Citi Reports Fed Nominee Warsh May Encounter Difficulties in Reducing Fed's Portfolio
Federal Reserve's Balance Sheet Management: The Federal Reserve is considering restarting its balance sheet unwinding, which could increase pressures in the $12.6 trillion repurchase market, as reported by Citi.
Quantitative Tightening Announcement: The Federal Open Market Committee (FOMC) announced in October that it is concluding its quantitative tightening, marking an end to significant central bank intervention that began during the COVID-19 pandemic.
Potential Strategies for the Fed: Kevin Warsh, the nominee for Federal Reserve Chair, may adopt a gradual approach to shrinking the central bank's $6.6 trillion portfolio to avoid rekindling tensions in the money markets.
Market Reactions: U.S. equities showed slight gains, with the SPDR S&P 500 ETF and other funds experiencing minor increases, while retail sentiment around trading remained cautious amid high volatility.
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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.
Jobless Claims Exceed Expectations Slightly, Continuing Claims Increase
Jobless Claims Increase: The four-week moving average for jobless claims rose by 7,000 to 219,500, with continuing claims increasing by 21,000 to 1.86 million for the week ending January 31.
State Variations: The largest increase in claims came from Pennsylvania at 5,268, while Nebraska and Virginia saw the largest decreases in claims.
Job Gains Exceed Expectations: Nonfarm payrolls increased by 130,000 in January, surpassing Wall Street estimates, with the unemployment rate coming in lower than expected at 4.3%.
Market Reactions: Following the jobs report, traders adjusted their expectations for a Federal Reserve rate cut, reducing the probability from roughly 70% to just under 50%.
Bessent Supports Potential Senate Investigation of Powell Over DOJ as Republicans Aim to Overcome Senator Tillis' Resistance: Report
GOP Lawmakers' Compromise: GOP lawmakers view a proposal to investigate Federal Reserve Chair Jerome Powell as a compromise and an attempt to placate Senator Thom Tillis, who has expressed opposition to President Trump's nominee for the position.
Tillis' Stance on Investigation: Senator Tillis has stated he will oppose any Federal Reserve nominee until the Department of Justice's inquiry into Powell is resolved, emphasizing the importance of protecting the Fed's independence from political interference.
Federal Reserve Renovation Probe: The investigation into Powell is centered around a $2.5 billion renovation project for the Federal Reserve's Eccles Building, which has raised concerns about potential misconduct.
Market Reactions: In the context of the ongoing investigation, U.S. equities showed gains, with various ETFs tracking the S&P 500 and Treasury bonds experiencing slight increases, indicating a mixed sentiment in the market.
Could the US Government Close on Valentine's Day? Insights from Prediction Markets
Democrats' Stance on ICE Reform: Senate Democrats, led by Chuck Schumer and Hakeem Jeffries, refuse to support another stopgap funding measure for the Department of Homeland Security without an agreement on ICE reforms, citing the agency's negative impact on communities.
Recent Violence Linked to ICE: The letter from Schumer and Jeffries highlights the tragic deaths of two U.S. citizens in Minneapolis due to actions by federal immigration agents, emphasizing the need for reform to prevent further chaos in communities.
Potential Government Shutdown: The U.S. government is facing a potential partial shutdown, coinciding with Valentine's Day, as negotiations over funding and immigration reform remain unresolved.
Call for Bipartisan Agreement: Schumer expresses optimism about reaching a bipartisan agreement on ICE reforms before the deadline, urging Republican leaders to collaborate on legislative solutions.
CITI PREDICTS FIRST RATE CUT OF THE YEAR IN MAY INSTEAD OF MARCH DUE TO JOBS DATA
Economic Forecast: CITI expects to deliver the first rate cut of the year in May, indicating a shift in monetary policy.
Job Market Insights: This forecast follows recent jobs data, suggesting changes in employment trends that may influence economic decisions.
US Payrolls Increased by 130,000 in January, Surpassing Wall Street Predictions; Unemployment Rate Stands at 4.3%
Job Additions and Unemployment Rate: Analysts expected an addition of 55,000 payrolls in January, with nonfarm payrolls rising higher than anticipated by 130,000, while the unemployment rate fell to 4.3%, below the expected 4.4%.
Federal Employment Decline: Federal government jobs declined by 34,000, contrasting with growth in health care, social assistance, and construction sectors, which added 82,000, 42,000, and 33,000 jobs respectively.
