Fed Chairman Powell may face questions about Trump’s proposed policies
Fed Chairman Jerome Powell is likely to face questions from reporters at a press conference at 2:30 p.m. ET on the impact of the tax and spending proposals promised by the incoming Trump administration when it took office in January.
Donald Trump was a frequent critic of the Fed and Powell when he was president. For example, in 2019, he criticized the central bank many times and once Calls it a bigger obstacle to U.S. prosperity than China.
——Scott Schniper
Major stock indexes remain stable after Fed announces expected rate cut
After the Federal Reserve released expectations for a 25 basis point interest rate cut, the three major averages did not change much.
The S&P 500 was last up nearly 0.7% around 2:10 p.m. ET, while the Nasdaq was up 1.4%. The Dow Jones Industrial Average was trading near its flat line, up about 15 points.
— Dara Mercado
Fed cuts rates by a quarter percentage point
Market stance ahead of Fed decision
At around 1:50 p.m. ET, the S&P 500 was up 0.6% and the Nasdaq was up 1.3%. The Dow Jones Industrial Average is hovering near flatline.
The 10-year Treasury yield fell 8 basis points to 4.34%. The 2-year Treasury yield was 4.2%, down 6 basis points.
— Dara Mercado
District Attorney Davidson’s Ragan said the labor market will be a focus of Powell’s speech
James Ragan, director of wealth management research at DA Davidson, said Fed officials’ current view on the labor market could be one of the key takeaways from Powell’s Thursday press conference.
“The biggest thing he can talk about is the job market because we have hurricane-impacted data for October. Obviously it’s a weak number, but I think the market is discounting the impact of the hurricane quite a bit. So I guess Listen to him talk about something beyond those numbers,” Ragan told CNBC.
October non-farm payrolls report shows growth only 12,000 jobs. However, the resolution of the storm and Boeing worker strike may temporarily lower that number, according to the U.S. Bureau of Labor Statistics.
— Jesse Pond
What to expect at the end of the Fed’s November meeting
With the Fed expected to cut interest rates by 25 basis points on Thursday, the market’s main event is likely to be Fed Chairman Jerome Powell’s press conference at 2pm ET.
Traders will be looking for clues from Powell on the future path of interest rate policy. Fed funds futures trading showed a roughly 63% chance the central bank will cut interest rates by another 25 basis points in December, but traders are also weighing the possibility that policymakers may choose to skip that month.
The central bank faces further complications now that Donald Trump won a second term in the White House this week. That’s because the new administration’s plans include tax cuts and tariffs, which could impact the Fed’s efforts to curb inflation.
Click here to read more about the Fed’s November meeting, as reported by CNBC’s Jeff Cox.
— Dara Mercado
How consumer prices today compare with March 2022
The Federal Reserve is widely expected to cut interest rates by 25 basis points on Thursday, taking another step toward easing tightening policy.
To that end, consumer interest rates have changed significantly since the Fed began raising rates in March 2022, while in some corners of the market they have cooled slightly since the central bank first cut rates by half a percentage point in September.
The interest rate on a $30,000 home equity line of credit was 8.7% in the week ended Nov. 1, according to Bankrate. This is down from 9.25% in the week of September 13, but still significantly higher than the 4.27% in March 2022.
As of last week, credit card interest rates were 20.5%, up significantly from 16.34% in March 2022, according to Bankrate.
The 30-year fixed mortgage rate was 7.09% for the week ended November 1, up significantly from 4.29% in March 2022.
This is because mortgage rates follow loosely this 10-Year Treasury Bond Yieldwhich has increased recently. In fact, the benchmark yield in the week of November 1 was 4.363%, significantly higher than the 3.649% in mid-September.
— Darla Mercado, Nick Wells
Markets believe the Fed is more likely to skip a rate cut in December
Traders went into Thursday’s Federal Reserve meeting convinced that a rate cut was coming but increasingly uncertain about what would happen in December.
The federal funds futures market shows a 100% chance that policymakers will loosen policy, with only a slim chance of a September rate cut of 0.5 percentage points. The market’s implied probability of a quarter-percentage point move is about 99%, according to the agency. CME Group’s Fed Watch Tracker for the 30-Day Fed Funds Futures Contract.
The likelihood of a pause is rising in December, sitting at 32.6% as of noon Thursday, up about 8 percentage points from a week ago. CME indicators show that if the Fed does not skip December, there is about a 68% chance of this happening in January.
— Jeff Cox
