Fed's Loretta Mester Says Three Cuts Still Seem Reasonable

Fed's Loretta Mester Says Three Cuts Still Seem Reasonable By Hardika Singh

The Federal Reserve's Loretta Mester said three interest-rate cuts this year still seem reasonable. Meanwhile, financial pros say investors should review their savings goals and strategies around tax time each year and make necessary adjustments. Also, banking regulators scrutinized BlackRock and Vanguard over their huge stakes in U.S. banks. Read on for this news and more.

Top News Fed's Loretta Mester Says Three Cuts Still Seem Reasonable

Cleveland Fed President Loretta Mester said Tuesday she had continued to pencil in three rate cuts this year as part of the quarterly economic projections submitted at the Federal Reserve's meeting last month, the same as in December. That put Mester among the narrow majority of 10 officials who had penciled in at least three cuts this year, versus the nine who saw two or fewer cuts as likely to be appropriate under the most likely forecast for the economy.

U.S. Economy Four Steps to Take When Spring-Cleaning Your Portfolio

It should be a common ritual: the spring portfolio cleaning. While investors can spruce up their portfolio any time of year, and should review it around November or December at a minimum to prepare for tax and retirement changes in the coming year, the spring does have its advantages for cleanup and assessment.

Financial Regulation Roundup Regulator Probes BlackRock and Vanguard Over Huge Stakes in U.S. Banks

Banking regulators are scrutinizing whether index-fund giants BlackRock, Vanguard and State Street are sticking to passive roles when it comes to their investments in U.S. banks. BlackRock and Vanguard each hold more than 10% of the shares at many banks, a threshold that normally determines whether an investor is assumed to have a controlling interest in a lender, while State Street also holds a number of sizable stakes. Regulators have an interest in policing who owns and controls banks because of their special role in the economy.

Forward Guidance Wednesday (all times ET)

9:45 a.m.: Fed's Bowman speaks at Committee on Capital Markets Regulation roundtable in Washington

12:10 p.m.: Fed's Powell speaks on economic outlook at Stanford Business, Government, and Society Forum

1:10 p.m.: Fed's Barr speaks on Community Reinvestment Act at Just Economy Conference in Washington

4:30 p.m.: Fed's Kugler speaks on economy and monetary policy in St. Louis

Thursday

4 a.m.: Eurozone services PMI

4:30 a.m.: S&P Global U.K. Services PMI

5 a.m.: EU producer-price index for February

8:30 a.m.: U.S. trade report for February

8:30 a.m.: U.S. weekly jobless claims

8:30 a.m.: Canada trade report for February

11:45 a.m.: Chicago Fed's Goolsbee at Multi-Chamber Economic Outlook Luncheon and Expo

12:15 p.m.: Richmond Fed's Barkin speaks to Home Building Association of Richmond

7:30 p.m.: Fed's Kugler speaks at Women in Economics Symposium in St. Louis

Research U.S. Payrolls Seen Coming in Higher Than Expected

U.S. nonfarm payrolls are likely to surprise on the upside again in March, Apollo's Torsten Slok says in a note. He points to data showing that since the Fed indicated it was done rising rates, late last year, households aren't reporting much difficulty finding a job. "The bottom line is that the improvement we have seen in the labor market in January and February is real." Economists polled by The Wall Street Journal expect payrolls at 200,000, down from February's 275,000. Any surprises to the upside could push Treasury yields and the dollar higher as an interest-rate cut in June would become less likely. - Paulo Trevisani

Basis Points The yen faces rising risks of intervention by Japanese authorities as it approaches the psychologically important 152.00 level against the U.S. dollar, but the impact of any actions could be short-lived. Traders are increasingly wary of potential intervention following recent warnings from Japanese officials as the yen weakened to 34-year lows against the dollar. - Ronnie Harui After a rough 2023 and early 2024, the first read on China's economy in March points to a tentative rebound heading into the second quarter. Data released over the weekend showed China's official factory purchasing managers index in March moving back above the 50-point level separating expansion from contraction for the first time since September. The services sector index notched its strongest reading since June, and a separate factory gauge from Caixin and S&P Global hit a 13-month high. - Nathaniel Taplin The eurozone's annual rate of inflation fell for the third straight month in March , a surprise that makes it more likely the European Central Bank will cut its key interest rate in June. - Joshua Kirby Feedback Loop

This newsletter is compiled by Hardika Singh in New York.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

04-03-24 0716ET