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<ul class="summary-list"><li>Indexes slipped Thursday as traders focused on remarks from Fed Chair Jerome Powell.</li><li>Powell said the Fed is in no hurry to cut rates, and reiterated the strength of the US economy.</li></ul>Indexes ended lower on Thursday, with the election rally fizzling out as traders digested remarks from Federal Reserve Chair Jerome Powell and assessed the latest inflation data. The S&amp;P 500 and Nasdaq fell more than 0.5%, while the Dow Jones Industrial Average lost over 200 points. The 10-year Treasury yield, meanwhile, remained nearly flat at 4.447%, hovering close to its highest level since July.Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,949.17, down 0.6% </li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 43,750.86, down 0.47% (-207.33 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 19,107.65, down 0.64%</li></ul>The slide comes after Powell signaled the Fed is in no rush to cut interest rates while the US economy remains on solid footing. "The economy is not sending any signals that we need to be in a hurry to lower rates," Powell said during prepared remarks at an event in Dallas. "The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully."Powell added the US has had the best domestic growth of any major economy, and emphasized the strength of the labor market. He said the October jobs report's slowing job growth was largely due to storm-related damage.Powell's comments come as investors seek hints of the Fed's intended easing path after a 25 basis point cut last week. Trump's election win has sparked worries that inflation could rise again under his proposals for broad tariffs and mass deportations, which could cause the Fed to pause rate hikes, economists say.Traders expect the central bank to cut another 25 basis points at its December meeting before pausing in January, according to the CME <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">FedWatch tool</a>.Powell's comments also follow the latest inflation reading which shows wholesale prices rose 0.2% in October, according to data from the Bureau of Labor Statistics.The data was in line with expectations but showed inflation remains somewhat sticky, with a year-over-year increase of 2.4%.The core producer price index, which excludes food and energy prices, rose 0.3% in the month and 3.1% year-over-year.Meanwhile, jobless claims data on Thursday, showed weekly claims dropped to their lowest since May, falling to 217,000 last week. That marks a 4,000 decline from the week prior.Here's what else is going on:<ul><li>Investors are underestimating how deep <a target="_blank" class="" href="https://www.businessinsider.com/fed-interest-rate-cuts-outlook-2025-trump-tariff-inflation-growth-2024-11">rate cuts will be in 2025</a>, Goldman Sachs says.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/electric-vehicle-stocks-trump-end-ev-tax-credit-tesla-rivian-2024-11?_gl=1*1794use*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTczMTYxNjYwOS40MTAuMS4xNzMxNjE3NjM3LjIyLjAuMA..">EV makers slid</a> on report Trump wants to scrap the EV tax credit.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/disney-stock-price-3q-earnings-streaming-profit-guidance-cruise-parks-2024-11?_gl=1*6r1dtf*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTczMTYxNjYwOS40MTAuMS4xNzMxNjE3NjUxLjguMC4w">Disney stock surged</a> as rare three-year forecast sees strong profit growth ahead.</li><li>China's weak economy and record US production will lead to a <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/oil-outlook-supply-crude-prices-us-production-china-opec-2024-11?_gl=1*1he4945*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTczMTYxNjYwOS40MTAuMS4xNzMxNjE3NjcwLjYwLjAuMA..">surplus</a> of one million barrels of oil a day next year, IEA says.</li></ul>In commodities, bonds, and crypto:<ul><li>Oil futures were up. <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/oil-price?type=wti">West Texas Intermediate crude</a> rose 0.3% to $68.63 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price?utm_medium=ingest&amp;utm_source=markets">Brent crude</a>, the international benchmark, climbed 0.3% to $72.48 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price?utm_medium=ingest&amp;utm_source=markets">Gold</a> rose fell 0.5% to $2,572 an ounce.</li><li>The 10-year Treasury was nearly flat at 4.447%.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> was down 1.4% to $87,531. </li></ul>

Stock market today: Indexes fall as Powell says the Fed is in no hurry to cut interest rates

