Most central banks are cutting interest rates. Not Russia’s. Last month policymakers raised rates to 21%, a two-decade high; markets expect them to reach 23% by the year’s end. The shift is all the more unusual as it is happening at a time of war, when central bankers are normally loth to supress economic activity. More
ELON MUSK and Vivek Ramaswamy are keen to whip the American government into shape. On November 14th their newly created Department of Government Efficiency (DOGE) announced it wants to hire “super-high-IQ small-government revolutionaries” to get to work on cost-cutting. It is easy to ridicule the enterprise. Mr Musk has talked of ripping $2trn out of the federal budget; a cut of that magnitude, done swiftly, would leave public offices incapable of performing many basic functions and plunge the economy into a recession. Moreover, Donald Trump has given DOGE less than two years to get the job done. And the entity is a small advisory body, not an actual department, with a name inspired by a joke cryptocurrency. More
Elon Musk on Saturday endorsed Howard Lutnick, Trump-Vance transition co-chair, as his pick for Treasury secretary.
Lutnick and Key Square Group founder and CEO Scott Bessent are reportedly top picks to run the Treasury Department.
Elon Musk at the tenth Breakthrough Prize ceremony held at the Academy Museum of Motion Pictures on April 13, 2024 in Los Angeles, California.
The Hollywood Reporter | The Hollywood Reporter | Getty Images
On Saturday, Elon Musk shared who he is endorsing for Treasury secretary on X, a cabinet position President-elect Donald Trump has yet to announce his preference to fill.
Musk wrote that Howard Lutnick, Trump-Vance transition co-chair and CEO and chairman of Cantor Fitzgerald, BGC Group and Newmark Group chairman, will “actually enact change.”
Lutnick and Key Square Group founder and CEO Scott Bessent are reportedly top picks to run the Treasury Department.
Musk, CEO of Tesla and SpaceX, also included his thoughts on Bessent in his post on X.
“My view fwiw is that Bessent is a business-as-usual choice,” he wrote.
“Business-as-usual is driving America bankrupt so we need change one way or another,” he added.
Musk also stated it would be “interesting to hear more people weigh in on this for @realDonaldTrump to consider feedback.”
Howard Lutnick, chairman and chief executive officer of Cantor Fitzgerald LP, left, and Elon Musk, chief executive officer of Tesla Inc., during a campaign event with former US President Donald Trump, not pictured, at Madison Square Garden in New York, US, on Sunday, Oct. 27, 2024.
Bloomberg | Bloomberg | Getty Images
In a statement to Politico, Trump transition spokesperson Karoline Leavitt made it clear that the president-elect has not made any decisions regarding the position of Treasury secretary.
“President-elect Trump is making decisions on who will serve in his second administration,” Leavitt said in a statement. “Those decisions will be announced when they are made.”
Both Lutnick and Bessent have close ties to Trump. Lutnick and Trump have known each other for decades, and the CEO has even hosted a fundraiser for the president-elect.
The Wall Street Journal also reported that Lutnick has already been helping Trump review candidates for cabinet positions in his administration.
On the other hand, Bessent was a key economic advisor to the president-elect during his 2024 campaign. Bessent also received an endorsement from Republican Senator Lindsey Graham of South Carolina, according to Semafor.
“He’s from South Carolina, I know him well, he’s highly qualified,” Graham said. More
Money manager John Davi is positioning for challenges tied to President-elect Donald Trump’s tariff agenda.
Davi said he worries the new administration’s policies could be “very inflationary,” so he thinks it is important to choose investments carefully.
“Small-cap industrials make more sense than large-cap industrials,” the Astoria Portfolio Advisors CEO told CNBC’s “ETF Edge” this week.
Davi, who is also the firm’s chief investment officer, expects the red sweep will help push a pro-growth, pro-domestic policy agenda forward that will benefit small caps.
It appears Wall Street agrees so far. Since the presidential election, the Russell 2000 index, which tracks small-cap stocks, is up around 4% as of Friday’s close.
Davi, whose firm has $1.9 billion in assets under management, also likes staying domestic despite the tariff risks.
“We’re overweight the U.S. I think that’s the right playbook in the next few years until the midterms,” added Davi. “We have two years of where he [Trump] can control a lot of the narrative.”
But Davi plans to stay away from fixed income due to challenges tied to the growing budget deficit.
“Be careful if you own bonds for sure,” said Davi.
Since the election, the benchmark 10-year Treasury yield is up 3% as of Friday’s close.
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Retail sales in October were forecast to have picked up to 3.8% year-on-year growth, according to analysts polled by Reuters, after rising by 3.2% in September.
Industrial production was expected to have risen by 5.6%.
Fixed-asset investment, reported on a year-to-date basis, was anticipated to post 3.5% growth from a year ago.
Pictured here is a Shanghai development under construction on Nov. 4, 2024.
Cfoto | Future Publishing | Getty Images
BEIJING — China’s National Bureau of Statistics is scheduled Friday to release retail sales, industrial production and fixed-asset investment data for October.
Retail sales are expected to have picked up to 3.8% year-on-year growth, according to analysts polled by Reuters, after rising by 3.2% in September.
Industrial production was forecast to have risen by 5.6%, the poll showed, up from 5.4% the prior month.
Fixed-asset investment, reported on a year-to-date basis, was anticipated to post 3.5% growth from a year ago, up from the 3.4% pace in September, according to the poll.
Chinese authorities have ramped up stimulus announcements since late September, fueling a stock rally. The central bank has cut interest rates and extended existing real estate support.
