Bonds rally after Fed chair Powell calls tariff-induced inflation 'transitory'
U.S. Treasury Yields Reaction: U.S. Treasury yields fell after Federal Reserve Chair Jerome Powell indicated that inflation from tariffs would be "transitory," leading to increased bond purchases despite earlier yield increases before the Fed's decision.
Fed's Monetary Policy Update: The Federal Reserve maintained steady interest rates while projecting lower GDP growth and higher core PCE inflation expectations, with Powell emphasizing that long-term inflation expectations remain stable despite short-term tariff impacts.
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CPI Report: January's Annual Inflation Rate Hits 2.4%, Falling Short of Wall Street Projections
Core CPI Increase: The Core Consumer Price Index (CPI), excluding food and energy, rose by 0.3% in January, up from a 0.2% increase in December, with an annual rate of 2.5%, aligning with expectations.
Food and Energy Costs: Food costs increased by 0.2% in January, while energy costs decreased by 1.5%, indicating mixed trends in consumer prices.
Market Reactions: Following the CPI report, the 10-year Treasury yield fell to 4.062%, while the 30-year yield declined to 4.699%, reflecting market adjustments to inflation data.
Retail Sentiment: Retail sentiment around the S&P 500 ETF was described as "bearish," with mixed performance observed in U.S. equities during the trading session.
Bessent Claims Trump Administration Aims to Mitigate Risks Rather Than Sever Ties with China: Report
Treasury Secretary's Statement: Treasury Secretary Scott Bessenet stated that the Trump administration prefers to de-risk rather than decouple from China, emphasizing a dual strategy of engagement and fair trade.
Concerns Over Free Trade: Bessenet highlighted that free trade with China has been unfair, resulting in American workers being adversely affected in the process.
Experts Caution That CPI May Exceed Expectations: 'The Details Will Be Crucial'
January Inflation Trends: January inflation has historically been higher, with the Boston Fed noting that seasonal factors and frequent price resets can distort inflation data, potentially leading to elevated readings.
Market Expectations: Analysts anticipate that the Consumer Price Index (CPI) for January may exceed expectations, with predictions of a 0.3% increase, while annual growth rates are forecasted at 2.5%.
Investor Caution: Market experts warn investors to be aware of the potential for unexpectedly high inflation, emphasizing the importance of understanding underlying inflation trends as the CPI report approaches.
Broader Market Impact: The CPI report comes amid a broader market sell-off, with major indices like the Dow Jones and S&P 500 experiencing declines, reflecting investor sentiment and concerns over inflation.
Could a Partial Government Shutdown Occur This Weekend?
Senate Vote Outcome: The U.S. Senate failed to advance a funding bill for the Department of Homeland Security, with a vote of 52 to 47, falling short of the 60 votes needed for passage.
Impact of Funding Delay: The lack of funding is expected to lead to a partial shutdown of the DHS, affecting essential workers, particularly those in the Transportation Security Administration at airports.
Democratic Opposition: Democrats blocked the bill due to disagreements over immigration enforcement measures, insisting on significant changes before agreeing to any funding.
Market Reactions: Following the vote, U.S. equities declined, with various ETFs tracking major indices showing losses, indicating a bearish sentiment in the market.
Americans Suffer the Most from Trump's Tariffs, According to NY Fed Report
Tariff Increase: The average tariff rate on U.S. imports rose significantly from 2.6% to 13% in 2025, primarily due to tariffs imposed during Trump's first term, which were not offset by price cuts from foreign exporters.
Economic Burden: U.S. businesses and consumers bore the majority of the economic burden from these tariffs, with nearly 90% of the tariff costs being shouldered by Americans, leading to increased import prices.
Impact on Supply Chains: The higher costs prompted companies to adjust and reorganize their supply chains, as they faced rising expenses due to the tariffs.
Market Status: Concurrently, U.S. equities experienced declines, with major ETFs tracking the S&P 500 and other indices showing significant drops, indicating a bearish sentiment in the market.
Peter Schiff Disagrees with Trump's Claim That Tariffs Fueled US Wealth in the 1880s and 1890s – Offers Advice on Achieving Wealth Again
Economic Strategy Proposal: The Economist outlines a roadmap to restore U.S. wealth akin to the 1880s by proposing the elimination of 90% of federal government agencies, except for essential programs like Social Security and Medicare.
Critique of Government Spending: Peter Schiff argues that the U.S. was wealthier in the late 19th century due to minimal government spending, which was only about 2% of GDP, compared to over 23% today.
Call for Federal Law Repeal: Schiff advocates for the repeal of nearly all federal laws enacted since 1900 to facilitate a return to a tariff-based economy, similar to the prosperous era of the 1880s and 1890s.
