Finance
Investors price in 4 rate cuts from Fed after Powell signals 'ample room' to move
Investors solidified bets on how deeply the Federal Reserve will cut interest rates this year after Fed Chair Jerome Powell said Friday the “time has come for policy to adjust.”
Powell noted the timing and pace of cuts will “depend on incoming data,” but markets quickly moved to fully price in four rate cuts of 0.25% by the end of 2024 on Friday morning after the Fed chair said the central bank has “ample room” to maneuver as policy enters its next phase.
“The current level of our policy rate gives us ample room to respond to any risks we may face, including the risk of unwelcome further weakening in labor market conditions,” Powell said.
Stocks rallied following Powell’s speech, with the S&P 500 (^GSPC) rising 1% and the tech-heavy Nasdaq Composite (^IXIC) gaining more than 1.3%. The Dow Jones Industrial Average (^DJI) rose about 1.1%, or more than 400 points, and the interest rate-sensitive Russell 2000 (^RUT) small-cap index soared, rising more than 2.5%.
Renaissance Macro head of Economics Neil Dutta highlighted in a note to clients that Powell didn’t use the word “gradual” when referring to rate cuts like some other Fed officials had in recent days.
This, Dutta argued, suggests “Powell is not removing the optionality of doing large moves as policy adjusts.”
Markets appear to agree.
Though with only three Fed meetings left in 2024, the looming question remains when the Fed would cut rates by 0.50% in a single meeting to reach the current investor expectation of four interest rate cuts this year.
Bets that a larger move will come in September moved up marginally on Friday morning. Markets are pricing in a 34.5% chance the Fed cuts by 50 basis points by the end of its September meeting, up from a roughly 24% chance seen the day prior, per the CME’s FedWatch Tool.
Economists have argued further weakness in the labor market would be the likely prompt for a larger cut in September. The July jobs report showed the second-weakest monthly job additions since 2020 and the highest unemployment rate, 4.3%, in nearly three years.
Powell addressed these developments on Friday, noting the cooling seen in the labor market is “unmistakeable” and that the downside risks to the central bank’s mandate for full employment have risen.
“It seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon,” Powell said. “We do not seek or welcome further cooling in labor market conditions.”
Capital Economics’ deputy chief North America economist Stephen Brown wrote in a note to clients that a weak August jobs report, set for release on Sept. 6, would be a likely catalyst for the Fed to cut by more than 25 basis points at its next meeting.
“Fed Chair Jerome Powell’s dovish tone at Jackson Hole [on Friday] and pledge to do ‘everything we can to support a strong labour market’ implies that a 50 bp cut could be on the table at the September meeting, although such a move might require a further rise in the unemployment rate in the August Employment Report, which we judge to be unlikely,” Brown wrote.
Oxford Economics chief US economist Ryan Sweet agreed.
“The August employment report will determine whether the Fed cuts by 25 [basis points] or 50 [basis points] in September,” Sweet wrote.
The Fed’s next policy decision will be announced on Sept. 18.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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Finance
Amazonian Church discusses new rite, finance, and participation of women
![Amazonian Church discusses new rite, finance, and participation of women Amazonian Church discusses new rite, finance, and participation of women](https://wp.cruxnow.com/wp-content/uploads/2024/08/V-Encontro-Amazonia-Legal-abertura.jpg?w=1200)
SÃO PAULO – Five years after the Amazon Synod, members of the region’s church gathered in Manaus, Brazil, in order to discuss ways to implement the changes suggested in 2019 during the meeting in Rome.
The need to increase the women’s participation in ecclesial life and alternatives for the Church’s financial challenges in the Amazon were among the most pressing themes debated by the participants between Aug. 19-22.
The meeting was led by Brazil’ Bishops’ Conference’s Special Episcopal Commission for the Amazon (CEA) and was attended by members of the Pan-Amazon Ecclesial Network (REPAM) and of the Amazonian Ecclesial Conference (CEAMA).
The message released by the participants of the encounter on Aug. 22 demonstrates the local churches’ biggest concerns and how they expect the Church to deal with them.
