Evelyn Reynolds

Paul Atkins, founder and chief executive officer of Patomak Global Partners LLC, speaks during a Bloomberg Television interview at the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, May 1, 2017. 
David Paul Morris | Bloomberg | Getty Images

President-elect Donald Trump, keeping with his promise for a crypto-friendly administration, plans to nominate former SEC Commissioner Paul Atkins to head the agency, according to a Truth Social post.
Currently the CEO at Patomak Global Partners, Atkins is a well-known veteran of the financial world and Republican political circles specifically. He had been widely expected to get the position as the nation’s top financial market regulator.

If confirmed, Atkins would succeed Gary Gensler, a widely reviled figure in the digital currency community for his many efforts to clamp down on the $3.5 trillion crypto market. Trump has promised a easier path for bitcoin and its myriad peers, and the market has soared since his election victory on Nov. 5.
“Paul is a proven leader for common sense regulations. He believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors, & that provide capital to make our Economy the best in the World,” Trump said in a statement. “He also recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”
Trump’s position on crypto mirrors his larger pro-deregulation stance prevalent during his first time in office.
Atkins served as SEC commissioner from 2002-08, under then-President George W. Bush. Before that, he also had served in other roles at the regulatory body in the division of corporate finance.
Along with adopting a pro-crypto stance, the prospective nominee was critical of some of the reforms that emerged from the global financial crisis in 2008. Specifically, he criticized the Dodd-Frank legislation as too burdensome on the banking industry.

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An attendee holds pamphlets at the Albany Job Fair in Latham, New York, US, on Wednesday, Oct. 2, 2024. 
Angus Mordant | Bloomberg | Getty Images

Private payrolls growth was less than expected in November, reflecting a slowing labor market, according to a report Wednesday from ADP.
Companies added 146,000 on the month, below the downwardly revised 184,000 in October and less than the Dow Jones estimate for 163,000.

Education and health services led job creation, adding 50,000 positions on the month. That was followed by construction with 30,000 new jobs, trade, transportation and utilities with 28,000 additions, and the other services category, which contributed 20,000 jobs.
Manufacturing lost 26,000 positions on the month. Businesses with fewer than 50 employees also reported a drop of 17,000.
Wage growth accelerated, by 4.8%, a faster gain since October, the first time that has happened in 27 months.
“While overall growth for the month was healthy, industry performance was mixed,” ADP chief economist Nela Richardson said. “Manufacturing was the weakest we’ve seen since spring. Financial services and leisure and hospitality were also soft.”
Even with the lower than expected total and downward October revision, ADP’s count was still well ahead of the Bureau of Labor Services’ more closely watched nonfarm payrolls count, which showed an increase of just 12,000 jobs in October. The BLS report will be released Friday and is expected to show growth of 214,000, according to Dow Jones, after the Boeing strike and storms in the Southeast lowered the October totals. More

Bank of England Governor Andrew Bailey hinted that four interest rate cuts could be in the pipeline over the coming year.
Bailey told the Financial Times that inflation had come down faster than the central bank had been anticipating.
Markets are currently pricing in three rate cuts from the Bank of England over the next year, with investors expecting the institution to hold rates steady at its December meeting.

Andrew Bailey, governor of the Bank of England, at the central bank’s headquarters in the City of London, U.K., on Nov. 29, 2024. 
Hollie Adams | Bloomberg | Getty Images

Bank of England Governor Andrew Bailey on Wednesday signaled that the U.K. could be on track for four interest rate cuts over the next year, if inflation continues on a downward path.
Asked during a Financial Times video interview whether the central bank would be poised to carry out four quarter-point cuts over the coming year, if its projections of “a little bit of [inflation] persistence” come to fruition, Bailey responded, “Exactly.”

Markets are currently pricing in a hold on interest rates at the Bank of England’s December meeting, according to LSEG data, followed by three 25-basis-point rate cuts. If all four trims materialize, they would bring down the bank’s key interest to around 3.75%, adding to the two BoE reductions this year to date. The institution began cuts over the summer, with Bailey telling reporters in November that the bank would need to take a “gradual” approach to lowering rates.
“Monetary policy will need to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target over the medium term have dissipated further,” he said at the time.
Surveying the inflation picture on Wednesday, the BoE governor added that consumer prices had come down faster than the central bank had anticipated.
“A year ago, we were saying that inflation today would be around 1% higher than it actually is,” he said during the interview. “And that, I think, is a good test of the [central banking] regime.”
U.K. inflation surprised markets with a rise to a sharply higher-than-expected 2.3% in October, up from the 1.7% of September.