<ul class="summary-list"><li>Indexes rose Thursday to continue a post-election rally after the Fed cut interest rates.</li><li>The Fed cut rates by 25 basis points, a smaller move compared to its September meeting. </li></ul>Indexes ended higher on Thursday, extending a post-election rally after the Federal Reserve delivered a rate cut at the end of its latest policy meeting. The Nasdaq jumped 1.5% to a new record high, while the S&amp;P 500 climbed 0.8% to a new record. The Dow Jones Industrial Index was nearly flat after surging by more than 1,500 points on Wednesday. Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,973.10, up 0.74% </li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 43,729.34</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 19,269.46, up 1.5%</li></ul>Major indexes gained as the Fed <a target="_blank" class="" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">cut rates by 25 basis points</a>, which was widely expected after an initial jumbo 50 basis point cut in September.Chair Jerome Powell said the Fed will continue to be data dependent, but that it is prepared to adjust its easing pace as necessary.Though some noted after the meeting that the Fed's tone may have sounded less confident about the path of inflation, noting "progress" has been made rather than the previous wording of "further progress," analysts were unconcerned."The Committee had used this language as a threshold to start cutting, so we interpret its removal as a reflection of the fact that the cutting cycle is already underway rather than as an indication of reduced confidence in the inflation outlook," analysts from Goldman Sachs said in a Thursday note.CPI data has been slightly sticky above the Fed's 2% target, with the <a target="_blank" class="" href="https://www.businessinsider.com/inflation-september-cpi-consumer-price-index-federal-reserve-interest-rates-2024-10">latest report</a> showing inflation cooled in September but less than economists had expected.The labor market, on the other hand, appears to be a smaller source of stress for the Fed, but Powell said it's "prepared to adjust the pace and destination" of easing as the jobs data evolves."There seems to be less anxiety about the risk of rising unemployment and slowing job growth," Fitch Ratings chief economist Brian Coulton said in a Thursday note.The latest employment data, released Thursday, shows weekly jobless claims increased slightly to 221,000, a gain of 3,000 from the week before and in line with expectations.Investors seem hopeful Trump's light regulatory stance and proposals for corporate tax cuts will make for a more friendly business environment. <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-bull-rally-trump-deregulation-tax-cuts-evercore-2024-11">Evercore ISI this week predicted</a> the S&amp;P 500 to jump 11% by next summer as the rally accelerates in Trump's second term. Powell said the election outcome will have "no effect" on the Fed's policy in the near future and reiterated that the Fed does not speculate on any administration's potential impact on the economy.Here's what else is going on:<ul><li><a target="_blank" class="" href="https://www.businessinsider.com/polymarket-whale-banked-85-million-profit-trump-president-election-win-2024-11?miRedirects=1">The Polymarket "whale" made a lot more</a> than previously thought betting on Trump to win. </li><li>Stocks are entering "Crazy Town" as valuations near generational highs. </li><li>Stocks tied to Russia rally as Trump's win <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/russia-stocks-trump-win-ukraine-war-putin-zelenskyy-2024-11?_gl=1*7o1w4e*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTczMTAxMTE0MC4zNzguMS4xNzMxMDEzMTI1LjYwLjAuMA..">fuels hopes</a> for an end to the Ukraine war.</li><li>Trump's win created a <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/wealthiest-people-in-world-net-worth-increase-trump-victory-stocks-2024-11?_gl=1*1kcs0b*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTczMTAxMTE0MC4zNzguMS4xNzMxMDEzMTUyLjMzLjAuMA..">record $64 billion</a> of net worth for the world's 10 richest people.</li></ul>In commodities, bonds, and crypto:<ul><li>Oil futures were up. <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/oil-price?type=wti">West Texas Intermediate crude</a> rose 0.5% to $72.06 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price?utm_medium=ingest&amp;utm_source=markets">Brent crude</a>, the international benchmark, climbed 0.7% to $75.42 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price?utm_medium=ingest&amp;utm_source=markets">Gold</a> rose climbed 1.4% to $2,713.80 an ounce.</li><li>The 10-year Treasury fell nine basis points to 4.335%. </li><li><a target="_blank" class="" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> was up slightly to $76,505.</li></ul>

Stock market today: Stocks extend post-election rally as the Fed cuts interest rates

