Finance

Abrdn analyst calls for faster rate cuts

Published

6 months ago

September 2, 2024

Business Finance News

An eagle tops the U.S. Federal Reserve building’s facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/

Jonathan Ernst | Reuters

While British fund manager abdrn predicts that the U.S. economy will see a soft landing, there is still the risk of a prolonged slowdown in 2025, said Kenneth Akintewe, the company’s head of Asian sovereign debt.

Speaking to CNBC’s “Squawk Box Asia” on Monday, Akintewe asked the question: “Is the Fed already sleepwalking into a policy mistake?”

He pointed to economic data like non-farm payrolls, saying they were later revised to reflect a weaker economic picture. In August, the U.S. Labor Department reported that the U.S. economy created 818,000 fewer jobs than originally reported from April 2023 to March 2024.

As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported 2.9 million from April 2023 through March of this year.

Akintewe said: “Is the economy already weaker than the headline data suggests and [the Fed] should already be easing?”

He added that policy changes by the Fed takes time to move through the economy, “so if the economy is weaker than the headline data suggests, they will need to accumulate [a] sufficient amount of easing, you know, 150, 200, basis points, that will take time.”

“And once you’ve done that amount of easing, it takes six to eight months to transmit that.”

If the economy suddenly shows signs of more weakness at the start of 2025, Akintewe said it will take until the second half of 2025 to see the effects of any easing transmitted through the economy, which could look “quite different” by that time.

He also argued that the market is too focused on forecasting the size of any possible upcoming cut, asking. “The other question no one seems to ask is, why is the policy rate still at 5.5% when inflation is down [to] almost 2.5%? Like, do you need a 300 basis point real policy rate in this kind of environment with all the uncertainty that we’re facing?

In the U.S. on Friday, data showed the personal consumption expenditures (PCE) price index, the Federal Reserve’s favored measure of inflation, ticked up 0.2% last month, as expected.

The data seems to back a smaller rate cut, with U.S. rate futures suggesting a lesser chance of a 50 basis-point rate cut later in September.

Currently, markets see an almost 70% chance of a 25-basis-point cut at the Fed’s meeting this month, with the remaining 30% expecting the Fed to slash rates by 50 basis points, according to the CME Fedwatch Tool.

— CNBC’s Jeff Cox contributed to this report.

Finance

Stocks making the biggest moves after hours: HIMS, TEM, FANG

Published

1 hour ago

February 24, 2025

Business Finance News

Finance

Anthropic closes in on $3.5 billion funding round

Published

2 hours ago

February 24, 2025

Business Finance News

Dario Amodei, Anthropic CEO, speaking on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 21st, 2025.

Gerry Miller | CNBC

Anthropic is in talks to raise a $3.5 billion funding round, significantly more than the amount previously expected, CNBC has confirmed.

The round would roughly triple the artificial intelligence startup’s valuation to $61.5 billion, according to two sources familiar with the deal, who asked not to be named because the details aren’t public. Lightspeed Ventures is leading the funding, with participation from General Catalyst and others, the sources said.

The financing, which was first reported by the Wall Street Journal, signals continued investor demand for top-tier AI companies, even in the face of potential disruption from China’s DeepSeek. Anthropic is backed by Amazon and Google, and had initially set out to raise $2 billion, according to a source.

Anthropic declined to comment.

The company’s last private market valuation was $18 billion. Amazon has poured $8 billion into the startup.

Anthropic was founded by early OpenAI employees and is the creator of the popular chatbot Claude. Earlier Monday, Anthropic released what it says is it’s “most intelligent AI model yet. Its so-called hybrid model combines an ability to reason — or stopping to think about complex answers — with a traditional model that spits out answers in real time.

WATCH: Anthropic unveils newest AI model

Amazon-backed Anthropic unveils newest AI-model

Finance

Jamie Dimon calls U.S. government ‘inefficient,’ touts Elon Musk’s DOGE effort

Published

4 hours ago

February 24, 2025

Business Finance News

Watch CNBC's full interview with JPMorgan CEO Jamie Dimon

JPMorgan Chase CEO Jamie Dimon on Monday said the U.S. government is inefficient and in need of work as the Trump administration terminates thousands of federal employees and works to dismantle agencies including the Consumer Financial Protection Bureau.

Dimon was asked by CNBC’s Leslie Picker whether he supported efforts by Elon Musk’s Department of Government Efficiency. He declined to give what he called a “binary” response, but made comments that supported the overall effort.

“The government is inefficient, not very competent, and needs a lot of work,” Dimon told Picker. “It’s not just waste and fraud, its outcomes.”

The Trump administration’s effort to rein in spending and scrutinize federal agencies “needs to be done,” Dimon added.

“Why are we spending the money on these things? Are we getting what we deserve? What should we change?” Dimon said. “It’s not just about the deficit, its about building the right policies and procedures and the government we deserve.”

Dimon said if DOGE overreaches with its cost-cutting efforts or engages in activity that’s not legal, “the courts will stop it.”

“I’m hoping it’s quite successful,” he said.

In the wide-ranging interview, Dimon also addressed his company’s push to have most workers in office five days a week, as well as his views on the Ukraine conflict, tariffs and the U.S. consumer.