#federal-reserve

#federal-reserve

For almost an entire year, Donald Trump has begged the Federal Reserve to slash interest rates and supercharge the American economy. And for almost an entire year, Fed Chair Jerome Powell has barely budged. Now, as the president prepares to appoint Powell's successor, amenability seems to be top of mind. "I don't think he should do exactly what we say," Trump told The Wall Street Journal today of the future chair. But "I'm a smart voice and should be listened to."

The presidents' five-year terms were due to end in February, and prior reappointments have typically come closer to expiration dates as they historically have been routine affairs. But recent suggestions from the Trump administration that new conditions ought to be placed on the presidents raised concerns it was seeking a wider leadership shakeup. Earlier this month, Treasury Secretary Scott Bessent floated a three-year residency requirement for Fed presidents. Days later, National Economic Council Director Kevin Hassett, who is the frontrunner to become the next Fed chair, endorsed the idea.

Silver rose on Tuesday, trading near all-time highs as markets priced in a nearly 90% probability of a Federal Reserve rate cut this week. Investors remain focused on whether Chair Powell will deliver a "hawkish cut" by signalling caution about further easing in 2026. The updated FOMC Economic Projections will also be closely watched for guidance on the policy path. Expectations for additional cuts next year point to two rate cuts.

Meanwhile, the news from consumers is more mixed. The University of Michigan's consumer sentiment survey last week showed a 53.3 reading, up 4.5 percentage points sequentially from November but down 28 points year over year. That's not necessarily good news, but it may help to give the Federal Open Markets Committee political cover to lower interest rates at its next meeting, as it's forecast to do on Wednesday. This would please the stock market - a second reason for the Voo to be up this morning.

Layoff announcements this year top 1.1 million, the most since 2020 when the pandemic hit, according to the Challenger jobs report, which has taken on a bit more significance lately due to the patchy official labour market data in the wake of the US government shutdown. The firm said layoff plans hit 71,321 in November, a down from the huge (22yr high for the month) cuts announced in October...the 1.17mn total is 54% higher than the same 11-month period a year ago

As the Federal Reserve prepares to end Quantitative Tightening (QT), the bitcoin price stands at a critical macroeconomic inflection point. With odds for a December rate cut now pricing it in as almost a certainty, the stage is set for a potential shift in monetary policy that could fundamentally alter the trajectory of Bitcoin and broader risk assets. History suggests that when the Fed's balance sheet stops contracting, Bitcoin typically experiences significant bullish catalysts.

"This Fed went to sleep," El-Erian, president of Queens College at the University of Cambridge, told CNBC. He said the independent central bank needs to admit it made some mistakes: It needs to think about scenario analysis as opposed to point estimates, it needs to look more closely at supply-side economics, and it needs to improve its culture of compliance.