<ul class="summary-list"><li>Investors might consider Treasury bills over CDs for better liquidity and tax benefits: Jason Browne</li><li>Treasury bills offer higher yields in some cases and are exempt from state taxes.</li></ul>If you're looking to put money to work in the fixed-income market before short-term interest rates likely come down further, you're probably considering a <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/who-has-the-best-cd-rates-right-now">certificate of deposit</a>, also known as a CD.In many ways, buying a CD is the same as investing in a bond. You hand the money over to your bank or credit union for a set period of time, and they pay you a monthly dividend before returning your money at the maturity date.But there are some advantages to investing in another cash equivalent — 3-month and 6-month Treasury bills — according to Jason Browne, the founder of Alexis Investment Partners.One is that they're more liquid than CDs. You can buy and sell Treasurys through a brokerage account quickly without forfeiting interest already earned. But if you want to exit a CD before its maturity date, you usually must give up prior interest payments.This gives you more control over being able to deploy money into places like the stock market on a moment's notice in case of a correction, he said."T-bills are easy to buy these days at no commission through almost every discount broker," Browne said.Another reason is that Treasurys are exempt from state taxes, which vary, while CDs are not.Perhaps a third reason, depending on where you bank, is that in many cases the shortest duration Treasurys are paying better rates than CDs. Yields on 3-month bills are 4.6%, and while some banks are offering similar or slightly higher rates still, many have much less attractive yields. According to <a target="_blank" class="" href="https://www.depositaccounts.com/cd/3-month-cd-rates.html">DepositAccounts by LendingTree</a>, the average 3-month CD yield is 1.9%.In terms of duration, Browne said that short-end T-bills are better than durations in the middle or long end of the yield curve, at least for the time being, with the Fed only having cut 50 basis points so far."Right now I don't see a lot of benefit of going further than six months," he said. "I just think the further you go, you're getting paid significantly less for something that has duration risk, and it can give you less liquidity, therefore."Over the next year, however, Browne sees short-end yields becoming less attractive as the Fed cuts, and more medium-term yields rising as a soft-landing scenario — his base case — comes more into view for investors.Typically, fears about a recession push down yields on longer-duration bonds as higher investor demand for safe assets raise the price of the securities. Recession concerns are elevated at the moment with the labor market weakening, but Browne believes those clouds will clear in the months ahead, lowering investor demand for longer-duration bonds, causing their yields to rise.So, buying short-duration T-bills in the meantime buys you time while longer yields rise, he said."Our feeling is that we're going toward a more normal yield-curve environment," Browne said. "The transition until we get there is still paying you more for staying liquid, high-quality short duration."

Try this higher-interest, lower-tax alternative to CDs while rates are still high 