“We structured the discussion and the themes of the letter according to the reality of several Amazonian communities,” Bishop Raimundo Vanthuy Neto of São Gabriel da Cachoeira told Crux.
The document establishes six commitments assumed during the event regarding the Church’s challenges to keep evangelizing the Amazonian communities.
The first one concerns the formation of Catholics in the region. The participants agreed to establish a committee to accompany the education of priests, to keep promoting dialogue between Catholic universities and seminaries, and to allow the exchange between schools and experiences of education of lay people.
The following commitment encompasses ministries. The Amazonian Church will elaborate a document reflecting on the needed ministries in the region and will institute ministries of ecclesial leaders.
The document also mentions the debates regarding the common house. The Amazonian Church will establish a Pastoral Ministry of the Common House and the Ministry of the Care for the Common House.
“There was much debate about the participation of the Church in the United Nations Convention on Climate Change [known as COP 30], which will happen in Belém next year. There’s an urgent need to stop deforestation in the region in the face of a continuous climatic crisis,” Vanthuy Neto said.
After a long and severe drought in the Amazon in 2023, the level of the rivers are falling again this year, and the air quality is unprecedentedly low in different Amazonian areas.
“The climate crises that have been occurring in the Amazon over the past years are a sign that human actions are destroying the biome. The last administration [headed by President Jair Bolsonaro] was responsible for loosening control over the Amazon,” Sister Laura Manso, a member of the Amazonian Ecclesial Conference, told Crux.
According to Manso, CEAMA will also have its second plenary assembly, something that will happen between Aug. 23-26. At least 72 participants are waited to come from seven bishops’ conferences and nine countries.
“It’s up to CEAMA to work on such changes and suggest ways of implementing them and make them real,” she said.
One of CEAMA’s current challenges is to identify and develop what would be the Amazonian rite, something that was also discussed during the Synod and by Pope Francis in his Querida Amazonia, the apostolic exhortation released after the meeting in 2019.
Vanthuy Neto said it’s not up to the local Church to “invent” a rite, but to reflect on the already existing adaptations that are a regular part of the celebrations in different Amazonian communities.
“In several regions, Indigenous groups use a kind of clay bowl instead of a thurible, and burn their usual resins inside of it. Those are examples of cultural and identity elements of such peoples. So, we won’t create anything, we’ll just build a new rite according to already existing practices,” the bishop said.
The Amazonian rite will determine that celebrations and sacraments may be performed in the native groups’ languages, he explained.
“There are several cultural traits that are shared by many Amazonian Indigenous groups, despite the multiplicity of cultures in the region,” Vanthuy Neto said.
A group of anthropologists, priests, and missionaries has been working on the new rite, the bishop explained, but added the committee still has much work to do.
“Only after the establishment of a new rite can we send a letter to the Vatican and ask their permission to experiment it. It will be a long process,” Vanthuy Neto said, and he can’t estimate how long it will take to finish.
The Amazonian Catholics who attended the event also talked about the women’s roles in ecclesial communities all over the Amazonian territory. That subject generated a heated discussion during the Synod five years ago, and now many Catholics have been demanding that women can become deacons.
“The ordination of women deacons – and of married people as priests – still causes heated debates in the region, but it was a need expressed by the Amazonian communities. There’s a chronic lack of people in the region and the pastoral work must go on,” Bishop Flavio Giovenale of Cruzeiro do Sul, Acre state, told Crux.
Study committees have been working on the subject and the result of their analysis will be disclosed next year.
Giovenale said the encounter promoted the debate of very concrete problems, including the continuous financial challenges of the Amazon Churches.
“When I assumed the diocese it was in huge debt. All I’ve been doing is to pay for the incoming interests. But the costs keep growing,” he said.
Fuel and some foods have a considerably higher price in regions like Cruzeiro do Sul, due to the lack of infrastructure that elevates transportation costs.
“Distances between communities and churches are vast. We spend a lot of money on gasoline,” Giovenale said.
