Oil prices stabilized on Thursday (February 12th), as the market reassigned a risk premium to US-Iran tensions despite US inventory data showing swelling domestic supplies. This movement confirms one thing: geopolitical headlines are still more "noise" than signals of a short-term surplus. As of 3:50 PM WIB, Brent was at $69.60/barrel (+0.29%) and WTI was at $64.83/barrel (+0.31%). The gains were moderate, but enough to keep prices near the psychological $70 level for Brent. From a geopolitical perspective, market focus is on the potential for escalation in the Middle East. Recent reports...
Inflation in the United States continues to show signs of moderation. The latest data shows CPI inflation hovering around 3% annually, while PCE inflation the Federal Reserve's favorite indicator is hovering around 2.1–2.6%. This decline in inflation signals that price pressures in the US are beginning to ease after a period of high price increases post-pandemic. This directly impacts market expectations regarding the Fed's interest rate policy, as stable inflation opens the door to further monetary policy easing in the near future. However, the Fed remains cautious as core inflation remains...
Federal Reserve Chairman Jerome Powell appeared at Stanford's Hoover Institution as part of the George P. Shultz Memorial Lecture Series: Shultz and Economic Policy. Instead of discussing inflation, interest rates, or the direction of monetary policy, Powell focused on paying tribute to the late George Shultz, one of the key figures behind US economic policy and diplomacy in the 20th century. In his remarks, Powell highlighted Shultz's career, which included serving as Secretary of State, Secretary of the Treasury, Secretary of Labor, and Director of the Budget. He emphasized Shultz's...
Federal Reserve bank supervisors are monitoring the commercial real estate portfolios of community and regional banks amid concerns over "rising interest rates, stricter underwriting standards, and declining commercial property values," the agency said. The central bank said these factors could impact borrowers' ability to refinance or repay their loans, according to a supervisory and regulatory report released Monday. Officials are monitoring commercial real estate lending trends in addition to closely reviewing underwriting practices and loan loss allowance levels. Among Wall Street...
Conflicting signals from the Federal Reserve on the timing and magnitude of U.S. interest rate cuts have accelerated hedging flows into swaptions and derivatives tied to overnight rates, with investors seeking protection against heightened policy uncertainty. Short-term volatility --specifically three-months and under -- on longer-dated swaptions such as those on 10-year and 30-year swaps has picked up following a prolonged period of compression. Swaptions, which are options on interest rate swaps, are one segment of the more than $600 trillion over-the-counter rate derivatives market....
Markets are pricing in a near-certain 25bp Fed cut in December, influenced by dovish Fed chatter and signs of a slowing US economy, while the US Dollar (USD) shows mixed reactions. Kevin Hassett seen as dovish Fed chair contender"On Friday, I discussed the correction in interest rate expectations for the December meeting in detail, emphasising that it is important not to focus too much on the movements for this particular meeting, but rather to keep an eye on the bigger picture. It seems as if market participants saw it similarly. In recent days, expectations for the December meeting have...
U.S. Treasury Secretary Scott Bessent said on Tuesday he was concluding a second round of interviews later in the day for a new U.S. Federal Reserve leader, and there was a good chance President Donald Trump would announce his pick before Christmas. White House economic adviser Kevin Hassett is seen by allies and advisers of Trump as the frontrunner, Bloomberg reported, citing unnamed people familiar with the matter. Hassett, like Trump, has said interest rates should be lower than they are now under the leadership of Fed Chair Jerome Powell. Bessent has narrowed the search for a successor...
Allies of Federal Reserve Chair Jerome Powell have laid the groundwork for him to push through an interest rate cut during the central bank's December 9-10 meeting, the Wall Street Journal's Nick Timiraos reported on Monday. But the decision is likely to be contested in an increasingly divided rate-setting committee, especially as a lack of clear data points for October leave the Fed flying blind into its final meeting for the year. Powell is likely to weigh two options, Timiraos said one involving an immediate rate cut before adopting a more cautious stance for further decisions, while...
Chicago Federal Reserve President Austan Goolsbee on Thursday said he is uneasy about cutting interest rates in the face of too-high inflation that's steady at best and by some measures getting worse, remarks that signal a reluctance to support a third straight reduction in borrowing costs next month. "My unease is about the short-run front-loading of too many rate cuts and counting on ... the inflation uptick that we've seen being transitory," Goolsbee told reporters in a virtual interview. "I'm not hawkish when it comes to rates over the medium term: I think rates are going to go down,...
Gold rises in the early Asian trade. There's a broad commodities uptrend, driven by macro uncertainty, a weaker dollar, and persistent demand for "hard" assets, says Fawad Razaqzada, market analyst...
Oil extended declines after OPEC+ agreed to a bigger-than-expected production increase next month, raising concerns about oversupply just as US tariffs fan fears about the demand outlook.
Brent...
The Japanese Yen (JPY) weakened against its US counterpart and reversed part of Friday's recovery from the lowest level since July 23 following Bank of Japan (BOJ) Governor Kazuo Ueda's remarks....