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☆ Strong dollar sends yen to 11-month low, focus on intervention risks
▼ + stars: | 2023-09-25 | by ( Joice Alves | ) www.reuters.com time to read: +3 min

Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. In the broader currency market, the dollar steadied after last week's gains as the Federal Reserve surprised markets by signalling U.S. rates would need to stay higher for longer than initially expected. The yen was last flat at 148.38 per dollar after falling to its lowest level of 148.49 per dollar since late October. "It is possible of course that exactly such fears of interventions might have prevented a weaker yen for now". The dollar index , which on Friday touched an over six-month high, firmed at 105.64 and was last 0.1% higher.

Persons: Florence Lo, Kazuo Ueda, Ueda, Esther Reichelt, Reichelt, Francois Villeroy de Galhau, Sterling, Joice Alves, Rae Wee, Ed Osmond Organizations: U.S, REUTERS, Bank of Japan, Federal Reserve, European Central Bank, Bank, Thomson Locations: Japan, London, Singapore

☆ ECB needs to be cautious about doing too much on rates - Villeroy
▼ + stars: | 2023-09-25 | by ( ) www.reuters.com time to read: +2 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. REUTERS/Heiko Becker//File Photo Acquire Licensing RightsPARIS, Sept 25 (Reuters) - The European Central Bank has reached the point where it needs to be wary of raising interest rates too high and should try to avoid a hard landing of the economy, ECB policymaker Francois Villeroy de Galhau said on Monday. The ECB raised its main interest rate to a record high 4% this month after 10 successive hikes, but signalled a pause in October. Villeroy said that the risk of doing too much - and possibly triggering a recession - and the risk of doing too little were now symmetrically balanced after the string of rate hikes. If the ECB did too much, the central bank could run the risk of having to rapidly reverse course, he told a conference at the French central bank, which he also heads.

Persons: Heiko Becker, Francois Villeroy de Galhau, Villeroy, Leigh Thomas, Toby Chopra Organizations: European Central Bank, REUTERS, Rights, ECB, Thomson Locations: Frankfurt, Germany

☆ Morning Bid: Fed's hawkish pause keeps pressure on markets
▼ + stars: | 2023-09-25 | by ( ) www.reuters.com time to read: +3 min

Global markets have been feeling the heat as U.S. bond yields surged and a strengthened dollar hit a six-month high following the Federal Reserve's hawkish tone last week. The euro zone central bank also struck a relatively dovish tone. But markets will have plenty of material to pore over this week as they try to glean future Fed moves. In the euro zone, ECB President Christine Lagarde kicks off a string of speeches and remarks this week. Markets are expecting that the euro zone's central bank is done hiking.

Persons: Jonathan Ernst, Brigid Riley, Neel Kashkari, Christine Lagarde, Francois Villeroy de Galhau, Isabel Schnabel, Fed's Neel Kashkari, Edmund Klamann Organizations: . Federal, REUTERS, Brigid, Brigid Riley Investors, Global, Federal Reserve, U.S, Minneapolis, China, HK, ECB policymaker, Bank of France, ECB, Thomson Locations: Washington, U.S, Europe, Britain, Switzerland, Japan, China, Hollywood

"I expect rates may have to stay higher, and for longer, than previous projections had suggested," said Collins. San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari are scheduled to make remarks later on Friday as the Fed's "blackout" period on post-meeting policy comments lifted. The central bank's decision to hold its benchmark overnight interest rate steady this week was unanimous. Collins does not currently have a vote on rate policy under a Fed system that rotates votes among the 12 reserve bank presidents year by year. New projections issued at the end of a two-day policy meeting on Wednesday showed 12 of 19 Fed officials expect one additional quarter point rate increase this year.

