Americans sharply boosted spending at retailers in July despite higher prices and interest rates

Associated Press

WASHINGTON (AP) — Americans sharply boosted spending at retailers in July despite higher prices and interest rates.

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  • When's the next Federal Reserve meeting? Here's when to expect updates on current rate.

    Mark your calendar, here is the 2024 schedule of Federal Reserve meetings.

  • Why Fed rate cuts matter to world markets

    When the Federal Reserve delivers a widely-anticipated interest rate cut on Wednesday, its first in four years, the move will resonate well beyond the United States. The size of a first move and the scale of overall easing remains open to debate, while a looming U.S. election is another complicating factor for global investors and ratesetters looking for a steer from the Fed and pinning hopes on an economic soft landing. "We don't know yet what kind of cycle this is going to be - will it be like 1995 when there was just 75 bps of cuts or 2007-2008, when there was 500 bps," said Kenneth Broux, head of corporate research, FX and Rates at Societe Generale.

  • iPhone fears wipe $94bn off Apple

    Apple saw nearly $94bn (£71bn) wiped off its valuation after analysts warned demand for its new iPhone would be weaker than expected.

  • Stock markets mixed before Fed decision

    US and European stock markets were mixed on Monday as investors traded cautiously ahead of what is expected to be the US Federal Reserve's first interest-rate cut since 2020. The BoE is expected to keep its key rate unchanged after cutting it in August, while the European Central Bank further reduced borrowing costs last week as inflation cools.  

  • Fed set to enter new era with first rate cut in 4 years Wednesday. But what comes next?

    When the Federal Reserve meets Wednesday, officials are expected to mark the end of an era as they cut interest rates for the first time in four years.

  • Indonesia's trade surplus beats forecast in August on export recovery

    JAKARTA (Reuters) -Indonesia's trade surplus rose to a three-month high in August, topping forecasts, as exports grew much faster than expected, official data showed on Tuesday. The August trade data is among economic indicators the central bank will analyse during its two-day policy meeting starting on Tuesday. Economists polled by Reuters ahead of the trade data expected Bank Indonesia (BI) to leave rates unchanged.

  • What's happening in Las Vegas shows Fed's 'soft landing' is a good bet

    The cracks in the labor market in Las Vegas and across Nevada have typically appeared early and widened fast when the U.S. economy soured, making the consumer-driven city and state a bellwether of sorts for the rest of the country. By that measure, as the Federal Reserve heads towards a momentous shift to interest rate cuts this week, business owners, labor leaders, and economists in Nevada see few obvious signs of trouble. Indeed, in a state critical to the outcome of a U.S. presidential election in November that may well turn on pocketbook issues, they see plenty of evidence of an economy moving beyond high inflation without an employment-crushing recession: The Fed's longed-for "soft landing."

  • Goldman Sachs, Citigroup cut China's 2024 growth forecast to 4.7%

    Weak economic activity in August has ramped up attention on China's slow economic recovery and highlighted the need for further stimulus measures to shore up demand. Goldman Sachs earlier expected full-year growth for the economy at 4.9%, while Citigroup had forecast growth at 4.8%. China's industrial output in August expanded 4.5% year-on-year, slowing from the 5.1% pace in July and marking the slowest growth since March, data from the National Bureau of Statistics (NBS) showed on Saturday.

  • Elizabeth Warren calls for emergency-like Fed rate cut ASAP

    The American economy appears to be just hours away from a major milestone: The first interest rate cut from the Federal Reserve since Covid. Yet there remains an unusual amount of drama over the magnitude of that rate cut, with some in Washington calling for a supersized move.

  • AUD/USD Forecast – Aussie Continues to See Range

    The Aussie dollar continues to see a lot of range bound trading, although the first day of the week is looking very positive. This is a market that has a massive ceiling above, and also a lot of questions about the overall global economy.

  • Foreigners pour $31 billion into EM portfolios in August, with Fed in sight -IIF

    Foreign investors ploughed a net $30.9 billion into emerging market stocks and debt portfolios in August as markets continue to position for an imminent rate cut from the U.S. Federal Reserve, data from a banking trade group showed on Monday. "The expectation of Fed cuts in the near future seems to be priced in and investors are positioning themselves into EM debt in large quantities," said in a statement IIF economist Jonathan Fortun. A Fed rate cut is fully priced in by the end of this week's policy-setting meeting, with bets for a quarter-point cut or a half point increasingly tilting towards the bigger reduction, according to the CME's FedWatch Tool.

  • Universities warn of financial disaster without huge fee rises

    Higher student fees and taxpayer funding are needed to tackle a funding black hole in England’s universities, a body representing 141 institutions said.

  • Canada's 2% inflation rate in August raises hopes for large rate cut

    OTTAWA (Reuters) -Canada's annual inflation rate reached the central bank's 2% target in August, data showed on Tuesday, fuelling hopes for a 50-basis-point interest rate cut by the country's central bank next month. The consumer price index posted its smallest rate of increase since February 2021 and the closely watched core price measures also cooled to their lowest levels in 40 months, Statistics Canada said. Consumer prices fell 0.2% on a month-on-month basis, it said.

