Jumat, 02 Agustus 2019

Magid: There are good reasons expensive phones aren’t selling - The Mercury News

I wasn’t surprised by the CNBC.com headline, “Apple and Samsung earnings show most people don’t want $1,000 phones.”

Larry Magid (Gary Reyes / Mercury News)

As nice as the iPhone 10x and Samsung Galaxy S10 phones are, most people don’t need to spend $1,000 or more on a smartphone. In fact, most people don’t need to spend anything on a new phone because their old one probably works just fine.

Today’s smartphone market reminds me of the auto-industry of the ’50s and ’60s when people were encouraged to buy a new car every year or two. My frugal parents didn’t fall for that, but a lot of their friends did.

Apple and Samsung, of course, want you to buy the latest and greatest offering every year and even have financing programs to encourage that by having you, essentially, lease your phone with the payments added to your cell phone bill. It may be painless, easy and seemingly affordable, but if you add up the numbers, you’ll find you’re spending a lot more than you need to, even if they aren’t charging you interest.

Imagine if that were the case with other things you own. When’s the last time you replaced your refrigerator, stove, microwave oven or coffee maker? If you’re like me, only after the old-one stopped working or got too expensive to repair. Sure, there are breakthrough moments like the time I replaced a greasy old electric stove with a shiny new induction cooktop but, other than that, I don’t think about my appliances until they stop working – and even then I usually just get them fixed.

And unlike the difference between my old stove and my newer one, this year’s smartphones aren’t all that much better than last year’s. Every year when Tim Cook introduces a new iPhone, he says something to the effect of “it’s the best iPhone ever.” He’s right of course – why would they introduce a flagship phone that isn’t better than last year’s. But the difference is often trivial. Yes, they improve the camera every year, but cell phone cameras have been good for several years now. Yes, they’re faster, but last year’s phone is fast enough and, besides, the reasons phones slow down isn’t because of big differences in hardware but because of the apps you use.

If your phone is slow or a bit buggy, you can return its performance to the way it was the day you bought it by making sure your data is backed up (it probably already is to iCloud or Google’s backup servers but check first) and then restore it to factory defaults. That will erase everything and clean up all the digital cobwebs. Restore your apps and I bet it will be a lot faster. It might even be more energy efficient if you only replace the apps you actually need vs. the many you’ve probably installed but rarely use.

Of course, some people do need to buy a new phone. Their old one might break, get lost or perhaps the screen is cracked, or the battery isn’t lasting as long. You can have the screen or batteries replaced but it might not be worth it. But if you are in the market for a new phone, you don’t need to spend $1,000 or more for a decent one just as you don’t need to spend $50,000 or more for a reliable new car.
I recently reviewed Google’s Pixel 3a which sells for $399 or $16.63 a month for 24 months, which adds up to $399.12 – an interest free loan.

For most practical purposes it’s as good as Google’s flagship Pixel 3, that starts at $799. It’s not 100% as good, but it’s 50% the price and has a longer battery life. You give up water resistance and inductive charging and, in theory, the screen isn’t as nice, but the difference is negligible. The processor is a bit slower than the flagship model but – again – the difference is essentially irrelevant. Very few people would even notice.

There are plenty of other budget-priced Android phones on the market from LG, Motorola, Nokia and other companies. Even Samsung has affordable phones, including slightly older models like the Galaxy S8, which Best Buy sells unlocked starting at $349. You can buy a reconditioned one for less.

If you simply must have an iPhone, you can get a perfectly good older model such as the iPhone 8, for a lot less than the latest model. Apple sells brand new ones for $599. Gazelle.com sells reconditioned ones for just over $400. iPhone 7s, which were state of the art in 2017 are $449 from Apple and start at $239 from Gazelle. You can probably find lower prices on eBay.

If you want – literally – the latest iPhone, you can save about 25% by selecting an iPhone XR instead of the iPhone XS. I’ve reviewed by the XS and XR and find them to be comparable in most important aspects.  As I said when I first reviewed them, The XS has a higher-resolution OLED display compared with the LCD screen on the XR, but holding them side-by-side, the difference, to my eyes, is negligible.

