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☆ US dollar recovers from inflation-related losses; yen slumps
▼ + stars: | 2023-08-10 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +4 min

The greenback climbed to five-week peaks against the yen of 144.735 , and last traded up 0.7% at 144.71 yen. The recovery of the dollar against both the euro and yen pushed the dollar index up 0.1% to 102.56 . Earlier in the session, the dollar dropped after data showed the consumer price index (CPI) rose 0.2% last month, matching the gain in June. Investors are also on the lookout for possible intervention by the Japan to lift the yen. In September, Japan intervened when the dollar rose above 145 yen, pushing the pair to around 140 yen as the Ministry of Finance bought the yen to weaken the dollar.

Persons: Florence Lo, Yen, Helen, It's, Francisco Federal Reserve Bank Mary Daly, Gertrude Chavez, Dreyfuss, Alun John, Mark Potter, Andrea Ricci, Richard Chang Organizations: REUTERS, Monex USA, Francisco Federal Reserve Bank, Federal, Market, Fed, Labor Department, Analysts, Ministry of Finance, Thomson Locations: U.S, Washington, Japan, London

☆ Daly: Premature to say if Fed has done enough on rates
▼ + stars: | 2023-08-10 | by ( ) www.reuters.com time to read: +2 min

"Whether we raise another time, or hold rates steady for a longer period -- those things are yet to be determined," Daly said in an interview with Yahoo Finance. "It would be premature to project what I think would happen because there's a lot of information coming in between now and our next meeting." While goods inflation is receding, and newly signed lease trends signal inflation from housing will also cool, core services inflation excluding housing has so far made little progress, Daly said. The Fed raised its policy a quarter of a percentage point last month, to a range of 5.25% to 5%, and policymakers will consider whether to raise rates further when they meet again in September, November and December. Daly before the most recent rate hike had thought a total of two more interest-rate increases would likely be needed before year's end, but she did not reiterate that view on Thursday.

Persons: Mary Daly, Daly, Ann Saphir, Jonathan Oatis Organizations: San Francisco Federal Reserve Bank, Yahoo Finance, U.S . Labor Department, Fed, Traders, Thomson

Yet a sharp drawdown in the excess savings created by COVID-19 could be a curve ball that slams into bullish sentiment. U.S. excess savings have fallen to around $500 billion from around $2.1 trillion in August 2021, the San Francisco Federal Reserve estimates. In Europe, Deutsche Bank reckons excess savings in Sweden, struggling to contain a property slump, have dwindled. Reuters GraphicsRUNNING OUTDefinitions for excess savings differ, but economists generally agree that this means savings that went beyond trend levels during the pandemic. Cardano chief economist Shweta Singh said U.S. pandemic excess savings are likely to be depleted by year-end.

Persons: Rachel Adams, Janus Henderson, Oliver Blackbourn, Shweta Singh, Guy Miller, Jamie Dimon, Ben, Eren Osman, Arbuthnot Latham, Janus Henderson's Blackbourn, U.S . Russell, Russell, Goldman Sachs, Blackbourn, Zurich's Miller, Simon Bell, Guilluame Paillat, Paillat, Naomi Rovnick, Sharon Singleton Organizations: Oxford, REUTERS, San Francisco Federal, Deutsche Bank, Reuters, Insurance Group, Ryanair, JPMorgan, Unilever, U.S ., London's, Bank of, Aviva, Thomson Locations: Britain, London, China, Europe, U.S, Sweden, United States, downturns, Australia

LONDON, July 26 (Reuters) - Even as fears of a 2023 U.S. recession recede and stock market bears concede defeat, there's scant sign of party mode. After wild swings of output, prices, employment, liquidity and interest rates, firm convictions about the precise onset of "technical" recessions - or even previously reliable gauges of bull and bear markets - have all become a bit suspect. Whether on a domestic or global scale, aggregate views of the economy, or stock market, right now are likely misleading. A bull to bear market and back again in little over 18 months - or so it seems. SP 500 2023 YTD THROUGH JULY 21BLUNTEDChief among the puzzles is the variable impact of sharply higher interest rates on both households and firms.

