Fed Chair Jay Powell Sends a Bold Message to Trump and Tanks the Dow by 1123 Points

By Pam Martens and Russ Martens: December 19, 2024 ~ If President-elect Donald Trump thought Fed Chair Jay Powell was going to be taking a loyalty oath to him, Trump got a rude awakening yesterday. The Fed cut interest rates by a quarter point yesterday but issued a statement suggesting that rate-cutting would be far more subdued next year than the market had expected. In response, the Dow Jones Industrial Average fell 1123 points, closing near its lows of the day and marking its 10th consecutive day of losses. The Dow gave up 2.58 percent of its value while the tech-heavy Nasdaq lost 3.56 percent. The megabanks on Wall Street were among the big losers of the day. Morgan Stanley dropped 5.25 percent; Goldman Sachs was down by 4.25 percent; Citigroup gave up 4.22 percent; Bank of America lost 3.44 percent while JPMorgan Chase shed 3.35 percent by the closing bell. These … Continue reading →

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The Head of Fixed Income at T. Rowe Price Makes the Scary Case for the 10-Year Treasury to Spike to 6 Percent

By Pam Martens and Russ Martens: December 17, 2024 ~ Arif Husain is the head of Global Fixed Income and Chief Investment Officer (CIO) of the Fixed Income Division of T. Rowe Price. He is also a member of the firm’s Management Committee. Husain holds a B.Sc. (honors) in banking and international finance from the City University London, Cass Business School. When Husain speaks, Wall Street listens. What Husain has been saying since October is that the U.S. is on a collision course with higher interest rates. In October, Husain released his interest rate outlook for the next six months, writing the following about the benchmark 10-year U.S. Treasury note, whose yield impacts mortgage rates and a wide swath of debt instruments: “I think that the 10-year Treasury yield will test the 5.0% threshold in the next six months, steepening the yield curve. There are three dynamics at play: 1. Fed rate … Continue reading →

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