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Logan is a voting member of the rate-setting Federal Open Market Committee this year. Officials were still worried about inflation and flagged a still strong job market, while a minority of policymakers expressed interest in raising rates at the June meeting. Logan also said that she doesn’t see anything tied to the Fed’s balance sheet drawdown affecting the Fed’s rate choices right now, and said the Treasury’s work to rebuild its cash account is unlikely to hit bank reserves, with the cash instead drawn from the Fed's reverse repo facility. Logan said after her formal remarks that she was surprised markets expect a sooner end to the balance sheet drawdown than she bets is likely. Reporting by Michael S. Derby Editing by Nick ZieminskiOur Standards: The Thomson Reuters Trust Principles.
Persons: Lorie Logan, , ” Logan, , Logan, Jerome Powell, John Williams, it’s, , Michael S, Nick Zieminski Organizations: YORK, Federal Reserve Bank, Dallas, Columbia University, , New York Fed, Fed, Thomson Locations: ,
Stupid nonsense that Treasury Secretary Janet Yellen will accomplish anything noteworthy on her China trip. Stupid nonsense that the pseudo-OPEC+ meeting will accomplish something. Stupid nonsense that Fed minutes matter. Stupid nonsense that it's time to load up the boat ahead of the upcoming earnings season. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.
Persons: Janet Yellen, That's, Dow, Morgan Stanley, Mark Zuckerberg, Tesla, Jim Cramer's, Jim Cramer, Jim Organizations: Nasdaq, Microsoft, Twitter, Elon, Meta, Bank of America, General Electric, GE, Jim Cramer's Charitable, CNBC Locations: China, Taiwan, Russia, U.S, Saudi Arabia, BofA
WASHINGTON, July 6 (Reuters) - New data from the New York Federal Reserve shows underlying inflation may have slowed faster than the headline measures that have kept U.S. central bank officials poised for further interest rate increases. The New York Fed core trend also factors out the food and energy items that central bankers try to look beyond in assessing the direction of inflation. That's because recent data on rents, which have been moderating, gets incorporated faster into the New York Fed's estimates. From a monetary policy perspective, the new estimate could add fodder to arguments for being more cautious about further rate increases. Some policymakers have been concerned that the main measure of core inflation has shown little improvement; the New York Fed's alternate measure suggests that may be the result of temporary factors rather than a more persistent trend.
Persons: Howard Schneider, Chizu Organizations: New York Federal Reserve, Reuters, New, Fed, New York Fed, York, Thomson Locations: York
SYDNEY, July 5 (Reuters) - The Australian government will announce this month whether it would reappoint Reserve Bank of Australia (RBA) Governor Philip Lowe or replace him. * Michele Bullock, 60, became the first female Deputy Governor of the RBA when she was appointed in the role in April 2022. She studied economics at the University of New England and a masters from the London School of Economics. He studied economics at Sydney University, and completed a PhD in health economics at the Australian National University. He has PhD degrees in physiology from Cambridge University and in economics from the Australian National University.
Persons: Philip Lowe, Michele Bullock, Bullock, RBA, Steven Kennedy, Kennedy, Kevin Rudd, Julia Gillard, Jenny Wilkinson, David Gruen, Wilkinson, Gruen, Martin Parkinson, Guy Debelle, Fortescue, Australia's, Debelle, Andrew, Carolyn Wilkins, Shri Navaratnam Organizations: SYDNEY, Australian, Reserve Bank of Australia, University of New, London School of Economics, Treasury, Labor, Sydney University, Australian National University, government's Department of Finance, Parliamentary, ANU, Princeton, Australian Bureau of Statistics, Cambridge University, Macquarie University, Department of Prime, Adelaide University, Fortescue Future Industries, University of Adelaide, MIT, Bank of Canada, Thomson Locations: University of New England
China's central bank is caught between trying to support the yuan and the country's economy. The People's Bank of China has been ramping up its commentary on the yuan, which is falling against the dollar. But to revive economic growth, it's also cutting rates, which could counteract efforts to boost the currency. The ramp-up in commentary comes as the central bank's other method of influencing the yuan has fizzled. After several attempts in recent days to boost the yuan with aggressive reference points, the currency has given up its gains.