Persons: Dado Ruvic, Michelle Bowman, Susan Collins, Collins, Mary Daly, Neel Kashkari, Bowman, Howard Schneider, Paul Simao, Andrea Ricci Organizations: REUTERS, Rights, . Federal, Independent Community Bankers of, Maine Bankers Association, Boston, Fed, San Francisco Fed, Minneapolis Fed, Thomson Locations: Independent Community Bankers of Colorado

☆ Take Five: An inflationary dilemma
▼ + stars: | 2023-09-22 | by ( ) www.reuters.com time to read: +5 min

The week ahead brings more evidence of how much progress is left for developed-economy policymakers, while in the emerging world, India is set to enter the bond-market big time and a raft of central banks wrestle with a dilemma. The personal consumption expenditures (PCE) price index rose 3.3% in the 12 months through July. Line chart with data from LSEG Datastream show the U.S.'s inflation on personal consumption expenditures (PCE), core PCE inflation and the federal funds target rate from 2019 to 2023. Reuters Graphics5\ASIA'S CURRENCY CONUNDRUMAsian central banks have a dilemma: how to handle weakening economic growth and peaking inflation, while arresting the slide in currencies to maintain stability in their financial systems. But much may rest on decisions of other central banks further afield, namely the Federal Reserve.

Persons: Lewis Krauskopf, Naomi Rovnick, Karin Strohecker, Amanda Cooper, Perry Warjiyo, Toby Chopra Organizations: Federal, Fed, European Central Bank, ECB, Reuters, CLUB India, JPMorgan, Russell, Bank of, Bank, Thailand, Reserve, Thomson Locations: India, Vidya Ranganathan, Singapore, New York, London, Washington, U.S, Saudi Arabia, Russia, Bank of Indonesia, Philippine

☆ Fed policymakers see 5.1% policy rate at end of 2024
▼ + stars: | 2023-09-20 | by ( ) www.reuters.com time to read: +2 min

That's according to the median of 19 forecasts included in the latest quarterly summary of Federal Reserve policymaker projections published on Wednesday, alongside the Fed's decision to leave its policy rate unchanged in a range of 5.25%-5.50%. Fed officials now see the personal consumption expenditures price index at 3.3% at year end, versus June's forecast of 3.2%, falling to 2.5% by the end of next year, compared with 2.5% seen in June. Fed officials expect further reductions in the policy rate as well, to 3.9% by the end of 2025 - above the 3.4% they projected in June - and to 2.9% by the end of 2026. That would still be above the 2.5% they continue to see as the long-run neutral policy rate - the level of borrowing costs that neither slows nor stimulates a healthy economy. Meanwhile the unemployment rate - which is currently at 3.8% - is seen peaking at 4.1% in 2024 - and remaining there for 2025 - versus the 4.5% high-water mark seen in June.

Persons: Ann Saphir, Dan Burns, Andrea Ricci Organizations: Fed, Thomson

The new projections and the Fed's latest policy statement will be released at 2 p.m. EDT (1800 GMT). Fed Chair Jerome Powell is scheduled to hold a press conference half an hour later. With inflation slowing, that would allow interest rates to decline also. The last set of projections envisioned that the Fed's policy rate would fall by a percentage point in 2024, and by 1.2 percentage points in 2025 to end that year in the 3.25%-3.50% range. It hasn't happened so far, with economic growth through the first half of the year above the 1.8% rate that Fed officials view as the economy's non-inflationary trend, and continuing that way through the third quarter.

Persons: Matthew Luzzetti, Jerome Powell, Powell, Joseph Davis, Davis, Howard Schneider, Paul Simao Organizations: Federal Reserve, Deutsche Bank, Reuters Graphics Reuters, Commerce, Vanguard, Thomson Locations: WASHINGTON

☆ What Happens When Global Human Population Peaks? - The New York Times
▼ + stars: | 2023-09-18 | by ( Dean Spears | ) www.nytimes.com time to read: +13 min

Over the past 100 years, the global population quadrupled, from two billion to eight billion. Some will inexcusably claim that restricting reproductive choice is a way to curb long-run population decline. If an inclusive, compassionate response to population decline emerges someday, it need not be in conflict with those values. It’s in no one’s hands to change global population trajectories alone. Six decades from now is when the U.N. projects the size of the world population will peak.