Concerns Over Global Economic Impact: Schiff highlights President Trump's comments on other countries benefiting at the expense of the U.S. economy, suggesting that if these practices continue, it could lead to increased prices and interest rates for American consumers.
CPI Report: January's Annual Inflation Rate Hits 2.4%, Falling Short of Wall Street Projections
Core CPI Increase: The Core Consumer Price Index (CPI), excluding food and energy, rose by 0.3% in January, up from a 0.2% increase in December, with an annual rate of 2.5%, aligning with expectations.
Food and Energy Costs: Food costs increased by 0.2% in January, while energy costs decreased by 1.5%, indicating mixed trends in consumer prices.
Market Reactions: Following the CPI report, the 10-year Treasury yield fell to 4.062%, while the 30-year yield declined to 4.699%, reflecting market adjustments to inflation data.
Retail Sentiment: Retail sentiment around the S&P 500 ETF was described as "bearish," with mixed performance observed in U.S. equities during the trading session.
Bessent Claims Trump Administration Aims to Mitigate Risks Rather Than Sever Ties with China: Report
Treasury Secretary's Statement: Treasury Secretary Scott Bessenet stated that the Trump administration prefers to de-risk rather than decouple from China, emphasizing a dual strategy of engagement and fair trade.
Concerns Over Free Trade: Bessenet highlighted that free trade with China has been unfair, resulting in American workers being adversely affected in the process.
Experts Caution That CPI May Exceed Expectations: 'The Details Will Be Crucial'
January Inflation Trends: January inflation has historically been higher, with the Boston Fed noting that seasonal factors and frequent price resets can distort inflation data, potentially leading to elevated readings.
Market Expectations: Analysts anticipate that the Consumer Price Index (CPI) for January may exceed expectations, with predictions of a 0.3% increase, while annual growth rates are forecasted at 2.5%.
Investor Caution: Market experts warn investors to be aware of the potential for unexpectedly high inflation, emphasizing the importance of understanding underlying inflation trends as the CPI report approaches.
Broader Market Impact: The CPI report comes amid a broader market sell-off, with major indices like the Dow Jones and S&P 500 experiencing declines, reflecting investor sentiment and concerns over inflation.
Could a Partial Government Shutdown Occur This Weekend?
Senate Vote Outcome: The U.S. Senate failed to advance a funding bill for the Department of Homeland Security, with a vote of 52 to 47, falling short of the 60 votes needed for passage.
Impact of Funding Delay: The lack of funding is expected to lead to a partial shutdown of the DHS, affecting essential workers, particularly those in the Transportation Security Administration at airports.
Democratic Opposition: Democrats blocked the bill due to disagreements over immigration enforcement measures, insisting on significant changes before agreeing to any funding.
Market Reactions: Following the vote, U.S. equities declined, with various ETFs tracking major indices showing losses, indicating a bearish sentiment in the market.
Americans Suffer the Most from Trump's Tariffs, According to NY Fed Report
Tariff Increase: The average tariff rate on U.S. imports rose significantly from 2.6% to 13% in 2025, primarily due to tariffs imposed during Trump's first term, which were not offset by price cuts from foreign exporters.
Economic Burden: U.S. businesses and consumers bore the majority of the economic burden from these tariffs, with nearly 90% of the tariff costs being shouldered by Americans, leading to increased import prices.
Impact on Supply Chains: The higher costs prompted companies to adjust and reorganize their supply chains, as they faced rising expenses due to the tariffs.
Market Status: Concurrently, U.S. equities experienced declines, with major ETFs tracking the S&P 500 and other indices showing significant drops, indicating a bearish sentiment in the market.
Peter Schiff Disagrees with Trump's Claim That Tariffs Fueled US Wealth in the 1880s and 1890s – Offers Advice on Achieving Wealth Again
Economic Strategy Proposal: The Economist outlines a roadmap to restore U.S. wealth akin to the 1880s by proposing the elimination of 90% of federal government agencies, except for essential programs like Social Security and Medicare.
Critique of Government Spending: Peter Schiff argues that the U.S. was wealthier in the late 19th century due to minimal government spending, which was only about 2% of GDP, compared to over 23% today.
Call for Federal Law Repeal: Schiff advocates for the repeal of nearly all federal laws enacted since 1900 to facilitate a return to a tariff-based economy, similar to the prosperous era of the 1880s and 1890s.
Concerns Over Global Economic Impact: Schiff highlights President Trump's comments on other countries benefiting at the expense of the U.S. economy, suggesting that if these practices continue, it could lead to increased prices and interest rates for American consumers.