Persons: it's, Organizations: People's Bank of, Service, Bank of China Locations: People's Bank of China
It’s a World of Inflation
  + stars: | 2023-07-05 | by ( Karl Russell | Jeanna Smialek | ) www.nytimes.com   time to read: 1 min
From Melbourne to Manchester to Miami, people are struggling under the weight of hefty price increases for the things they buy each day. The worst spike in inflation that many advanced economies have seen in decades underscores the global forces driving prices higher, namely the disruptions set in motion by the coronavirus pandemic. The stakes are high for policymakers around the world, who are facing similar problems. To try to get inflation under control, central bankers have rapidly lifted interest rates, trying to slow their economies in hopes of cooling prices.
Locations: Melbourne, Manchester, Miami
ET, the yield on the 2-year Treasury was last trading 5 basis points lower at 4.886%. U.S. Treasury yields were little changed Wednesday as markets reopened after the Fourth of July holiday and investors looked ahead to the release of the Federal Reserve's latest meeting minutes. Since the last Fed meeting, policymakers including central bank chief Jerome Powell have repeatedly indicated that further interest rate hikes will likely be needed to bring inflation down and cool the economy. According to CME Group's FedWatch tool, traders are currently pricing in a 88.7% chance of the Fed hiking rates again at its July meeting. These data points are likely to inform the Fed's next policy move as well as provide clues about the state of the U.S. economy.
Persons: John Williams, Jerome Powell, Powell Organizations: Treasury, U.S, Investors, New York Fed Locations: New, U.S
July 5 (Reuters) - Federal Reserve meeting minutes from the June policy gathering to be released on Wednesday are likely to show an active debate among policymakers who still on balance appear inclined to support more action to tame inflation. The meeting minutes, due at 2 p.m. EDT (1800 GMT), will arrive after U.S. central bank officials have spent the last three weeks following the June Federal Open Market Committee meeting sketching out their policy outlooks. “Although policy is restrictive, it's not, it may not be restrictive enough and it has not been restrictive for long enough," which keeps alive prospects for more increases, Powell said. It stood at near zero levels in March 2022 and has risen swiftly as Fed officials have sought to tame the worst levels of inflation in decades. The meeting minutes will also add details about what officials and their staff expect for the economy, and some are watching the central bank staff's view with particular interest.
Persons: Jerome Powell, , Powell, Raphael Bostic, , Tim Duy, Michael S, Andrea Ricci Organizations: Reserve, Atlanta Fed, Fed, Macro, Thomson Locations: Portugal
Earlier in the day, Australia's central bank held interest rates steady, but reiterated its warning that further tightening might be needed to cool prices. However, a 2.7% increase in real estate stocks (.SX86P) helped keep the STOXX 600 steady, while healthcare stocks (.SXDP) rebounded from the previous day's sharp declines. Travel and leisure (.SXTP) stocks edged higher as Irish airline Ryanair's(RYA.I) upbeat monthly traffic numbers helped sentiment for the sector. Britain's second-largest supermarket group Sainsubury (SBRY.L) fell 1.8% as fierce competition in the sector took shine off its robust quarterly sales. German chip firm Aixtron (AIXGn.DE) dropped 0.5% after China said it will control exports of some metals widely used in the semiconductor industry.
Persons: Michael Hewson, Stuart Cole, Amruta Khandekar, Shreyashi Sanyal, Dhanya Ann Thoppil, David Gregorio Our Organizations: U.S, Independence, CMC Markets, EU, Fed, ECB, European Central Bank, Equiti, Wall, Thomson Locations: China, U.S, Bengaluru
Sweden, Switzerland and the European Central Bank also tightened policy, taking the total monthly tally of hikes to 225 basis points last month. The latest G10 moves bring the total 2023 rate hike tally among G10 central banks to 950 bps across 28 hikes. "The last leg of inflation reduction to central bank targets may be the most challenging, in our view." Thirteen out of 18 central banks in the Reuters sample of developing economies had interest rate setting meetings last month. This was the second biggest rate hike in recent times since Russia was forced to deliver an emergency 1,050 bps rate hike following its invasion of Ukraine.