<ul class="summary-list"><li>My bank has lowered the APY on my high-yield savings account by almost half a percent recently.</li><li>I'm not happy that my cash is generating less returns now, and I don't know what to do.</li></ul>It's never pleasant to receive an email from your bank informing you that the interest rate on your <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/best-high-yield-savings-accounts-rates-right-now">high-yield savings account</a> is decreasing.Unfortunately, like many Americans happy to collect a robust yield on their savings, I've gotten three of these notifications in the last three months as the Federal Reserve has begun to lower interest rates. From August until the end of October, the annual percentage yield (APY) on my high-yield savings account has fallen from 4.6% to 4.2%.I opened this bank account almost two years ago, right after graduating from college. Back in 2023, with inflation still elevated, interest rates were at their highest levels since the Great Financial Crisis, and it seemed like most banks were offering near-5% yields on savings. After paying off my bills every month, I would put the remainder of my paycheck into my high-yield savings account and watch the number creep up.Now, it looks like the days of a 5% APY are in the past. In September, the Federal Reserve dished out a 50 basis-point rate cut, signifying the beginning of the end for high rates. Continuing this trend, the central bank's chair, Jerome Powell, announced a <a target="_blank" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">25 basis-point cut</a> last week, and is expected to slash rates further in the months ahead.Is there anything I can do about the state of my savings account, or do I have to watch my yield erode away slowly? Curious, I asked three financial experts for their advice on this topic.As a famous politician once said, we didn't just fall out of a coconut tree. Context is important. Patti Black, a financial advisor at Savant Wealth Management, reminded me that the recent high interest rate environment is a marked departure from the last decade, where interest rates were near zero and there was no yield on cash to be found. So, while yields dropping from nearly 5% might seem like a tough pill to swallow for someone like me who just opened an account in the last couple of years, it's still a pretty good deal when you consider where rates have been in the past.I didn't have a bank account during the post-2008 zero-interest rate policy era, so this was helpful context to have. Perhaps my generation is indeed coddled — first by our parents and now by Jerome Powell's post-pandemic rate hikes.Black also suggested that I switch up my perspective. While a rate-cutting cycle means less return on my cash, it also means lower borrowing costs for a car loan or a mortgage, which is good news for the housing market.But there are other options for where I can have my money sit, Black said. Of course, one alternative is a <a target="_blank" href="https://www.businessinsider.com/cd-rates-certificate-deposit-high-interest-where-to-invest-now-2024-10">certificate of deposit</a> (CD), which is essentially a savings account that holds money at a fixed interest rate for a fixed period of time. CDs generally pay higher interest rates than savings and money market accounts in exchange for locking up your money for anywhere between three months to many years. However, my hands are a little tied. A well-known rule of thumb is to keep three to six months of living expenses available in your bank account as an emergency fund (read: liquid and highly accessible), so it's not a good idea to lock up money in my high-yield savings account for a prolonged period time. I could withdraw my money from the CD if needed, but I'd have to pay back some or all of the interest I'd generated up until that point as a penalty.With this in mind, Black said that sometimes it doesn't matter what the rate on the high-yield savings account is — it's the best place to park cash for easy access.Armed with this context, I still wanted to see if there were more ways to put my cash to work for me.Daniel Milan, financial advisor at Cornerstone Financial Services, had some more thoughts on CDs. A three-month CD could be a good option if I were comfortable locking up my money for that period of time, according to Milan.My bank didn't offer CDs, so I would need to open up a new bank account, which isn't necessarily a bad thing. Some financial experts recommend having <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/how-many-savings-accounts-can-you-have">multiple bank accounts</a> for different savings goals. Searching online, I saw <a target="_blank" href="https://www.businessinsider.com/personal-finance/banking/best-3-month-cd-rates">multiple options</a> yielding over 4.6%.However, Milan didn't recommend locking up my money for longer. Usually, the longer the term of the CD, the higher the rate. But that's not always the case in today's market."In this current environment, it makes no sense to go further out than three months on a CD because the three-month CD is paying you more than a one-year or two-year right now," Milan said.Looking at CD offerings from a variety of banks, I discovered that this was indeed true — generally, the longer the CD duration, the lower the rate, especially after a 1-year duration. Rates on 6-month and 9-month CDs were also attractive depending on the bank, but again, my liquidity needs take those off the table.Many of the banks I looked at didn't offer short-term CDs, either. For example, one option offered a 4.5% APY on an 11-month CD, 3.7% on a 2-year, and 3.5% on a 5-year.It wouldn't make sense to move my money out of my savings account without high enough compensation for the lower liquidity."You're not getting paid for that illiquidity," Milan told me.Short-term <a target="_blank" href="https://markets.businessinsider.com/bonds">Treasury bills</a> are another investment option for higher yield, and they offer more liquidity than CDs, according to Richard McHorter, a private wealth advisor at SRM Private Wealth. A three-month Treasury bill currently yields 4.43%.There's also the added benefit of tax savings, which is especially appealing for McHorter, who lives in California: "If you're a resident of a high-income tax state, I would be looking at Treasury bills."As a resident of New York City, the idea of lower taxes certainly appeals to me. If I were to buy Treasury bills, I would only need to pay federal taxes, bypassing state and local income taxes.McHorter also said that there's a lot of uncertainty about interest rates right now, and they could actually start going back up again. Trump's proposed <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-hit-company-stock-profits-hardest-china-investing-manufacturing-2024-11">tariff policies</a> could increase inflation, in which case the Fed would probably increase rates to combat an overheating economy, he said.If I buy a three-month Treasury bill, I can reassess the inflation situation when I get my money back in three months and reinvest it accordingly, McHorter said.When it comes to interest rates and inflation, pay attention to the data and don't try to predict the market with your money, Milan advised. <a target="_blank" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">Jerome Powell</a> himself has said that it's too soon to say how the election results could reshape markets and interest rates."My advice to anybody would be: just be diligent in reading and interpreting the data as it comes out," Milan said. Watch inflation data and Fed commentary, and base your investing decisions on the information you have at hand.It feels like the market is a bit in limbo as everyone waits for the effects of the election to ripple through, but as Black mentioned, not taking any action right now isn't the worst decision.What's next? For starters, I'm going to sit down and crunch some numbers for what three to six months of living expenses look like for me and keep that in my high-yield savings account. With the money I have left over, I have some good options.Are you a Gen-Zer who has recently been faced with an investing predicament? Feel free to reach out to Christine at <a target="_blank" href="mailto:cji@businessinsider.com">cji@businessinsider.com</a> to share your story.

The interest rate on my high-yield savings account keeps dropping. I asked 3 experts how to earn more on my cash.