Persons: Morgan Stanley's, Mike Wilson, Wilson, Morgan Stanley, Andrew Lapthorne, Russell, Mike Dolan Organizations: Reuters Graphics, Barclays, International Monetary Fund, Tuesday, eventual, San Francisco Federal Reserve, Generale, Fed, Reuters, Twitter, Thomson Locations: U.S, midyear

☆ From inflation to mortgages: What last week’s data says about the economy
▼ + stars: | 2023-07-15 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

The Fed’s preferred gauge of inflation, the Personal Consumption Expenditures index, showed that inflation was double the target in May (more on inflation shortly). Wednesday’s Consumer Price Index showed that annual inflation slowed from 4% to 3% in June, the lowest level since March 2021. Then on Thursday came Producer Price Index data, which measures the average change in prices that businesses pay to suppliers. That data showed annual wholesale inflation cooled last month to the lowest level in nearly three years. And June of last year was monumental: Annual inflation soared to 9.1%, the highest in more than 40 years largely because of record-high energy costs,” she wrote.

Persons: Michael Scott, Price, ”, Mary Daly, “ It’s, Alicia Wallace, Freddie Mac, Jamie Dimon, JPMorgan Chase, can’t, Dimon, “, — CNN’s Bryan Mena, Matt Egan Organizations: New, New York CNN, Reserve, ” San Francisco Federal Reserve Bank, University of Michigan, JPMorgan, CNN Locations: New York, ” San Francisco

☆ San Francisco Fed president: ‘It’s really too early to declare victory on inflation’
▼ + stars: | 2023-07-13 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

New York CNN —Despite promising signs that inflation is abating, San Francisco Federal Reserve Bank President Mary Daly said the fight against price increases isn’t over. But she cautioned, “It’s really too early to declare victory on inflation.”The latest Consumer Price Index report published on Wednesday showed that annual inflation slowed from 4% to 3% in June, the lowest level since March 2021. However, the Fed’s preferred gauge of inflation, the Personal Consumption Expenditures index, showed that inflation was double its 2% target in May. Daly acknowledged there’s a risk the Fed will raise rates higher than what’s ultimately needed to get inflation down to 2%. Daly, who will be voting on interest rates at the Fed’s meetings next year, said she wouldn’t necessarily consider cutting rates once inflation hits 2%.

Persons: Mary Daly, ” Daly, “ It’s, Daly, there’s, “ can’t, ”, Daly’s, James Bullard Organizations: New, New York CNN, San Francisco Federal Reserve Bank, CNBC, Louis Federal Reserve Bank Locations: New York, San, St

The Fed has raised interest rates by 5 percentage points since March 2022 to bring down the highest U.S. inflation in four decades. "We may end up doing less because we need to do less; we may end up doing just that; we could end up doing more. Fed policymakers are widely expected to deliver a rate hike at their meeting later this month, a move that would bring the policy rate to the 5.25%-5.50% range. That could buttress the case that price pressures are weakening, which in turn could take some pressure off the central bank to hike rates again. Atlanta Fed President Raphael Bostic, speaking at yet another event on Monday, repeated his view that the Fed can be "patient" on rates and allow restrictive policy to bring down inflation without further action by the central bank.

Persons: Mary Daly, Daly, Jerome Powell, Ann Saphir, Michael Barr, Raphael Bostic, Loretta Mester, Mester, Dan Burns, Howard Schneider, Paul Simao Organizations: Federal Reserve, San Francisco Fed, Brookings Institution, San Francisco Federal, REUTERS, New York Fed, Atlanta Fed, Cleveland Fed, Thomson Locations: U.S, San Francisco , California

☆ San Francisco Fed president: Silicon Valley Bank’s failure wasn’t our fault
▼ + stars: | 2023-07-10 | by ( Bryan Mena | ) edition.cnn.com time to read: +6 min

Washington, DC CNN —Silicon Valley Bank failed because regulators were far too slow to take action, San Francisco Federal Reserve Bank President Mary Daly said Monday in her first extended remarks about the collapse. SVB operated in Daly’s district before the regional bank’s stunningly rapid failure in March, but she noted she doesn’t have a supervising role. Daly said the supervisors at the San Francisco Fed simply report issues to the Fed’s Board of Governors, which is ultimately responsible for fixing any regulatory issues. “My job is to support the supervision that the vice chair of supervision has set out, so how do I do that? The possibility of a rate hike in September remains unclear, though Powell said he wouldn’t take consecutive rate hikes off the table.

