Connect with us

Economic

September inflation calls for ‘front loading’, but may not need higher overall rates By Reuters

Avatar

Published

on


© Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore on October 8, 2018. REUTERS/Edgar Sue/File Photo

By Howard Schneider

WASHINGTON (Reuters) – James Bullard, President of the St. Louis Federal Reserve, said on Friday that a “higher-than-expected” September inflation report does not necessarily mean the Federal Reserve needs to raise interest rates higher than officials expected at their last meeting. They ensure that “forward loading” continues through three-quarters of a percentage point larger strides.

In an interview with Reuters, Bullard said US consumer price index data for September released this week showed inflation had become “malignant” and hard to stop, so “it makes sense that we’re still moving fast.”

After the expected three-quarter point increase at the Fed’s November 1 and 2 meeting, Bullard said that while it was “too early to judge ‘what to do at the December meeting’,” if that was today, I would continue “another increase by Three-quarters of a point, which would be the fifth in a row.

Advertisement

The Fed has raised its policy rate by this size in its last three meetings, and two additional increases of three quarters by the end of the year will bring the interest rate to a range of 4.50%-4.75% from the current 3.00%-3.25%.

But in watered-down remarks to one of the Fed’s more hawkish voices recently, Bullard said that at that point he would allow additional increases on incoming data.

“I think 2023 should be data-driven in the year. It’s a two-sided risk. It’s very likely that the data will come in a way that the committee is going to be higher in the policy rate. But it’s also possible that you will get a benefit,” said Bullard, a day after the CPI report. For the month of September, inflation remained above 8%.

The probability of a fifth-higher-than-normal increase in December is “a little more front loading than I’ve said in the past,” Pollard said.

Source link

Advertisement

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Economic

Global central banks extend November rate hike push by Reuters

Avatar

Published

on


© Reuters. FILE PHOTO: The Federal Reserve building is seen in front of the Federal Reserve Board and is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, US, January 26, 2022. REUTERS/Joshua Roberts/File Photo

Written by Karen Stroeker and Vincent Flasser

LONDON (Reuters) – The pace and scope of interest rate hikes by central banks in November accelerated again as policymakers around the world grappled with decade-long high inflation.

Central banks that oversee six of the 10 most traded currencies delivered 350 basis points of rate increases between them last month.

The US Federal Reserve, the Bank of England, the Reserve Bank of Australia, the Norwegian Bank of Norway, Sweden’s Riksbank and the Reserve Bank of New Zealand all raised interest rates in November.

Advertisement

The European Central Bank, Bank of Canada, Swiss National Bank and Bank of Japan did not hold rate-setting meetings in November.

The recent moves raised the total interest rates in 2022 from the G10 central banks to 2,400 basis points.

Interest rates will continue to rise, said Alexandra Dimitrijevic of global agency Standard & Poor’s (NYSE:) in Standard & Poor’s (NYSE:) ratings, looking forward to 2023. “Central banks’ determination to lower inflation suggests that interest rates should continue to rise. “.

Interest rates in developed markets https://www.reuters.com/graphics/GLOBAL-MARKETS/klpygkyzepg/G10CEN1.2.gif

Global financial markets have been in a tailspin in recent weeks as investors try to gauge how quickly and to what extent the US Federal Reserve and other major central banks will raise interest rates to combat inflationary pressures, while fears of a slowdown in global growth linger. spread out.

Advertisement

Some nascent signs that US inflation may be slowing have cheered markets in recent days, as Federal Reserve officials are scheduled to meet on December 13-14.

On Wednesday, Federal Reserve Chairman Jerome Powell said the US central bank may lower the pace of interest rate hikes “as early as December.”

Data from central banks in emerging markets showed a similar pattern. Eight of the 18 central banks delivered a total of 400 basis points to raise interest rates in November – from 325 basis points in October, but somehow less than 800 basis points per month in both June and July.

