BlackMask Breaking News

(Reuters) – Global equity funds witnessed their biggest weekly capital withdrawals in five weeks in the week to Aug. 24 on concerns that rate hikes would lead to a recession. Investors were also wary ahead of the Federal Reserve’s annual Jackson Hole symposium, which could offer insights into the central bank’s future policy path. According to Refinitiv Lipper, investors disposed of a net $10.48 billion worth of global equity funds in the week, which compares with just $3.15 billion worth of purchases in the previous week. Fed Chair Jerome Powell is due to deliver his keynote speech to the symposium on Friday, and investors are likely to scrutinize the comments for any indication on how steep future interest rate hikes would be. All major regions witnessed equity fund outflows with investors exiting a net $5.17 billion, $2.19 billion and $2.11 billion from Europe, the United States and Asia, respectively. Among sector funds, tech, industrials and consumer discretionary faced outflows of $2.04 billion, $735 million and $595 million, respectively. Financials sector funds obtained $1.85 billion, while utilities received $588 million. Bond funds also recorded withdrawals, amounting to $8.41 billion, the biggest for a week since June 29. Investors sold high yield funds of $5.98 billion, marking their biggest weekly net selling since June 15, while government and short- & medium-term funds saw outflows of $894 million and $153 million, respectively. Meanwhile, weekly net selling in money market funds eased to a three-week low of $375 million. Commodities funds’ data showed precious metal funds suffered outflows of $354 million in a ninth straight week of net selling, while energy funds had a second weekly outgo, although a marginal $5 million. An analysis of 24,457 emerging market funds showed investors sold equity funds of $1.34 billion, posting the biggest outflow in five weeks, while also exiting bond funds to the tune of $1.05 billion, after three weeks of buying in a row. NN: This is a trickle,,, soon a stream, then a river and ending in a wipeout of umbilical proportions. Its a hundred year event……

Cleveland Federal Reserve Bank Presidnet Loretta Mester told Jackson Hole Economic Symposium that she is not convinced inflation in the United States has peaked, despite hitting an over 40-year high in June. Mester went on to say that said she is not predicting a recession but that below-trend growth should be expected in the foreseeable future. ”I’m not penciling in a recession, but risks have risen,” Mester went on to say she would base her decision on whether to back a third straight 75-basis point interest rate hike  next month on U.S. inflation data, not the closely-watched jobs report.

Fed Chair Jerome Powell on Friday said the Fed will raise borrowing costs high enough to start biting into growth, soften the labor market and bring down inflation, but said the size of September’s rate hike would depend on the “totality” of the data before then. The U.S. Labor Department releases its estimate for September job gains next Friday, and for the consumer price index a week before the Fed’s Sept. 20-21 meeting. The University of Michigan will publish its closely-watched inflation expectations data on Sept. 16. “I don’t have a lean at this point,” Mester told Reuters on the sidelines of the annual central bankers’ conference in Jackson Hole, Wyoming, adding data on inflation and the inflation outlook will guide her calculus. “We haven’t really seen, to my satisfaction, convincing evidence that inflation is on a downward path – I’m not even convinced it’s peaked yet.” Mester also said she envisions raising the U.S. central bank’s policy rate to a little above 4% by early next year and then holding it there for all of 2023. The Fed currently targets its policy rate in the 2.25%-2.5% range.

“I don’t see the fed funds rate moving back down next year,” she said. That’s contrary to market expectations for a small decrease, presumably in response to a weakening economy or a decline in inflation.

With the labor market very tight, Mester said she is not expecting a recession. She also does not expect the unemployment rate, now at 3.5%, to rise to more than 4.25%, much less to the 5%-6% that some analysts have said might be required to really cool inflation that, by the Fed’s preferred measure, rose 6.3% in July. That measure, the personal consumption expenditures price index, was down from June’s 6.8%, but has been running at above the Fed’s 2% target since March 2021.

Mester’s remarks underscore the complete unity among Fed policymakers on the need to raise rates further to beat inflation, regardless of the hit to households as the jobless rate rises. But they suggest there is room for debate over how far they need to go. Atlanta Fed President Raphael Bostic on Friday for instance said he sees a need for another 100 to 125 basis points of increases, which would bring the target rate to somewhere between 3.25%-3.75%. While rising unemployment will hurt households, things would be worse if the Fed doesn’t act, Mester said, echoing Powell’s remarks on Friday. “Inflation right now is causing pain ,” Mester said. “Right now inflation is still very high, it’s unacceptably high, and it’s just going to take more action on the part of the Fed to get it on that downward trajectory.”