Despite what I just wrote, I know some people will want the latest and greatest and some of you who own the latest iPhone or Samsung, or Pixel are anxiously awaiting the new high-end models that will be announced this fall. I don’t blame you – I get excited about new phones too and enjoy getting to review them as soon as they’re released. If you really want a new phone and can swing it without having to forgo rent, skimp on medicine or eat beans for dinner, than I’m certainly not going to tell you not to indulge yourself.  But if you need to save some money or have other things you’d rather spend your dollars on, then heed my advice and either keep your old phone or get a really good one that serves your needs but doesn’t break the bank.

Larry Magid is a tech journalist and internet safety activist.

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https://www.mercurynews.com/2019/08/02/magid-there-are-good-reasons-that-apple-and-samsung-are-having-trouble-selling-their-most-expensive-phones/

2019-08-02 10:00:00Z
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Kamis, 01 Agustus 2019

Bond market fights Fed, interest rates drop sharply in blowout move - CNBC

The bond market is bent on having its way and is now pricing in a Fed mistake.

In a swift reversal, the bond market began to assume more easing is coming, a day after Fed Chairman Jerome Powell surprised markets with a low commitment to future interest rate cuts and a less dovish view than expected.

Additionally, the idea that low inflation will now force the Fed to ease more than Powell signaled after the Fed cut rates Wednesday has now filtered into the markets and is driving bond yields sharply lower and stock prices higher. The 10-year U.S. Treasury yield, which influences mortgages and other loans, fell to a stunning 1.95%, nearing a three-year low, while the Dow surged more than 300 points.

Powell upended a big chunk of market positioning when he said Wednesday the Fed was in "midcycle adjustment," not a longer-running rate-cutting cycle. The market had been poised for three cuts this year, and in a convulsive move, it gave back one of those cuts. But by Thursday, the odds for a September rate cut in the futures were back above 64% and traders say it's the Fed — or at least Powell— that's getting it wrong.

"The market was already starting to say 'we don't believe everything is going to be perfectly fine and this is only going to be a 25 basis point cut,'" said John Briggs, head of strategy at NatWest Markets. "Follow that up with weaker than expected ISM, and it's only gaining momentum on the idea that Powell will have to ease anyway."

The ISM manufacturing index came in Thursday at 51.2, less than the 52 expected. It still shows expansion, but the market is sensitive to an overall trend of weakening at factories. Plus, the report came after weak manufacturing data in Europe earlier in the day. The ISM is also the last big piece of data before Friday's July jobs report.

"If we get a weak payroll number the market might just run him [Powell] off," said Briggs. Economists expect 164,000 nonfarm payrolls in the July report, and they expect to see wages rise by 0.2%, according to Refinitiv.

Simply put, the bond market is implying that the Fed is taking the wrong tact, and its failure to promise more easing will force it in the end to ease anyway. Traders have also taken issue with Powell's comments from Wednesday when he said the Fed helped the economy by just transitioning from its hawkish rate-hiking cycle in December to pausing through the spring and now to easing.

Several said actions have to follow those words to prevent further market upheaval, and the comments from Powell on Wednesday fell short of the commitment the market expected.

"What's additionally worrisome is the market is pricing in an element of a policy error trade," said Jon Hill, rate strategist at BMO.

Traders on Thursday were betting against the Fed's hawkishness, driving interest rates lower along the Treasury curve to one month lows for longer-dated securities, like 10-year notes and 30-year bonds. The 2-year note yield has lost 15 basis points to 1.81%, since its high of 1.96%, hit right after Powell's comments Wednesday. The 10-year fell to 1.95% — below 2% for the first time since July 5 — after hitting a high of 2.15% on July 15. The 10-year yield, which moves opposite price, is edging close to a 2016 low, which could trigger more buying.

Traders said bond market expectations for inflation fell Thursday, with the widely watched spread between 5-year Treasury yields and the yield on 5-year Treasury Inflation Protected Securities at about 1.5%. That is a measure of inflation compensation in the Treasury market over the next five years, including expected inflation and a risk premium.

