CNBC Daily Open: More signs the Fed may stop raising rates

What you need to know today

Cooling inflation

The U.S. personal consumption expenditures price index rose just 3% year-on-year in June and 0.2% month-on-month. Stripping out food and energy prices, core PCE was 4.1%, the slowest year-on-year increase since September 2021, and up 0.2% from May. The Federal Reserve monitors PCE closely because it tracks how people spend their money instead of how much goods cost.

Winning week for US stocksU.S. Stocks rose on Friday, giving all major indexes a winning week on the back of positive economic data. The pan-European Stoxx 600 index fell 0.2%. Meanwhile, German gross domestic product was flat in the second quarter, according to flash estimates, but French GDP rose 0.5%, easily beating the 0.1% expected.

Google feeling lucky Alphabet shares jumped 10% last week to $132.58, the highest in more than a year, as investors bullish on the stock after Alphabet reported better-than-expected second-quarter earnings. Alphabet's report showed that the company could still keep Google as the leader in the search business despite the challenges posed by generative artificial intelligence chatbots.

Looser YCC, tighter monetary policy

The Bank of Japan announced on Friday that it will offer to buy 10-year Japanese government bonds at 1%. This means the bank is effectively releasing its grip on the yield curve by widening its tolerance range for 10-year JGB yields by an additional 50 basis points. Analysts believe the bank could be preparing to tighten monetary policy – ​​and eventually lift yield curve controls.

[PRO] Jobs, Apple and Amazon What's next after the historic 13-day rise of the Dow Jones Industrial Average? That depends on the July jobs report out on Friday and earnings reports from tech giants Apple and Amazon. CNBC Pro's Sarah Min breaks down what analysts expect from these data points released this week.

Bottom Line

There are more signs that the Federal Reserve's latest hike may be the last for some time.

Total PCE for June came in at 3%, the slowest year-over-year increase since March 2021. Notably, this is just one percentage point above the Fed's 2% inflation target. In fact, goods and food prices fell by 0.1% for the month, contributing to a 0.8 percentage point drop in the headline figure from May. This suggests that we may not be too far from reaching the Fed's target.

In addition to the inflation data, the Commerce Department reported that personal income rose 0.3%, slightly below expectations. This was confirmed by the Labor Department, which said the employment cost index rose 1% in the second quarter, less than the 1.1% estimate.

Markets were pleased with the news. The S&P 500 added nearly 1%, the Dow Jones Industrial Average rose 0.5% and the Nasdaq Composite jumped 1.9%, boosted by gains in technology stocks. All three indices ended the week in the green.

But taking a break from raising interest rates is only half the battle won for Wall Street. A pause doesn't mean a cut — America will still have to live with the highest interest rates in more than 22 years for the foreseeable future. And "Shark Tank" investor Kevin O'Leary told CNBC he thinks "more things will break" under that kind of pressure.

"I'm just predicting — and I'm being very cautious about it — that it's going to collapse in the regional banks that support 60% of the economy," O'Leary said.

Still, things are looking good in the sector so far. The SPDR S&P Regional Banking ETF is up more than 19% since the start of July. That means it has its best month since October 2016.

O'Leary acknowledges that the economy is still sailing forward. But he added, "we're starting to see cracks." Perhaps this is another sign that the Fed should really loosen its grip on monetary policy.

Welcome to CNBC's Daily Open, where we bring you the latest on the financial landscape. Today we examine growing signs that the Federal Reserve may be preparing to stop raising interest rates. While markets are anxiously watching for any developments, the Fed's stance has major implications for investors and the broader economy. Read on for key indicators that point to a potential pause in rate hikes.

Strengthening of economic indicators:

The first notable sign comes from a series of robust economic indicators that point to a potential slowdown in the pace of the Fed's tightening cycle. Positive employment data, steady GDP growth and improving consumer confidence suggest the economy may be on a more stable footing, giving the central bank room to reconsider tightening measures.

Alleviating Inflation:

Amid concerns about surging inflation, recent data suggest a possible easing of price pressures. While inflation has been the main driver of the Fed's hawkish stance, recent data suggests a possible easing of those pressures. The central bank may see this as an opportunity to take a more cautious approach to raising rates.

Shift in Fed Rhetoric:

Statements by Federal Reserve officials are closely watched for any changes in tone and language. Recent remarks by key policymakers indicate a growing willingness to take a patient, data-driven approach. The change in rhetoric signals a potential pause in rate hikes as the Fed waits for clearer economic signals.

Global economic uncertainty:

Amid ongoing global economic challenges, the Federal Reserve is closely monitoring international developments. Geopolitical tensions, trade disputes and other external factors significantly influence the central bank's decision-making process. Given the uncertain global economic situation, a cautious approach might be warranted.

Market Volatility and Investor Sentiment:

Increased market volatility and fluctuating investor sentiment have added to the uncertainty surrounding the Fed's future actions. The Central Bank is well aware of the possible impact of its decisions on the financial markets. As a result, the Fed may lean toward a more cautious approach to avoid exacerbating market turbulence.