Persons: demographers, Wittgenstein, Spears, Grandma, humanity’s, They’ve, birthrates, everyone’s, It’s, it’s Organizations: Human, The Institute for Health Metrics, University of Washington, University of Texas, Population Research, New York Times, White, won’t Locations: Vienna, Austin, United States, Europe, East Asia, Latin America, Guinea, Africa, China, Brazil, India, birthrates, Chile, Thailand, Canada, Germany, Japan, Saharan Africa, Israel

☆ ECB’s Stournaras urges governments to help bring down inflation, Bloomberg reports
▼ + stars: | 2023-09-17 | by ( ) www.reuters.com time to read: +1 min

Central Bank Governor Yannis Stournaras poses for a photo in his office at the bank’s headquarters in Athens, Greece, October 22, 2021. REUTERS/Louiza Vradi Acquire Licensing RightsSept 17 (Reuters) - European Central Bank Governing Council member Yannis Stournaras said governments must do their part in reining in consumer prices after borrowing costs reached a level that may well be their peak, Bloomberg News reported on Sunday. “Monetary policy has done its part to fight inflation,” Stournaras told Bloomberg in an interview, adding that now it was up to fiscal policy to "take out some of the heat." “A more restrictive fiscal stance wouldn’t only be a welcome strategic complement to ECB policy but also help improve the credibility of public debt and loosen the nexus with banks,” the Greek central bank chief said. Reporting by Kanjyik Ghosh in Bengaluru Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

Persons: Central Bank Governor Yannis Stournaras, Louiza, Yannis Stournaras, ” Stournaras, wouldn’t, Stournaras, Francois Villeroy de Galhau, Kanjyik Ghosh, Tomasz Janowski Organizations: Central Bank Governor, REUTERS, Central Bank Governing, Bloomberg, ECB, Thomson Locations: Athens, Greece, reining, Bengaluru

What they likely won't be changing: Keeping one more rate hike on the table. Given that rosier picture, Luzzetti - like most analysts polled by Reuters - says Fed policymakers probably won't lift the policy rate any further. Many other economists also expect Fed policymakers to signal fewer rate cuts next year. That's only a touch higher than the 3.2% rate the Fed had expected to see at the end of this year. Reuters GraphicsIf progress towards the Fed's 2% goal slows next year though, as many economists forecast, that may mean fewer interest rate cuts next year.

Persons: Sarah Silbiger, won't, Matthew Luzzetti, Luzzetti, Tim Duy, Duy, That's, Loretta Mester, Kathy Bostjancic, Ann Saphir, Dan Burns, Andrea Ricci Organizations: Eccles Federal Reserve, Washington , D.C, REUTERS, Federal Reserve, Deutsche Bank, Reuters, Reuters Graphics Reuters, U.S, Fed, Cleveland Fed, Thomson Locations: Washington ,, U.S, China

☆ Morning Bid: Japan jolt as inflation forks
▼ + stars: | 2023-09-11 | by ( ) www.reuters.com time to read: +5 min

A man walks past the headquarters of Bank of Japan in Tokyo, Japan, January 17, 2023. "If we judge that Japan can achieve its inflation target even after ending negative rates, we'll do so," Ueda said. The yen surged 1% against the dollar, knocking the U.S. currency back more generally (.DXY) on the foreign exchange markets. If Japan's does tighten further by yearend, it comes as the Federal Reserve and European Central Bank rate hike campaigns are coming to halt. News of an expected return of headline Chinese consumer price inflation to positive territory last month and above-forecast August lending data helped mainland shares (.CSI300) higher, with the yuan bouncing back from 16-year lows.

