The tea leaves seem to say that President Donald Trump is leaning toward appointing Kevin Warsh to head the Federal Reserve when Janet Yellen’s term as chair of the U.S. central bank expires in February 2018. Trump has met with Warsh to discuss the position of chair of the Fed, the White House confirmed this week. Yellen, meanwhile, told reporters that she had not met with Trump since early in 2017.
Slightly lower than expected inflation reported this morning hasn’t (so far) dented expectations for December 13 Fed interest rate increase
For August the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation measure, showed an increase in core inflation of just 0.1%. Economists had projected an increase of 0.2% for the month. Year over year the core PCE Index is up 1.3%, well short of the Fed’s target inflation rate of 2%.
Today Gary Cohn, currently chief economic advisor to President Trump and formerly chief operating officer at Goldman Sachs, told a White House press briefing what the “typical” family of four making $100,000 a year could expect under the President’s tax cut. Try a tax cut of $1,000.
The Treasury market has been taking a beating recently with traders and investors increasingly pricing in a December interest rate increase from the Federal Reserve. So today’s flat performance for the 10-year Treasury is actually a relief, especially considering that the Treasury sold $28 billion in 7-year notes today.
President Donald Trump has proposed cutting the top line corporate tax rate to 20%. What stocks might get a boost from any anticipation of that proposal becoming law?
U.S. oil producers have hedged more of their oil production in the last two weeks than in the last four to five months. In August a sample of 43 large and small U.S. producers had hedged just 23% of 2018 production. But now with West Texas Intermediate back above $52 a barrel, producers have rushed to finish hedging 2017 production, and the bulk of their 2018 production, and started to establish hedges for 2019.
The odds of a December 13 interest rate increase, according to prices in the Fed Funds Futures market, have climbed to 81.4% today, September 27. That’s up from 72.5% odds on September 25 and from 37.8% odds back on August 25.
Will OPEC really keep pumping less oil than it could in an effort to clear the global surplus in crude and to support prices above $50 a barrel and maybe push oil back to $60 a barrel? The annual confab of oil traders this week in Singapore is likely to tell.