"The 5-year breakeven is at 1.51%. What that means is if the Fed cemented expectations at 2% that would be at 2% or even a little higher. What this indicates is the Treasury market reflecting skepticism that the Fed will be able to achieve a 2% inflation rate over the next five years," said Hill. "In Q4, it was at 2% when the Fed was hiking. Now it's at 1.5, and yesterday it was 1.6 [prior to Fed announcement]."

The Fed's target for inflation is 2%, and the Fed has conceded it is concerned inflation is missing the mark. The Fed's preferred inflation measure, the core PCE deflator, is showing annualized inflation at about 1.6%.

"[Inflation expectations are] getting drilled because if the Fed is obstinate in easing and if it's going to take longer than the market thinks it should take to generate inflation, they'll underperform. Additionally, you have a stronger dollar in the wheel house so they're getting a double whammy today," said Briggs. "The front end of the curve, we're going to be lower here on the week. We're pricing rate cuts back in. It's helping stocks and TIPS." .

Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch, said the market's bet against inflation longer term is also a bet that the Fed will not be there to provide support.

"Breakevens got crushed and they're getting crushed again today. You thought at least you had some support from the Fed to help you provide some upside inflation pressure and it turns out you may not, and in that context you saw breakevens fall from the time the statement occurred," said Cabana. "You've seen them fall 8 basis points in the 10-year part of the curve. I don't think that's what the Fed was intending to do."

Cabana expects the Fed to cut rates by a quarter point in September, regardless of Powell's comments, which he described as confused and muddled.

"In the statement, the Fed said they were cutting because they were worried about global uncertainty and muted inflation. And they would continue to do that as long as those uncertainties exist because they want to sustain the expansion, " said Cabana. "In my mind, that means the Fed is willing to do more."

He said the Fed is focused on trade, global growth and inflation. "I don't think any of these things are going to magically solve themselves before September," he said.

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https://www.cnbc.com/2019/08/01/bond-market-fights-fed-interest-rates-drop-sharply-in-blowout-move.html

2019-08-01 16:46:54Z
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Amazon chief Bezos cashes in $1.8 billion of share pile - Yahoo Finance

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Amazon chief Bezos cashes in $1.8 billion of share pile

FILE PHOTO: Founder of Amazon and Blue Origin Bezos speaks at the John F. Kennedy Library in Boston

(Reuters) - Amazon.com Inc <AMZN.O> founder Jeff Bezos sold shares worth $1.8 billion in the last three days of July, reducing the value of his stake in the world's third most valuable company to about $110 billion.

The move by Bezos was part of a previously adopted trading plan and was revealed in regulatory filings that also showed that his former wife Mackenzie Bezos is now the online retailer's second largest individual shareholder.

Her stake, stemming from a divorce settlement of the pair's previous joint holdings, is currently worth more than $37 billion.

The numbers mean Bezos retains his pole position among the world's billionaires, while his former wife now ranks 23rd, according to Forbes data.

The couple announced their plan to divorce in a joint Twitter statement in January, and Amazon disclosed in April that 4% of its outstanding stock or 19.7 million shares would be registered in MacKenzie Bezos' name after court approval of the divorce.

The billionaire chief executive has said previously that he would sell stock worth about $1 billion each year to fund his rocket company, Blue Origin.

Blue Origin aims eventually to cut the cost of space flight to levels that would allow millions of people to live and work off Earth, Bezos has said.


(Reporting by Munsif Vengattil and Neha Malara in Bengaluru; editing by Patrick Graham)

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https://news.yahoo.com/amazon-chief-bezos-cashes-1-150027835.html

2019-08-01 15:08:23Z
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Burger King takes the Impossible Whopper nationwide August 8th - Engadget

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Smith Collection/Gado via Getty Images

Burger King announced today that it is adding the Impossible Whopper -- the chain's famous Whopper burger made with a plant-based patty from Impossible Foods -- to its menu nationwide. Starting on August 8th, you'll be able to go to any Burger King location in the United States and get your hands on the alternative meat burger.

