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- 🪙 Why High Rates Might Stay For A While
🪙 Why High Rates Might Stay For A While
Plus, stagflation is becoming a growing concern, and more
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It’s Friday! The Fed signaled no urgency in cutting rates, with Cleveland Fed President Beth Hammack stating that inflation remains above target despite recent progress. Here’s what that means for markets — and how investors can navigate a persistently high-interest-rate environment. Also, learn why stagflation fears are rising.
—Josh Enomoto
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MARKET RECAP
Yesterday: Stocks fell Thursday as Nvidia’s post-earnings drop and renewed tariff concerns pressured markets, with tech stocks leading losses. Bond yields edged higher, while investors assessed jobless claims data and corporate earnings for signs of economic resilience.
On Our Radar: Next Monday, analysts will turn to construction spending and ISM manufacturing reports. On the earnings front, blockchain miner Hut 8 will disclose its results amid heightened concerns over the crypto complex.
TOP STORY
Cleveland Fed President Beth Hammack sees no rush to cut interest rates while inflation remains stubbornly above 2%.
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FIVE ZINGERS
Beefing Up: UK Prime Minister Keir Starmer visited Palantir's DC office amid a tough geopolitical backdrop. Learn about the high-profile stakes driving this meeting.
Harsh Words: Former White House communications director Anthony Scaramucci remarked bluntly that investors dislike the Trump administration tariffs. Discover the historical comparison that sparked controversy.
Magic Act: OpenAI launched its latest GPT-4.5 model, with company CEO Sam Altman stating that there's a "magic" to the AI program. Read why the team is excited about this debut.
Staying Home: Investor Louis Navellier dismissed the idea of investing in emerging markets. Instead, learn why the expert wants to keep his money stateside.
Open Season: The SEC stated recently that meme coins do not fall under federal securities laws. Here's why this announcement may be a double-edged sword.
ONE FOR THE ROAD
Wall Street digested a slew of new economic data including soaring jobless claims and pending home sales dropping to the lowest level on record in January. The second estimate of the fourth quarter 2024 real GDP showed signs of rising inflation with the personal consumption expenditures price index for the quarter revised up 0.1 percentage point, and core PCE revised up 0.2 percentage points.
Economist Mohamed A. El-Erian pointed to the GDP revisions, rising jobless claims and drop in pending home sales as signs of potential trouble ahead.
"Once again, today’s U.S. economic data have somewhat of a scent of stagflation to them, adding to concerns that the global economy’s only reliable engine of growth risks playing a game of economic Twister with a foot on stagnation and a hand on inflation," El-Erian wrote in a social media post.
President Donald Trump confirmed Thursday that 25% tariffs on Mexico and Canada will go into effect on March 4. He added that imports from China will also see an additional 10% tariff on March 4, fueling fears that his tariff policies could lead to slower growth and higher inflation.
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