Persons: Issei Kato, Mike Dolan, Kazuo Ueda, Ueda, Alibaba, Daniel Zhang, Bank of England policymaker Catherine Mann, Christina Fincher Organizations: Bank of Japan, REUTERS, U.S, Tokyo Stock, Nikkei, Global, Treasury, yearend, Federal Reserve, European Central Bank, ECB, Fed, CPI, OpenAI, Wall Street, SoftBank Group, underwriters, Bank of England, Oracle, Graphics, Graphics Reuters, Thomson, Reuters Locations: Tokyo, Japan, U.S, Hong Kong, Ottawa

☆ BOJ policymaker calls for keeping ultra-easy policy, sets high bar on exit
▼ + stars: | 2023-09-07 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

As a result, it was hard to say when inflation could hit the bank's 2% inflation target in a sustainable manner, she said. "But we're not at a stage where we can judge that Japan has achieved our price target in a stable, sustainable fashion." The BOJ has defined sustainable inflation as price rises driven not by rising raw material costs, but strong domestic demand accompanied by continued wage increases. But she laid out in detail the conditions for ending negative rates. "When we see many people share prospects that wages will keep rising, we may be able to exit (negative rates)," she added.

Persons: Androniki, Nakagawa, Bank of Japan policymaker Junko Nakagawa, Haruhiko Kuroda, We're, Kazuo Ueda, Leika Kihara, Tom Hogue, Kim Coghill, Emelia Organizations: REUTERS, Bank of Japan, Thomson Locations: Japan, Tokyo, KOCHI, Kochi

☆ BOJ policymaker calls for keeping ultra-easy policy for now
▼ + stars: | 2023-09-07 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

An office employee walks in front of the bank of Japan building in Tokyo, Japan, April 7, 2023. An increasing number of Japanese companies were raising prices and wages, Nakagawa said, adding that there was a chance inflation could accelerate more than initially expected. But there was also a risk inflation could slow once the pass-through of higher costs moderate, she said. "But we're not at a stage where we can judge that Japan has achieved our price target in a stable, sustainable fashion." Reporting by Leika Kihara; Editing by Tom Hogue and Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

Persons: Androniki, Bank of Japan policymaker Junko Nakagawa, Nakagawa, Kazuo Ueda, Leika Kihara, Tom Hogue, Kim Coghill Organizations: REUTERS, Rights, Bank of Japan, Thomson Locations: Japan, Tokyo, Rights KOCHI, Kochi

☆ BOJ policymaker sees shift in Japan's deflationary mindset
▼ + stars: | 2023-09-06 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

Policymaker Takata stressed the need to maintain ultra-loose monetary policy for the time being, as slowing global growth was heightening uncertainty on whether the Bank of Japan's (BOJ) 2% inflation target was sustainably achievable. In an earlier speech, he said he believe Japan's economy was "finally seeing early signs" of achieving the 2% target. Two other BOJ board members earlier gave diverging views on how soon the central bank should consider scaling back its radical stimulus. Japan's core inflation hit 3.1% in July, exceeding the BOJ's 2% target for the 16th straight month. BOJ officials have said the central bank must keep interest rates ultra-low until robust domestic demand and sustained wage growth replace rising import costs as key drivers of inflation.

Persons: Androniki, Takata, Hajime Takata, Policymaker Takata, Haruhiko Kuroda, Leika Kihara, Tetsushi Kajimoto, Takahiko Wada, Tom Hogue, Lincoln, John Stonestreet Organizations: REUTERS, Bank of Japan's, CHINA IMPACT, Thomson Locations: Japan, Tokyo, TOKYO, China, CHINA

☆ BOJ policymaker sees signs of change in Japan's deflationary mindset
▼ + stars: | 2023-09-06 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

An office employee walks in front of the bank of Japan building in Tokyo, Japan, April 7, 2023. Takata stressed the need to maintain ultra-loose monetary policy for the time being, as slowing global growth heightens uncertainty on whether Japan can sustainably achieve the Bank of Japan's (BOJ) 2% inflation target. "Personally, I believe Japan's economy is finally seeing early signs of achieving the BOJ's 2% inflation target," Takata said in a speech. The remarks follow those of two other BOJ board members, who gave diverging views on how soon the central bank should consider scaling back its radical stimulus. BOJ officials have said the central bank must keep interest rates ultra-low until robust domestic demand and sustained wage growth replace rising import costs as key drivers of inflation.

