President Trump Calls To End Quarterly Financial Reporting, Suggesting Semiannual Schedule Instead

Economic

Summary:

President Donald Trump suggested Monday on Truth Social that companies should stop filing quarterly earnings reports and instead move to a semiannual schedule. Trump’s call to replace quarterly earnings reports with semiannual filings revives a debate that also surfaced during his first term.

In his post, Trump said the idea is “subject to SEC approval” and would “save money, and allow managers to focus on properly running their companies.” He added: “Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis??? Not good!!!’”

The concept has long divided business leaders and regulators. In 2018, Warren Buffett and JPMorgan Chase CEO Jamie Dimon argued against quarterly guidance, writing: “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

But others warn that reducing reporting could weaken transparency. “Trying to get companies less hyper focused on the short-term quarterly hamster wheel would be good, but it's far from clear that reducing investor disclosure to semi-annual reporting would do that,” Dennis Kelleher, CEO of advocacy group Better Markets, told Axios. “The real solution would be getting Boards of Directors to incentivize and then support corporate executives to focus more on the long term and less on the short term.”

TD Cowen, in a note Monday, said Trump’s comments could carry weight: given his push to roll back regulations, the post moves the idea “from improbable to probable though not guaranteed,” according to Axios.

“In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. ‘Stop quarterly reporting & go to a six month system,’ said one. That would allow greater flexibility & save money. I have asked the SEC to study!” Trump said in a post on X during his first term in 2018.

Currently, U.S. companies must file quarterly reports, though forecasts remain voluntary. Proponents say frequent reports give investors timely, reliable insights, with GAAP standards ensuring consistency. Critics, however, argue that short-term pressure hampers long-range planning.

Despite Trump’s comparison to China, firms there are required to file quarterly, semiannual, and annual reports. Hong Kong-listed companies report every six months, similar to rules in the U.K. and EU, where quarterly updates are optional. Norway’s sovereign wealth fund recently proposed semiannual reporting as well, citing the need for companies to prioritize long-term growth.

Source: Zero Hedge

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Adam

Economic

With a pivotal Federal Reserve meeting coming up this week, America’s central bankers are confronted with an all-too-familiar question: Is it already too late to step in?

In just a few days, the central bank is expected to lower interest rates for the first time since December to shore up America’s crumbling labor market. Unusually weak hiring in recent months has locked in a rate cut, according to futures, with perhaps a few more by year’s end. But some central bankers — namely, Fed governors Christopher Waller and Michelle Bowman, both appointed by President Donald Trump — say the Fed should have cut interest rates in July, echoing Trump’s loud demands to lower borrowing costs.

During a speech in Miami on August 28, Waller — a potential Fed chair candidate — said monetary policy risks “falling behind the curve” if economic conditions continue to weaken.

Fed officials wait for months of data before deciding to pivot on rates, but it’s notoriously difficult to time with razor-sharp precision. That timing is crucial because it can impact the jobs of millions of Americans and whether inflation shoots higher. In 2021, the Fed was criticized for responding too late to rising inflation.

In 2025, getting the timing right for rate cuts is an even tougher task with Trump’s widespread tariffs already pushing up some prices and the US labor market hitting a lull in hiring.

And whether the Fed has already missed its cue is “the million-dollar question that I think no one knows the answer to,” Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company, told CNN.

The Fed’s tough job

Economic forecasters don’t always get it right — and neither does the Fed.

In 2021, some economists and Fed officials, including Fed Chair Jerome Powell, said a bout of inflation would prove to be only “transitory,” which ended up not being the case. And, in 2023, forecasters and Fed economists predicted a recession that never happened.

“The Fed isn’t any better at reading the tea leaves than all the other private forecasters out there,” said Kent Smetters, an economics professor at the University of Pennsylvania’s Wharton School.

The central bank has to factor in abstract concepts, such as the lagging effects of interest rates and the so-called neutral rate of interest, the point where borrowing costs neither stimulate nor dampen economic activity.

“Monetary policy lags in terms of how much it stimulates the economy, so, ideally, it should move a couple months ahead of weaker jobs numbers,” said Smetters. “But the Fed also can’t place a lot of weight on data for a single month or even two.”

Last year, the unemployment rate climbed quickly in a short period and there was similar criticism that the central bank was too late to lower rates. Then the Fed stepped in with a bold half-point rate cut to stave off further weakening.

By the end of last year, it turned out that the labor market wasn’t falling off a cliff: In December, employers added a massive 323,000 jobs as the unemployment rate edged down from the prior month to 4.1%.

The Fed’s efforts last year showed that despite central bankers’ good-faith attempts to right-size their policy in a timely manner, there isn’t a science to it and they could be off-point.