NN: It  is a outrage what wall street tried to do. Telling their clients that inflation had been defeated and the FED was done raising rates.. The famous “taper”. This is what started the June swoon that ended up in the 50% August  rally back based on Fubanachi bullshit!. Another 7 trillion dollars is about to go up in smoke…. Friday  was just the 10% down payment. Please note we are not on easy street. Follow our recoes very very carefully. This is a very volatile market. As a mater of record the FED will have to raise rates far more then the Doctoral Algo, AI asshole have figured… so far.

Fed Chair Powell Gives Eight Minute Speech

Jerome Powell’s Unprecedented Candid Speech at Jackson Hole Symposium, Transcript:

Thank you for the opportunity to speak here today. At past Jackson Hole conferences, I have discussed broad topics such as the ever-changing structure of the economy and the challenges of conducting monetary policy under high uncertainty. Today, my remarks will be shorter, my focus narrower, and my message more direct.

The Federal Open Market Committee’s (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them.

Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.

The U.S. economy is clearly slowing from the historically high growth rates of 2021, which reflected the reopening of the economy following the pandemic recession. While the latest economic data have been mixed, in my view our economy continues to show strong underlying momentum. The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers. Inflation is running well above 2 percent, and high inflation has continued to spread through the economy. While the lower inflation readings for July are welcome, a single month’s improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down.

July’s increase in the target range was the second 75 basis point increase in as many meetings, and I said then that another unusually large increase could be appropriate at our next meeting. We are now about halfway through the intermeeting period. Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook. At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases.

Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy. Committee participants’ most recent individual projections from the June SEP showed the median federal funds rate running slightly below 4 percent through the end of 2023. Participants will update their projections at the September meeting.

Our monetary policy deliberations and decisions build on what we have learned about inflation dynamics both from the high and volatile inflation of the 1970s and 1980s, and from the low and stable inflation of the past quarter-century. In particular, we are drawing on three important lessons.

The first lesson is that central banks can and should take responsibility for delivering low and stable inflation. It may seem strange now that central bankers and others once needed convincing on these two fronts, but as former Chairman Ben Bernanke has shown, both propositions were widely questioned during the Great Inflation period.1 Today, we regard these questions as settled. Our responsibility to deliver price stability is unconditional. It is true that the current high inflation is a global phenomenon, and that many economies around the world face inflation as high or higher than seen here in the United States. It is also true, in my view, that the current high inflation in the United States is the product of strong demand and constrained supply, and that the Fed’s tools work principally on aggregate demand. None of this diminishes the Federal Reserve’s responsibility to carry out our assigned task of achieving price stability. There is clearly a job to do in moderating demand to better align with supply. We are committed to doing that job.

The second lesson is that the public’s expectations about future inflation can play an important role in setting the path of inflation over time. Today, by many measures, longer-term inflation expectations appear to remain well anchored. That is broadly true of surveys of households, businesses, and forecasters, and of market-based measures as well. But that is not grounds for complacency, with inflation having run well above our goal for some time. If the public expects that inflation will remain low and stable over time, then, absent major shocks, it likely will. Unfortunately, the same is true of expectations of high and volatile inflation. During the 1970s, as inflation climbed, the anticipation of high inflation became entrenched in the economic decisionmaking of households and businesses. The more inflation rose, the more people came to expect it to remain high, and they built that belief into wage and pricing decisions. As former Chairman Paul Volcker put it at the height of the Great Inflation in 1979, “Inflation feeds in part on itself, so part of the job of returning to a more stable and more productive economy must be to break the grip of inflationary expectations.”2

One useful insight into how actual inflation may affect expectations about its future path is based in the concept of “rational inattention.”3 When inflation is persistently high, households and businesses must pay close attention and incorporate inflation into their economic decisions. When inflation is low and stable, they are freer to focus their attention elsewhere. Former Chairman Alan Greenspan put it this way: “For all practical purposes, price stability means that expected changes in the average price level are small enough and gradual enough that they do not materially enter business and household financial decisions.”4

Of course, inflation has just about everyone’s attention right now, which highlights a particular risk today: The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched. That brings me to the