Persons: Androniki, Takata, Hajime Takata, Haruhiko Kuroda, Leika Kihara, Tom Hogue Organizations: REUTERS, of Japan's, Thomson Locations: Japan, Tokyo, TOKYO, Lincoln

"Most Districts reported price growth slowed overall," the Fed said in its latest "Beige Book" summary of surveys and interviews conducted across its 12 districts through Aug. 28. It added that "nearly all districts indicated businesses renewed their previously unfulfilled expectations that wage growth will slow broadly in the near term." Data since the last Fed rate hike six weeks ago has tended to support that view, with the economy adding an average of 150,000 jobs per month over the last three months, down sharply from the prior three months. Earlier on Wednesday, Boston Fed President Susan Collins also said the central bank has the space to be patient, while acknowledging that inflation pressures, though easing, still remain too high. Home building was picking up, the Fed said, but building affordable properties is being strained by high financing costs and rising insurance premiums.

Persons: Christopher Waller, Susan Collins, Collins, Ann Saphir, Andrea Ricci, Paul Simao Organizations: Federal, Boston, New, New York Fed, San Francisco Fed, Fed, Thomson Locations: U.S, New York

☆ Euro falls as ECB hike bets take hit on inflation, policymaker comments
▼ + stars: | 2023-08-31 | by ( Samuel Indyk | ) www.reuters.com time to read: +4 min

U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. But, while euro area-wide inflation unexpectedly held at 5.3% this month, underlying price growth fell, complicating matters for the ECB, who now appear more likely to keep interest rates unchanged next month than raise them. ECB rate-setter Schnabel - considered one of the most hawkish members on the ECB - said euro zone growth was weaker than predicted but that does not necessarily void the need for more rate hikes. "I think the fact she is flagging downside risks to growth is putting some downside pressure on the euro." Both sterling and the euro are set for monthly drops of over 1% against the dollar in August.

Persons: Dado Ruvic, policymaker Isabel Schnabel, Schnabel, We've, Michael Brown, Chris Turner, Samuel Indyk, Tom Westbrook, Shri Navaratnam, Kim Coghill, Chizu Organizations: REUTERS, European Central Bank, ECB, Trader, Traders, Federal, Commerce Department, UK, CEE, New Zealand, Aussie, Thomson Locations: Tokyo

A man walks at the headquarters of Bank of Japan in Tokyo, Japan, January 18, 2023. The central bank would take time to determine whether it can raise interest rates as it waits for evidence that a sustained economic recovery will eradicate Japan's deflationary mindset, he said. "The key is for the economy to keep recovering," Nakamura told a news conference, when asked about the conditions for ending negative interest rates. We therefore need more time before shifting to monetary tightening," he said, adding the key was to determine whether companies' growth expectations were heightening. Markets are divided on whether the BOJ could remove the yield cap before raising short-term rates, ditch both simultaneously, or keep the yield cap when ending negative rates as a precaution against an abrupt rise in long-term yields.

