Flash News

TREE NEWS update: New York Fed President John Williams said AI is not the cause of the decline in hiring of recent graduates. Williams pointed to data showing that companies using AI are more productive. He did not offer further detail on the labor market outlook.

TREE NEWS reports: Traders reduced wagers on a Federal Reserve rate hike in October after New York Fed President John Williams said there is no rush to act. The market now expects the Fed to raise rates only once more by the end of the year.

TREE NEWS reports: WTI November crude futures closed down $3.22, or nearly 3.48%, at $89.38 a barrel, approaching the September 4 close of $88.57 after touching $101.69 intraday on September 15. Middle East Abu Dhabi Murban crude futures rose 2.61% to $119.99 a barrel. NYMEX November natural gas settled at $3.0110 per million BTU.

TREE NEWS reports: Shanghai crude oil futures for the 2611 contract closed down 1.63% at 705.20 yuan per barrel in night trading. Gold and silver moved the other way, with Shanghai gold up 0.8% and Shanghai silver up 0.35% in the same session.

TREE NEWS update: Federal Reserve Bank of St. Louis President Alberto Musalem said the Fed’s Summary of Economic Projections could be refined by anonymously matching the interest-rate “dot plot” to individual economic forecasts. Musalem made the remark on the Fed’s quarterly projections, which include policymakers’ rate expectations and outlooks for growth, inflation and unemployment.

TREE NEWS reports: Barclays Capital’s head of US rates research, Anshul Pradhan, wrote that the 30-year US Treasury yield has room to rise to 6%, because this month’s bond selloff has not priced in the risk of persistently faster productivity growth. The market still assumes the currently elevated neutral rate will prove cyclical rather than structural, he said. A key challenge to that view is rising economic productivity, with US tech giants expected to spend as much on AI infrastructure this year as in the past three years combined.

TREE NEWS reports: Federal Reserve official Musalem said persistent supply shocks could generate second-round effects, adding that inflation remains elevated and is only partly attributable to supply shocks. The remarks point to continued concern over inflation pressures at the US central bank.

TREE NEWS update: New York Fed President John Williams said there is “no need to rush” following September’s rate hike, as the two-year US Treasury yield hit a fresh daily low. Williams, the Fed’s third-ranking official, signaled patience on further policy moves. The two-year yield’s decline reflected the market’s read on his comments.

TREE NEWS update: New York Fed President John Williams said another rate hike may be appropriate later this year to help bring inflation back to target. “If the evolution of the economy is broadly in line with my forecast, it may be appropriate to make one more increase in the target range for the federal funds rate later this year,” Williams said in prepared remarks in Buffalo, New York. He added there is no rush, given the FOMC already delivered its first hike since 2023 earlier in September.

TREE NEWS reports: Federal Reserve Bank of Chicago President Austan Goolsbee said that during 2023-24 he believed US inflation would fall back to 2%, but inflation then stalled. The remark points to the persistence of price pressures that has kept the Fed cautious about easing policy.

TREE NEWS update: The Bank of Canada’s purchases of Government of Canada bonds under its balance sheet operations may not begin until 2028, a deputy governor said. The timing implies the central bank will keep its balance sheet on a slower normalization path than previously expected, with sovereign bond buying held off for roughly the next few years.

TREE NEWS update: Bank of Canada Deputy Governor Toni Gravelle said the central bank is increasing the size of its regular two-week repo operations to relieve upward pressure on Corra, the Canadian Overnight Repo Rate Average, which measures the cost of overnight funding against Government of Canada T-bills and bonds as collateral. Gravelle also said the bank will launch the Canadian Collateral Management Service in the first quarter of 2027 to automate parts of repo transactions and reduce inefficiencies.

TREE NEWS update: Oklahoma Governor Kevin Stitt is seeking a 120-day suspension of the tax on dyed diesel. The move targets the fuel used in off-road agriculture, construction and other exempt applications. No effective date or revenue impact was given.

TREE NEWS update: Federal Reserve Bank of Chicago President Austan Goolsbee said nothing in the Federal Reserve Act requires the central bank to please the bond market or to guarantee that the stock market is never surprised. Goolsbee’s remarks frame the Fed’s mandate as set by statute rather than by market expectations.

TREE NEWS reports: Federal Reserve Governor Michael Barr said AI’s most significant near-term effect is to drive up costs. Barr, a member of the Fed’s Board of Governors, framed the impact as a short-term dynamic rather than a benefit. He gave no specific figures or timeframe for the cost pressure.

TREE NEWS update: Federal Reserve official Musalem said the Fed should communicate how it converts information into policy, noting that being granted authority over interest-rate decisions carries an obligation to explain the way and the reasons that power is used. He said the policy framework does not promise a specific rate path, and that a clear framework supports policy transparency and helps guard against both inflationary and deflationary spirals.

TREE NEWS reports: Federal Reserve Governor Michael Barr said the central bank likely cannot reach its 2% inflation target in time unless policy is adjusted, adding that the last rate hike was appropriate and further tightening may be needed. Barr’s remarks signal continued caution on inflation even as markets weigh the path of US interest rates.

TREE NEWS update: Israeli Defense Minister Israel Katz said on September 29 that Hamas leaders living abroad are also targets, vowing Israel will pursue everyone involved in the October 7, 2023 attack. In a video statement, Katz said none of the “core figures” behind the attack would “die in peace.” He also said Israeli forces killed the commander of Hamas’s North Gaza Brigade in operations overnight from September 28 to 29.

TREE NEWS reports: Federal Reserve Bank of Chicago President Austan Goolsbee said corporate profit margins remain elevated but are beginning to narrow. The remark, delivered without further detail, touches on a pricing dynamic the Fed has weighed as it assesses inflation pressures. Goolsbee did not indicate what the trend implies for the path of interest rates.

TREE NEWS reports: The Federal Reserve’s overnight reverse repurchase agreement (RRP) facility took in $11.446 billion on Tuesday, September 29, from 10 counterparties, up sharply from $851 million the previous trading day. The prior session’s usage was reported at $851 million.