Chatham Financial’s Post

EUR/USD REMAINS ABOVE 1.0700 AMID EXPECTATIONS OF FED REFRAINING FROM FURTHER RATE HIKES EUR/USD appreciates on improved risk appetite after dovish remarks from Fed Chair Jerome Powell. Fed Chair Powell said that it would take longer than previously anticipated to bring inflation down to the 2% target. The Euro may struggle as the recent Eurozone inflation data have bolstered expectations for a potential rate cut by the ECB in June.

Fed keeps rates at 5.25%-5.50%. Some big data points eroding rate cut possibilities, i.e. Consumer expenditures are up, labour costs are up. Fed Chair Powell's commentary still maintained an easing undertone. Although, we look a long way from the market's priced 7 rate cuts earlier this year, now looking likely to be considerably less. How are you positioning for this choppy inflation/rates environment? Reach out if you would like to discuss our thematic positioning. Westpac Private Bank Bo Li Sang Dinh Shaun Atkinson #Markets #PrivateWealth #Privatebanking

Fed Leaves Door Open to Further Tightening. Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy, minutes from the latest meeting showed. However, some participants cited the risks to the economy of pushing rates too far. Policymakers agreed that the level of uncertainty remained high and that future rate decisions would depend on data arriving in the coming months to help clarify the extent to which the disinflation process was continuing. The Fed raised the fed funds rate by 25bps to 5.25%-5.5% in July, the highest since January 2001. #us #federalreserve #fomc #minutes #ratehike #inflation #dollarindex

In a recent statement, Federal Reserve Chair Jerome Powell highlighted that the U.S. economy has not achieved the central bank's inflation target, suggesting that interest rate cuts are unlikely in the near future. Despite solid growth and a strong labor market, inflation has not decreased as quickly as hoped. The Fed has maintained interest rates at 5.25%-5.5% since July 2023, and Powell emphasized the need for greater confidence that inflation is moving sustainably towards the 2% goal before considering policy easing. March's inflation data showed a 3.5% annual rate, indicating a slower return to the target. Financial markets have adjusted their expectations, now anticipating one or two rate cuts later in the year, contrary to earlier predictions of multiple cuts starting in March. https://lnkd.in/dhGNHaBw

Daily Commentary – Thursday 30 November 2023 US central bank officials gave mixed messages on Wednesday, whilst data from the US indicates a strong economy and a downward trend in inflation, which has boosted the US narrative for sooner-rather-than-later interest rate cuts. Market focus now shifts to today’s crucial US PCE inflation report, and Fed Chair, Jerome Powell’s statement on Friday. Chinese manufacturing activity declined further in November, amid slowing overseas demand. On the data front today, we will keep an eye on local PPI and trade balance numbers, as well as preliminary CPI and the unemployment rate from the EU. In the US we will focus on PCE Price Index and jobless claims. The rand starts the day trading at R18.71/$, R20.53/€, R23.77/£ and R21.45/₣. Source www.citadelglobal.co.za #offshore #investment #OffshoreInvesting #retirement #RetirementPlanning

If the Fed used the European methodology, they would be very close to the inflation target already. 2 take-aways 1) The Fed would have been closer to pause with another inflation method 2) The ECB will pause/pivot ahead of the Fed https://lnkd.in/ePXmEGYw

Yet another example of the masterful command of the art of the ambivalent, Fed Governor Powell gave his much awaited Jackson Hole speech. Essentially he signalled the 'job's not done' when it comes to inflation, (probably). A continued focus on the PCE measure of inflation left markets believing a pause remained more probable in September while another rate increase seems probably on the cards late this year. What was more evident is that they look likely to hold interest rates at a more elevated level for somewhat longer, lest inflation get a chance to raise its head again. A more robust than expected US economy has probably given the Fed more flexibility than their ECB counterparts who will face a trickier decision given greater weakness in the likes of Germany. #interestrates #Fed #Jacksonhole

The Fed chief also cautioned that a soft-landing scenario was not yet guaranteed, saying it was not the Fed’s baseline expectation — despite what the latest projections implied. “Ultimately, this may be decided by factors that are outside our control,” Powell said, though he later added that a soft landing is “what we’ve been trying to achieve for all this time.” With an array of potential economic headwinds on the horizon — including rising gas prices, a United Auto Workers strike and a looming government shutdown — investors remain skeptical that the Fed will follow through with another rate increase this year. Futures show roughly even odds of more tightening in 2023. #interestratehike #interestrates #inflationimpact #inflationhedge #softlanding #useconomy #investmentstrategy #businessstrategy

Stocks and bonds are up sharply today after the Federal Reserve pivoted to rate cuts in 2024 as inflation eases 📈 As expected, the US central bank kept interest rates unchanged at 5.25-5.50%. However, it was the lack of pushback against growing investor expectations for 2024 rate cuts helped spark a massive rally in Treasuries and sent the Dow Jones Industrial Average to a record high. Updated quarterly forecasts showed Fed officials expect to lower rates by 75 basis points next year, a sharper pace of cuts than indicated in September. A tweak to the Fed’s post-meeting statement on Wednesday also highlighted the shift in tone, with officials noting they will monitor a range of data and developments to see if “any” additional policy firming is appropriate. That word was not present in the November statement. The Bank of England and European Central Bank are to follow today 👀 #federalreserve #jeromepowell #interestrates #stocks #yields #finance

The Federal Reserve will likely begin cutting U.S. interest rates by the middle of next year, according to a note written by Goldman Sachs economists over the weekend. The group's prediction suggests rates will begin their gradual decline in the second quarter of 2024. A consensus is developing that the Fed will likely hold rates next month after it lifted them again last month in reaffirming its commitment to achieving a 2% annual rate of inflation. Similarly, a growing number of economists now anticipate that the US will escape a recession. Last month's raise upped the U.S. benchmark lending rate to between 5.25% and 5.50% — the highest level in 22 years. #inflation #interestrates