  • Wages, adjusted for inflation, are falling for new hires in sign of slowing job market

    Pay for newly hired workers is dropping after adjusting for inflation. As the Fed weighs rate cuts this week, it's a sign of a weakening job market

  • Morning Bid: China gloom vs Wall St vroom

    Asia kicks off the trading week on Monday with investors likely to give a big thumbs down to yet another batch of uniformly disappointing economic indicators from China, while at the same time cheering one of Wall Street's best weeks of the year. Fueled by growing hopes that the Federal Reserve will kick off its interest rate-cutting cycle with a 50-basis-point cut rather than a quarter-point move later this week, U.S. stocks rose solidly on Friday, which could provide a good springboard for Asia on Monday. That's the backdrop to the start of a hugely important week for markets around the world with the highlight being the Fed's rate decision and revised economic forecasts on Wednesday, but maybe even more so for Asian markets.

  • Over-priced Fed rate cuts make T-bills unattractive, Federated Hermes says

    Market expectations of substantial U.S. rate cuts this year are making short-dated debt unattractive as the Federal Reserve is unlikely to be as aggressive in easing monetary policy, said Deborah Cunningham, a money market fund manager for Federated Hermes, on Tuesday. The Fed delivers its decision on policy on Wednesday and is all but certain to cut interest rates from their 23-year high. Federated Hermes, in contrast, expects a 25-bp cut on Wednesday and two more such cuts by year end, Cunningham said.

  • Odds of a jumbo rate cut inch up, as inflation reaches lowest level since February 2021

    "Today's figure tilts the scales a touch toward a more aggressive path," says one economist. "If we get another big downside surprise, calls for a 50 basis point cut will only grow louder."

  • The data that has this economist pricing in a 25bps cut

    Bank of America US economist Stephen Juneau joins Morning Brief hosts Seana Smith and Brad Smith to discuss August's retail sales print, which blew past economist expectations, and what it could mean for the Federal Reserve's interest rate moves this Wednesday. Retail sales rose 0.1% above experts' estimates, compared to the expected 0.2% decrease. Juneau tells Yahoo Finance that the increase in consumer spending is "kind of a nonevent," with the economist's expectations for a 25 basis point cut remaining unchanged. "This is part of a normalization process that we're going through. And we've been seeing this for some time now, where you're finally seeing that spending, that consumer basket, really return towards its pre-pandemic basket, where we spend a lot more on services than goods." The latest Bank of America fund managers survey found that 79% of investors are pricing in a soft-landing scenario as the Fed is set to initiate rate cuts. Juneau turns to the labor market for data to support this soft landing optimism: "Certainly we've seen some cooling in job growth, but 115,000 jobs added over the last three months on average is not really typically a worrisome economy." "We still have significant labor demand. We still have significant consumer demand. We're not really seeing investment slow down sharply. So where's that kind of hard landing coming from? We just don't see it kind of in the data right now. We do see some normalization. We see some cooling, but that's a soft landing." This post was written by Naomi Buchanan.

  • Rate-cut fever boosts investor sentiment in September, BofA survey shows

    Global investor sentiment improved in September for the first time since June on optimism over a soft landing and interest rate cuts by the U.S. Federal Reserve, a BofA survey of fund mangers published on Tuesday showed. According to the survey, cash allocations fell to 4.2% with investors also rotating to bond-sensitive assets from cyclicals, driving overweight allocations to utilities to the highest since 2008. BofA said investors in the survey were best described as “nervous bulls".

  • Fed should start off easing cycle with 50bps cut: Claudia Sahm

    Ahead of the interest rate cuts expected out of the Federal Reserve's September policy meeting, New Century Advisors chief economist Claudia Sahm and Deutsche Bank chief US economist Matthew Luzzetti join Morning Brief's Seana Smith and Madison Mills to discuss the cases for a 25 and 50-basis-point cuts further down the line from the Fed. Sahm is also a former Federal Reserve Board economist and the namesake of the Fed's Sahm Rule, a key recession indicator. “It's time to cut,” Sahm tells Yahoo Finance, explaining that inflation data has made “massive [improvements] with the federal funds rate still very elevated… That's your 25 basis points just on the progress with inflation.” “What happened since the July FOMC meeting is we've gotten a lot of disconcerting information about the labor market,” she notes, adding, “You don't even need to go to the ‘we're in a recession is imminent,’ just things have cooled off considerably more and to recalibrate, respond to the data to add another 25 basis points" for a 50 point cut. "They should be cutting rates. They're very clearly going to be doing so, and there is a compelling case to do that by 50 basis points," Luzzetti agrees with Sahm. "I think coming into the blackout period, when we heard from Fed officials, it did not seem like there was consensus around moving by the larger increment." For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Naomi Buchanan