Persons: Mary Daly, SVB, ” Daly, Michael Barr, Democratic Sen, Elizabeth Warren, Daly, Jerome Powell, Warren, ”, Barr, it’s, It’s, Powell, Loretta Mester, Mester, “, Raphael Bostic, ” Bostic, ” — CNN’s Elisabeth Buchwald Organizations: DC CNN, Valley Bank, San Francisco Federal Reserve Bank, Brookings Institution, Signature Bank, First Republic Bank, Democratic, San Francisco Fed, Fed’s, of Governors, Fed, San Francisco, Cleveland Fed, University of California, Atlanta Fed, trickling, Cobb County Chamber of Commerce Locations: Washington, Daly’s district, Washington ,, San Francisco Fed, San Diego, Cobb County, Atlanta

☆ Oil dips on demand worries as more rate hikes likely
▼ + stars: | 2023-06-23 | by ( Arathy Somasekhar | ) www.reuters.com time to read: +3 min

More U.S. interest rate hikes also seemed likelier. San Francisco Federal Reserve Bank President Mary Daly said two more rate hikes this year was a "very reasonable" projection. The Bank of England rate rise triggered fund liquidation and energy producers were moving to a "hedge now" mentality, Kissler added. Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand. Risk-aversion among investors also boosted the value of the U.S. dollar, which pressures oil prices by making the commodity more expensive for other currency holders.

Persons: Brent, Mary Daly, Dennis Kissler, China's, Alex Lawler, Sudarshan, Philippa Fletcher, Kirsten Donovan, Louise Heavens, David Gregorio Our Organizations: Fed's Daly Bank of, HOUSTON, . West Texas, Bank of England, San Francisco Federal Reserve Bank, EU, BOK, The Bank of, U.S ., Thomson Locations: Norway, Switzerland, San, China, Saudi, OPEC

Last week Fed policymakers decided to hold the policy rate steady at the current 5%-5.25% range, interrupting what had been a string of 10 straight increases aimed at stomping inflation. The unemployment rate has crept up to 3.7% but is lower than the 4% rate Fed policymakers estimate is consistent with a fully employed American workforce on a sustainable basis. That's one more reason, she said, to slow down on rate hikes. "No wonder there's a couple of extra rate hikes," Daly said. Two more quarter-point rate hikes this year, Daly said, is "a very reasonable projection at this point," she said.

Persons: Florence Lo, Mary Daly, Daly, what's, Banks, I've, Ann Saphir, Dan Burns, Andrea Ricci Organizations: REUTERS, San Francisco Federal Reserve Bank, Reuters, Thomson

☆ Morning Bid: Tech politics, debt cap brinkmanship
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: +5 min

Well-choreographed brinkmanship over the debt ceiling standoff looks set to go down to the wire, while technology firms have once again become a battleground in tense geopolitics. As AI-fueled U.S. technology stocks have led the way this year, the S&P (.SPX) has gained almost 10% this year and hit its highest level in nine months on Friday. Minneapolis Fed chief Neel Kashkari said on Sunday he could support holding rates steady at the next meeting. Futures markets see more than an 80% chance of a June pause and still price almost 50bp of cuts by yearend. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ AMERICAS Debt cap tick-tock leaves eerie calm
▼ + stars: | 2023-05-12 | by ( ) www.reuters.com time to read: +4 min

The issue dominated much of the G7 finance chiefs meeting in Japan. Dimon claimed any technical default could cause financial panic and JPMorgan had convened a 'war room' internally to deal with the issue. "It's very unfortunate, it's time-consuming, hopefully it won't happen, but it affects contracts, collateral, clearing houses, clients," Dimon said. Chinese stocks underperformed, with the G7 meeting mulling restrictions on investment to the world's second-biggest economy. Bank of England chief economist Huw Pill speaksReuters GraphicsJobless claimsReuters GraphicsReuters GraphicsBy Mike Dolan, editing by Christina Fincher, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ Fed report on SVB collapse faults bank's managers — and central bank regulators
▼ + stars: | 2023-04-28 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Central bank officials likely will turn their attention to cultural changes, noting that risks at SVB were not thoroughly examined. Future changes could see standardized liquidity requirements to a broader range of banks, and tighter supervision of compensation for bank managers. "[T]he combination of social media, a highly networked and concentrated depositor base, and technology may have fundamentally changed the speed of bank runs,' he said in the report. "Social media enabled depositors to instantly spread concerns about a bank run, and technology enabled immediate withdrawals of funding." Fed Chairman Jerome Powell said he welcomed the Barr probe and its internal criticism of Fed actions during the crisis.