The nationwide expansion comes after several successful tests in smaller markets. Burger King initially introduced the Impossible Whopper in April of this year as part of a trial run in St. Louis. The company then added the burger to the menu of its locations in San Francisco, Las Vegas, Miami, Baltimore, Columbus, Georgia and Montgomery, Alabama. According to a report from inMarket, Burger King locations with the Impossible Whopper saw significantly more traffic than the company's national average after introducing the plant-based burger.

In addition to taking the Impossible Whopper nationwide, Burger King is partnering with DoorDash to deliver the burger directly to people's homes. From August 8th to September 1st, DoorDash will deliver the Impossible Whopper with a $0 delivery fee. Users can also order the Impossible Taste Test -- an Impossible Whopper and original meat-based Whopper -- for $7 with no additional delivery fee. To enjoy the fee-free delivery, users can use the promotional code IMPOSSIBLE at checkout on DoorDash.

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https://www.engadget.com/2019/08/01/impossible-burger-whopper-burger-king-nationwide-august-8/

2019-08-01 15:06:24Z
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Economists who predicted the rate cut are now utterly confused about what the Fed does next - CNBC

Major Wall Street economists were largely in agreement that the Federal Reserve would cut rates by a quarter point heading into the second day of its two-day meeting on Wednesday afternoon.

But after a confusing news conference by the Fed chief, their forecasts for future rate policy are now all over the place.

The Fed cut its key interest rate by a quarter-point for the first time since 2008. But then Powell said after that this was just a "midcycle adjustment," causing the stock market to drop and rates to firm.

"If the Chair could not pull the Committee to 50bp (basis points) today or even a strongly dovish tilt, we see it as unlikely that he can pull them to cuts in subsequent meetings," UBS economist Seth Carpenter said. "Further cuts possible but not likely."

Still yet other economists varied between one or two more rate cuts going forward this year.

"Given today's Fed decision and guidance, we remain comfortable with our view that the Fed will provide two more 25bp cuts this year (September and October)," Bank of America said.

"[Wednesday's] policy action should be viewed as an 'insurance' rate cut," Wells Fargo economist Jay Bryson said.

"We continue to look for one additional 25 bps rate cut, probably at the October 30 policy meeting," he said.

Looking ahead, it will really be all about the "data" according to J.P. Morgan economists.

"We still look for one more easing in September, and continue to believe that, unlike today's meeting, the call on September depends on all of the data. While today's move was motivated by global growth, trade policy and inflation developments, we expect September's decision will also depend on domestic growth developments," they said.

Here's what the major Wall Street economists said about the Fed's latest move:

Bank of America

"Today's guidance suggests Fed will likely provide additional accommodation in coming meetings to support inflation and offset the downside risks in the outlook. They will likely put more emphasis on global economic conditions as they appear to be worried about the potential spillover effects from weakening global growth through weaker US manufacturing activity. Given today's Fed decision and guidance, we remain comfortable with our view that the Fed will provide two more 25bp cuts this year (September and October)."

Credit Suisse

"One modest dovish surprise is the early end to balance sheet run-off. The FOMC kept the door open for future cuts, but Chair Powell downplayed the likelihood of a prolonged easing cycle. We continue to expect that this will be the only rate cut and policy will be on hold for the rest of 2019."

Nomura

"While the FOMC's decisions and its statement were largely in line with what was expected, Chair Powell's press conference generated a notable repricing of many financial markets. Chair Powell said that today's action was a "mid-cycle adjustment" to policy and not the beginning of a "lengthy cutting cycle."

Morgan Stanley

"While this may not be the start of a full easing cycle as Chair Powell underscored, we expect the FOMC will deliver one additional 25bp rate cut before year end, and our base case is that the next rate cut will come at the October 29-30 FOMC meeting. Thereafter, we expect policy will remain on hold."

Goldman Sachs

"The FOMC statement introduced a bit more ambiguity about a possible second cut in September by slightly watering down its "act as appropriate" policy guidance. In the press conference, Powell said that the FOMC intends its
"mid-cycle adjustment" to "adjust policy to a somewhat more accommodative stance over time," language we see as consistent with our expectation that easing will end with a second 25bp cut. We continue to see a 55% chance of a 25bp cut in September, a 5% chance of a 50bp cut, and a 40% chance of no cut. We see an 80% cumulative probability of another cut at some point this year."