Persons: Henry Nicholls, Tiffany Wilding, Hafize Gaye Erkan, Karin Strohecker, Vincent Flasseur, William Maclean Organizations: Bank of England, REUTERS, Australia, European Central Bank, Reuters, U.S, Vanguard, Thomson Locations: City, London, Britain, Norway, Canada, Sweden, Switzerland, U.S . Federal, Turkey's, Russia, Ukraine, China's
European shares muted as miners weigh
  + stars: | 2023-07-04 | by ( ) www.reuters.com   time to read: +1 min
July 4 (Reuters) - European shares were muted on Tuesday, as uncertainty about the direction of global interest rates prompted investors to stick to the sidelines, while miners weighed on concerns about weak demand from China. The pan-European STOXX 600 index (.STOXX) held steady at 461.17 points by 0710 GMT as investors weighed hawkish signals from central bankers against data pointing to slowing global growth. Miners (.SXPP) fell 0.3% as metal prices slipped on concerns about the demand outlook from China after a raft of weak economic data, while a 0.5% increase in banks (.SX7P) limited losses. Independence Day public holiday while the economic data calendar is also light. Wacker Chemie (WCHG.DE) advanced 2.7% to the top of the STOXX 600 after HSBC upgraded its rating to "buy" from "hold."
Persons: Amruta Khandekar, Dhanya Ann Thoppil Organizations: Wall, U.S, Independence, Wacker Chemie, HSBC, Thomson Locations: China
LONDON/HONG KONG, July 4 (Reuters) - Global stocks held steady on Tuesday, as investors balanced the inflationary force of rising oil prices with hopes that central banks would not over-tighten monetary policy into a potential recession. Earlier in the session, Australia's central bank held interest rates steady at 4.1%, saying it needed time to assess the economic impact of its rate hikes so far. Complicating the outlook for inflation, oil prices rose on Tuesday as markets weighed supply cuts for August by top producers Saudi Arabia and Russia. Brent crude futures climbed 0.6% to $75.09 a barrel, with West Texas Intermediate crude adding the same amount to $70.23. "At least the improved supply-demand imbalance seems to be having an effect on price pressures," Capital Economics global economist Ariane Curtis said.
Persons: Europe's, Brent, Ariane Curtis, Curtis, Manishi Raychaudhuri, Raychaudhuri, Schatz, Paul Volcker, Ankur Banerjee, Sam Holmes, Himani Sarkar, Alex Richardson Organizations: U.S . Federal Reserve, Wall, West Texas, Institute of Supply Management, Economics, Asia, BNP Paribas, Treasury, Independence, U.S, Fed, Thomson Locations: HONG KONG, Saudi Arabia, Russia, U.S, Singapore
The central bank did not immediately respond to Reuters' request for comment. Pan, central bank deputy governor since 2012 who turns 60 this month, is not expected to deviate from China's measured pace of policy easing to support the recovery, analysts said. "His professional ability will help safeguard the bottom line of systemic financial risks, especially as the property sector is slowing, and fend off a big systemic crisis." In an unexpected move, the ruling Communist Party appointed Pan as the central bank's party secretary on Saturday, taking over from Guo Shuqing. China has taken a series of steps this year to tighten party control over the country's vast, but largely closed, financial system, including plans to set up the Central Financial Commission to oversee the PBOC and other financial regulators.