Sterling was trading flat on Wednesday morning, reaching $1.2671 by 11:52 a.m., erasing some of its earlier losses.
Meanwhile, the yield on the U.K.’s 10-year gilts was flat at around 4.273%. More

French lawmakers will hold a vote of no-confidence in the fragile minority government of Prime Minister Michel Barnier on Wednesday which is expected to pass.
Economists warned that the lack of a fresh 2025 budget would set the country’s deficit higher, spur higher bond yields and deter international investors.
The political turbulence comes as Germany heads for its own no-confidence vote, adding to headwinds for the euro.

A pedestrian crosses a flooded street following heavy rainfall in Paris on October 17, 2024.
Joel Saget | Afp | Getty Images

French lawmakers will hold a no-confidence vote in the fragile minority government of Prime Minister Michel Barnier on Wednesday, as economists warn the political stalemate likely to ensue will come at a high economic cost.
Two so-called “motions of censure” filed by both the left-wing and far-right opposition parties will be debated and voted on from 4 p.m. local time. The administration is widely seen as likely to be ousted, just three months after it was formed. If the government collapses, Barnier — who failed to find compromise within the heavily-divided National Assembly to pass a 2025 budget bill aimed at reducing the hefty French deficit — will then be forced to tender his resignation to President Emmanuel Macron.

From there, uncertainty reigns. Macron will eventually need to name a new prime minister, after already struggling to make such an appointment in the wake of the snap summer election which delivered the most votes to the left-wing coalition, but did not give any party a majority. Long-time minister Barnier had been seen as a technocratic compromise.
“Once Barnier resigns, Macron will likely ask him to continue as a caretaker. The alternative option of formally renominating Barnier looks unlikely given the manifest lack of a majority,” Carsten Nickel, deputy director of research at Teneo, said in a Tuesday note.
This caretaker status could drag on for months, since fresh elections cannot be held until next year, while another possibility is Macron’s resignation triggering presidential elections within 35 days, Nickel said.

French budget surprises with focus on tax hikes as analysts warn of ratings downgrades

He added that such a series of events would leave the budget bill unpassed, with a last-minute deal appearing improbable.
The caretaker government is therefore likely to present a special constitutional law which would “effectively roll over the 2024 accounts without any of the previously envisaged spending cuts or tax hikes, while empowering the government to keep collecting taxes,” he said.

Amid the turmoil, French borrowing costs are climbing while the euro has been caught up in negative sentiment — exacerbated by bleak manufacturing data from the euro area and concurrent political volatility in Germany.
“France is facing a prospect of a growing fiscal deficit that will become more expensive to finance as their [government bond] yields rise amid this uncertainty,” analysts at Maybank said in a note Wednesday.

Deficit challenge

To international investors, the situation in France looks “very bad,” Javier Díaz-Giménez, professor of Economics at Spain’s IESE Business School, told CNBC by phone.
“Without a budget, they really would default, not because they can’t pay interest on their debt, but because they won’t without a budget. Ratings agencies are already putting in warnings, 10-year French bonds have a higher premium than Greece’s, which is crazy in terms of fundamentals,” he said. Greece had briefly lost its investment grade credit rating status amid the euro area debt crisis, which led to the nation’s sovereign default.
“But that’s because pension funds don’t care, they just want an assured steam of revenue with no concerns about legal shenanigans. So they will dump [French bonds] and go elsewhere,” Díaz-Giménez said.

“Beyond economic growth and stability, this will send debt in a non-sustainable direction in France.”
Economists had already trimmed their growth forecasts for France following the publication of the budget proposal in October, given its sweeping tax hikes and public spending cuts.
Analysts at Dutch bank ING, who previously forecast French growth slowing from 1.1% in 2024 to 0.6% in 2025, said Tuesday that the fall of Barnier’s government “would be bad news for the French economy.”
They also predicted the passing of a provisional budget mirroring the 2024 framework.
“Such a budget will not rectify the trajectory of public spending,” they said, throwing out Barnier’s target of reducing the public deficit from 6% of GDP to 5% in 2025 — which would mean France would not move toward meeting the European Union’s new fiscal rules.

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“At a time when economic growth in France is slowing markedly, this is bad news. The public deficit will remain high, debt will continue to grow and the next government – whenever that may be – will have an even tougher task to put public finances right,” the ING analysts said.
Gilles Moëc, group chief economist at AXA, observed in a note Monday that “France can count on large reserves of domestic savings to replace international investors, and the euro area dataflow helps to decouple European from US yields, but in the medium run, directing too much of domestic savings to funding the government can become costly in terms of growth dynamics.”

Here’s how investors are trading France’s political chaos

“Consumer confidence has already declined, and the savings rate could rise further, thwarting the rebound in consumption on which the government is counting to support tax receipts in 2025,” Moëc said.

