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The chair of the Federal Reserve is set to give a major speech Friday at a pivotal time for the central bank’s monetary policy.Fed Chair Jerome Powell’s speech at the annual economic symposium at Jackson Hole, Wyo., will be closely followed by financial markets. Investors are looking for signals that the Fed is on course to cut its benchmark interest rate from its current quarter-century high when policymakers next meet in September, as is widely expected. They'll also be listening for any hints about how the Fed will approach rate cuts afterward.
The speech comes as Fed officials are shifting the central bank’s focus from fighting inflation to preventing a spike in unemployment. By law, the Fed is tasked with keeping both inflation and unemployment under control.
Should the Fed cut in September, it would be the first time the central bank has lowered interest rates since 2020, when it slashed the fed funds rate to near zero to stimulate the economy after the onset of COVID-19.The Fed began raising the rate in March 2022 to counteract an alarming spike in inflation. Raising the federal funds rate pushed up borrowing costs on mortgages, credit cards, car loans, and other loans in an attempt to slow the economy by discouraging borrowing and spending.
With inflation now having fallen close to the Fed’s goal of a 2% annual rate, and the job market showing signs of faltering, Fed officials have said they’re considering rate cuts in September.
The speech will also be a chance for financial market participants to gauge how Powell is thinking about recent economic data.
The economic outlook has been on a roller coaster ride since the fed chair last made public remarks in July. In early August, a spate of economic reports showed unemployment rising and manufacturing slowing, raising fears that the economy could fall into a recession. Later in the month, reports showing inflation slowing down and retail spending accelerating sent the opposite message.Many economists expect Powell to signal that September rate cuts are on the table, confirming what he said in a July press conference.“We expect Mr. Powell to give his clearest signal yet that the FOMC will ease policy in September and at one other meeting this year,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
However, Fed officials in recent speeches have stressed that the central bank’s moves will depend on what economic data shows. They may cut rates more aggressively the more inflation slows and the more the labor market seems at risk of imploding under the weight of high interest rates.
That means Powell is expected not to offer any specifics about how much the Fed will cut rates in September or at future meetings. An open question is whether the Fed will cut rates by a quarter percentage point in September, or go for a steeper half-point cut.
“Ultimately, we think data dependence by the Fed could limit the forward guidance Powell provides as it will be difficult to pre-commit to a particular trajectory,” Justin Weidner and other analysts at Deutsche Bank wrote in a commentary.
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Investopedia
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The highlight of this week will be the annual central bank symposium in Jackson Hole, Wyoming, which kicks off on Thursday night and runs through Saturday. And the show-stopper of that event, at least for Wall Street, is likely to be Federal Reserve Chair Jerome Powell’s speech, scheduled for 10 a.m. ET Friday.
The annual symposium comes at a critical juncture for the U.S. economy. Interest rates have been at their highest level in decades for more than a year, pushing inflation down and slowing economic activity. The unemployment rate simultaneously has risen, giving Wall Street reason to believe the Fed will begin to cut interest rates in September.
And the Fed has set the stage for interest-rate cuts. After years of focusing on inflation, policymakers have in recent months begun saying they're equally concerned with the strength of the labor market, the second component of the Fed’s dual mandate. Powell echoed those comments after the Fed’s most recent policy meeting.
Investors will be looking to Powell’s speech on Friday for any hints about the trajectory of monetary policy, including the magnitude of the Fed’s first interest-rate cut in years and the potential pace of subsequent cuts.
Analysts don’t expect Powell’s speech to deviate too much from his press conference after July’s Fed meeting.
“He will likely acknowledge that the Fed is prepared to ease quickly if labor markets deteriorate,” wrote Nomura analysts in a note on Friday. The health of the labor market was called into question earlier this month when data showed the unemployment rate jumped to 4.3% in July, triggering the Sahm Rule recession indicator.
“That said, we expect his remarks to be more balanced than at the July press conference–noting upside inflation risks, as well,” the analysts added.
Recession fears were quelled somewhat last week after a strong consumer spending report and a slight decrease in unemployment claims pointed to the economy’s resilience.
Subsequently, markets settled into a relative calm as expectations for Fed rate cuts moderated. Last Monday, traders were pricing in a 50% chance of the Fed cutting rates by 50 basis points next month, according to federal funds rate futures trading data. Now, markets see just a 23% chance of a cut of that magnitude.
The market's quiet, Nomura notes, "should allow Powell to emphasize that the Fed can be patient and data-dependent, pushing back modestly on recent market pricing for an aggressive start to the easing cycle.”
Economists at Deutsche Bank wrote Monday that they expect Powell won’t “pre-commit to any particular rate-cut trajectory but [will] signal that the Fed has gained sufficient confidence that it will soon be appropriate to begin easing policy.”
Even a dovish stance from Powell might not have much of an impact on the market.
Bank of America Securities analysts recently noted that the S&P 500 historically has had a limited reaction to Jackson Hole. Granted, there are exceptions: Stocks plummeted in 2022 after Powell struck a hawkish tone when addressing the need to restore price stability.