Persons: Issei Kato, Nakamura, Toyoaki Nakamura, Japan's, we're, Naoki Tamura, Kazuo Ueda, Leika Kihara, Christian Schmollinger, Navaratnam, Gerry Doyle Organizations: Bank of Japan, REUTERS, Hitachi Ltd, Thomson Locations: Tokyo, Japan, GIFU, Gifu

☆ BOJ policymaker Nakamura warns against premature monetary tightening
▼ + stars: | 2023-08-31 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

Tightening monetary policy before rising prices are accompanied by higher wages would hurt domestic demand and corporate profits, Nakamura said. We therefore need more time before shifting to monetary tightening," Nakamura said in a speech to business leaders in the city of Gifu in central Japan. "Close scrutiny of (economic) conditions and cautious decision-making are required when modifying monetary policy," he said, warning against shifting policy too hastily. Governor Kazuo Ueda has said the BOJ must maintain ultra-low rates until there is more evidence that Japan's inflation can sustainably hit 2% backed by solid consumption and wage growth. Reporting by Leika Kihara; Editing by Christian Schmollinger and Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

Persons: Issei Kato, Nakamura, Toyoaki Nakamura, Naoki Tamura, Kazuo Ueda, Leika Kihara, Christian Schmollinger Organizations: Bank of Japan, REUTERS, Nakamura Overseas, Hitachi Ltd, Thomson Locations: Tokyo, Japan, Gifu

☆ Euro slips as ECB policymaker takes cautious tone
▼ + stars: | 2023-08-31 | by ( ) www.cnbc.com time to read: +3 min

The lettering Euro can be seen on a 1 euro coin, taken on 10 August 2023, in Baden-Württemberg, Rottweil. The euro edged back on Thursday after comments from German policymaker Isabel Schnabel failed to give firm clues on whether the European Central Bank will raise rates in September. ECB rate-setter Schnabel said that euro zone growth was weaker than predicted but that does not necessarily void the need for more rate hikes. "We've heard the most influential hawk on the Governing Council take on a much more cautious tone," said Michael Brown, analyst at Trader X. "I think the fact she is flagging downside risks to growth is putting some downside pressure on the euro this morning."

Persons: policymaker Isabel Schnabel, Schnabel, We've, Michael Brown, Chris Turner Organizations: European Central Bank, ECB, Trader, Traders, Federal, Commerce Department, UK, CEE Locations: Baden, Tokyo

☆ Column: US offshore wind goals need policy help to reach potential
▼ + stars: | 2023-08-31 | by ( Gavin Maguire | Thomson Reuters | Gavin Maguire Is The Global Energy Transition Columnist. He Was Previously Asia Commodities | ) www.reuters.com time to read: +5 min

LITTLETON, Colorado, Aug 31 (Reuters) - The weak showing at the first auction for offshore wind development rights in the Gulf of Mexico highlights the critical role that policymaking must play in making ambitious long-term climate goals compatible with current commercial realities. SMALL SCALE IMPACTOne of the biggest faults of the Gulf of Mexico wind leases is the absence of a viable pathway for wind power generators to profitably sell their power to electricity providers given current market conditions. In contrast to several utilities in the Northeast, which have state-level mandates to purchase certain volumes of power from offshore wind generators, the power systems covering Texas and Louisiana do not allow for similar power purchase agreements to be drawn up. Currently, there is a policy planning chasm between the Gulf Coast's power market systems and the long-term strategies of that region's largest employers and tax payers. But if legislators and corporate planners can recognise they may both gain from the emergence of a vibrant offshore wind energy sector that could cut power sector emissions and generate green hydrogen in abundance, there may be scope for closer collaboration and planning.

Persons: Joe Biden's, Gavin Maguire, Miral Organizations: Reuters, Thomson Locations: LITTLETON , Colorado, Gulf, Mexico, United States, Joe Biden's U.S, Texas, Louisiana

☆ BOJ policymaker signals chance of policy tweak early next year
▼ + stars: | 2023-08-30 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

The remarks are the strongest signal to date by a Bank of Japan (BOJ) policymaker that rising inflation and wages could prod the bank to take bolder steps towards phasing out its radical stimulus. "About a decade has passed since the BOJ began efforts to sustainably and stably achieve its 2% inflation target. For now, the BOJ must sustain monetary easing to scrutinise wage and price developments, said the former commercial banker. "Abandoning negative rates will obviously be among options" if the BOJ were to normalise policy, he said. "Even if the BOJ were to end negative rates, it won't be scaling back monetary easing as long as it can keep interest rates low."