German comparison

While both countries are mired in their political turbulence, the spread between France’s borrowing costs over those of Germany stretched to a fresh 12-year high this month.
However, Díaz-Giménez of IESE Business School said that in some ways, the French outlook was more positive than that of the euro area’s largest economy.
“In France, economic prospects are pretty bleak, but it’s not going to be a disaster if ancillary risks can be avoided. The high fiscal deficit is hard to fix and requires political harmony but they could still find a way through, it just puts pressure on politicians to do their jobs and solve the real problems, in this case fiscal sustainability,” he told CNBC.
“But in Germany the problem is growth. The German economy needs major adaptation to a new environment without Russian gas and in which making cars in Europe looks like a really bad business plan. From an economic point of view, that is harder to solve than the French problem.”

Barclays prefers Germany over France as it sends ‘bond vigilante’ warning More

Job openings totaled 7.74 million on the month, up 372,000 from September.
Hiring tailed off at a time when the labor market was disrupted by violent storms in the Southeast as well as two major labor strikes involving dockworkers and Boeing.

Available jobs rose in October while hiring fell during a month in which payrolls growth hit its lowest level in nearly four years, the Bureau of Labor Statistics reported Tuesday.
Job openings totaled 7.74 million on the month, up 372,000 from September and more than the Dow Jones estimate for 7.5 million, the BLS said in its Job Openings and Labor Turnover Survey. The rate of openings as a share of the labor force rose to 4.6% from 4.4%.

That brought the ratio of available positions to unemployed workers up to 1.1, about half of where it was during the peak of a massive gap between supply and demand in 2022.
Hiring also tailed off at a time when the labor market was disrupted by violent storms in the Southeast as well as two major labor strikes involving dockworkers and Boeing. Hires totaled 5.31 million, down 269,000 on the month, lowering the hiring rate to 3.3%. That’s also a decline of 0.2 percentage point.
Layoffs, though, fell to 1.63 million, a decrease of 169,000 from September. Also, voluntary job quitters increased to 3.33 million, up 228,000 from September.
The data comes for a month in which the BLS reported nonfarm payroll growth of just 12,000, the worst month since December 2020.
The Federal Reserve watches the JOLTS report closely for signs of tightness or slack in the labor market. Markets expect the Fed to lower its benchmark borrowing rate by a quarter percentage point when it meets later this month, in part an effort to head off any potential weakness in the labor market.

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Federal Reserve Governor Christopher Waller said Monday he is anticipating an interest rate cut in December but is concerned about recent trends on inflation.
Waller cited recent data indicating that progress on inflation may be “stalling.”
Markets expect the Fed to lop another quarter-percentage point off its benchmark overnight borrowing rate when it meets Dec. 17-18.

Federal Reserve Governor Christopher Waller speaks during The Clearing House Annual Conference in New York City on Nov. 12, 2024.
Brendan Mcdermid | Reuters

Federal Reserve Governor Christopher Waller said Monday he is anticipating an interest rate cut in December but is concerned about recent trends on inflation that could change his mind.
“Based on the economic data in hand today and forecasts that show that inflation will continue on its downward path to 2 percent over the medium term, at present I lean toward supporting a cut to the policy rate at our December meeting,” Waller said in remarks before a monetary policy forum in Washington.

However, he noted the “decision will depend on whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation.”
Waller cited recent data indicating that progress on inflation may be “stalling.”
In October, the Fed’s preferred inflation indicator, the personal consumption expenditures price index, showed headline inflation moving up to 2.3% annually, and core prices, which exclude the cost of food and energy, moving up to 2.8%. The Fed targets a 2% rate.
Though the data was in line with Wall Street expectations, it showed an increase from the prior month and was evidence that despite the progress, the central bank’s goal has proved elusive.
“Overall, I feel like an MMA fighter who keeps getting inflation in a choke hold, waiting for it to tap out, yet it keeps slipping out of my grasp at the last minute,” Waller said, referring to mixed martial arts. “But let me assure you that submission is inevitable — inflation isn’t getting out of the octagon.”

Markets expect the Fed to lop another quarter-percentage point off its benchmark overnight borrowing rate when it meets Dec. 17-18. That would follow a half-point cut in September and a quarter-point reduction in November.
“As of today, I am leaning toward continuing the work we have started in returning monetary policy to a more neutral setting,” Waller said.
Waller said he will watch incoming employment and inflation data closely. The Bureau of Labor Statistics this week will release reports on job openings and nonfarm payrolls, the latter coming after gains in October came in at a paltry 12,000, due largely to labor strikes and weather issues.
Even with the slowing progress on inflation, Waller said broader economic health has him feeling like it will be appropriate to continue to ease monetary policy.
“After we cut by 75 basis points, I believe the evidence is strong that policy continues to be significantly restrictive and that cutting again will only mean that we aren’t pressing on the brake pedal quite as hard,” he said.
Also Monday, New York Fed President John Williams expressed confidence that inflation is heading lower and said he still thinks it will be likely to put policy in a more “neutral” setting over time, without providing specifics.

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