt.

Japan's asteroid probe Hayabusa2 set for final touchdown
It was hailed as a scientific triumph regardless of various setbacks throughout its epic seven-year odyssey. Hayabusa-2 started its mission to reach Ryugu in 2014, launching from Japan's space port Tanegashima.

Spanish judge rules Julio Iglesias biological father of 43-year-old man
Singer Julio Iglesias smiles during his star unveiling ceremony at the Walk of Fame in San Juan, Puerto Rico. Iglesias now has 20 days to lodge an appeal if he so wishes. 'Javier won the trial.

Edu becomes Arsenal's new technical director after winning Copa America with Brazil
The Brazilian played for Arsenal between 2001 and 2005 winning two league titles, including the "Invincibles" season of 2003-04. Edu will be responsible for coordinating the first-team coaching group, the academy and scouting and recruitment.

Gatwick Airport: Flights resume after ATC issue
According to Gatwick Airport's website, flights have resumed from 7.20pm United Kingdom time after almost two hours of chaos. Some flights had been diverted to other United Kingdom airports.

Mexico's new finance minister, believer in stability, takes charge of choppy economy
Urzua also worked with Lopez Obrador from 2000 to 2003 when he was Mexico City mayor. He appointed Arturo Herrera, the current finance undersecretary, in his place.

Apple updates Mac to fix faulty video conferencing app
The researcher says he contacted Zoom on March 26, giving the company a public disclosure deadline of 90 days. He demonstrated that any website can open up a video-enabled call on a Mac with the Zoom app installed.

Moana not marijuana: Hilarious mix-up as bakery delivers pot-themed birthday cake
But that's not what a Milledgeville, Georgia, woman received when she picked up her daughter's birthday cake from a local store. Kensli Davis absolutely loves Moana , so her mother ordered an ice cream cake for her birthday, featuring the Disney character.

Papua New Guinea: Dozens killed in tribal violence
William Bando mentioned he had now called for in spite of every thing 100 more police to toughen the reward 40 native officers. But while clans have fought each other for decades or centuries, the severity of the violence has shocked Papua New Guinea.

Colorful self-made billionaire H Ross Perot dies at 89
Ross Perot epitomized the entrepreneurial spirit and the American creed. "That is from Ross Perot ", Sanders told the Times . His campaign became a cultural argument against Mexicans as much as it was an economic one for blue-collar Americans.