Persons: Issei Kato, Tamura BOJ, KUSHIRO, Naoki Tamura, Tamura, Kazuo Ueda, Shinichi Uchida, Ueda, Leika Kihara, Muralikumar Anantharaman, Sam Holmes Organizations: Bank of Japan, REUTERS, Reuters, Thomson Locations: Tokyo, Japan

☆ Euro zone growth risks materialising, warranting ECB caution: Centeno
▼ + stars: | 2023-08-30 | by ( ) www.reuters.com time to read: +2 min

The ECB is debating whether to raise rates again in September to combat stubborn underlying price growth or pause given the weakening outlook that is now raising recession fears. "We need to be very cautious about our decisions, because a lot has been done," Centeno told the Reuters Global Markets Forum. "The labour market in Europe is performing in a novel way... I see a degree of flexibility in the European labour market that we were not used to see in the past," Centeno said. "This will ease wage pressures in our labour market, contrary to what we have [been used to] in the past."

Persons: Mario Centeno, Pedro Nunes, Centeno, Mehnaz Yasmin, Balazs Koranyi, Alison Williams, Mike Harrison Organizations: Bank of Portugal, European Central Bank, Bank of, REUTERS, Rights, ECB, Reuters Global Markets, Thomson Locations: Bank of Portugal, Carregado, Alenquer, Portugal, Europe

☆ Morning Bid: Quietly absorbing one more Fed hike
▼ + stars: | 2023-08-29 | by ( ) www.reuters.com time to read: +5 min

A sign is seen outside the 11 Wall St. entrance of the New York Stock Exchange (NYSE) in New York, U.S., March 1, 2021. Early Tuesday, futures priced almost a two-thirds chance of that additional quarter-point move in November. And yet - perhaps with the uncertainty dissipating, the economy still robust and bond markets better priced - world markets appear to be taking the tighter odds in their stride. More impressively in the circumstances, restive bond markets calmed down and bond yields continued to dial back from their highest in over a decade last week. Asia bourses more widely and European indices were higher, while Wall St futures were flat ahead of the open.

Persons: Brendan McDermid, Mike Dolan, Jerome Powell's, Jackson, Gina Raimondo, China's, Idalia, Michael Barr, JM Smucker, Susan Fenton Organizations: New York Stock Exchange, REUTERS, Atlanta, Overseas, U.S . Commerce, Garden Holdings, Wall, U.S, Dallas Fed, Federal, Treasury, HP, Reuters Graphics, Reuters Graphics Reuters, Thomson, Reuters Locations: New York, U.S, Washington, Beijing, China, HK, Asia, Florida's, Coast, Cuba

☆ ECB rate pause now may be too early: policymaker
▼ + stars: | 2023-08-26 | by ( Balazs Koranyi | ) www.reuters.com time to read: +3 min

JACKSON HOLE, Wyoming, Aug 26 (Reuters) - It may be too early for the European Central Bank to pause interest rate hikes now as an early stop in the fight against inflation could force the bank to exert even more pain on the economy later, Latvian policymaker Martins Kazaks said on Saturday. The ECB has raised rates at each of its past nine meetings to arrest runaway inflation but policymakers are now contemplating a pause as recession risks loom, inflation slows and wage growth remains moderate. ECB projections currently see inflation returning to its 2% target only in late 2025 and Kazaks argued this was too late. Once rates peak, a plateau should be held for some time and the ECB should only start cutting rates when projections start showing inflation was at risk of coming back below 2%. Markets see a rate cut only in the second half of 2024 and Kazaks said he did not consider this inconsistent with the macroeconomic outlook.

Persons: JACKSON, Martins Kazaks, Kazaks, Balazs Koranyi, Marguerita Choy Organizations: European Central Bank, ECB, Reuters, Industry, Thomson Locations: , Wyoming, Latvian, Jackson Hole , Wyoming

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