<ul class="summary-list"><li>President-elect Donald Trump said he would implement tariffs on imported goods.</li><li>Economists said the proposals could boost inflation and raise prices for consumers.</li></ul>One of the first policies President-elect <a target="_blank" class="" href="https://www.businessinsider.com/election-results-trump-harris-presidential-election-2024-11">Donald Trump</a> is expected to enact after being sworn into office is imposing <a target="_blank" class="" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10#imported-goods">taxes on imported goods</a>.Many economists say these tariffs, as well as some of his other proposals, could kick-start another bout of inflation and interest-rate hikes.Trump has said that his proposals would not impact US prices. "I am going to put tariffs on other countries coming into our country, and that has nothing to do with taxes to us. That is a tax on another country," he said in an August speech.Some experts have argued <a target="_blank" class="" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">otherwise</a>. Economists and investors project that taxes imposed on imports will be passed on to American consumers in the form of higher prices. In an economic chain reaction, households would then pay higher interest rates on borrowing of all kinds as the Fed moves to tame that newly rekindled inflation.<h2 id="28eee089-e5e3-42d1-bc61-18122840af26">Ramping up tariffs from Trump's first term is expected to eat into Americans' wallets</h2>On the campaign trail, one of Trump's cornerstone proposals was a 60% <a target="_blank" class="" href="https://www.businessinsider.com/where-does-trump-vance-stand-on-china-tariffs-inflation-taxes-2024-7">tariff</a> on goods imported from China and a 10% to 20% tariff on imports from other countries.The US Census Bureau reported that broad tariffs would likely affect the prices of automobiles, drugs for human and veterinary use, food and beverages, furniture, and household appliances.Trump could announce these changes as soon as he takes office because they would not require congressional approval, but because implementation could take time, consumers would not see higher prices immediately.An <a target="_blank" class="" href="https://www.piie.com/sites/default/files/2024-09/wp24-20.pdf">analysis</a> from the nonpartisan Peterson Institute examined Trump's proposed 60% tariff on goods imported from China and estimated that it would boost inflation by 0.4 percentage points in 2025. The estimate does not include Trump's proposal for a 10% to 20% tariff on other imports.Markets are also <a target="_blank" class="" href="https://markets.businessinsider.com/news/bonds/surging-treasury-yields-after-trump-win-show-borrowers-may-not-get-relief-2024-11">expecting higher inflation</a> under Trump; bond yields surged following Trump's victory. That led to the 30-year fixed mortgage rate rising, meaning homebuyers are on track to see higher interest rates on loans.An <a target="_blank" class="" href="https://taxpolicycenter.org/taxvox/tpc-trump-tariffs-would-raise-household-taxes-and-slow-imports">analysis</a> by the nonpartisan Tax Policy Center found that Trump's policies would decrease posttax incomes by an average of $1,800 in 2025. A separate <a target="_blank" class="" href="https://www.americanprogressaction.org/article/trumps-tariff-would-cost-the-typical-american-household-roughly-1500-each-year/">analysis</a> by the left-leaning Center for American Progress said that his tariff plans could cost the typical American household an extra $1,500 a year.Tariffs are typically used to raise government revenue and bolster domestic manufacturing. Trump enacted them in his first term as part of his "America First" policies, including a 25% tariff on Chinese goods that ultimately <a target="_blank" rel="" class="" href="https://www.businessinsider.com/trump-tariff-trade-war-risk-china-exports-great-depression-economy-2024-5">led to a trade war</a> between the two economies. While they did not significantly impact inflation, they did raise taxes for consumers. The Tax Foundation <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/where-does-trump-vance-stand-on-china-tariffs-inflation-taxes-2024-7">estimated</a> that Trump's tariffs during his first term amounted to a nearly $80 billion tax increase on Americans buying Chinese imports.Trump's win is also expected to influence the Federal Reserve's upcoming decisions on interest rates. While it's too soon for the Fed to make any adjustments since Trump has not yet implemented any tariffs, members of the Federal Open Market Committee will likely begin discussing how Trump's future economic policies could affect consumers — including whether the central bank would need to hike interest rates in the future in response to inflationary pressure.The Fed is expected to <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-federal-reserve-election-jerome-powell-inflation-jobs-2024-11">cut interest rates by 25 basis points</a> on Thursday, and Fed chair Jerome Powell will likely offer some insight into the Fed's direction following Trump's victory.However, the future of the Federal Reserve <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cut-trump-fed-powell-reaction-independence-history-2024-9">is uncertain under Trump</a>. The president-elect has previously suggested that he would like to have a say over interest-rate decisions, something presidents do not currently have. This raises the question of whether the central bank would continue to remain politically independent.Americans will likely learn more about what to expect from Trump as the year comes to a close. While Trump has maintained that his policies will help the economy and leave Americans better off, the Nobel Prize-winning economist Joseph Stiglitz <a target="_blank" class="" href="https://www.businessinsider.com/trump-presidency-policies-inflation-economy-americans-joseph-stiglitz-letter-2024-6">previously told Business Insider</a> that the "general consensus" among experts is that "the Trump administration would be more inflationary.""The broad assessment of the consequences of that is that the Fed would be forced to raise interest rates, and all that combined would still serve to increase inflation even as unemployment increased and GDP slowed," he said.

