President Donald Trump said Monday he's in no rush to respond to a coordinated attack that hit Saudi Arabia's oil industry over the weekend.Marketsread more
The price of oil could go sharply higher, depending on the duration of the disruption at Saudi oil facilities and whether there is a military response.Powering the Futureread more
Energy stocks, one of the worst-performing sectors this year, spiked Monday after an attack on Saudi Arabia's heart of oil production Saturday sent oil prices soaring.Marketsread more
The Saudi-led military coalition battling Yemen's Houthi movement said on Monday that the attack on Saudi oil plants was carried out by Iranian weapons and did not originate...Oilread more
After a series of setbacks on the road to an initial public offering, the parent company of real estate start-up WeWork is delaying the move, sources told CNBC Monday.Technologyread more
"The United States military, with our interagency team, is working with our partners to address this unprecedented attack and defend the international rules-based order that...Politicsread more
Crude oil's spike following attacks on Saudi Arabia's energy supply has experts weighing whether or not the gains will last.ETF Edgeread more
"In the old days, the averages would've plunged on this kind of oil shock. I know because I've lived through a bunch of them, starting in 1973," Jim Cramer says.Mad Money with Jim Cramerread more
Traders in the fed funds futures market on Monday were pricing in a 34% chance that the Fed will stay put on rates.The Fedread more
The meeting comes amid months of stalled trade talks between Washington and New Delhi, resulting in both sides taking retaliatory measures.Asia Politicsread more
Gas prices could rise by about 20 cents per gallon "starting tomorrow," oil analyst Andy Lipow says Monday.Oil and Gasread more
With pretty much everyone convinced that the Fed is going to be cutting interest rates at some point this year, the central bank faces one rather pressing question: Why wait?
After all, the market already is pricing in at least reductions this year and probably three. Though the Federal Open Market Committee meets next week, there is little expectation of a move then.
Not moving next week essentially comes down to three factors, according to Fed watchers: The looming G-20 summit at which the U.S. and China, at least theoretically, could reach a trade agreement; a desire not to be seen as overly influenced by the financial markets and President Donald Trump's hectoring; and the desire to avoid making December's rate hike look like a policy mistake.
"They don't want to be seen as cowing to any sort of pressure, be it political from the White House or from the market," said Lindsey Piegza, chief economist at Stifel. "The Fed is going to look at the data, they're going to look at what their models say. To them, it doesn't matter what the markets say."
Wall Street, though, is clamoring for a cut.
Futures pricing Friday afternoon in the fed funds market showed a 21% chance of a move at the June 18-19 meeting, down from 30% earlier in the day on some stronger-than-expected economic data. The chance of a July cut remained at 85%, while the market was figuring a 61% probability for three moves in total by the end of the year.
As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. That is likely to change when FOMC members submit their economic projections at the June 18-19 meeting, which include the "dot plot" of individual members' expectations of where rates are headed over the next few years.
"I can't imagine what they are going to do with the dots," Jeffrey Gundlach, founder of DoubleLine Capital, said in a webcast Thursday. He noted the "big divergence" between the market and Fed projections and said, "No cuts this year is hard to believe."
In May, Gundlach recommended a straddle options trade that benefited from wide fluctuations in interest rates. The trade recently had netted a 22% gain.
Fed officials have been under intense pressure from more than the markets. Trump has been a continuous nemesis to the central bank, most recently repeating his demand for lower rates and saying he's "not happy with what [Powell has] done" as Fed chair.
Along the same lines, the Fed has its credibility to worry about.
Trump and a growing number of market participants view the December rate hike — the fourth of the year — as a policy mistake that came amid several pivots and missteps that caused Powell and other officials to change their public statements to assuage investors' nerves.
From October to March, the Fed went from being "a long way from neutral" on rates and with a balance sheet reduction on "autopilot," both in Powell's words, to adopting a "patient" stance on policy and finally laying out a timetable to end the balance sheet program by September. Officials also cut the forecast level of rate hikes from two to zero, and now are in the position of having to convey a likelihood of cuts, if that is the way the FOMC members see things unfolding.
"It's a difficult transition for the Fed now from two rate hikes this year to the pause and now moving closer and closer to rate cuts," said Quincy Krosby, chief market strategist at Prudential Financial.
Krosby points to two pivotal events recently that signaled yet another change in policy — remarks from Powell and Vice Chairman Richard Clarida earlier in June that set the groundwork for potential cuts. In Powell's case, it was a pledge to "act as appropriate to sustain the expansion" while for Clarida it was a vow to adapt policy to keep the economy "in a good place."
"You can't dismiss the comments from Powell and Clarida. That was orchestrated. They were laying the groundwork. That's what the Fed does," Krosby said. "It came across as verbal intervention and they didn't even have to do anything. The market reacted."
Indeed, stocks have been on a solid run lately, with the Dow Jones Industrial Average up more than 5% in June after a brutal May. That equity strength gives the Fed another pillar to rest on if it chooses not to cut this month, though that hasn't always been enough to stop easing in the past.
But if the market strength holds up and the U.S. and China come to a trade agreement, it at least could lower the level of expectations for cuts.
Tom Porcelli, chief U.S. economist at RBC, said a client survey showed that if a trade deal gets one, 85% of clients "would not react negatively to the Fed taking a pass" on a July rate cut.