☆ Dollar eases as US inflation cools
▼ + stars: | 2023-04-13 | by ( Ankur Banerjee | ) www.reuters.com time to read: +2 min

SINGAPORE, April 13 (Reuters) - The dollar was on the back foot on Thursday after cooler-than-anticipated U.S. inflation data lifted risk sentiment and stoked expectations that the Federal Reserve will be done with its monetary tightening after hiking one last time next month. The dollar index , which measures the currency against six major peers, eased 0.03% to 101.44, hovering around a one week low of 101.40 after sinking 0.6% overnight. "While disinflation trends continue and broadened across headline, core and supercore measures, the CPI report is hardly an all clear on inflation," strategists at Saxo Markets said. Taylor Nugent, an economist at National Australia Bank, said the CPI data and the minutes provided ample fodder for those reading the Fed tea leaves, noting that inflation showed welcome, but not overwhelming progress. The Japanese yen weakened 0.04% to 133.20 per dollar, while sterling was last trading at $1.2486, up 0.04% on the day.

☆ Dollar eases as U.S. inflation cools
▼ + stars: | 2023-04-13 | by ( ) www.cnbc.com time to read: +2 min

An image of the U.S. dollar bill and a euro coinThe dollar was on the back foot on Thursday after cooler-than-anticipated U.S. inflation data lifted risk sentiment and stoked expectations that the Federal Reserve will be done with its monetary tightening after hiking one last time next month. The dollar index , which measures the currency against six major peers, eased 0.03% to 101.44, hovering around a one week low of 101.40 after sinking 0.6% overnight. "While disinflation trends continue and broadened across headline, core and supercore measures, the CPI report is hardly an all clear on inflation," strategists at Saxo Markets said. Taylor Nugent, an economist at National Australia Bank, said the CPI data and the minutes provided ample fodder for those reading the Fed tea leaves, noting that inflation showed welcome, but not overwhelming progress. The Japanese yen weakened 0.04% to 133.20 per dollar, while sterling was last trading at $1.2486, up 0.04% on the day.

☆ San Francisco Fed leader Daly likely not a major player in SVB saga, officials say
▼ + stars: | 2023-03-31 | by ( Steve Liesman | ) www.cnbc.com time to read: +5 min

"She was not in the chain of command," one former Fed bank president told CNBC. "Supervisory action taken by the San Francisco Fed staff would have been cleared by Washington." Daly and Fed board officials declined to comment for this report. San Francisco Federal Reserve President Mary Daly reacts at the Los Angeles World Affairs Council Town Hall, Los Angeles, California, U.S., October 15, 2019. A review of what went wrong will likely point more heavily to Washington, its supervisory bureaucracy and the board leadership than to San Francisco.

NOVEMBER 2021Examiners issue six citations -- "matters requiring attention" (MRA) and "matters requiring immediate attention" (MRIA) -- related to the bank's liquidity stress testing, contingency funding, and liquidity risk management. SVB's tests, supervisors find, are not "stressful enough; they were not realistic... it conducted those tests and the guidance back from the supervisors was that the tests were inadequate," Barr told Congress. "The supervisors told the board of directors and the bank that the board oversight with respect to risk management was deficient," Barr said this week. Fed supervisors begin a "horizontal review" of several banks, including SVB, for interest-rate risk. FEB 2023Fed staff give a presentation to Barr and other Board members about interest rate risk generally and at Silicon Valley Bank in particular.

WASHINGTON, March 30 (Reuters) - The secretive world of Federal Reserve bank supervision has been laid bare by the collapse of Silicon Valley Bank and critics say it needs an overhaul to make it more nimble, transparent and decisive. Typically, bank supervisors do most of their work behind closed doors. Bank supervision is typically conducted behind closed-doors because of concerns that publicizing bank missteps could spur bank runs and undermine confidence in the overall system. SVB's rapid growth also was a factor for Fed supervisors. Barr said part of his review would look at whether Fed supervision was appropriate for the bank's "rapid growth and vulnerabilities."

☆ A Climate for Failed Bank Regulation
▼ + stars: | 2023-03-27 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

Congress will hold hearings this week on the role of regulators in recent bank failures, and let’s hope they’re instructive. One question that deserves probing is whether misplaced priorities at the San Francisco Federal Reserve Bank caused it to overlook financial risks hiding in plain sight. The Fed’s mandates include promoting price stability and full employment on monetary policy and a safe and sound banking system as a regulator. The San Francisco Fed is responsible for regulating banks in the Western U.S., and one of those was Silicon Valley Bank (SVB) that failed two weeks ago.

