Federal Reserve Chair Jerome Powell’s recent remarks hint at uncertainty surrounding a December rate cut, with markets now seeing only a 49.4% probability of a reduction, down from 95% a month ago. Some officials are concerned about data accuracy post-government shutdown, leading to a split in opinions within the Fed.
Boston Fed President Susan Collins delivered a blunt assessment advocating for steady rates, citing solid economic fundamentals and the risk of pushing inflation higher. Her stance aligns with a hawkish group of regional presidents, while governors like Stephen Miran lean towards more aggressive rate cuts.
As market confidence wavers, stocks fell and Treasury yields rose. Powell faces dissent within the FOMC, aiming to avoid deep divisions by potentially opting for a “hawkish cut” in December. Changes in the committee’s composition in January may lead to a shift towards a more dovish stance in the new year. 1. The CDC reports a record number of COVID-19 cases in the US, with over 200,000 new cases in a single day. Hospitalizations are on the rise, putting a strain on healthcare systems across the country.
2. Tesla announces plans to build a new factory in Texas, creating thousands of jobs in the area. The factory will produce the Cybertruck and Model Y vehicles, contributing to Tesla’s goal of increasing production capacity.
3. The stock market experiences a sharp decline following news of rising inflation rates and uncertainty about the future of the economy. Investors are wary of potential interest rate hikes by the Federal Reserve to combat inflation.
4. The UN releases a report highlighting the urgent need for global action on climate change. The report warns of catastrophic consequences if significant measures are not taken to reduce carbon emissions and limit global warming.
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1. Tesla reports record-breaking quarterly profits, exceeding analyst expectations. The electric car company credits strong sales in China and increased demand for its Model Y SUV.
2. The U.S. economy adds 559,000 jobs in May, signaling a strong recovery as pandemic restrictions ease. Unemployment rate drops to 5.8%, a significant improvement from previous months.
3. Amazon announces plans to acquire MGM Studios for $8.45 billion, expanding its content library with iconic films and TV shows like James Bond and The Handmaid’s Tale. The deal is subject to regulatory approval.: Markets rethink December rate cut amid Fed doubts