As we closely monitor the Federal Reserve's next moves, growing signs of a potential halt in interest rate hikes are attracting the attention of investors and economists alike. Economic indicators, inflation trends, statements by Fed officials, global factors and market sentiment all play a critical role in shaping the central bank's decisions. Stay tuned to CNBC's Daily Open for the latest updates on this major development that could significantly impact the financial landscape.

Welcome to CNBC's Daily Open, where we bring you the most up-to-date insights into the Federal Reserve's monetary policy and its potential impact on the financial world. Today we delve into the latest signals that suggest the Fed may be considering a halt to interest rate hikes. This crucial information can significantly influence your investment decisions, so let's dive right into the analysis.

Strong economic data fuels speculation: Are rate hikes on hold?

Summary:

Amid strong economic indicators, speculation is mounting that the Federal Reserve may hit the pause button on its planned interest rate hikes. CNBC examines the latest data and examines what these developments could mean for businesses and investors.

Have inflation concerns eased? The Fed is reacting cautiously

Summary:

With recent reports showing signs of stabilizing inflation, the Federal Reserve may be reconsidering its aggressive stance on raising interest rates. CNBC follows the central bank's cautious response to changing economic dynamics.

Markets react to Fed rate hike speculation

Summary:

As expectations for future Federal Reserve rate hikes change, global markets are reacting with uncertainty. Stay up to date with the latest market reactions and see how investors are stacking up.

Impact on borrowing costs: halting potential Fed rate hikes

Summary:

The possibility that the Fed will hold off on raising interest rates has significant implications for borrowing costs across sectors. CNBC assesses the potential impact on mortgages, loans and business financing.

Sector focus: How industries respond to the Fed's monetary policy cues

Summary:

Different industries react differently to the Federal Reserve's monetary policy proposals. CNBC takes a closer look at how sectors like technology, real estate and manufacturing may be affected if the Fed decides to hold off on rate hikes.

International economies are preparing for the Fed's next move

Summary:

As the Federal Reserve weighs its options, global economies brace for potential ripple effects. CNBC analyzes how major international players are preparing for the Fed's next move.

Statement by Federal Reserve Officials: Guidance for Future Decisions

Summary:

Key statements by Federal Reserve officials often provide valuable insight into their thinking. CNBC compiles the latest remarks from central bank policymakers to help you understand their potential future decisions.

Investor sentiment is shifting amid speculation of a rate hike

Summary:

As the market reacts to a possible halt in rate hikes by the Fed, investor sentiment is shifting. CNBC gauges investor sentiment and provides expert insights on navigating these uncertain times.

Stay ahead of the curve with CNBC's Daily Open, your go-to source for the latest Federal Reserve monetary policy updates. As more signals emerge indicating a potential pause in interest rate hikes, we will keep you updated on how these developments may affect the financial environment. Make informed decisions and seize opportunities in a fast-moving market with CNBC's comprehensive coverage.

Welcome to CNBC Daily Open, your trusted source for staying current with the ever-evolving financial landscape. Today, we bring you key insights into the mounting evidence that suggests the Federal Reserve may be on the verge of halting rate hikes. As the global economy prepares for the potential fallout, investors and businesses alike are watching these developments closely. Join us as we dive into the latest signals pointing to a possible shift in the Fed's monetary policy.

Interpretation of economic indicators:

Our expert analysts carefully dissect the latest economic indicators and uncover clues that the Federal Reserve may pause its rate hike trajectory. Data on unemployment, GDP growth, inflation rates and consumer spending are evaluated in this comprehensive report to help you understand the implications for your investment and financial decisions.

Official Federal Reserve Statement:

Stay tuned for detailed coverage of statements and speeches from Federal Reserve officials as CNBC monitors any hints or statements regarding potential changes in their stance on interest rates. Our team of financial experts offers valuable insights into the Fed's intentions, keeping you well informed and equipped to navigate the markets.

Impact on markets and investments:

As a pause in rate hikes looms, CNBC assesses the potential impact on various asset classes such as stocks, bonds, commodities and cryptocurrencies. Find out how these potential policy changes could change your investment strategy and portfolio allocation.

Global economic implications:

The Fed's decisions reverberate across international borders and affect economies around the world. Our coverage extends beyond the United States, giving you a comprehensive view of how global markets are reacting to the prospect of a change in monetary policy.

Expert opinions and interviews:

Get exclusive access to interviews with renowned economists, financial experts and policymakers as they share their views on a possible pause in Fed rate hikes. These thought-provoking discussions shed light on the potential implications for businesses, consumers and the overall economic outlook.

As the Federal Reserve considers its next steps, CNBC Daily Open will keep you on top with valuable insights, expert analysis and exclusive interviews. Be prepared for potential changes in the financial environment and make informed decisions with our comprehensive coverage of the growing signals that suggest the Fed may stop raising rates. Stay tuned for the latest updates and expert opinions to help you navigate the evolving economic environment.