On the fiscal front, the Ministry of Finance last week announced a five-year 10 trillion yuan ($1.4 trillion) program to address local government debt problems, and hinted more fiscal support could come next year.
Manufacturing surveys indicated a pickup in activity last month, while exports surged at their fastest pace in more than a year.
Imports, however, fell as domestic demand remained soft. The core consumer price index that strips out more volatile food and energy prices rose by 0.2% in October from a year ago, modestly better than the 0.1% increase seen in September.
Beyond a trade-in program to encourage car and home appliance sales, Beijing’s stimulus measures have not targeted consumers directly.
China’s Golden Week holiday in early October affirmed a trend in more cautious consumer spending, but several consultants said that sales during the Singles Day shopping festival, which recently ended, had beat low expectations.
The country’s gross domestic product in the first three quarters of the year grew by 4.8%. The country has set a target of around 5% growth for the year.
This is a developing story. Please check back later for updates. More
Federal Reserve Chair Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in Dallas.
Federal Reserve Chair Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in remarks for a speech to business leaders in Dallas. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”
(Watch Powell’s remarkets live here.)
In an upbeat assessment of current conditions, the central bank leader called domestic growth “by far the best of any major economy in the world.”
Specifically, he said the labor market is holding up well despite disappointing job growth in October that he largely attributed to storm damage in the Southeast and labor strikes. Nonfarm payrolls increased by just 12,000 for the period.
Powell noted that the unemployment rate has been rising but has flattened out in recent months and remains low by historical standards.
Federal Reserve Chair Jerome Powell delivers remarks in Dallas on Nov. 14, 2024.
Ann Saphir | Reuters
On the question of inflation, he cited progress that has been “broad based,” noting that Fed officials expect it to continue to drift back toward the central bank’s 2% goal. Inflation data this week, however, showed a slight uptick in both consumer and producer prices, with 12-month rates pulling further away from the Fed mandate.
Still, Powell said the two indexes are indicating inflation by the Fed’s preferred measure at 2.3% in October, or 2.8% excluding food and energy.
“Inflation is running much closer to our 2 percent longer-run goal, but it is not there yet. We are committed to finishing the job,” said Powell, who noted that getting there could be “on a sometimes-bumpy path.”
Powell’s cautious view on rate cuts sent stocks lower and Treasury yields higher. Traders also lowered their expectations for a December rate cut.
The remarks come a week after the Federal Open Market Committee lowered the central bank’s benchmark borrowing rate by a quarter percentage point, pushing it down into a range between 4.5% and 4.75%. That followed a half-point cut in September.
Powell has called the moves a recalibration of monetary policy that no longer needs to be focused primarily on stomping out inflation and now has a balanced aim at sustaining the labor market as well. Markets still largely expect the Fed to continue with another quarter-point cut in December and then a few more in 2025.
However, Powell was noncommittal when it came to providing his own forecast. The Fed is seeking to guide its key rate down to a neutral setting that neither boosts nor inhibits growth, but is not sure what the end point will be.
“We are confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained, with inflation moving sustainably down to 2 percent,” he said. “We are moving policy over time to a more neutral setting. But the path for getting there is not preset.”
Powell added that the calculus of getting the move to neutral rate will be tricky.
“We’re navigating between … the risk that we move too quickly and the risk that we move too slowly. We want to go down the middle and get it just right so that we’re providing support for the labor market but also helping enable inflation to come down,” he said. “So going a little slower, if the data let us go a little slower, that seems like a smart thing to do.”
The Fed also has been allowing proceeds from its bond holdings to roll off its mammoth balance sheet each month. There have been no indications of when that process might end.
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U.S. Securities and Exchange Commission Chair Gary Gensler testifies before a House Financial Services Committee oversight hearing on Capitol Hill in Washington, D.C., on Sept. 27, 2023.
Jonathan Ernst | Reuters
Securities and Exchange Commission Chairman Gary Gensler spoke this morning at the Practising Law Institute’s 56th annual conference on securities regulation.
It sounded awfully close to a farewell speech.
“It’s a remarkable agency,” Gensler said of the SEC, which he has led since April 2021.
“It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.”
Gensler reviews accomplishments
Gensler offered a review of what he has accomplished.
Most notably, Gensler highlighted the many disclosure rules the SEC has enacted, including disclosure on data breaches, executive pay versus performance and additional disclosures on those seeking to control and buy more than a 5% stake in a company.
Gensler made only passing reference to his most controversial disclosure rule, on climate change, which has been challenged in court.
“Congress put in place important provisions about disclosure because information about securities creates a public good,” he said.
On market structure, Gensler noted he had put in place new rules on central clearing of Treasuries and shortening of the settlement cycle for stocks from two days to one day, and had recently passed rules that allow stocks to be quoted in increments of less than a penny.
Defense of crypto stance
Gensler offered a full-throated defense of his approach to crypto.
Gensler repeated his assertion that while bitcoin is not a security, the SEC’s focus “has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities” and are therefore subject to the SEC’s purview.
He again asserted anyone offering to sell securities needs to register, and that intermediaries such as broker-dealers, exchanges and clearinghouses also need to be registered.
He said that the failure to properly police the crypto industry had resulted in “significant investor harm” and that “the vast majority of crypto assets have yet to prove out sustainable use cases.”
Proud to serve
Gensler did not say he was resigning, but the tone was clear.
“I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance,” he said at the end of his speech. More