The challenge of Trump’s policies

Powell has said that if it weren’t for Trump’s trade war, the Fed would have already lowered interest rates at this point this year.

Instead, Trump’s unprecedented tariffs have squeezed businesses and begun to erode American consumers’ purchasing power. This has threatened both sides of the Fed’s dual mandate — stable prices and maximum employment.

According to the Fed’s preferred inflation gauge — the Personal Consumption Expenditures price index — inflation of goods exposed to tariffs, such as appliances and furniture, has already crept up and could continue to rise in the months ahead.

But several Fed officials have warmed up to the idea that tariff inflation may be short term, possibly resulting in only a one-time price adjustment.

San Francisco Fed President Mary Daly wrote in a recent social media post that “tariff-related price increases will be a one-off.” St. Louis Fed President Alberto Musalem said as much at a September 3 event, stating that he expects “the effects of tariffs will work through the economy over the next two to three quarters and the impact on inflation will fade after that.”

Not only does the tariff situation remain highly uncertain, despite Fed officials’ higher hopes that tariff inflation may be limited, but so does the future of the labor market.

Before Powell opened the door to rate cuts in his keynote speech at the Kansas City Fed’s annual economic symposium last month, the Fed chief had repeatedly described the labor market as “solid” with some “downside risk.” But the most recent federal data showed that the labor market was on shakier footing than previously thought.

Last week, the Labor Department reported that US job growth in the year ending in March was running at a much slower pace than previously reported. Job gains were revised down by 911,000 during that period, the biggest downward revision on record. Since March, job growth has continued to slow to a crawl, with more industries shedding jobs than adding.

“Labor market momentum is being lost from an even weaker position than originally thought, reinforcing expectations of meaningful interest rate cuts,” James Knightley, chief international economist at ING, said in a September 9 note after the benchmark revision was released.

Chicago Fed President Austan Goolsbee said in a speech last month that the Fed’s meetings this fall will be “live,” meaning policy decisions will not be obvious and will be subject to incoming data.

“We’re going to have to figure it out,” he said.

Source: cnn

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Adam

Bond

While the stock market hovers near record highs, a shift in the bond market is signaling mounting concerns about the economy’s health.

A bevy of data this month showed the labor market is on shakier ground than previously thought. That spurred a rally in bonds as investors sought safe havens and ramped up bets that the Federal Reserve will cut interest rates this week.

As bonds rallied, it pushed yields lower: The two-year Treasury yield this month hit its lowest level since 2022, and the 10-year yield hit its lowest level since April, when President Donald Trump announced an unprecedented tariff campaign that sparked fears of an economic slowdown.

The decline in Treasury yields shows markets are adjusting to the reality of a weaker-than-expected job market and expectations for potentially subdued economic growth.

The Fed, which has held its benchmark interest rate steady since December, is widely expected to lower rates at its policy meeting this week amid a slowing labor market. Investors are flocking to Treasuries to lock in the current relatively high rates ahead of expected Fed rate cuts.

Labor Department data released on Thursday showed one of the biggest weekly increases in jobless claims in more than a year. That came after separate data earlier this month showed the unemployment rate in August ticked up to 4.3%, its highest level since 2021. The US economy also added 911,000 fewer jobs for the year ending in March than previously thought, according to Bureau of Labor Statistics data this month.

Treasuries are seen as relatively risk-free assets because they are backed by the full faith and credit of the US government. When investors expect a slowdown, they often move cash into Treasuries as a sure bet to ride out the uncertainty.

“The bond market is acknowledging that job creation, a powerful engine of the US economy, is decelerating,” said Chip Hughey, managing director for fixed income at Truist Advisory Services.

The two-year Treasury yield tracks expectations for the Fed’s rate policy, and has swiftly dropped as markets have adjusted to the prospect of rate cuts. The 10-year yield, meanwhile, tracks expectations for economic growth.

“The yield declines we are seeing right now can be viewed as a recalibration for an expected step-down in economic activity — not recessionary — but softer in comparison to the past few years,” Hughey said.

A balancing act

The 10-year yield — a key benchmark for borrowing costs across the economy — fell from 4.27% at the start of the month to briefly dip below 4% on Thursday.

A decline in the 10-year yield can lead to lower mortgage rates and more affordable loans. But a swift decline in the 10-year yield is not always a good sign: It could signal investors think the economy is weakening.

“Yields are coming down because the market is expecting slower growth ahead,” said Kathy Jones, chief fixed income strategist at Charles Schwab. “That’s the assumption behind why the Fed will cut rates, because the job market is deteriorating.”