Third lesson, which is that we must keep at it until the job is done. History show s that the employment costs of bringing down inflation are likely to increase with delay, as high inflation becomes more entrenched in wage and price setting. The successful Volcker disinflation in the early 1980s followed multiple failed attempts to lower inflation over the previous 15 years. A lengthy period of very restrictive monetary policy was ultimately needed to stem the high inflation and start the process of getting inflation down to the low and stable levels that were the norm until the spring of last year. Our aim is to avoid that outcome by acting with resolve now. These lessons are guiding us as we use our tools to bring inflation down. We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored. We will keep at it until we are confident the job is done. NN: It is settled bussiness. The FED is not about to temper its interst rate hikes, Its not about to tapper And its goal is 2% inflation….. Do not let Wall Street shit you the FED will not stop. The FED is not going to back down. It got black eye  and lost a lot of credibility when they took the Wall Street spin that inflation was “transitory”. The worst call i have ever seen the FED Reserve make, which has made a lot of bad calls over the years. As you know at the time i raise hell and warned about the embedded inflation crises we now find ourselves in….. This all could have been avoided. THE FED WILL NOT MAKE THE SAME MISTAKE AGAIN! This should be considered their working statement. The blueprint for further action. This document was reviewed and approeved by all board members and district bank presidents. You really Really REALLY need to pay attention here.

(Bloomberg) — The US and Iran remain at loggerheads over key details of an emerging deal to revive a landmark nuclear agreement and may need several weeks to resolve their differences, according to officials familiar with the talks. Expectations of an imminent breakthrough grew as Washington and Tehran responded to a “final” European Union proposal that would ease sanctions on Iran’s economy, including oil exports, in return for scaling back its advancing atomic program. One senior European official said the sides have never been closer to rebooting their 2015 accord, echoing comments by a top Biden administration adviser.

Yet two other officials with knowledge of the negotiations said clashes continue over international monitors’ investigation into the Islamic Republic’s past nuclear work, and economic indemnities demanded by Tehran if a future US government exits the agreement, as then-President Donald Trump did four years ago. All the officials asked not to be identified in exchange for discussing sensitive information.

The talks are being closely watched by oil and gas traders — and politicians facing a public backlash as high energy prices send inflation spiraling around the world. A deal could release millions of barrels of oil and refined products that Iran has stored since the Trump administration re-imposed US sanctions in 2018. NB: their really are not the millions of barre of crude oil sloshing around Iran. China has helped Iran out of that problem. BUY if we get a Iran deal the persecution could knock $10 off the oil price. That is why we are using a strategy that takes a deal that is not a done deal into account… See continuing  trade updates for details NB:Their are several more documents and videos to be see after the “more” button. You will find this information particularity noteworthy if your in oil .                            
Continue reading “Iran Nuclear Deal close BUT Still NO cookie… Israel with Saudi help prepare to ATTACK Iran’s Nuclear Infrastructure…… Saudi answer to Iran: Pakistan may transfer ready-to-use atomic bombs”

Federal Reserve Chair Jerome Powell says interest rates will keep rising ‘sharply’ for some time because of persistently high inflation

Fed Chair Jerome Powell said that interest rates would keep rising ‘sharply’ for quite some time as the Fed worked to rein in stubbornly high inflation.  ‘Our responsibility to deliver price stability is unconditional,’ Powell said, adding that restoring price stability would take ‘some time.’  Inflation has been running hot and remained near a 40-year high at 8.5 percent in July, despite a rapid series of jumbo interest hikes that have taken the Fed’s policy rate from near zero to 2.5 percent. The July rate was a slight dip from June’s high of 9.1 percent.  ‘Lower ratings for July are certainly welcome, but fall far short of what committee will need to see,’ to stop tightening monetary policy, Powell said in highly anticipated remarks at the Kansas Federal Reserve’s Jackson Hole, Wyo. symposium. Powell warned that Americans would feel the effects of reining in prices.  ‘While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,’ he said. ‘These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.’  ‘The historical record cautions strongly against prematurely loosening policy,’ Powell said, harkening back to former Fed Chair Paul Volcker, who reined in over-10 percent inflation of the early 1980s.  He quoted the hawkish inflation fighter who has said that ‘inflation feeds on itself.’ ‘So part of the job of returning to a more stable and more productive economy must be to break the grip of inflationary expectations,’ Powell added.  ‘The longer inflation lasts, the greater the chance it will become entrenched,’ Powell said, explaining that if the public believes inflation is here to stay then it will be.  Powell did not hint at what the Fed might do at its upcoming Sept. 20-21 policy meeting. Officials are expected to approve either a 50-basis-point or 75-basis-point rate increase.  The Fed chair promised to fight ‘forcefully’ against price increases until inflation was back down to its target two percent.  And despite low 3.5 percent unemployment, Powell issued a warning about the labor market: ‘The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers.’  NN: They really blew it this time.. And as usual the little guy muss suffer……….. So be it! I am telling you sooner or later the masses will rise up with pitch forks and touches.

