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[Quick Facts]

1. Wall Street calls for support of new candidates to replace Biden and Trump.

2. Mester: monetary policy in a "good place" to assess incoming data.

3. Beige Book shows slower U.S. economic activity.

4. Two hawkish Fed officials release dovish views.

[News Details]

Wall Street calls for support of new candidates to replace Biden and Trump

Wall Street leaders are looking past President Joe Biden and former President Donald Trump, the presumed major party nominees, for long-shot candidates to shake up the 2024 election less than two months before primary voting starts, according to media reports. JPMorgan Chase & Co. CEO Jamie Dimon said Wednesday that voters should support former South Carolina Governor Nikki Haley as one potential alternative to Trump for the GOP nomination. Bill Ackman, founder of Pershing Square Capital Management, said that Biden should step aside for a new candidate to emerge. A last-minute push for another candidate is unlikely to change the outcome of the nomination, but the desire for a new candidate underscores the deep dissatisfaction many voters have with Biden and Trump.

Mester: monetary policy in a "good place" to assess incoming data

Cleveland Fed President Loretta Mester hinted in a speech Wednesday that she would support leaving interest rates unchanged at the Fed's December meeting.

Mester said that monetary policy is in a good place for policymakers to assess incoming information on the economy and financial conditions and judge whether policy is well calibrated to ensure that inflation is on a timely path back to 2%.

Despite the overall economy remaining relatively strong, notable progress has been achieved in fighting against inflation. Mester did not explicitly say she would support a third consecutive pause in rate hikes next month, but her remarks echoed those of other hawkish policymakers this week. Mester held open the possibility that rates could rise in the future, saying it would depend on economic conditions and progress in achieving the dual mandate.

Beige Book shows slower U.S. economic activity

The latest Beige Book showed an overall slowdown in U.S. economic activity in the six weeks ended Nov. 7, as well as a decline in the economic outlook. Consumers become more price-sensitive and spend less on non-essential and durable goods. Meanwhile, demand growth in the labor market slowed despite tight market supplies. Price increases have largely slowed down, with moderate price increases expected to continue into next year.

Retail sales showed mixed performance, especially those including automobiles.

Sales of non-essential and durable goods, such as furniture and electrical appliances, declined on average as consumers became more price-sensitive. Tourism activity remained generally healthy, but demand for transportation services was subdued. Manufacturing activity was mixed, and manufacturers' outlooks weakened.

Commercial real estate activity continued to slow, the office segment remained weak, and multifamily activity softened. Several districts noted a slight decline in residential sales. Inventories of homes for sale increased in some districts.

Demand for labor continued to ease. Wage gains were moderate in most districts, and many districts reported some easing of wage pressures. Starting salaries even declined in some districts. Nonetheless, some wage pressures remained, and attracting and retaining high-performing employees and workers with specialized skills continues to be a challenge.

Two hawkish Fed officials release dovish views

Two Fed's "big hawks" who pushed for big rate hikes last year to curb inflation hinted that they are now happy to see interest rates remain unchanged, reinforcing expectations that the Fed's current rate-hiking cycle is over.

Fed Governor Waller, one of the most hawkish Fed officials, said that policy is well positioned to return inflation to the Fed's 2% goal, suggesting that policymakers may not need to raise rates again.

Another hawkish governor, Bowman, said she would still be willing to support a rate hike if inflation progress stalls, but she did not take a position in favor of a rate hike next month.

The remarks of these two officials did not fundamentally change the expectations for the Fed's December meeting, but Waller's statement indicates that more Fed officials support for holding rates steady at a time when economic activity, inflation, and the labor market are showing signs of cooling.

Both Waller and Bowman pointed out that there are still many uncertainties about how policy will unfold. Bowman even said that she still supports further policy tightening, but she now sets more preconditions for a rate hike compared to her previous statements.

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