Persons: Gongsheng, Jason Lee, Pan, Yi Gang, Gu Tianyong, Guo Shuqing, Yi, Yi's, Zhou Xiaochuan, Zhou, Xu Hongcai, Marius Zaharia, Jacqueline Wong Organizations: People's Bank of China, National People's Congress, REUTERS, outflows, Reuters, cryptocurrencies, prudential, Central University of Finance, Economics, Communist Party, Pan, Street, Cambridge University, Harvard University, Central Financial Commission, China Association of Policy, Thomson Locations: Beijing, China, BEIJING
Ghost of Silicon Valley Bank turns up in Italy
  + stars: | 2023-07-04 | by ( Lisa Jucca | ) www.reuters.com   time to read: +3 min
The rapid collapse of Silicon Valley Bank earlier this year was largely down to an ill-advised bond portfolio and liabilities that were less sticky than assumed. While Italy’s Eurovita isn’t a bank, its demise has some similarities with events across the Atlantic. Eurovita, whose 2022 balance sheet was only about 15 billion euros, chiefly offered life insurance products that guaranteed policyholders’ invested capital and a fixed annual return. Follow @LJucca on TwitterCONTEXT NEWSItaly’s top four insurers and Germany’s Allianz have agreed a multibillion-euro rescue deal for ailing life insurer Eurovita, industry supervisor IVASS said on June 30. The deal also involves banks that sold the insurance products through their networks.
Persons: policyholders ’, Cinven, Intesa, redemptions, Eurovita, Marco Sesana, weren’t, IVASS, George Hay, Oliver Taslic Organizations: MILAN, Reuters, Banco, Reuters Breakingviews, Allianz, Germany’s Allianz, Thomson Locations: Silicon, Eurovita
Europe stocks open mixed as investors await data releases
  + stars: | 2023-07-04 | by ( Jenni Reid | ) www.cnbc.com   time to read: +1 min
European markets opened mixed on Tuesday, with investors in a cautious mood ahead of data releases and the start of second-quarter earnings season. Data is also due on U.K. average mortgage rates. The U.S. Federal Reserve will release the minutes of its last meeting Wednesday, after Chairman Jerome Powell said there was "more restriction coming." Markets are currently pricing in an 89.9% likelihood of a 25-basis-point hike in interest rates July, according to CME's FedWatch tool. It comes as central bankers and leading economists warn markets not to expect interest rate cuts too fast or too soon.
Persons: Banks, Jerome Powell Organizations: U.S . Federal
"We are positioned for a very big bond rally, and we think that risky assets are completely underestimating the risk of a recession or something nasty happening," he added. (.MERW0G1)An early sign that the bond outlook is improving came last week with data showing euro zone business growth stalled in June. In response, German bond yields, which move inversely to prices, posted their second biggest daily drop since March. But highlighting how hard economic data has become to read, higher-than-expected U.S. first quarter growth and German inflation sent yields surging on Thursday. Major central banks fighting a surge in inflation have collectively raised borrowing costs by over 3,750 bps since September 2021.
Persons: Jason Reed, Mike Riddell, Viraj Patel, Vanda's Patel, BoE, Urban, Jill Hirzel, Dhara Ranasinghe, Harry Robertson, Catherine Evans Organizations: U.S . Federal, REUTERS, Bond, U.S, Federal Reserve, European Central Bank, Bank of England, Reuters, Allianz Global Investors, Vanda Research, Deutsche Bank, General Investment Management, Insight Investment, Thomson Locations: Washington, hawkish, Canada, Britain, Norway, Sintra, Germany, United States, U.S
Explainer: The Fed's rate policy path, and what the data says
  + stars: | 2023-06-30 | by ( ) www.reuters.com   time to read: +3 min
Here's a guide to some of the key data that will shape the policy debate and expectations around the Federal Reserve's next move:INFLATION (released June 30): Headline price pressures by the Fed's preferred inflation gauge eased to 3.8%, their lowest year-on-year reading since 2021, but underlying inflation pressures remained stuck on overdrive, with the core personal consumption expenditures index at 4.6%. The lack of progress toward the Fed's 2% target makes it less likely that Fed policymakers will feel comfortable holding off again on a rate hike come July. That ratio has dropped as the Fed's rate hikes have slowed labor market demand. A still-robust job market driving wage gains and consumer spending would be seen as contributing to the persistence of high inflation, and would build the case for further Fed rate hikes. Reporting by Ann Saphir; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.