Stock and bond investors who’ve spent months sneering at the Federal Reserve are starting to worry about a comeuppance. On the eve of a landmark gathering in Jackson Hole, Wyoming, a concern repeatedly voiced in interviews with big money managers is that market confidence itself is something the Jerome Powell-led bank is bent on doing away with. Financial conditions — going by measures of strain across asset classes — are at easier levels than before the Fed kicked off its most aggressive tightening campaign in decades back in March, according to a Bloomberg gauge. By Powell’s own admission, that’s a problem for policy makers, who are monitoring whether these drivers and strictures on the real economy are “appropriately tight” as they battle to cool inflation.   “The Fed needs to break one of two things,” said Gene Tannuzzo, global head of fixed income at Columbia Threadneedle. “Either they need to break the labor market, with unemployment pushing higher. Or they need to break financial conditions.”

Even with this week’s shudder, stocks and Treasuries have rebounded mightily from June’s lows. Corporate bonds have rallied as well, with spreads on both investment-grade and high-yield debt far narrower than July’s peaks.  That’s all served to ease financial conditions as policy makers try and beat back market pricing of a friendlier Fed in the face of still decades-high inflation. Earlier this week, Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s “very clear” the Fed needs to continue tightening. On Wednesday alone, both Kansas City Fed President Esther George and Philadelphia Fed President Patrick Harker said rates need to be lifted into restrictive territory.

“I don’t think the market’s listened to any of the governors,” Tom Thornton, Hedge Fund Telemetry Founder, said in a Bloomberg Television interview. “It’s going to take Powell to reverse some of the dovish comments he had at the last Fed meeting to have the market take this seriously.”

Minutes of the Fed’s meeting last month stoked a view that the Fed might soon pivot to a less-aggressive stance. After several consecutive super-sized hikes, the pace of rate increases could slow “at some point,” the minutes showed. But even if policy makers back off from another 75-basis point hike at September’s meeting, quantitative tightening is scheduled to kick into its highest gear. The balance-sheet runoff’s monthly cap will lift from $47.5 billion to a maximum pace of $95 billion next month — a reality that has yet to be reflected in markets.

“Here we are with a Fed that’s going to want to reduce the size of its balance sheet, it wants to soak up excess liquidity, and as that happens, markets are doing exactly the opposite,” Karissa McDonough, Community Bank Trust Services fixed-income strategist, said in a Bloomberg Television interview. “They are going to do whatever they can to put a fork in it.”

The potential for a marketwide shock is high. A Barclays Plc measure of cross-asset correlation is hovering near the highest levels of the past 17 years, with everything from equities to bonds to commodities moving seemingly in lockstep. 

The current macro-obsession across markets puts the focus squarely on Powell’s performance Friday. Given that the annual Jackson Hole symposium is such a high-profile event, the Fed Chair would be seen as endorsing the easing seen in financial conditions if he doesn’t comment on it, according to LH Meyer’s Derek Tang. “The Fed really needs to convince the market that you are not taking us seriously enough — we are saying all these things and you are not believing us,” said Tang, an economist at LH Meyer in Washington. “People are want a comment from Powell on it. And if he doesn’t, it’s sort of silence speaks volumes.” NN: I want to be clear here. I expect a 20% drop in the NASDAQ100 from here in the next 10 months….. Be careful of the chop shop. The algo guys will chop us to ribbons if we ovrleverage….

OPEC+ Is a Big Winner of Russia’s War in Ukraine. High oil prices have been beneficial for OPEC+, an alliance of oil-producing countries that controls more than half of the world’s output.  Momentum is building among oil producers behind the idea of cutting crude production to stabilize the market, with OPEC’s president the latest to back Saudi Arabia’s suggestion that the alliance might pump less—comments that pushed the price of a barrel back over $100 earlier this week. The growing consensus among members of the Organization of the Petroleum Exporting Countries and its Russian-led allies, known as OPEC+, threatens to keep energy prices elevated despite Biden administration efforts to get the members to pump more.