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☆ CNBC Daily Open: U.S. markets got the Fed’s message: Interest rate hikes are probably here to stay
▼ + stars: | 2023-02-09 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

After weeks of defying the Federal Reserve, U.S. markets realized that interest rate hikes are probably here to stay. This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. In a wave of downbeat news, investors may indeed need a telescope to find some good news in the near term. Subscribe here to get this report sent directly to your inbox each morning before markets open.

"But I'm not seeing signals of ... quick decline in the economic data, and I am prepared for a longer fight," Waller said. Though wage growth has slowed, the decline is "not enough," Waller said. Waller did not say in his prepared remarks how much higher the Fed may need to raise its benchmark overnight interest rate to reach a level adequate to return inflation to the Fed's 2% target. As of December, the Fed's preferred measure of inflation was increasing at a 5% annual rate. "Though we have made progress reducing inflation, I want to be clear today that the job is not done," Waller said.

Waller said he remained "cautious" about the path of inflation and expected it would take "continued tightening of monetary policy" to return the rate of price increases to the Fed's 2% target. That process seems to be underway, Waller said, all while the unemployment rate remains, at least so far, at a half-century low of 3.5%. The Fed used a series of aggressive-three-quarter point rate increases last year to push the target federal funds rate from near zero to a range between 4.25% and 4.5%. At the Fed's last meeting in December, however, policymakers eased the pace and approved just a half-point increase. While supporting the use of quarter point hikes, Waller did not indicate in his prepared remarks how much further he feels rates need to rise from here.

WASHINGTON, Nov 16 (Reuters) - U.S. Federal Reserve Governor Christopher Waller, an early and outspoken "hawk" in the central bank's efforts to confront inflation, said Wednesday he is now "more comfortable" with smaller rate increases going forward after recent data showed the pace of price increases slowing. Recent positive news on inflation has led investors to bet the Fed may not have to do as much as expected, and may only need to raise the target policy rate to around 5%. Waller said signs the economy and wage growth are slowing have added to his sense that Fed policy is beginning to do its job. But he cautioned it was too early to pin down just how high rates may need to go. "Getting inflation to fall meaningfully and persistently toward our 2% target will require increases in the federal funds rate into next year.

Recent positive news on inflation has led investors to bet the Fed may not have to do as much as expected, and may only need to raise the target policy rate to around 5%. Waller said signs the economy and wage growth are slowing have added to his sense that Fed policy is beginning to do its job. But he cautioned it was too early to pin down just how high rates may need to go. "Getting inflation to fall meaningfully and persistently toward our 2% target will require increases in the federal funds rate into next year. Reporting by Howard Schneider and Ann Saphir; Editing by Andrea Ricci and Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.

☆ Fed's Waller says he's open to a half-point rate hike at December meeting
▼ + stars: | 2022-11-16 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

Federal Reserve Governor Christopher Waller said Wednesday he's open to reducing the level of interest rate increases soon, so long as the economic data cooperate. Market expectations are running high that policymakers will approve another rate hike, but this time opting for a 0.5 percentage point, or 50 basis point, move. "But I won't be making a judgement about that until I see more data, including the next PCE inflation report and the next jobs report." The next PCE inflation report is due out on Dec. 1. Investors have grown optimistic that a lower-than-expected increase in October's consumer price index reading is indicative that inflation is cooling.

The dollar index rose less than expected in October prompted bets the Fed would scale back its hefty interest rate hikes. Waller did say that the Fed could now start thinking about hiking at a slower pace. The comments, however, poured cold water on investor hopes for a "rapid Fed recalibration," said Adam Button, chief currency analyst at ForexLive in Toronto. The euro fell 0.24% against the dollar to $1.0322, after rising to a three-month high during Asian trading hours. The dollar index, which gauges the greenback against a basket of six other major currencies including the euro, yen, and sterling, rose 0.74% to 107.072.

☆ Shares and bonds chastened as Fed, ECB urge care
▼ + stars: | 2022-11-14 | by ( Lawrence White | ) www.reuters.com time to read: +5 min

Meanwhile dovish comments from European Central Bank policymaker Fabio Panetta saw European bond yields ease, but short-dated rates remained within striking distance of multi-year highs. Panetta said the ECB needs to avoid overtightening as that could destroy productive capacity and deepen a recession. The benchmark European STOXX index rose 0.26% (.STOXX), and MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.6%, after jumping 7.7% last week. The dollar index was last seen on Monday at 106.86, still well short of last week's 111.280 top , while the euro eased a touch to $1.032 , after climbing 3.9% last week. The firming dollar also dragged down oil prices, despite the hopes of a demand boost from China's hints at reopening.

☆ U.S. dollar surges as traders say markets overreacted to U.S. inflation data
▼ + stars: | 2022-11-14 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

But Governor Christopher Waller flagged on Sunday that the inflation print was "just one data point" and that other similar readings would be needed to show convincingly that inflation was slowing. Waller did add, however, that the Fed could now start thinking about hiking at a slower pace. The euro fell 0.6% against the dollar to $1.0284 at 1130 GMT, after rising to a three-month high during Asian trading hours. The dollar index, which gauges the greenback against a basket of six other major currencies including the euro, yen, and sterling, rose 0.4% to 107.14. The risk-sensitive Australian and New Zealand dollars slipped, giving up some gains made after China moderated its zero COVID strategy.