Emerging market interest rates https://www.reuters.com/graphics/GLOBAL-MARKET/lbvggnegavq/EMCEN1.1.gif

Indonesia, South Korea, Mexico, Thailand, Malaysia, the Philippines, Israel and South Africa all raised interest rates in November, indicating the wave of policy tightening towards Asia and a shift away from emerging Latin America and Europe, as the cycle draws to a close.

Advertisement

Nafez Zouk said Aviva (LON:) Investors.

Outside Turkey, where President Recep Tayyip Erdogan is pushing for lower interest rates, it made another record cut of 150 basis points to bring rates down to single digits, even though inflation has soared to more than 80%.

Not all EM central banks in the sample held rate-setting meetings last month.

Calculations showed that central banks in emerging markets raised interest rates by a total of 7,165 basis points year-to-date, more than double the 2,745 basis points for the full year of 2021.

Source link

Advertisement

Continue Reading

Economic

FirstFT: CBI warns of a one-year recession in the UK

Avatar

Published

on

good morning. This article is an in situ version of our website FirstFT the news. Subscribe to our site AsiaAnd the Europe/Africa or The Americas A release to send straight to your inbox every weekday morning

The United Kingdom will fall into recession for a year in 2023 As “stagflation” the combination of high inflation, negative growth and declining business investment affects the economy, according to Britain’s largest business group.

The Central Bank of Iraq warned that the gross domestic product will decline by 0.4 percent in 2023, which is a decrease from its previous forecast for growth of 1 percent set in June. She said consumer spending would decline throughout the year as inflation remained above the BoE’s target.

The lobbyist gave its own gloomy forecasts for business investment, which it said would start to decline from the middle of next year when the current “super-deductible” tax break scheme designed to boost investment ends.

Business investment is expected to be 9 per cent below pre-Covid pandemic levels by the end of 2024 – the equivalent of around £5 billion.

Advertisement

CBI Director General Tony Danker warned:[Companies] Seeing potential growth opportunities, but not having ‘reasons to believe’ in the face of headwinds causes investment to pause.”

The UK’s economic outlook is among the weakest of the developed countries covered in the CBI report, with only Germany’s GDP set to decline at a slightly faster pace next year.

1. Europe cuts gas demand by a quarter Interim data from commodity analytics firm ICIS showed that gas demand in the European Union was 24 percent lower than the five-year average last month, after a similar decline in October, in the latest evidence of the bloc’s success in reduce its dependence on Russian energy Since Moscow’s invasion of Ukraine.

2. War and weather to keep food prices high Bad weather and war events are set in Ukraine Keep food prices high Despite signs of moderation in global commodity markets, economists and agriculture experts have warned. Costs are likely to remain well above pre-pandemic levels because wars and droughts limit producers’ ability to increase supply.

The line graph of annual percentage change shows that the moderation in food prices in world markets has not yet interfered with the decline in consumer inflation.

3. The European Union is pledging to simplify aid rules to compete with Biden’s climate package The European Union should “Simplify and adapt” its rules On government aid to counter the US $369 billion climate package, European Commission President Ursula von der Leyen said yesterday in her first public response to Washington’s support for green energy. EU leaders said the plan risked “dividing” the transatlantic union by enticing European companies to relocate.

4. The court paves the way for the sale of the Belgian steel mills in Gupta Can Sanjeev Gupta He loses control of his steel mills in Belgium After a court in Liège last week upheld a request from workers at its Liberty Steel subsidiary to begin restructuring. The court appointed a legal representative to supervise the sale of two factories at Flémalle and Tilleur.

Advertisement

5. A report calling for the suppression of asylum seekers in the UK Britain’s Home Secretary, Soyla Braverman, has welcomed a report by a centre-right think tank calling for an amendment Great repression of asylum seekers who come to Britain using illegal routes. The report says that “if necessary” the UK should withdraw from the European Convention on Human Rights to address the problem.

next day

economic indicators S&P Global released the November Composite PMI for the European Union, the Services PMI for Russia, and the Composite PMI with Cips for the United Kingdom. In the US, ISM publishes the Non-Manufacturing PMI.

WHO meeting The World Health Organization is meeting in Geneva to review the new pandemic control convention.