Persons: Jerome Powell, Powell, Ann Saphir, Andrea Ricci Organizations: Federal, Reuters Graphics Reuters Graphics, Institute for Supply Management, Labor, Survey, Thomson
The pan-European STOXX 600 index (.STOXX) closed 1.2% higher. European shares still advanced 8.7% in the first six months of the year. Miners (.SXPP) were a big drag this quarter, down 9.2% as worries around top metals consumer China weighed heavily on metal prices. The real estate sector (.SX86P) rose 1.7%, buoyed by 4.3% gains in shares of LEG Immobilien (LEGn.DE) after the German firm raised its 2023 outlook. Shares in Adidas (ADSGn.DE) and Puma (PUMG.DE), which had fallen earlier on Nike's (NKE.N) dour forecast, reversed course to rise 2.5% and 3.3%, respectively.
Persons: Melanie Debono, Hubert de, Amruta Khandekar, Matteo Allievi, Varun H, Eileen Soreng, David Evans Organizations: European Central Bank, Pantheon, ECB, Capital Economics, MIB, Miners, Adidas, Puma, Thomson Locations: Europe, U.S, Hubert de Barochez, China, Bengaluru, Gdansk
The next revolution in monetary policy is underway
  + stars: | 2023-06-30 | by ( Felix Martin | ) www.reuters.com   time to read: +7 min
LONDON, June 30 (Reuters Breakingviews) - Monetary policy, Milton Friedman said, acts on the economy with long and variable lags. Monetary policy regimes evolve in response to the changing nature of prevailing economic challenges – though this also takes time. The next revolution in monetary policy may be brewing. One question Gopinath did not address is how the financial system came to dominate monetary policy. When contractions hit, however, central banks eased monetary policy and governments loosened their purse strings, just as before.
Persons: Milton Friedman, Gita Gopinath, Gopinath, , , Peter Thal Larsen, Pranav Kiran, Oliver Taslic Organizations: Reuters, International Monetary Fund, Bank for International, IMF, Central, SVB, Signature Bank, Credit Suisse, Fed Funds, BIS, Thomson Locations: Portuguese, Sintra, Korean, United States, Europe, Central, England, London, U.S, China, Ukraine,
The pan-European STOXX 600 index (.STOXX) closed 0.1% higher. That made Spain the first among the euro zone's large economies to have inflation fall below 2%. This followed hawkish comments from U.S. and European central bank policymakers at a European Central Bank meet-up in Sintra on Wednesday, where the underlying theme was that rates are likely to stay higher for longer. Adding to recent hawkish messages from central banks globally, Sweden's central bank raised its policy rate by a quarter percentage point as expected and forecast at least one more rate hike this year. The stock was the top gainer on France's blue-chip index (.FCHI), which rose 0.4% and also helped the automaker sub-index (.SXAP) climb 1.3%.
Persons: Germany's DAX, year's, Claus Vistesen, Daniela Hathorn, Amruta Khandekar, Matteo Allievi, Sherry Jacob, Phillips, Rashmi Aich, Conor Humphries Organizations: Pantheon, U.S . Federal Reserve, European Central Bank, Capital.com, Renault, Belgian, Severn Trent, Thames, Semiconductor, Citigroup, Thomson Locations: Spain, Sintra, Severn, Bengaluru, Gdansk
TOKYO (Reuters) - The U.S. dollar hovered near a 7-1/2-month high against the Japanese yen after the heads of the respective central banks reaffirmed the stark divergence in their policy paths at a European Central Bank conference overnight. Japanese yen and U.S. dollar banknotes are seen in this illustration picture taken June 15, 2022. The ministry of finance and BOJ intervened in the currency market last autumn when the dollar strengthened beyond 145 yen. The U.S. currency eased back 0.15% to 144.265 yen in the Asian morning on Thursday. China’s yuan was not far from Wednesday’s 7-1/2-month low of 7.2694 per dollar in offshore trading.
