🤠🏦 Texas Becoming Wall Street 2.0?
Happy Wednesday all,
Another week, another set of surprises in the markets. The Fed is holding rates steady but still eyeing two cuts this year—though traders aren’t so sure. Meanwhile, Nasdaq is making a bold move, setting up a second US headquarters in Texas, signaling a shift in the financial industry’s power dynamics. Immigration policy changes are also making waves, with Goldman Sachs warning of potential labor force impacts.
We’ll also cover how investor sentiment heading into 2025 may have been misplaced, a major shake-up in education policy, and why consumer confidence is slipping. Let’s dive in.
Enjoy this week’s Hump Days!
- Humphrey & Rickie
👀 Eye-Catching Headlines
Fed holds interest rates steady, still sees two cuts coming this year (CNBC)
Trump to sign order to shut down Department of Education, White House says (CNBC)
War-Torn Congo Has a Deal for Trump: Kick Out Rebels, Get Minerals (WSJ)
Five Takeaways From the New JFK Assassination Files (WSJ)
Investors Were Confident Heading Into 2025. That Was a Bad Sign. (WSJ)
Fed to Shrink Balance Sheet at Slower Pace Until Debt-Ceiling Deal Reached (BBG)
Fund Giant BlackRock Is Out to Unite Public and Private Markets (BBG)
The Weekly Brief
Traders Pull Back on Rate-Cut Bets as They Seek Clarity From Fed
Interest rate traders are increasingly scaling back their expectations for US interest rate cuts as they await clarity from the Federal Reserve amidst complex economic and political factors.
Just a week ago, markets anticipated nearly three-quarters of a point in rate cuts for 2025, including a potential reduction in June. However, as the Fed's policy decision and press conference approach, expectations have shifted to only two cuts, likely in the latter half of the year.
The current economic landscape presents a challenging scenario for both Fed policymakers and investors.
While the US economy continues to grow and inflation appears to be moderating, consumer sentiment is declining and concerns are rising about the potential impact of President Trump's trade policies on economic growth and inflation.
Goldman says 94% Drop in Migrant Crossings Could Lead to Lower Labor Force Growth
Vice President JD Vance recently addressed the American Dynamism Summit, highlighting a 94% decrease in migrant crossings to an all-time low within two months of implementing stricter border enforcement.
He also noted that for the first time in over a year, the majority of job gains went to American-born citizens.
In a recent note, Goldman Sachs corroborated these claims, estimating that US immigration policy has tightened considerably in the first two months of 2025. They reported a decline in annualized inflows of humanitarian and other non-visa immigrants from 1.4 million in December 2024 to 200,000 in February 2025.
As a result, net immigration fell from 1.7 million to 700,000 during the same period.
Nasdaq Plans Second US Headquarters in Texas
Nasdaq has announced plans to open its first regional headquarters in Dallas, Texas, later this year. This move has been part of a broader trend of New York-based financial institutions expanding their presence in Texas, which is increasingly positioning itself as a rival to the Northeast's financial dominance.
The new Dallas office will serve Texas and the entire Southeast, focusing not only on winning listings but also housing parts of Nasdaq's technology and financial crime management businesses.
This expansion builds upon Nasdaq's existing presence in Texas, where it already has over 200 listed companies and has maintained a physical presence since 2013.
Texas has been actively working to attract financial institutions and corporations. The state has established specialized business courts, proposed legislation to encourage companies to reincorporate there, and is even seeing efforts to launch a Texas Stock Exchange.
There are indications that other major companies, such as Meta, may consider moving their incorporation to the state from Delaware.
You’ll Find This Interesting
In Case You Missed It