Finance

Fed Governor Waller sees need for ‘more caution’ ahead when lowering interest rates

Published

1 day ago

October 14, 2024

Christopher Waller, governor of the US Federal Reserve, during a Fed Listens event in Washington, D.C., on Friday, Sept. 23, 2022.

Al Drago | Bloomberg | Getty Images

Federal Reserve Governor Christopher Waller on Monday signaled that future interest rate cuts will be less aggressive than the big move in September as he expressed concern that the economy could still be running at a hotter-than-desired pace.

Citing recent reports on employment, inflation, gross domestic product and income, the policymaker indicated that “the data is signaling that the economy may not be slowing as much as desired.”

“While we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting,” Waller said in prepared remarks for a conference at Stanford University.

The Federal Open Market Committee at its September meeting took the unusual step of lowering its baseline interest rate by a half percentage point, or 50 basis points, to a target range of 4.75%-5.0%. In the past, the Fed has only done that during times of crisis, as it prefers to move in increments of a quarter percentage point, or 25 basis points.

Along with the cut, officials indicated the likelihood of another half point lopped off in the final two meetings of 2024, along with another full percentage point of cuts in 2025. However, Waller did not commit to a specific path ahead.

“Whatever happens in the near term, my baseline still calls for reducing the policy rate gradually over the next year,” he said.

Key data points for the Fed have been mixed in recent days: The labor market posted stronger numbers in September after weakening through the summer, the consumer price index inflation gauge was slightly higher than expected, and GDP also has held strong.

In the final revision for second-quarter growth, the Commerce Department also punched up the level of gross domestic income gain to 3.4%, an adjustment of 2.1 percentage points from the previous estimate and closer in line with GDP. The savings rate also was adjusted much higher, to 5.2%.

“These revisions suggest that the economy is much stronger than previously thought, with little indication of a major slowdown in economic activity,” Waller said.

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Citigroup C earnings Q3 2024

Published

13 hours ago

October 15, 2024

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The Citibank building in Canada Square at the heart of Canary Wharf financial district in London on May 7, 2024.

Mike Kemp | In Pictures | Getty Images

Citigroup is set to report its third-quarter earnings before the opening bell on Tuesday, as investors will get the latest updates about the progress of CEO Jane Fraser’s turnaround plan.

Here are the results expected by Wall Street analysts, according to LSEG.

Earnings per share: $1.31
Revenue: $19.84 billion

Fraser took over in March 2021 and has focused on slimming down the bank during her tenure. That includes reducing Citigroup’s global presence and laying off workers.

Investment banking and equities trading were two bright spots for the bank in its second-quarter earnings report, released in July.

Shares of Citigroup were up more than 28% year to date through Monday, outperforming both the S&P 500 and the financial sector.