Aurelia Butler

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The Fed cut interest rates by a half a percentage point last month and investors see another smaller move in November as the labour market is cooling and inflation pressures continue to ease.”While I believe the focus should remain on continuing to bring inflation to 2%, I support shifting attention to the maximum-employment side of the FOMC’s dual mandate as well,” Kugler said, referring to the U.S. rate-setting Federal Open Market Committee, of which she is a member.She argued that the labour market was already starting show signs of cooling and the Fed was keen to avoid sharper weakness.”We don’t want a drastic slowdown in the labour market,” Kugler told a European Central Bank conference. “We don’t want the labour market to weaken so much that it’s going to cause undue pain, when at the same time we have been seeing a serious reduction in terms of inflation and inflation is moving back to target.”But Kugler also noted that last week’s job report, which showed a bigger than expected jump in job creation and a fall in the unemployment rate was a welcome development, since it showed resilience in the labour market. She also argued that the Fed will not base its decisions on a single indicator and would instead look at trends, which are clearly showing that cooling has started to take hold in the labour market. “The labour market remains resilient, but I support a balanced approach to the FOMC’s dual mandate so we can continue making progress on inflation while avoiding an undesirable slowdown in employment growth and economic expansion.”A stronger U.S. economy allowed the FOMC to be “patient about the timing” in reducing its policy rate and focus on bringing inflation down, Kugler said. “If progress on inflation continues as I expect, I will support additional cuts in the federal funds rate to move toward a more neutral policy stance over time,” Kugler said. Kugler said she is closely monitoring the economic effects of Hurricane Helene and geopolitical events in the Middle East.”If downside risks to employment escalate, it may be appropriate to move policy more quickly to a neutral stance,” Kugler said.”Alternatively, if incoming data do not provide confidence that inflation is moving sustainably toward 2%, it may be appropriate to slow normalization in the policy rate.” More

“The lower unemployment that we saw in Friday’s jobs report is very welcome,” Kugler told a European Central Bank Conference. “We don’t want a drastic slowdown in the labor market.”Kugler said there were several metrics suggesting that the labor market was cooling back to its pre-pandemic levels but the Fed does not want it to cool so much that it causes “undue” pain. More

1. Futures mutedUS stock futures hovered around the flatline on Tuesday, with investors reassessing the outlook for Federal Reserve interest-rate easing ahead of upcoming inflation data and corporate earnings.By 04:03 ET (08:03 GMT), the Dow futures contract and S&P 500 futures were mostly unchanged, while Nasdaq 100 futures had added 13 points or 0.1%.The main averages on Wall Street fell in the prior session as some traders backed away from bets that the Fed could lower borrowing costs at its next meeting in November following last week’s blockbuster September jobs report.Instead of a second-straight 50-basis point reduction, markets are now anticipating the central bank will roll out a more traditional quarter-point drawdown, the CME Group’s (NASDAQ:CME) FedWatch Tool showed. The chances of the Fed leaving rates unchanged at their current range of 4.75% to 5.00% also increased.US Treasury yields, which typically move inversely to prices, rose. The benchmark 10-year year note even climbed above 4% for the first time in two months.2. Fed’s Williams says US economy “well positioned” for soft landing – FTThe Fed’s currently policy stance is now “really well positioned” to achieve a soft landing for the US economy, New York Fed President John Williams has said.In an interview with the Financial Times on Tuesday, Williams said the robust jobs report showed that rates are at level that “hopefully” supports ongoing strength in the world’s largest economy and its domestic labor market, while also bringing once-elevated inflation back down to the central bank’s 2% target.He defended the Fed’s super-sized rate cut last month, saying it allows borrowing costs to stay at restrictive levels but still remove “significant” pressure off the economy, the FT reported.Williams added that the latest “dot plot” of officials’ projections, which indicated two quarter-point reductions at the Fed’s two final gatherings of 2024, remains a “very good base case.” However, he stressed the central bank is on no “preset course,” mirroring comments from Fed Chair Jerome Powell.3. Google required to open Android to rival app storesAlphabet’s (NASDAQ:GOOGL) Google has been ordered by a US judge to reconfigure its Android operating system to allow rivals to make their own app marketplaces and payment options, marking a setback for the tech giant’s defense against antitrust claims.The order from US District Judge James Donato in San Francisco blocks Google from prohibiting the use of in-app payment methods for three years, and forces the search engine titan to let users download competing third-party Android app platforms.Google is also restricted from making payments to device makers to preinstall its app store.The ruling came after “Fortnite” maker Epic Games prevailed in a high-profile antitrust case against Google. Epic had accused Google of stifling competition through its app store and payments system.Google has vowed to launch an appeal, arguing that, while the changes will satisfy Epic, they will cause “unintended consequences” that will harm American consumers, developers and device makers. Shares in Alphabet dropped by 2.5% on Monday following the announcement.4. Chinese markets pare back gainsChinese markets rose sharply on Tuesday as trade resumed after the Golden Week holiday, although analysts flagged disappointment that Beijing stopped short of introducing new fiscal stimulus measures, capping gains.China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose between 4% and 6% after opening up as high as 13%.Sentiment was initially boosted by a slew of major stimulus measures announced by Chinese officials prior to the holiday period, including interest rate cuts and looser property market rules. The moves were perceived as a push by Beijing to bolster the country’s ailing economy in time to hit an annual 5% growth target.On Tuesday, China’s state economic planner said it continued to have “full confidence” the economy would achieve that goal, but investors were underwhelmed by a lack of details around an anticipated fiscal stimulus program.5. Oil slumpsOil prices fell Tuesday as traders banked some profits following a strong rally on the back of concerns that an all-out war in the Middle East will hit supplies from the oil-rich region.Muted reactions to the comments from the state economic planner in China — the world’s biggest oil importer — also weighed on crude.By 04:04 ET, the Brent contract slipped 1.4% to $79.80 per barrel, while U.S. crude futures (WTI) traded 1.5% lower at $76.00 per barrel.Both contracts rose over 3% on Monday to their highest levels since late August, adding to last week’s rally of 8%, the biggest weekly gain in over a year.Elsewhere, the latest U.S. crude oil inventory data, from the American Petroleum Institute, is due later in the session, with analysts expecting stocks to rise by 1.9 million barrels. More

Save over 65%$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More

Save over 65%$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More