Fed Signals Jolt Volatile Markets
On Friday, U.S. stocks snapped back from a brutal two-day slide after New York Fed President John Williams said there is room for a rate cut “in the near term.” His comments, delivered in a speech in Santiago, Chile, pushed market-implied odds of a December cut to about 70%–75%, up from roughly 40% a day earlier, according to the CME FedWatch tool as cited by Yahoo Finance and Barron’s.
The comments arrived after a wild Thursday session in which markets initially soared on blowout Nvidia earnings and a confusing September jobs report, then reversed to deep losses as investors questioned whether the data really guaranteed near-term easing. By Friday’s close, the Dow gained roughly 500 points, while the S&P 500 and Nasdaq rose around 1%. The rebound did not erase the week’s damage: the S&P 500 finished down nearly 2% and the Nasdaq about 3%, with CNN’s Fear & Greed Index back in “extreme fear.”
Under the surface, traders continue to debate whether AI-linked tech stocks are in a bubble. Nvidia rallied intraday Friday on a Reuters report that the Trump administration may allow sales of its H200 chips to China, but the stock still closed lower on the week, and chip peers from Taiwan Semiconductor to Samsung and SK Hynix have been under pressure. Bitcoin mirrored the risk-off mood, sliding toward $80,000 in what could be its worst month since 2022, even as equities bounced on Friday.
Analysts warn that until investors get clearer signals on Fed policy and the durability of AI earnings, intraday swings like Thursday’s 3.5% peak‑to‑trough S&P reversal will remain common. Williams’ dovish tilt gave equities breathing room and helped pull bond yields lower, but other Fed officials, including Boston Fed President Susan Collins and Dallas Fed President Lorie Logan, have stressed inflation risks and questioned the need for more cuts. That internal split keeps December’s decision a live event and suggests volatility may stay elevated into year-end.
Tariff Rollbacks Meet Sticky Food Inflation
On Nov. 14 and again this week, President Donald Trump moved to ease parts of his own tariff regime in a bid to cool food inflation, including rollbacks on imports such as coffee, beef, cocoa, bananas and certain fertilizers. A White House fact sheet and related executive orders on “reciprocal” tariffs detail reductions of 10%–40% on markups for selected categories, and a separate order eliminated an extra 40% duty on many Brazilian beef products. The moves follow political backlash over high grocery bills and polling showing broad voter dissatisfaction with the economy.
Economists and supply chain experts caution that shoppers will not feel relief soon. As CNBC reports, retailers are only now selling through inventories of food and commodities purchased at higher tariff‑inflated prices. Goods have been sitting in the “middle mile” of warehouses and distribution centers, and history from the pandemic era suggests it can take roughly six months for price increases to filter through and another six for declines once pressures ease. In the meantime, higher input costs from steel and aluminum tariffs are keeping canned and processed items expensive, while drought‑reduced cocoa crops, a 74‑year‑low U.S. cattle herd and avian flu‑hit turkey flocks all add independent upward pressure.
The September labor report underscores how these price dynamics are landing in a slowing but still tight job market. Delayed by a 43‑day government shutdown, the Bureau of Labor Statistics found the unemployment rate ticked up to 4.4%, a four‑year high, even as nonfarm payrolls rose by 119,000 and health care and services hiring continued to “trend up,” according to the BLS employment situation. Analysts quoted by CNN argue the labor market is in a low‑hire, low‑fire slog that leaves many workers feeling stuck while real incomes barely outpace inflation. That mix of elevated food prices and fragile employment is driving the affordability crisis that now dominates both economic sentiment and policy debates.
For households, the practical implication is that grocery costs are unlikely to return to pre‑tariff levels even after inventories turn over, as companies keep some of the margin gains from tariff cuts and continue to pass through structural cost increases. Restaurant operators may see somewhat faster relief on items like imported coffee, fruit and some beef cuts, enabling targeted promotions, but broad‑based price cuts are unlikely soon. The Fed, already wrestling with mixed labor data and stubborn services inflation, will be watching whether tariff relief slows food inflation enough to ease pressure without requiring deeper rate cuts that could reignite price growth elsewhere.
Tariff Whiplash Hits Ranchers
Over the past month, a series of tariff policy pivots has upended the U.S. cattle market, pitting efforts to cut consumer beef prices against the finances of domestic ranchers. A recent White House order removed an additional 40% duty on many Brazilian beef products that had been imposed in July, while another order exempted some beef and citrus imports from “reciprocal” tariffs. Those shifts followed weeks of public comments from President Trump calling for more foreign beef to lower grocery bills, plus speculation about reopening the Mexican border to live cattle imports.
Futures markets reacted before policy details were even final. As described by cattle-market analysts, feeder cattle contracts on CME fell more than $42 per cwt between mid‑October and mid‑November, while live cattle dropped nearly $30 per cwt, even though underlying fundamentals like tight U.S. supplies and solid beef demand have not changed much. In North Dakota, ranchers told local station KFYR that auction prices are down $50–$80 per hundredweight, translating into losses of $200–$300 per 600‑pound calf right as many sell their annual crop.
At the retail level, however, consumers have yet to see meaningful price relief. Supply constraints, including the smallest U.S. cattle herd in 74 years, disease‑related bans on Mexican beef, and lingering high feed and fertilizer costs mean grocery prices for beef cuts remain elevated despite cheaper futures and lower import tariffs. Market participants interviewed across outlets warn that while policy headlines can quickly crush rancher margins through sentiment‑driven futures moves, supermarket prices respond far more slowly as processors and retailers seek to protect their own margins.
Looking ahead, the administration is floating complementary steps such as opening new grazing lands and boosting live cattle supply by next summer, but those are multi‑season fixes. For now, the key risk is that domestic producers shoulder short‑term price pain while households see little near‑term benefit. That disconnect could fuel political pressure from both ranch‑country lawmakers and consumers, and it underscores why producers are being urged to lean more heavily on hedging and forward‑looking risk‑management rather than reacting to each new tariff headline.
Signals In A Confusing Economy
- Track how odds of a December Fed rate cut evolve after John Williams’ dovish remarks, especially as other officials like Susan Collins and Lorie Logan stress inflation risks and question further easing.
- Watch AI‑linked bellwethers such as Nvidia’s stock moves for signs the recent tech selloff is a healthy reset versus the start of a broader unwind in AI valuations.
- Monitor Bitcoin’s slide toward the $80,000 level and broader crypto volatility as a barometer of risk appetite, especially after its worst month since 2022.
- Follow implementation of Trump’s food‑related tariff rollbacks, including exemptions for Brazilian beef, coffee, fruit and fertilizer, to see when and whether wholesale savings make it into grocery and restaurant prices.
- Keep an eye on forthcoming labor data, given September’s unemployment rise to 4.4% alongside modest job gains, which leaves the Fed room to interpret the economy as either resilient or weakening.