Matthew Luzzetti, chief US economist at Deutsche Bank, on Friday said he raised his expectations for interest rate cuts this year. Luzzetti now expects three quarter-point cuts across September, October and December.

“With recent data showing further weakness in the labor market and somewhat more modest inflationary pressures than anticipated, we have brought forward one rate cut from next year,” Luzzetti said in a Friday note.

Bank of America earlier this month also revised its expectations for the Fed to cut interest rates. The bank now expects a quarter-point cut in September and December, after previously forecasting zero cuts this year.

“The August jobs report is likely to amplify the Fed’s concerns about labor market weakness,” Aditya Bhave, senior US economist at Bank of America, said in a September 5 note.

It’s unclear how much interest rates will be slashed. Traders are pricing in a 96% chance the Fed will cut its benchmark interest rate by a quarter point this week, with a 4% chance of a jumbo half-point cut.

Consumer spending and inflation are key

While investors are adjusting to the reality of a weaker labor market, consumer spending this year has remained relatively robust, supporting outlooks for economic growth, according to Bill Merz, head of capital markets research at US Bank Asset Management Group.

Consumer spending rose 0.5% from June to July, according to Commerce Department data. Economic growth in the second quarter, as measured by gross domestic product, also came in stronger than expected.

“Consumer spending continues to be the engine for growth,” Merz said. “We’re not seeing signs of that cracking yet, but we’re watching that carefully, because there’s obvious weakening in the labor market at this point.”

And while nerves about a labor market slowdown are at the forefront of investors’ focus, concerns about inflation still linger.

The Fed is in a tricky spot, balancing a weakening labor market while inflation remains relatively elevated. A core measure of Consumer Price Index that excludes volatile food and energy prices rose 3.1% year-over-year in August, according to data from the Bureau of Labor Statistics. That’s well above the Fed’s target of 2%.

“Short-term (borrowing) rates are coming down faster than long-term rates, and that is also a bit of a signal of concerns about long-term rates and how much they can decline in this environment of a great deal of uncertainty about fiscal deficits, inflation remaining high and not turning lower,” said Jones of Charles Schwab.

Source :cnn

Risk Warnings and Disclaimers

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Devin

Central Bank

In 2025, the mainstream Keynesian narrative that the United States would inevitably experience a recession and stagflation has proven to be utterly incorrect.

The American economy is performing much better than its comparable nations, is showing broad-based strength, and even has indications of accelerating growth, giving investors and consumers plenty of reason to feel more optimistic, despite the consensus estimates from earlier in the year.

The consensus was wrong.

The United States economy is outperforming the economies of the UK, Germany, France, Italy, Japan, and the entire euro area, showing estimates of economic growth that exceed those of the best-performing developed nations, along with significantly lower unemployment rates and solid real wage growth.

Due to exaggerated expectations of the impact of factors like new tariffs, global uncertainty, and the potential for persistently high inflation, most mainstream analysts and market commentators projected a stagnant or recessionary environment for the US in 2025, while hailing the euro area as the place to invest. We have seen the opposite.

US bond yields are falling, while euro area sovereign yields are rising despite ECB rate cuts. Additionally, GDP growth estimates for the euro area are weak, and US economic growth is stronger than the European Union’s “engines of growth,” whereas Japan and the UK remain stagnant. Inflation is under control, real wage growth is strong, and the private sector is improving.

The mainstream consensus predictions were biased and incorrect. Rather, the US economy has reported strong real GDP growth: following a short contraction in Q1, growth in the second quarter bounced back to 3–3.3% annually, and the Atlanta Fed’s GDPNow model currently projects Q3 growth at a stable 3% pace. In addition to consumer spending and imports, business investment also contributed to this GDP strength, and, more importantly, it came with government spending under control.

The most recent CPI and PPI data dispel concerns that the tariff regime is causing inflation. CPI and core measures in August came in close to or below expectations, indicating that headline monthly inflation and producer price increases are still under control. Prices for durable and nondurable goods are still stable, and, despite negative forecasts, tariffs have not generated a significant increase in the cost of living for Americans; instead, energy and important imports have either decreased or stabilised.

Despite recent revisions, the private-sector labor market maintained momentum from January through August. The significant negative revisions occurred during the January-December 2024 period, indicating that the Biden administration’s job creation was only half of what was reported and required a two million downward adjustment to the job figures from 2023 to 2024. What the Bureau of Labour Statistics has shown clearly is that the United States was in a private sector recession in 2024, which justified the negative sentiment from citizens.