Read more about this call here.

Bernstein

"The FOMC's first rate cut in over a decade – fully expected and priced in – completes the Fed's abandonment of the "star" framework and highlights its lack of a new policy narrative. We continue to view monetary policy through the lens of the "whimsy" Fed, i.e. a lack of independence from markets: intimidated by tighter financial conditions if it pushed back against market expectations (a small version of which was seen during the press conference yesterday), the Fed is forced to follow them instead. In this sense, more cuts are in the cards unless the Fed is bailed out by very strong fundamental data."

J.P. Morgan

"Fed events may have given risk markets a little indigestion, but they also bought the Fed a little more flexibility going into the next FOMC meeting. We still look for one more easing in September, and continue to believe that, unlike today's meeting, the call on September depends on all of the data. While today's move was motivated by global growth, trade policy and inflation developments, we expect September's decision will also depend on domestic growth developments."

Wells Fargo

"We continue to look for one additional 25 bps rate cut, probably at the October 30 policy meeting. Today's policy action should be viewed as an "insurance" rate cut. In the context of uncertainties about the economic outlook and below-target inflation, easier policy seems to be warranted. In our view, another 25 bps rate cut would constitute additional "insurance" against a more pronounced slowdown."

UBS

"The FOMC cut 25bp; further cuts possible but not likely. The statement clearly leaves open the door for future rate cuts if the domestic data were to deteriorate, but there was precious little indication of a strong desire for more immediate action. The two dissents were expected and do not give much signal on future action....If the Chair could not pull the Committee to 50bp today or even a strongly dovish tilt, we see it as unlikely that he can pull them to cuts in subsequent meetings. That said, data are volatile; a few bad prints between now and September could intensify extant fears and lead to another 25bp cut in September."

Citi

"The developments of the July FOMC were hawkish relative to very dovish market expectations – but consistent with our base case for just a 50bp total downward adjustment in policy rates. We continue to think that strong domestic data will mean that the FOMC does not embark on a full cut cycle and expect just one further 25bp cut in 2019, most likely in September."

Deutsche Bank

"While policy outcomes going forward will be driven by data and events, we think the bar for the Committee to remain on hold in September is relatively high. In particular, to not cut the Committee will likely need to see notable improvements on the various headwinds they have emphasized – slowing global growth and trade uncertainties – and evidence that inflation pressures are building more rapidly than anticipated. These pre-conditions are unlikely to be in place by the next FOMC meeting. Further, global headwinds are likely to persist in the months beyond, with increasing evidence of spillovers to the domestic economy. As such, we maintain our expectation for two more cuts this year in September and December."

Barclays

"In our view, the Fed signaled a willingness to enact further policy rate cuts to support the outlook. The Fed faced two communication challenges today. First, it had to signal that it had not lost confidence in the outlook, but saw a reason to adjust the policy stance in light of downside risks. We felt this was accomplished. Second, it had to signal to markets that further rate reductions are likely to be appropriate while also retaining some optionality and an adherence to a data-dependent mantra. Communicating forward guidance was clearly more challenging, as markets appeared to struggle with Powell's characterization of a "mid-cycle" adjustment in the policy stance and prolonged rate cut cycle driven by recession risk."

.

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https://www.cnbc.com/2019/08/01/wall-street-economists-react-to-the-feds-latest-move.html

2019-08-01 12:57:33Z
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Jeff Bezos Sells $2 Billion of Amazon Stock After 4% Stake Transfer - Yahoo Finance

(Bloomberg) -- MacKenzie Bezos is officially Amazon.com Inc.’s second-largest individual shareholder.

About 19.7 million shares are now registered in 49-year-old MacKenzie’s name, according to regulatory filings detailing stock sales by her ex-husband, Jeff Bezos. The transfer is a rare disclosure for a divorce whose financial terms have otherwise been shielded from the public. A King County, Washington, judge had signed an order formalizing the separation on July 5.