☆ US Sen. Scott pushes for new Fed inspector general, slams Fed over bank regulation,
▼ + stars: | 2023-03-21 | by ( David Morgan | ) www.reuters.com time to read: +3 min

Senator Rick Scott said on Monday he will introduce legislation to create an independent inspector general to oversee the Federal Reserve, as he called the U.S. central bank "unable or unwilling to properly regulate" banks in a letter to Fed Chair Jerome Powell. "I am proposing legislation to establish a presidentially-appointed and Senate-confirmed inspector general for the Federal Reserve," Scott told Powell in the letter. The Federal Reserve is responsible for supervising - monitoring, inspecting and examining - certain financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner. Scott's legislation stems from concern in Congress that the Federal Reserve's current inspector general is not independent enough to serve as a check on the central bank. Scott also urged the Fed chief to use the central bank's policy meeting this week to examine the bank failures and identify accountable Fed personnel.

☆ About Those ‘Safe’ Silicon Valley Bank Treasurys
▼ + stars: | 2023-03-15 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

One surprise for investors in the Silicon Valley Bank failure is that it didn’t hold exotic derivatives, structured debt products or other horrors that caused so much financial carnage 15 years ago. SVB held boring Treasurys and highly rated mortgage-backed securities in large quantities. Bad management and negligent oversight from the San Francisco Federal Reserve Bank played a role. But the politicians and regulators who supposedly fixed the financial system after 2008 share responsibility. The banking rules they introduced after 2008 made sovereign bonds such as Treasurys and the mortgage securities of Fannie Mae and Freddie Mac the coin of the realm for bank capital standards.

☆ Tech pressure, Yellen everywhere: How Washington scrambled as SVB collapsed
▼ + stars: | 2023-03-15 | by ( Andrea Shalal | ) www.reuters.com time to read: +7 min

Yellen heads to the White House, Brainard meets with her staff and holds Zoom calls in her wood-paneled office in the West Wing. Treasury staff hustle to get Yellen on CBS News' "Face the Nation" program on Sunday, in an attempt to reassure markets. White House officials draft news releases with various scenarios, uncertain until shortly before 6 p.m. if an acquisition can still happen. As he leaves Delaware to return to the White House, Biden tells reporters he will make a statement on Monday. Treasury and White House officials reach out to members of Congress and their staffs throughout the evening to explain the plan, with discussions continuing into Monday.

Silicon Valley Bank had $209 billion in assets at the end of last year, while Signature Bank had some $110 billion. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by (Republican former President) Donald Trump that I strongly opposed," Senator Bernie Sanders said in a statement. he added, saying awareness of the bank's recent growth and business model should have led Fed officials to anticipate trouble. In an op-ed for the New York Times, Democratic Senator Elizabeth Warren placed some of the blame at the feet of bank regulators, whom she accused of "letting financial institutions load up on risk." "There won't be legislation getting through Congress, and so regulators will be making the big decisions," he said.

☆ What to expect from the February jobs report
▼ + stars: | 2023-03-10 | by ( Alicia Wallace | ) edition.cnn.com time to read: +8 min

Minneapolis CNN —January’s jobs report delivered a heck of a surprise when it showed the US economy had added more than half a million jobs and unemployment had dipped to a level not seen in more than five decades. But economists say they are not bracing for another blindside when the February jobs report comes out on Friday morning. “If we get a second strong jobs report [on Friday], it’s no longer an anomaly,” Terrazas added. Seasonality, benchmarking and the interplay of pandemic-era data don’t completely explain away January’s blockbuster jobs report, economists say, noting there are likely influences from the currently tight labor market. The Bureau of Labor Statistics’ February jobs report is set to be released at 8:30 a.m.

☆ Wondering what the hell just happened at SVB? Here's everything you need to know
▼ + stars: | 2023-03-10 | by ( Sindhu Sundar | ) www.businessinsider.com time to read: +4 min

Silicon Valley Bank, a once-trusted banker to startups, was closed down by regulators on Friday. SVB became the latest casualty of a bank run as VCs and founders rushed to protect their funds. Sign up for our newsletter for the latest tech news and scoops — delivered daily to your inbox. The bank had already been experiencing headwinds from "continued higher interest rates, pressured public and private markets, and elevated cash burn," Greg Becker, the CEO of Silicon Valley Bank, wrote to investors on Wednesday. As part of the closure, Federal Deposit Insurance Corporation, the agency that helps insure customers' bank funds, has now taken control of SVB.

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