Brussels bombing trial Belgium’s largest criminal case against suspects in the 2016 Brussels attacks that killed 32 people and left hundreds injured has been brought to court.

Saint Nicholas Ev Holland celebrates the pre-Sinterklaas night.

Advertisement

cricket England and Pakistan face off on the final day of their first Test match in Rawalpindi.

What else do we read

FT Person of the Year: Volodymyr Zelensky The 44-year-old Ukrainian president, who before the February invasion was seen by many as something of a joke, embodies the resilience of his people and has become the standard-bearer of liberal democracy. He has earned a place in history for him An exceptional display of ride and stability.

“I wish our students would be more resilient to bad feedback.” She is preparing to step down this month Louise Richardson, Vice-Chancellor of the University of OxfordHe talks to Henry Mance about cancellation culture, public schools, why universities shouldn’t be corporations, and the need for free speech.

Louise Richardson says:
“I worry that academics are afraid of taking on public office because they just don’t want to be subservient to social media,” says Louise Richardson. © Charlie Bibby / FT

How Sam Bankman-Fried blurred the lines between FTX and Alameda In an interview with the Financial Times, the founder of FTX said he did He isolated himself from trading and risk management in the Alameda Research business, which he owns majority, but he also admitted his involvement more closely than he had previously disclosed. “We kind of lost track of the spot risks,” he said.

Find the next market break With soaring inflation, soaring interest rates, and financial shocks sucking liquidity out of the markets, and sudden price moves sparking malicious margin calls and forced sell-offs, where will the next shock come from? Here are the corners of the market Which is closely watched by decision makers and investors.

The 4-Day Week: Does It Really Work? About 70 British companies, involving 3,300 employees, took part in a four-day-a-week trial, with researchers at Cambridge University, Boston College and Oxford University measuring the impact of a shorter week on productivity and well-being. This is what four companies discovered.

Advertisement

residence

Instead of “perfectly” renovating the house, bring it back to imperfection. Maiden outdated – and there A fresh and sustainable aesthetic It displays the scars of the past while preserving the building’s history and collective memory.

Restoration of Clandon Park House in Surrey, which was destroyed by fire in 2015, will preserve parts of its burnt condition
Restoration of Clandon Park House in Surrey, destroyed by fire in 2015, will preserve parts of its burnt condition © National Trust Images / James Do

Thank you for reading and remember that you can Add FirstFT to myFT. You can also choose to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.com

Climate chart: an explanation – Learn about the most important weather data for the week. Participation over here

Long story short – The biggest and best-read stories in one smart email. Participation over here


Source link

Advertisement
Continue Reading

Economic

Philippines Cuts 2023 GDP Growth Target to 6.0-7.0% By Reuters

Avatar

Published

on

© Reuters. A vendor settles into a public market in Quezon City, Philippines, August 9, 2022. REUTERS/Eloisa Lopez/Files

MANILA (Reuters) – The Philippines cut its growth target for 2023 to 6.0%-7.0% from 6.5%-8.0%, an interagency government panel said on Monday, taking into account the impact of a weaker peso and higher inflation.

The government has also revised its foreign exchange rate assumptions for the period 2022-2024. It now expects the peso to trade against the US dollar at 54-55 in 2022 compared to a previous forecast of 51-53, at 55-59 in 2023, and at 53-57 in 2024, compared to a previous forecast of 51-55 for 2023. onwards.

The Development Budget Coordination Committee (DBCC) said in a briefing that the growth target for 2024-2028 has been maintained at 6.5%-8.0%.

The peso has recovered slightly against the dollar after falling to a record low of 59 in recent weeks, thanks to a series of interest rate increases by the Bangko Sentral ng Pilpinas (BSP) to keep pace with the US Federal Reserve’s aggressive tightening.

Advertisement



It was trading at 55.73-55.88 on Monday.

Officials said the economy is on track to meet this year’s growth target of 6.5%-7.5%, faster than the 5.6% expansion in 2021, after the government removed nearly all COVID-19 restrictions and allowed more business activities to resume.

Source link

Continue Reading
Advertisement

Trending