Get ready for inflation and interest rates to rise again

<ul class="summary-list"><li>US indexes edged higher as investors waited for a likely interest rate cut from the Fed. </li><li>The central bank will wrap up its policy meeting at 2 p.m. ET, with markets pricing in a 50 basis point move. </li></ul>US stocks rose on Wednesday as traders readied for what's likely to be the Federal Reserves's first rate cut in four years. Major indexes were slightly higher after the opening bell, with the S&amp;P 500 looking to hit a fresh record after touching all-time highs in Tuesday's session. Bond yields rose. The 10-year Treasury yield was up three basis points to 3.677%. Central bankers are set to conclude their policy meeting and announce their highly anticipated decision on interest rates at 2 p.m. ET, with markets betting on a rate cut with certainty. Investors are pricing in a 61% chance the Fed will cut rates 50 basis points, according to the <a target="_blank" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch tool</a>, down slightly from 63% odds priced in on Tuesday. The debate has swung in favor of a larger rate cut versus a 25 basis point move following recent data points that support more rapid Fed easing. Softer labor market condition in July and August and a slight rise in the monthly core consumer price index last month bolster the case for a 50 basis point move, traders say. Still, forecasters expect the Fed to tread cautiously given the upside risks to inflation stemming from loosening monetary policy too quickly. "Though consensus is leaning toward a 50 basis point move, we look for the Fed to cut by 25 basis points today. Inflation growth is not yet at the Fed's target for price stability, the unemployment rate still hovers around 4.0%, and federal deficit spending continues to surge," John Lynch, chief investment officer at Comerica Wealth Management, said in a note Wednesday morning. "We suspect this next rate cycle may resemble the non-recessionary 'tweaks' of 1995.""Sure, there are risks of further labor market cooling, but I see the reignition of price pressures as a graver danger," José Torres, a senior economist at Interactive Brokers, said, predicting a quarter-point cut.Following the interest rate decision, all eyes will be on Fed Chair Jerome Powell, who will deliver prepared remarks during a press conference. Whether he strikes a dovish or hawkish tone, his commentary is likely to sway markets. "Powell will face a communications challenge regardless of their chosen action. If the Fed opts for a 25bp reduction, the Chair will have to project confidence about the outlook and assuage concerns about the Fed falling behind the curve. Conversely, if they cut by 50bps, Powell will need to avoid sending negative signals about the economy and dissuade markets from pricing a sequence of large reductions. These will be challenging — but manageable — communications," Deutsche Bank strategists said.Investors should gear up for potential volatility whatever the Fed ends up deciding. While the market has been building toward this moment for most of the year, it shouldn't be assumed the move is fully priced in, and a sharp swing in either direction is possible. "The intraday path on Powell Fed Days has been interesting, to say the least," Bespoke Investment Group said in a note. "While the market has usually bounced immediately following the 2 PM rate decision, the sell-off usually starts at or near the end of Powell's post-FOMC press conference."Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,635.51, up 0.02%</li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 41,537.05, down 0.17% (-69.13 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 17,664.14, up 0.21%</li></ul>Here's what else is going on:<ul><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/bitcoin-price-increase-outlook-cryptocurrency-fed-rate-cut-risk-recession-2024-9">Bitcoin is surging on hopes rate cuts could drive a speculative rush</a> into the cryptocurrency.</li><li>The more <a target="_blank" class="" href="https://www.businessinsider.com/fed-rate-cuts-outlook-jerome-powell-fomc-economy-recession-bmo-2024-9">markets price in a jumbo rate cut</a>, the more likely the Fed is to deliver, according to BMO.</li><li>The <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/us-debt-crisis-dedollarization-dollar-dominance-treasury-bond-china-jpmorgan-2024-9">biggest threat to the US dollar</a> is America's exorbitant debt load, according to JPMorgan.</li></ul>In commodities, bonds, and crypto:<ul><li>Oil futures edged down.<a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price"> West Texas Intermediate</a> crude oil dipped 0.7% to $70.69 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, edged lower 0.6% to $73.31 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> ticked 0.4% higher to $2,604 an ounce.</li><li>The 10-year Treasury yield edged up three basis points to 3.677%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> rose 1% to $60,041. </li></ul>