Private payrolls have reported consistent net gains, particularly in the important service and construction segments, despite slight revisions to previous months. Even more encouraging is the fact that real wage growth is accelerating rather than merely keeping up with inflation. Real average hourly earnings increased by 1.2%, and real weekly earnings increased by 1.4% between July 2024 and July 2025. Increased purchasing power is boosting middle-class disposable income and driving retail demand because wage gains are outpacing price growth.

Retail sales also remain resilient in the face of market volatility and trade uncertainty. Bloomberg predicts that headline retail sales will increase by 0.2% in August, while the core control group will increase by 0.3%. This increase is significantly better than what April estimates showed, particularly since consumer sentiment is still cautious but generally stable. Throughout the third quarter, household consumption is increasing due to strong private labor markets and healthy wage growth.

The growing agreement that inflation risks are under control represents the most significant development for financial markets, paving the way for the Federal Reserve to finally recognise reality and cut interest rates in the coming months. Markets are beginning to anticipate that the Fed will soon lower interest rates, which could further boost borrowing, investment, and the economy’s momentum for the rest of 2025.

Despite the pessimistic predictions of recession and stagflation, they have proven to be undeniably wrong. The US economy is in a period of true private sector expansion, thanks to strong job and wage growth, favourable taxation, and deregulation, whereas tariffs are having no real impact on inflation. Now the Fed needs to be truly data dependent. Putting aside the pessimism of the previous year, the data currently indicates an improving outlook and a recovery from the private sector recession and fiscal mess inherited in 2024.

The Fed models were wrong about inflation and used labor market figures that were hugely inflated. The Fed should have read its own Beige Book, which alerted of a marked slowdown in job creation in March and April, instead of succumbing to the biased consensus narrative.

Source: Zero Hedge

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Adam

Central Bank

Economic

The market is entering that usually turbulent airspace where the Fed once again dominates the instrument panel. For months, traders have been glancing at labour data like a pilot eyeing the altimeter, wondering if the steady drop was giving way to stall speed.

Now, with job revisions peeling away nearly a million payrolls and unemployment creeping higher, the stall horn has begun to chirp. Powell and his crew can’t ignore the warning. The throttle is coming down — the only question is whether it’s the start of consecutive insurance adjustment or the Fed thinks we are moving into emergency times.

Futures markets have already plotted the flight path: a 90% chance of a quarter-point trim, with only a slim 10% probability of a sharper 50. The history lesson is clear — most cuts, 60% since 1990, have been 25 bp, while nearly every 50 has come in the teeth of recession.

That’s why a half-point slash here would be the equivalent of declaring an engine flameout. The convexity sits in the tails: if labour weakness accelerates, the front end will rip higher, with Z5 and H6 ( Front end options), the gauges every trader has pinned to the dash.

The labour market is the drag forcing the Fed’s hand. Goldman Sachs’ Global Investment Research (GIR) composite measure of tightness — unemployment, job openings, quits, and surveys — has broken down, now sitting below its pre-pandemic level.

Fed Cuts Look Set for a Smooth Takeoff but Turbulence Lies Ahead_1

Even with all the noise from survey response rates and immigration shifts, the thrust has faded. The Fed can’t be caught behind the curve; trimming rates now is less about stoking growth and more about stabilizing lift before stall speed turns into a nosedive.

Inflation, meanwhile, looks more like crosswinds than a head-on storm. Tariff pass-through could push core PCE to 3.2% into year-end, but that’s a squall the Fed can fly through. Housing is normalising, supply is abundant, and wage-sensitive services are losing altitude as labour cools. Last Thursday’s CPI was static on the radio, not a reason to divert course. Markets have already looked through it, betting Powell continues to ease regardless.

That’s why this first stage of the cutting cycle is the “easy part.” A series of 25 bp trims brings policy closer to neutral without rattling the cabin. Futures are already baking in around 73 bp of easing by December — three standard cuts that fit neatly into the narrative. But the convexity is there: a sharper labour deterioration could flip the script, with traders repricing quickly for a 50 bp emergency move.

Beyond 2025, the skies get choppier. As the policy rate approaches 3%, each additional cut gets harder to justify without recessionary conditions. On one side, markets will continue to price a dovish premium under Trump — a new Fed chair unlikely to raise rates, a fiscal stance leaning expansionary, and political cover for easier policy. On the other hand, inflation risks remain. Push cuts too far, and second-order price effects could return just as growth begins to re-accelerate.

And that re-acceleration is not hypothetical. GIR’s base case has tariffs fading, fiscal impulse turning positive, and productivity — turbocharged by AI investment — lifting potential GDP above 2.25%. Financial conditions are already loose, easing another 75 bp since June, with equities doing most of the work.

