Jan 8, 2020

Despite the trade war, large-scale farmers remain very optimistic

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Data: Purdue University/CME Group; Chart: Axios Visuals

Even after a very tough year in which farm debt has risen, sales have declined and the prices of key exports like soybeans have plummeted, large-scale U.S. farmers remain upbeat on their prospects, a survey shows.

Driving the news: The latest results of the Purdue University and CME Group reading of the agriculture economy showed a slight decline in December, but that was down from an all-time high touched in November.

Methodology: CME and Purdue surveyed 400 farmers whose farms have a market value upwards of $500,000 on a series of five questions.

  • A reading of 100 indicates that sentiment is neither improving nor worsening from a baseline set between late 2015 and early 2016. Higher readings indicate respondents are more positive, while readings below 100 indicate more negative sentiment.

Go deeper: Farmers hoping for more "Trump money" in 2020

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Trump rallies in Iowa: "If we don't win, your farms are going to hell"

In his final rally before the Iowa caucuses, President Trump greeted Iowans Thursday by saying: "If we don't win, your farms are going to hell, I can tell you right now."

The market is expecting multiple rate cuts in 2020

Data: CME Group; Note: Chart does not include expectations below 5% for a rate hike in 2020; Chart: Andrew Witherspoon/Axios

Just four days into February, traders have thrown out the Fed's guidance that it will remain on the sidelines in 2020, and lined up bets for multiple U.S. interest-rate cuts.

What's happening: Fed fund futures prices show that as the coronavirus outbreak has worsened, expectations are rising that the Fed will take action, as policymakers did last year when the U.S.-China trade war began to ravage the manufacturing, trade and transportation industries.

Fed manufacturing indexes jump in January

Data: FactSet; Chart: Naema Ahmed/Axios

The Richmond Fed's January manufacturing survey recorded its highest reading in almost a year and a half on Tuesday.

Why it matters: The survey is considered a potential leading indicator of overall manufacturing because it is released close to month-end and may offer clues on national manufacturing readings like those from ISM and IHS Markit.

Go deeperArrowJan 29, 2020