Interest Rate Commentary: President Donald Trump stated that the U.S. should be paying the lowest interest rates on its borrowings, emphasizing the country's strong economic position and potential savings of at least one trillion dollars per year.
Revisions in Job Reports: The Bureau of Labor Statistics released final benchmark revisions showing a downward adjustment of 898,000 in total jobs, with significant downward revisions in average monthly payroll additions for 2025 compared to previous reports.
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.
Jobless Claims Exceed Expectations Slightly, Continuing Claims Increase
Jobless Claims Increase: The four-week moving average for jobless claims rose by 7,000 to 219,500, with continuing claims increasing by 21,000 to 1.86 million for the week ending January 31.
State Variations: The largest increase in claims came from Pennsylvania at 5,268, while Nebraska and Virginia saw the largest decreases in claims.
Job Gains Exceed Expectations: Nonfarm payrolls increased by 130,000 in January, surpassing Wall Street estimates, with the unemployment rate coming in lower than expected at 4.3%.
Market Reactions: Following the jobs report, traders adjusted their expectations for a Federal Reserve rate cut, reducing the probability from roughly 70% to just under 50%.
Bessent Supports Potential Senate Investigation of Powell Over DOJ as Republicans Aim to Overcome Senator Tillis' Resistance: Report
GOP Lawmakers' Compromise: GOP lawmakers view a proposal to investigate Federal Reserve Chair Jerome Powell as a compromise and an attempt to placate Senator Thom Tillis, who has expressed opposition to President Trump's nominee for the position.
Tillis' Stance on Investigation: Senator Tillis has stated he will oppose any Federal Reserve nominee until the Department of Justice's inquiry into Powell is resolved, emphasizing the importance of protecting the Fed's independence from political interference.
Federal Reserve Renovation Probe: The investigation into Powell is centered around a $2.5 billion renovation project for the Federal Reserve's Eccles Building, which has raised concerns about potential misconduct.
Market Reactions: In the context of the ongoing investigation, U.S. equities showed gains, with various ETFs tracking the S&P 500 and Treasury bonds experiencing slight increases, indicating a mixed sentiment in the market.
Could the US Government Close on Valentine's Day? Insights from Prediction Markets
Democrats' Stance on ICE Reform: Senate Democrats, led by Chuck Schumer and Hakeem Jeffries, refuse to support another stopgap funding measure for the Department of Homeland Security without an agreement on ICE reforms, citing the agency's negative impact on communities.
Recent Violence Linked to ICE: The letter from Schumer and Jeffries highlights the tragic deaths of two U.S. citizens in Minneapolis due to actions by federal immigration agents, emphasizing the need for reform to prevent further chaos in communities.
Potential Government Shutdown: The U.S. government is facing a potential partial shutdown, coinciding with Valentine's Day, as negotiations over funding and immigration reform remain unresolved.
Call for Bipartisan Agreement: Schumer expresses optimism about reaching a bipartisan agreement on ICE reforms before the deadline, urging Republican leaders to collaborate on legislative solutions.
CITI PREDICTS FIRST RATE CUT OF THE YEAR IN MAY INSTEAD OF MARCH DUE TO JOBS DATA
Economic Forecast: CITI expects to deliver the first rate cut of the year in May, indicating a shift in monetary policy.
Job Market Insights: This forecast follows recent jobs data, suggesting changes in employment trends that may influence economic decisions.
US Payrolls Increased by 130,000 in January, Surpassing Wall Street Predictions; Unemployment Rate Stands at 4.3%
Job Additions and Unemployment Rate: Analysts expected an addition of 55,000 payrolls in January, with nonfarm payrolls rising higher than anticipated by 130,000, while the unemployment rate fell to 4.3%, below the expected 4.4%.
Federal Employment Decline: Federal government jobs declined by 34,000, contrasting with growth in health care, social assistance, and construction sectors, which added 82,000, 42,000, and 33,000 jobs respectively.
Interest Rate Commentary: President Donald Trump stated that the U.S. should be paying the lowest interest rates on its borrowings, emphasizing the country's strong economic position and potential savings of at least one trillion dollars per year.
Revisions in Job Reports: The Bureau of Labor Statistics released final benchmark revisions showing a downward adjustment of 898,000 in total jobs, with significant downward revisions in average monthly payroll additions for 2025 compared to previous reports.