☆ Shares and bonds chastened as Fed urges caution
▼ + stars: | 2022-11-14 | by ( Lawrence White | ) www.reuters.com time to read: +5 min

The benchmark European STOXX index rose 0.15% (.STOXX), and MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.5%, after jumping 7.7% last week. EYES ON CHINAChinese stocks gained on reports that regulators have asked financial institutions to extend more support to stressed property developers. The support for China's property sector, which consumes a vast amount of metals, boosted copper towards a five-month high. The dollar index was last seen on Monday at 107.15, still well short of last week's 111.280 top , while the euro eased a touch to $1.02875 , after climbing 3.9% last week. The firming dollar also dragged down oil prices, despite the hopes of a demand boost from China's hints at reopening.

A modest miss on U.S. inflation on Thursday put pressure on the dollar , which declined almost 4% in a week, marking its worst week in more than two and half years. But Waller said on Sunday that the inflation print last week was "just one data point" and that other similar readings would be needed to show convincingly that inflation was slowing. Waller did add, however, that the Fed could now start thinking about hiking at a slower pace. U.S. inflation will likely remain high and keep the Fed on its monetary tightening path, Kong said. Elsewhere, the Japanese yen weakened 0.9% versus the greenback to 140 per dollar, while the euro was down 0.2% at $1.0324.

☆ Shares mixed on Fed warning, China acts on property
▼ + stars: | 2022-11-14 | by ( Wayne Cole | ) www.reuters.com time to read: +5 min

read moreWaller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 1.1%, after jumping 7.7% last week. read moreThe news on COVID rules had stoked a short-covering bounce in the yuan, which added to broad pressure on the dollar as yields dived. The dollar index was up a fraction on Monday at 106.920 , but still well short of last week's 111.280 top. Reporting by Wayne Cole; Editing by Shri Navaratnam and Kenneth MaxwellOur Standards: The Thomson Reuters Trust Principles.

☆ Asia shares pause as Fed warns against exuberance
▼ + stars: | 2022-11-14 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

read moreWaller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.2%, after jumping 7.7% last week. read moreThe news on COVID rules had stoked a short-covering bounce in the yuan last week, which added to broad pressure on the dollar as yields dived. The dollar's recent retreat provided a much-needed fillip to commodities, with gold up at $1,768 an ounce after jumping over $100 last week. Oil futures extended their gains with Brent up 86 cents at $96.85, while U.S. crude rose 80 cents to $89.76 per barrel.

☆ Dollar steadies as Fed cautions on inflation
▼ + stars: | 2022-11-14 | by ( ) www.cnbc.com time to read: +2 min

Global equities soared as investors poured into risky assets on hopes that peaking inflation means less aggressive rate hikes from the Fed. Waller, however, did add that the Fed could now start thinking about hiking at a slower pace. U.S. inflation will likely remain high and keep the Fed on its monetary tightening path, Kong said. The Japanese yen weakened 0.24% versus the greenback to 139.12 per dollar, having strengthened 5.4% last week against the dollar. The offshore Chinese yuan fell 0.23% versus the greenback to stand at $7.0723 per dollar on the day.

☆ Asia shares mixed on Fed warning, China hopes
▼ + stars: | 2022-11-14 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

read moreWaller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.8%, after jumping 7.7% last week. read moreThe news on COVID rules had stoked a short-covering bounce in the yuan last week, which added to broad pressure on the dollar as yields dived. The euro eased a touch to $1.0324 , after climbing 3.9% last week, while the dollar firmed to 139.27 yen following last week's 5.4% drubbing. The dollar's recent retreat provided a much-needed fillip to commodities, with gold holding at $1,763 an ounce after jumping over $100 last week.

☆ Fed's Waller maintains skepticism on U.S. digital currency
▼ + stars: | 2022-11-10 | by ( ) www.reuters.com time to read: +1 min

Nov 10 (Reuters) - There is currently no credible case for the United States to develop an official digital version of the dollar, Federal Reserve Governor Christopher Waller said on Thursday, keeping to his long-held skeptical view amid debate at the U.S. central bank. "The case for adopting one is not yet convincing to me and many others," Waller said during an event at Queensland University of Technology in Brisbane, Australia. Fed policymakers remain divided on the need for a central bank digital currency, with Fed Vice Chair Lael Brainard, second in command at the Fed, among those expressing support. Regardless, the Fed has indicated it would not launch one without clear support from the White House and lawmakers. Reporting by Lindsay Dunsmuir; Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

All eyes are turning to the latest U.S. inflation figures, but all tongues are wagging about the crash in crypto. U.S. rates market have been comfortable pricing an implied terminal rate above 5%, to be reached some time in the middle of next year, for over a week. Bitcoin sank 10% on Tuesday and 12% on Wednesday to a two-year low below $16,500. The web of holdings and investments between crypto and tech is murky, but real. Tesla shares sank to a two-year low on Wednesday, and Cathie Wood's ARKK Innovation ETF slumped to a five-year low - it is down 80% from its peak last year.

☆ A U.S. central bank digital currency isn't necessary for dollar supremacy- Fed's Waller
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +1 min

Oct 14 (Reuters) - Creating a U.S. central bank digital currency is likely not important to the long-term status of the U.S. dollar, Federal Reserve Governor Christopher Waller said Friday. In a speech during an event held by the Harvard National Security Journal, Waller said that a digital dollar would not offer material benefits over making U.S. dollar-denominated payments, especially because the introduction of a central bank digital currency, or CBDC, would introduce additional risks, such as cybersecurity threats. "I don’t think there are implications here for the role of the United States in the global economy and financial system," Waller said, suggesting instead that the debate around a digital dollar should focus on financial stability, payment system innovations and financial inclusion." Register now for FREE unlimited access to Reuters.com RegisterReporting by Hannah Lang in WashingtonOur Standards: The Thomson Reuters Trust Principles.

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