In the event, the local Church agreed to work on the creation of a fund for donations for the Amazon Church. The participants also decided to build a team of experts in preparing projects to be submitted to international institutions that can fund their activities.
“Many dioceses in the region are not prepared to deal with such dynamics. A group will study how that team can be formed,” the bishop added.
The encounter’s final document mentions the need to be courageous and accompany the Amazonian people in its struggle for their rights.
“The Holy Spirit sustains our identity as a Church that is side by side with the people, and struggles with the people for their rights,” the letter read.
Finance
Dave Ramsey has blunt words on the secret to financial freedom
![Dave Ramsey has blunt words on the secret to financial freedom Dave Ramsey has blunt words on the secret to financial freedom](https://www.thestreet.com/.image/ar_1.91%2Cc_fill%2Ccs_srgb%2Cfl_progressive%2Cg_faces:center%2Cq_auto:good%2Cw_1200/MTk3MzcyMjI2NjE2NDM1NzE4/dave-ramsey_2_kl_041123.jpg)
U.S. household debt levels have risen to $17.8 trillion this year, with credit card debt comprising over $1 trillion of the total. Americans are battling untenable levels of debt, and many are facing a shaky financial future.
Experts agree that paying down high-interest debt is the first step in taking control of your finances, but it is often tricky curtailing spending to have extra income to pay down debt.
TheStreet spoke with Dave Ramsey about how consumers can realistically cut spending to stay within their budget. He offers a pragmatic approach: Cut out all non-essentials.
The key to reducing debt is reducing nonessential spending
Ramsey provides some tough love when asked about what Americans can do to rid themselves of debt.
“Just cut all the fat,” he said. “The deeper you cut, the more your friends think you’re crazy because you’re not doing anything, the faster you get out. It’s math.”
More on personal finance:
Visa has found that, barring 2020, consumer spending on leisure has steadily increased since 2013, reaching about 13% of total consumption in 2022. Recreation and leisure have become such a constant in people’s lives that it may feel difficult to completely cut them out of their budgets.
However, Ramsey suggests it’s the most straightforward path to becoming debt-free.
He continues, “Deep sacrifice increases the speed at which you get out of debt and the probability. And that could include working three jobs.”
Short-term sacrifice leads to long-term financial freedom
“The typical family that we coach on the Ramsey show or in our classes is able to clear off all of their debt in somewhere around 18 to 24 months. But that 18 to 24 months is hell. It’s awful.”
For many people, cutting out recreational spending is the biggest challenge in budgeting.
Visa Business and Economic Insights analysis found an interesting paradox. Though time spent on leisure activities has decreased over the past few decades, it has created an inverse effect on consumption.
In 2013, leisure spending comprised 9.5% of total consumption; by 2022, it had risen to 13%. Ramsey suggests that this increase in leisure spending is a big part of the problem.
“You have to just work all the time,” he said. “You don’t see the inside of a restaurant unless you’re working there. You’re not going on vacation.”
He continues, “People will think you’re crazy. But those two years are the catalyst that blows the lid off the math and allows you to build wealth the rest of your life.”
Finance
Diversifying sources of finance for water in Africa
![Diversifying sources of finance for water in Africa Diversifying sources of finance for water in Africa](https://www.oecd.org/content/dam/oecd/en/publications/fallbacks/01.png)
This working paper provides an in-depth review of the opportunities and challenges surrounding water investment in Africa. It also presents the state of play in the use of ultimate sources of funding (the “3Ts”: tariffs, taxes, and transfers) and financing for water on the continent, showing that these sources are not currently being used to their full potential and in the most efficient and equitable way. In this context, there is a wide range of options to scale up and improve water finance in Africa and to achieve SDG 6 – and, by extension, all the Sustainable Development Goals – on the continent. This paper follows the lifecycle of a project, paying particular attention to equity and affordability. It presents concrete proposals to strengthen water policy investment frameworks, build well-prepared and investment-ready water projects, scale up risk mitigation instruments for water, and diversify financing instruments and sources.
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