The market is still pricing positive growth outcomes alongside an increasingly dovish Fed. Unless labour truly rolls over, 2026 could see the economy climbing again even as Powell’s foot remains on the easing pedal.

Fed Cuts Look Set for a Smooth Takeoff but Turbulence Lies Ahead_2

For traders, that paradox is the real destination. Cuts now are justified, quarter-point trims are the base case, but the convex (and short US dollar) trade is in the front end if labour cracks faster. Beyond that, the bigger question is whether 2026 forces the market to start building inflation premia back into the curve.

With a dovish Fed, a fiscal tailwind, and AI-driven productivity acting like a fresh thrust, real assets should remain well bid. The landing this year may look smooth, but the longer flight path promises plenty of turbulence.

Source: investing

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James Whitman

Central Bank

Economic

The Bank of England should stop selling gilts from its quantitative-easing portfolio because the sales are distorting monetary policy, a former BOE rate-setter warned.

Sushil Wadhwani, who was a member of the nine-strong Monetary Policy Committee between 1999 and 2002, said active gilt sales are causing a “transmission problem.” While the bank has been cutting short-term interest rates, long-term borrowing costs have been rising in a sign that policy “is not transmitting along the yield curve in the way we normally expect.”

The comments by Wadhwani, who sold his Wadhwani Asset Management firm to US fund PGIM in 2018 and is now a research associate at the London School of Economics, echo concerns raised in June by Catherine Mann, a current MPC member. Mann said there is a disconnect between the five cuts in interest rates since August 2024, to 4% from 5.25%, and the rise in longer-term borrowing costs. The 30-year UK government bond yield recently hit a 27 year high.

Under quantitative tightening, the BOE has reduced its portfolio since 2022 from a peak of £895 billion ($1.2 trillion) to £558 billion, unwinding gilts at an annual pace of £100 billion through a combination of letting maturing bonds run off and actively selling debt. The securities were acquired to shore up the economy through the financial crisis, Brexit and Covid.

The MPC will announce its plan for QT alongside its interest-rate decision on Thursday. The bank is expected to hold rates at 4% but to reduce QT to about £70 billion, the median response to a Bloomberg survey of 22 economists. BNP Paribas SA, Morgan Stanley and NatWest Markets expect the active sales to end altogether, reducing the run-off rate to £49 billion. Oxford Economics and Royal Bank of Canada expect just the sale of long-dated bonds to cease.

Wadhwani said the bank should end active sales because they are affecting the cost of long-term government debt, which is having “a significant impact on confidence in the UK economy.”

“I have foreign investors bring it up all the time,” he said. He added that the budget on Nov. 26 is likely to involve a fiscal tightening, through tax rises or spending cuts, that will weigh on growth. “It is not uncommon to deliver monetary easing alongside fiscal tightening,” he said.

Ending active sales would potentially cost Chancellor of the Exchequer Rachel Reeves £4.5 billion by increasing interest losses on the BOE’s gilt portfolio. Wadhwani said the bank should ignore the fiscal consequences of its decision as its role is to manage interest rates. “They should stick to their knitting and focus on the primary objective,” he said.

The bank is losing money on the gilt portfolio in two ways. Interest-rate losses come about because the BOE pays its benchmark rate, currently 4%, on the reserves created to buy the gilts but earns only 2%-2.5% on the securities. Separate valuation losses arise when gilts are sold, though these only affect fiscal rules relating to debt, not Reeves’ binding rule that requires taxes and and day-to-day spending to be in balance by 2029-30.

Source: Bloomberg

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Adam

Economic

India and the United States will hold trade talks in New Delhi on Tuesday, weeks after President Donald Trump imposed punitive tariffs on the South Asian nation's exports, slowing its overall shipments to a nine-month low in August.

India and the United States will "fast-track" trade talks, Rajesh Agarwal, India's chief negotiator and a special secretary in its commerce ministry, told reporters at an event for the release of trade data, but gave no details.

U.S. trade representative for South Asia Brendan Lynch is set to make a one-day visit to New Delhi on Tuesday, Agarwal said.

India's exports slowed to $35.10 billion in August from $37.24 billion in July, and its trade gap narrowed to $26.49 billion, from $27.35 billion in July.

U.S. imposed an additional 25% tariff on Indian goods over New Delhi's continued purchases of Russian oil starting August 27, taking the total on Indian exports to 50%, among the highest for any U.S. trading partner.

Exports to the United States fell to $6.86 billion in August from $8.01 billion in July. New Delhi's shipments to Washington in the period from April to August stood at $40.39 billion.

The full impact of higher tariffs from the United States on Indian goods imports will be felt next month as the punitive tariffs kicked in from August 27.