Both the STOXX 50 and the STOXX 600 traded around the flatline on Monday, as investors adopted a cautious stance amid a lack of fresh catalysts. The only notable data release was the UK's final GDP growth figures, which confirmed the preliminary estimate. Trading conditions are expected to remain subdued this week, as the schedule is shortened by the Christmas holiday, with most major European stock exchanges closed on Thursday and Friday. Meanwhile, investors continue to monitor developments in the war in Ukraine, after a Kremlin aide said that European and Ukrainian revisions to US peace...
The Federal Reserve is expected to reduce interest rates by 25 basis points to a range of 3.5%-3.75% at next week's meeting, but Bank of America says Chair Jerome Powell faces the most divided committee in years. "We expect him to try to deliver a hawkish cut as a compromise," BofA strategists led by Mark Cabana said in a Thursday note. "We're skeptical about whether he will be able to pull this off. But for now, markets are giving him the benefit of the doubt," they added. Markets are still pricing only modest easing beyond December, expecting just 8 basis points of potential cuts in...
Treasury Secretary Scott Bessent said Wednesday he will push for a new rule requiring regional Federal Reserve chairpersons to live in their district for at least three years. The initiative is Bessent's latest push for a major overhaul of the US central bank—which he has repeatedly accused of mission drift and straying from its primary mandate of setting monetary policy. "I believe there is a disconnect now from the original framework" of the Fed, Bessent said during a discussion at a New York Times event. The US central bank, founded more than a century ago, established a board of...
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...