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Showing posts with the label inflation risks

Fed hits pause button on interest rates. What it means for stock market investors

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[hfe_template id='11223'] [ad_1] In a world twitching for cues, the US Federal Reserve has chosen stillness. Interest rates remain frozen at 4.25–4.5%, as the central bank clings to caution amid a storm of rising inflation risks and unemployment fears. Markets may have priced in the pause, but the real action is just beginning, and India’s investors would do well to buckle up. “Risks of higher unemployment and higher inflation have risen... we think we can be patient,” Fed Chair Jerome Powell said, dropping the kind of soundbite that rattles trading desks from Wall Street to Dalal Street. Adding context, Akshay Chinchalkar, Head of Research at Axis Securities, summed up the Fed’s dilemma sharply: In their first policy meeting since President Trump announced sweeping tariff measures, the Fed kept rates constant as was largely expected, and Chair Powell made it clear that they aren’t in any hurry to tweak monetary policy amid elevated tariff-led uncertainty. He cautioned t...

Asian stocks track US drop on tech, inflation risk

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[hfe_template id='11223'] [ad_1] Stocks in Asia followed US peers lower after a selloff in Treasuries deepened on bets the Federal Reserve won’t cut interest rates again before July due to inflation risks. Equities opened lower in Sydney and Tokyo, sending a regional gauge lower. A drop in Big Tech weighed on US trading, with Nvidia Corp. sinking more than 6% as a product presentation left investors wanting more. US contracts were steady after the S&P 500 fell more than 1% following a report on US service providers that showed a price gauge at the highest since early 2023. Treasuries were little changed after falling across the curve in the previous session. A $39 billion sale of 10-year bonds drew the highest yield since 2007. “Rising yields are not necessarily an issue for stocks unless, of course, the economy starts to fail. Then all bets are off,” said Kenny Polcari at SlateStone Wealth. “But rising yields will be an issue if inflation rears its ugly head.” Trade...

Wall St Week Ahead: US jobs report poses first big stocks test of 2025

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[hfe_template id='11223'] [ad_1] The stock market faces its first major test of the year in the coming week, with investors counting on the U.S. jobs report to show a stable but not overheated economy that underpins expectations for equity gains in 2025. Stocks wobbled at the end of December and the start of January, cooling off after a torrid run. The benchmark S&P 500 closed 2024 with a 23% rise and posted its biggest two-year gain since 1997-1998. Prospects for a third straight standout year hinge in part on the strength of the economy, with labor market data among the most important reads into the economy's health. The data could also help clarify the Federal Reserve's interest rate plans after the central bank last month rattled markets by reducing its projected rate cuts for 2025. "Investors are going to want to see confirmation that labor trends remain solid, which means the economic outlook probably remains firm," said Anthony Saglimbene, ch...

Ed Yardeni sees Fed pausing rate cuts for 2024 after jobs report

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[hfe_template id='11223'] [ad_1] The Federal Reserve’s monetary-easing campaign for 2024 may already be over as the strong labor report Friday underscores the stubborn resilience of the world’s largest economy, according to Wall Street veteran Ed Yardeni. Further policy easing would risk sparking inflation just as oil prices rebound and China seeks to jump start its economy, according to the founder of Yardeni Research Inc., who famously coined the “Fed Model” and the “bond vigilante.”The market prognosticator says the central bank’s September decision to lower rates by half a percentage point — a move usually reserved to tackle a recession or market crash — was “not necessary” with the economy riding high and the S&P 500 hovering near records. “They don’t need to do more,” Yardeni wrote in an e-mailed response to questions. “I assume several Fed officials regret doing so much.” Stocks climbed Friday while Treasury yields and the dollar spiked after government data s...