Bezos sold 968,148 shares for about $1.8 billion between July 29 and July 31 as part of his stock-sale plan, the filings show.

MacKenzie’s 4% holding is worth $37 billion, enough to place her 23rd on the Bloomberg Billionaires Index, a ranking of the world’s 500 richest people. The value of her stake has fallen by $1 billion since April, when the settlement was first disclosed. Bezos, 55, the founder and chief executive officer of the world’s largest online retailer and web-services company, retains a 12% stake worth $109 billion and remains the world’s wealthiest person.

The value of the transfer makes it the world’s most expensive divorce. While Oracle Corp.’s Larry Ellison has been through multiple breakups, none has affected his ownership in the software maker. Likewise, Google co-founder Sergey Brin’s stake remained unchanged after he and Anne Wojcicki divorced in 2015.

To contact the reporters on this story: Tom Metcalf in London at tmetcalf7@bloomberg.net;Matt Day in Seattle at mday63@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill, Steve Dickson

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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2019-08-01 13:54:00Z
CBMiSGh0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9qZWZmLWJlem9zLXNlbGxzLTItYmlsbGlvbi0xMjA2MTE4MzkuaHRtbNIBUGh0dHBzOi8vZmluYW5jZS55YWhvby5jb20vYW1waHRtbC9uZXdzL2plZmYtYmV6b3Mtc2VsbHMtMi1iaWxsaW9uLTEyMDYxMTgzOS5odG1s

Markets go for a ride as Powell tried to communicate next steps on rates - Yahoo Finance

Fed Chairman Jerome Powell fielded a number of questions on Wednesday after policymakers lowered interest rates by 25 basis points, strapping markets in for a roller coaster ride through the close.

At its lowest point during the day, the Dow was down more than 400 points as investors tried to figure out what Powell’s commentary meant for future rate moves.

The S&P 500 (GSPC), Dow Jones Industrial Average (DJI) and Nasdaq composite (IXIC) were quiet heading into Fed Chairman Jerome Powell's press conference but moved wildly as Powell fielded questions about where rates go from here.

Here is a rough timeline of key points communicated by the Fed and Chairman Powell throughout the afternoon on Wednesday.

2:00 p.m.

The Fed announces that it cut its target interest rates by 25 basis points to a target range of 2% to 2.25%, citing a need for accommodation amid “global developments” and “muted” inflationary pressures.

The Federal Open Market Committee statement says the Fed also decided to end its balance sheet normalization process two months early. Since 2017, the Fed has been unwinding assets that it accumulated to battle the financial crisis. The Fed had originally planned on stopping “quantitative tightening” at the end of September.

The Dow Jones twitches by about 100 points but bounces back as markets wait for Powell to take the podium. The yield on the 10-year U.S. Treasury slips from 2.04 to 2.01% in the next 20 minutes.

2:30 p.m.

Powell opens with a statement saying that the Fed still sees a “favorable” outlook for the U.S. economy but opted to lower rates to “support that outlook” for three reasons: insuring against further slowing global growth, countering the slowing impacts already affecting the U.S., and spurring inflation closer to its 2% target.

Powell says there were positive and negative developments in data received since the FOMC’s last meeting on June 19. GDP and job growth were positives, foreign growth and falling business fixed investment at home were negatives.

2:36 p.m.

Powell gets a question on whether or not 25 basis points is strong enough to return inflation to the Fed’s target and what developments may require the Fed to cut again.

“The committee is really thinking of this as a way to adjusting policy to a somewhat more accommodative stance,” Powell says before referencing the three reasons he mentioned in his opening remarks. “We’re thinking of it as essentially in the nature of a mid-cycle adjustment.”

Markets start turning, and the Dow, which headed into the opening statement around 27,162, slips 100 points in the next few minutes.

2:43 p.m.

Powell describes 25 basis points as “a bit of an insurance” cut, adding during another answer that different members of the committee saw different conditions in the economy that warranted a need for a 25 basis point cut. Two voting members, Boston Fed’s Eric Rosengren and Kansas City Fed’s Esther George, dissented because they would have preferred holding rates steady at the previous level of 2.25% to 2.5%.