Stock market today: Indexes edge up ahead of major Fed interest rate decision

<ul class="summary-list"><li>The Federal Reserve cut interest rates by 25 basis points on Thursday.</li><li>It follows a 50-basis-point cut in September, with the pace of inflation continuing to cool.</li></ul>Another <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-federal-reserve-election-jerome-powell-inflation-jobs-2024-11">interest rate cut</a> is headed Americans' way.On Thursday, the Federal Open Market Committee announced a 25-basis-point interest rate cut, following a <a target="_blank" class="" href="https://www.businessinsider.com/fed-cuts-interest-rates-how-much-september-fomc-powell-inflation-2024-9">50-basis-point cut</a> in September. It follows continued data showing inflation is nearing the Federal Reserve's 2% target — the consumer price index, a commonly-watched measure of inflation, <a target="_blank" class="" href="https://www.businessinsider.com/inflation-september-cpi-consumer-price-index-federal-reserve-interest-rates-2024-10">rose 2.4%</a> over the year in September.This latest interest rate decision also came two days after Donald Trump <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-election-victory-impact-investments-costs-housing-taxes-childcare-2024-11">won the presidential election</a>. Trump is expected to implement high tariffs once his term begins, and members of the FOMC will likely begin discussing the impact of the president-elect's policies on the economy and forthcoming interest rate decisions."A victory for Trump could raise doubts over a December cut, and the Fed may strike a more hawkish note as a result," Matthew Ryan, head of market strategy at financial services firm Ebury, said in a statement last week.Trump's victory also throws into question the future of the Fed itself. Trump has previously said that he would like to <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cut-trump-fed-powell-reaction-independence-history-2024-9">have a say in interest-rate decisions</a>, challenging the politically independent nature of the central bank.Fed chair Jerome Powell will likely offer more insight into the Fed's thinking following Trump's victory. He has expressed confidence in the economy's direction in recent months, saying during remarks in late September that "overall, the economy is in solid shape.""We intend to use our tools to keep it there," he said.However, <a target="_blank" class="" href="https://www.businessinsider.com/october-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-11">recent jobs data</a> will make it difficult for the central bank to give a clear vision of its upcoming decisions. The economy added just 12,000 jobs in October, well below the 106,000 forecast, primarily because Hurricanes Milton and Helene — along with the Boeing strike — put people temporarily out of work, artificially driving down the employment figures.It will take time for Americans to feel the impact of interest rate cuts, given the lag in monetary policy, meaning credit cards, housing, and car loans won't see immediate relief.The 25-basis-point cut was in line with market predictions. Still, some Democratic lawmakers urged the Fed to implement another 50-basis-point cut to give Americans continued financial relief. On November 1, Sens. Elizabeth Warren and John Hickenlooper wrote in a <a target="_blank" class="" href="https://www.warren.senate.gov/imo/media/doc/final_-_warren_hickenlooper_letter_to_fed_renovember2024ratecut.pdf">letter</a> to Powell that housing costs "are still too high," and bigger rate cuts are warranted."If the Fed moves forward with more rate cuts, housing prices and mortgage rates would thus also likely drop, allowing more families to achieve the American dream," they wrote.

The Federal Reserve gives Americans another interest rate cut

New Delhi: Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">Sebi</keyword> has proposed allowing Real Estate Investment Trusts (<keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword>), Small and Medium REITs (SM REITs) and Infrastructure Investment Trusts (<keyword id="20186403" type="General" weightage="20" keywordseo="InvITs" source="keywords">InvITs</keyword>) to use <keyword id="21737868" type="General" weightage="20" keywordseo="interest-rate-derivatives" source="keywords">interest rate derivatives</keyword> for <keyword id="23778373" type="General" weightage="20" keywordseo="hedging-risk" source="keywords">hedging risk</keyword>. Also, the regulator has suggested approving locked-in units for REITs and InvITs to be transferred among sponsors and their groups, similar to rules for promoters in listed companies, to help sponsors manage their holdings without compromising "skin in the game". Additionally, Sebi has suggested permitting fixed deposits to be considered as cash equivalents when calculating leverage for REITs and InvITs, clarifying credit rating requirements for REIT and InvIT borrowings, and setting a timeline for filling vacancies on their boards and expanding the asset base for REITs and SM REITs. The regulator has also proposed to permit REITs to invest in liquid mutual funds. It has suggested measures to facilitate ease of doing business for REITs and InvITs, along with investors' protection. According to its consultation paper, Sebi is considering allowing REITs and InvITs to hedge against interest rate fluctuations by using derivatives like interest rate swaps. This could help stabilise cash flows, reduce risks, and protect unitholder interests, especially for long-term infrastructure projects. It is also proposed to define "Common Infrastructure" for REIT regulations. To enhance business flexibility for REITs, it has been proposed to clarify that facilities like power plants, heating/cooling systems, water treatment, and waste treatment plants -- serving one or more REIT assets -- will qualify as "common infrastructure" under REIT rules. This applies even if these facilities are not located within a single project due to their technical requirements. These facilities should supply and be used exclusively by REIT assets. For power plants, however, any excess power can be sold to the state utility/grid as per regulations, with any credits or payments going towards the benefit of REIT assets. To improve transparency, it has been proposed to amend the governance norms for quarterly reporting of InvITs. Currently, quarterly results for the investment manager and its business segments are presented to the investment manager's board, but there is no direct requirement for InvITs to report their performance. The proposed amendment would clarify that quarterly results should specifically reflect the performance of the InvITs themselves, not just the investment managers. This change aligns InvIT regulations with REIT regulations, where the focus is on the quarterly results of the REIT itself. Also, it has been suggested to align the composition of NRCs in REIT and InvIT managers with listed companies under the LODR regulations. Currently, all NRC members for REITs and InvITs must be independent directors. The proposal allows a mix of independent and non-executive directors, similar to listed companies. To enhance investors' protection, Sebi has suggested reviewing conditions for InvITs to borrow beyond the 49 per cent limit, assessing REIT investments in unlisted equity shares and outlining the roles and responsibilities of trustees for REITs, InvITs, and SM REITs. In a separate consultation paper, the regulator has proposed a regulatory framework for "restricted return InvITs" to provide infrastructure investors with predictable returns by setting limits on both upside gains and downside protection. The proposed framework for restricted return InvITs is designed to provide investors with structured returns, capped at both minimum and maximum levels to offer stability. Restricted return InvITs would include downside protection -- a minimum assured return -- and/or an upside restriction, a cap on returns -- depending on the arrangement. These investments would be limited to sophisticated investors who meet high minimum investment thresholds, with each unit priced at a minimum of Rs 500 crore and total InvIT assets of at least Rs 50,000 crore. Investors would be required to sign a waiver and undertaking form, acknowledging their understanding of the structured returns and risks involved, including the transfer of any excess returns to the sponsors. This waiver should be submitted before purchase in both primary and secondary markets, with compliance overseen by merchant bankers or brokers. The Securities and Exchange Board of India (Sebi) has sought public comments on both consultation papers by November 13.