But this year, they forecast, isn't likely to be exceptional. “With rate cuts already priced into the market, upside on even a dovish Jackson Hole speech is likely limited,” the analysts wrote.
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Investopedia
2 hrs
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Power demand for data centers in the U.S. is expected to triple by 2030, fueled by artificial intelligence (AI) applications, Mizuho Research analysts said.
The rise in demand could drive growth for electric utilities stocks, the analysts said, as well as companies in the renewable energy industry, and more.
Electric utilities stocks like Constellation Energy (CEG), Duke Energy (DUK), and NextEra Energy (NEE) could be poised to benefit, the analysts said, as well as infrastructure providers like Equinix (EQIX).
The analysts said they expect AI to increase demand for renewables like solar and wind energy as well, given the tech sector's climate commitments. They added that based on their models, clean energy resources could supply more than half of electricity in the U.S. by 2030, supported by heightened demand driven by AI data centers.
First Solar (FSLR), GE Vernova (GEV), and Nextracker (NXT) are among the stocks that could get a boost from this trend, they said.
The analysts also said natural gas demand is expected to rise in the near term to keep up with the growing power needs of data centers.
They named Chesapeake Energy (CHK) and EQT (EQT) as natural gas stocks that could gain, as well as infrastructure picks including Kinder Morgan (KMI) and Williams Companies (WMB).
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Instablog9ja
6 hrs
14
Kogi State Governor, Alhaji Usman Ododo, has approved 1,192 additional aides.
This was contained in a statement issued on Monday by the Secretary to the State Government, Dr Folashade Ayoade.
“The aides include Yakubu Abdulhakeem who is to serve as the Executive Secretary, Kogi State Office for Disability, 165 Senior Special Assistants, and 36 Special Assistants.
Others on the list approved by the governor are 574 Ward Special Assistants and 290 Local Government Special Assistants,” the statement read.
Similarly, Ododo also approved the appointment of Alhaji Ibrahim Abdulsadiq as the Director of Protocol, First Lady Office, in addition to other retinue of aides.
Ayoade said that all appointments are with effect from September 1, 2024.
Instablog9ja
8 hrs
13
British tech magnate Mike Lynch was among six people lost at sea on Monday, August 19, after a luxury superyacht sank off the Italian island of Sicily during a sudden storm.
Lynch’s wife Angela Bacares was among the 15 people rescued but the businessman and his 18-year-old daughter, Hannah Lynch, were missing, Salvo Cocina, head of the Civil Protection Agency in Sicily, told AFP.
The ship had a crew of 10 people and 12 passengers, the Italian coast guard said. A sudden fierce storm had battered the area overnight, and a waterspout struck precisely where the 56-meter (184-foot) British-flagged Bayesian had been moored.
Lynch, 59, is a celebrated technology sector entrepreneur and investor, sometimes referred to as the UK’s answer to Bill Gates.
One body was recovered, and police divers spent the day trying to reach the hull of the ship, which was resting at a depth of 50 meters (163 feet) off Porticello where it had been anchored, rescue authorities said.
“They were in the wrong place at the wrong time,” said Cocina, noting that another big ship nearby, the Sir Robert Baden Powell, wasn’t as badly damaged and helped rescue the 15 survivors — including Lynch’s wife, Angela Bacares.
Eight of those rescued were hospitalized while the others were taken to a hotel. One body believed to be the cook was found near the wreck, but six others were unaccounted for and believed inside the hull, said Cari, the fire rescue spokesperson.
The rescue operations, which were visible from shore, involved helicopters and rescue boats from the coast guard, fire rescue and civil protection service.
Top Stock Movers Now: AMD, HP, McDonald's, And More
U.S. Equities Rose At Midday, Exten...
Investopedia
12 hrs
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U.S. equities rose at midday, extending last week’s rally as concerns about the health of the economy eased. The Dow, S&P 500, and Nasdaq all advanced.
Advanced Micro Devices (AMD) shares gained as the chipmaker boosted its artificial intelligence (AI) portfolio by purchasing data center infrastructure provider ZT Systems for $4.9 billion.
McDonald’s (MCD) shares rose as Evercore ISI analysts raised their price target for the stock, saying they were increasingly bullish on the fast-food giant’s U.S. business.
FuboTV (FUBO) shares soared following a judge’s ruling in favor of the company blocking Walt Disney (DIS), Fox (FOX.A), and Warner Bros. Discovery (WBD) from launching a streaming sports service together.
HP (HPQ) shares dropped after a downgrade by Morgan Stanley, which suggested the PC and printer maker's stock could have limited upside.
Dutch Brothers (BROS) shares also lost ground after a downgrade from Piper Sandler.
Oil futures slipped and gold prices were higher. The yield on the 10-year Treasury note declined. The U.S. dollar lost ground to the euro, pound, and yen. Most major cryptocurrencies traded lower.
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