Powell says Fed had signaled that it was watching changing financial conditions closely over the past few months.

“I don’t think asking about a quarter-point is really the right question. I think you have to look at the course of the year and see the committee moving away from rate increases to a neutral posture to now a rate cut.”

Markets continue to dip.

2:48 p.m.

Powell says the 25 basis point cut is not the beginning of a “lengthy cutting cycle.”

"That's not what we're seeing now,” Powell says.

The Dow, which is already down over 200 points from where it was when the press conference began, begins accelerating downward over the next five minutes before bouncing back and recuperating some losses. At its lowest point, the Dow was more than 400 points off of where it was when Powell stepped up to the podium.

The 10-year Treasury yield jumps up to 2.07% but starts coming back down.

2:57 p.m.

Powell says the decision to cut rates and end the balance sheet unwind, as President Donald Trump has called for, had nothing to do with political pressure.

“We never take into account political considerations there’s no place in our discussions for that. We also don’t conduct monetary policy in order to prove our independence.”

On the decision to end the balance sheet normalization process, Powell said it was a “matter of simplicity and consistency, really nothing more to it than that.” Some speculated ahead of the meeting that the Fed might try to avoid out-of-sync monetary policy actions by pre-emptively ending its quantitative tightening process to align with its efforts to also ease rates.

3:03 p.m.

Powell clarifies earlier commentary on where the Fed goes on rates.

“Let me be clear, I said it’s not the beginning of a long series of rate cuts. I didn’t say it’s just one or anything like that. I said when you think about rate-cutting cycles they go on a long time. The committee is not seeing that, not seeing us in that place. You would do that if you saw real economic weakness and you thought the federal funds needed to be cut a lot. That’s not what we’re seeing.”

Markets continue bouncing back, and are now down only about 200 points compared to where it was about 30 minutes earlier. The 10-year Treasury comes back down to around 2.02%.

3:09 p.m.

Powell says the insurance cut could get the economy to good enough place where the Fed hikes again.

“In other cycles, the Fed wound up raising rates again after a mid-cycle adjustment. Again I’m not predicting that but I don’t think we know that we we’ll have less ammo because of these things,” Powell said.

3:13 p.m.

Powell responds to a Yahoo Finance question on communicating downside risks against the Fed’s description of the U.S. outlook as “positive.”

“There really isn’t anything in the U.S. economy that presents a prominent near term risk to the U.S. economy. As I mentioned, there’s no segment or sector that’s really boiling over or overheating. Within the economy it’s healthy so I would say that. Downside risks are really coming from abroad, of course we are concerned about low inflation.”

3:15 p.m.

Powell concludes press conference. Dow hovers around 26,900.

4:00 p.m.

Closing bell rings and the Dow Jones Industrial Average ends the day down over 300 points to 26,864.27, a 1.23% decline. The S&P 500 had fallen 1.09% to 2,980.38 and the NASDAQ Composite had lost 1.19% to 8,175.42.

The spread between the two-year and the ten-year Treasuries narrows to 13 basis points. The day before, the spread was 21 basis points.

4:41 p.m.

President Trump tweets that markets would have preferred a more “aggressive rate-cutting cycle,” saying Powell disappointed “as usual.”

The Fed’s next policy-setting meeting will be on September 18.

Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him on Twitter @bcheungz.

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https://finance.yahoo.com/news/market-moves-on-federal-reserve-rate-decision-cut-123544830.html

2019-08-01 12:35:00Z
CBMiX2h0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9tYXJrZXQtbW92ZXMtb24tZmVkZXJhbC1yZXNlcnZlLXJhdGUtZGVjaXNpb24tY3V0LTEyMzU0NDgzMC5odG1s0gFnaHR0cHM6Ly9maW5hbmNlLnlhaG9vLmNvbS9hbXBodG1sL25ld3MvbWFya2V0LW1vdmVzLW9uLWZlZGVyYWwtcmVzZXJ2ZS1yYXRlLWRlY2lzaW9uLWN1dC0xMjM1NDQ4MzAuaHRtbA