Persons: Florence Lo, Jerome Powell, Christine Lagarde, Kazuo Ueda, Andrew Bailey, Ueda, , BOJ, Shinichi Kadota, “ I’m, Sterling Organizations: U.S, European Central Bank, REUTERS, Bank of Japan, Bank of England, Barclays, Reserve Bank of Australia Locations: TOKYO, Tokyo
But it shelved the plan, citing “noticeable” falls in pasta prices. Pasta prices dipped in May compared with April, though provisional official data released Wednesday showed that they ticked up again this month. Broader food price inflation, albeit slowing, is still high in Italy and elsewhere. Concerns have grown that retailers and food producers are deliberately keeping prices high to boost profit margins — claims they strenuously deny. That meant they had “locked in higher prices” for longer, he told a gathering of central bankers in Portugal.
Persons: Danni Hewson, AJ Bell, Pasta, Remo Casilli, Andrew Bailey, , Mintec, Andrew Woods, , Jack Allen, Reynolds, That’s, Christine Lagarde, ” Nestlé, ” Lagarde, Jeremy Hunt, , Cristiano Laurenza, ” — Valentina Di Donato, Hanna Ziady Organizations: London CNN, CNN, , Bank of England, Labor, European Union, Capital Economics, European Central Bank, Wednesday, Competition, Markets Authority, Unione Italiana Food Locations: Italian, Italy, United Kingdom, United States, France, Germany, Russia, Ukraine, Cecco's, Fara San Martino, Portugal, Europe, European, , Sweden
European stocks were cautiously higher Thursday as investors assessed commentary from leading central bankers on the need to continue the fight against inflation. The pan-European Stoxx 600 nudged 0.3% higher by late morning, with retail stocks adding 1.7% to lead gains while travel and leisure stocks fell 0.4%. A further message from the conference this week has been on market pricing of swift interest rate cuts from the ECB. The Stoxx 600 closed 0.7% higher Wednesday after staging a cautious turnaround from six straight negative sessions on Tuesday. U.S. futures were slightly higher as banks rose after passing the Federal Reserve's annual stress test.
Persons: Christine Lagarde, Andrew Bailey, Jerome Powell, Powell, Lagarde, England's Bailey, Philip Lane, Chipmakers Organizations: CNBC, European Central Bank, Wednesday, Bank of England, Federal, ECB, Journal Locations: Sintra , Portugal, U.S, China, Asia, Pacific
Jerome H. Powell, the Federal Reserve chair, said on Thursday that he would expect to continue with a slower pace of interest rate increases after central bankers skipped raising interest rates in June for the first time in 11 policy meetings — but he didn’t rule out that officials could return to back-to-back rate moves. “It may be that we don’t move for a meeting, and then move at a meeting,” Mr. Powell said. Speaking at a conference in Madrid, he reiterated an assertion he made a day earlier that he wouldn’t take future rate increases at consecutive meetings “off the table.” But he added that he would expect a more patient approach to persist. “We did take one meeting where we didn’t move, so that’s in a way a moderation of the pace,” he explained. “So I would expect something like that to continue, assuming the economy evolves about as expected.”Mr. Powell noted, however, that the economy “has a tendency to do something different” than policymakers anticipate.
Persons: Jerome H, Powell, ” Mr, , Mr Organizations: Federal Reserve Locations: Madrid
The US is in for a more serious recession than Fed Chair Powell thinks, according to Evercore's Roger Altman. The market veteran pointed to the inverted Treasury yield curve and troubling signs among small businesses. A moderate recession is the most likely outcome by the end of the year, Altman warned. "To me, the likelihood is a moderate recession," Altman said. "You can look at the yield curve.
Persons: Powell, Evercore's Roger Altman, Altman, , Jerome Powell, Roger Altman, " Altman Organizations: Service, CNBC, Treasury
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