Sebi proposes to allow InvITs, REITs, SM REITs to use interest rate derivatives for hedging risk

<ul class="summary-list"><li>Mid-cap stocks are poised for greater growth than small- and large-caps, Goldman Sachs says.</li><li>Analysts point to lower valuations than large-caps and stronger fundamentals than smaller shares.</li></ul>There's one area of the stock market that is likely set for outsized growth after rate cuts: the mid-cap shares. Mid-cap equities have historically seen stronger growth in the year after rate cuts compared to large- and small-caps, analysts from Goldman Sachs say."Since 1984, the S&amp;P 400 mid-cap index has typically outperformed both the S&amp;P 500 and Russell 2000 during the 3 and 12 months following the first Fed rate cut," the analysts wrote in a Tuesday note.They forecast a 13% return on mid-cap shares in the next year, primarily driven by low starting valuations and a healthy environment for growth."A low starting valuation has historically been a significant predictor of forward mid-cap returns, particularly at extreme levels, unless the US economy enters a recession," the analysts said.They add that mid-caps offer "growth and quality at a discount price" compared to large-caps, which are currently trading just below record highs reached during the tech bubble and post-pandemic euphoria.Consensus forecasts see mid-cap earnings growing 11% annually in the next two years, compared to 7% for the S&amp;P 500, the analysts say.Mid-caps also have better balance sheets and profitability than small-caps, the analysts said. "Small-caps are even more sensitive to the economy than mid-caps," the analysts said, adding, "10-year interest rates near 4% and the risk of renewed growth concerns suggest small-caps will likely struggle to outperform on a sustained basis."Goldman analysts say their expectations for strong mid-cap performance is largely dependent on strong, accelerating economic growth, which generates the strongest monthly mid-cap returns."The S&amp;P 400 has typically generated positive returns as long as the US economy is expanding. Median monthly mid-cap returns are strongest when the economy is expanding and accelerating (+2%) but still solid when an expansion decelerates (+1%), which is the Goldman Sachs baseline forecast," the analysts said.Further weak labor data after July's surprise unemployment increase could pose downside risks to mid-caps, they note, since the industrial and financial sectors are heavily weighted in the index. The analysts say these risks "should be cushioned by lower valuations relative to large-caps and stronger fundamentals relative to small-caps," though, and that there is low probability of a recession in the next year.Goldman Sachs expects the Fed to cut interest rates by 25 basis points at its policy meeting next week, followed by 25 basis points in November and December.That forecast is slightly more conservative than the general consensus. Investors are pricing in a 25 basis point cut for September, and cuts totaling between 100 and 125 basis points by the end of the year."In the near term, the performance of mid-caps relative to large- and small-caps will depend on the strength of the economic growth data and the trajectory of the Fed easing cycle," the analysts said.

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