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☆ Ex-BOJ gov Shirakawa urges re-examination of monetary framework, inflation targets
▼ + stars: | 2023-03-02 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

TOKYO, March 2 (Reuters) - Former Bank of Japan (BOJ) Governor Masaaki Shirakawa called on policymakers to reconsider central banks' monetary framework based on inflation targets, given their limits that became apparent from the recent spike in prices seen in many countries. By allowing inflation to overshoot their targets, central banks "forgot the difficulty of taking away the monetary punch bowl" and failed to tighten policy soon enough, he said. "Inflation targeting itself was an innovation that came about in response to the severe stagflation of the 1970s and early 1980s. "Now that we know its limitations, the time is ripe to reconsider the intellectual foundation on which we have relied for the past 30 years and renew our framework for monetary policy," he added. Shirakawa, who was BOJ governor before incumbent Haruhiko Kuroda, also criticised the central bank's current forward guidance committing to keep interest rates ultra-low.

BERLIN, Feb 21 (Reuters) - Germany must end its expansionary fiscal policy or risk fuelling inflation, German Finance Minister Christian Lindner told Reuters in an interview. "Rising interest rates are already a signal for the government to see that it can't continue like this," Lindner said. Lindner said Germany was monitoring inflation developments closely and had already introduced a raft of measures to curb inflation. Lindner said that IMF warnings had to be taken seriously. "I am sure that the European Central Bank is also following the situation closely," he said.

☆ China Jan services activity expands for first time in five months - Caixin PMI
▼ + stars: | 2023-02-03 | by ( ) www.reuters.com time to read: +3 min

The Caixin/S&P Global services purchasing managers' index (PMI) rose to 52.9 in January from 48.0 in December, above the 50-point mark which indicates expansion in activity, marking an end to a four-month contraction. The reading mirrored the results of a larger official services PMI published earlier this week, adding to evidence of a rebound in activity in the world's second-largest economy as disruptions from reopening fade. "Improving expectations, restoring confidence, increasing income, expanding consumption, and stimulating domestic demand will be among the priorities," Wang said. Caixin/S&P's composite PMI, which includes both manufacturing and services activity, rose to 51.1 in January from 48.3 the previous month, marking the first expansion in five months. The Caixin PMI is compiled by S&P Global based on responses to questions sent to purchasing managers in China.

☆ In hindsight, monetary policy everywhere was too expansionary: Swiss central bank chief
▼ + stars: | 2023-01-20 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: 1 min

Monetary policy was "too expansionary" in previous years and the current surge in consumer prices has not yet been brought under control, the chairman of the Swiss National Bank Thomas Jordan said Friday. "Probably with the benefit of hindsight monetary policy was all over the place a little bit too expansionary," Jordan said when asked by CNBC's Joumanna Bercetche if the current economic situation would be different if the central banking community had reacted quicker to signs of inflation. "We probably all underestimated inflationary pressure in 2021," Jordan told CNBC on a panel at the World Economic Forum in Davos. While inflation will likely come down in 2023, having hit a three-decade high in Switzerland in August and a record high in the euro zone in October, Jordan said that the jump from 4% to 2% will be tough.

☆ In hindsight monetary policy was too expansionary, Swiss central bank chair says
▼ + stars: | 2023-01-20 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailIn hindsight monetary policy was too expansionary, Swiss central bank chair saysEverybody underestimated inflationary pressures in 2021 and in hindsight monetary policy was a bit too expansionary, according to the Swiss National Bank Chairman Thomas Jordan. He discussed inflation in Europe as part of a WEF panel on the future of monetary policy.

☆ Bank of Japan defends yield curve control measures, intends to stick to ultra-easy monetary policy
▼ + stars: | 2023-01-20 | by ( Sam Meredith | ) www.cnbc.com time to read: +1 min

Bank of Japan Governor Haruhiko Kuroda on Friday defended the central bank's decision to widen the trading band in its yield curve control program and committed to continuing the BOJ's "extremely accommodative" expansionary monetary policy. His comments at Davos come shortly after the central bank defied market expectations by sticking to a core tenet of its ultra-loose monetary policy. The BOJ on Wednesday opted to keep its ultra-dovish -0.1% interest rate unchanged and maintained its yield curve tolerance band. It leaves the BOJ at odds with other major central banks, which have hiked interest rates in a bid to tackle rising inflationary pressure. Nonetheless, the world's third-largest economy reported core consumer prices rose to 4% on an annualized basis in the final month of last year, double the central bank's target of 2%.

☆ China growth seen rebounding to 4.9% in 2023, more stimulus on the cards: Reuters poll
▼ + stars: | 2023-01-12 | by ( Kevin Yao | ) www.reuters.com time to read: +4 min

"We expect economic activities and consumption to rebound strongly from March-April onwards, helped by post-COVID re-opening and release of excess savings," Tao Wang, chief China economist at UBS, said in a research note. Reuters GraphicsThe expected 2022 growth rate would be far below the official target of around of 5.5%. China is likely to aim for economic growth of at least 5% in 2023 to keep a lid on unemployment, policy sources said. "Economic policy would turn more supportive in 2023. Consumer inflation will likely quicken to 2.3% in 2023 from 2.0% in 2022, before steadying in 2024, the poll showed.

☆ The U.S. economy and stocks face a difficult year — and could even lag Europe
▼ + stars: | 2023-01-12 | by ( Jenni Reid | ) www.cnbc.com time to read: +1 min

Last year took the U.S. economy and markets on a bumpy ride — and the year ahead also looks tough. "Europe has been in expansionary fiscal policy mode for quite a while, especially due to the energy crisis," she told CNBC's "Squawk Box Europe" Monday. "But beyond that, not only the internalization of U.S. manufacturing and consumption within the U.S., Europe is also betting on the reopening of China and it is going to give positive tailwinds to the European growth story." European GDP growth last outpaced the U.S. in 2017, though final 2022 figures have not yet been released. Ozturk-Unlu pointed to the diversification of sectors in Europe compared to the U.S. and sustainable production growth, particularly in Germany and France, as a case for Europe having more stable economic growth.

☆ India's services growth at 6-month high on robust demand - PMI
▼ + stars: | 2023-01-04 | by ( Anant Chandak | ) www.reuters.com time to read: +2 min

REUTERS/Rupak De ChowdhuriBENGALURU, Jan 4 (Reuters) - India's services industry saw activity increase at the fastest pace in six months during the final month of 2022 amid robust demand, fuelling business optimism despite high costs, a private-sector survey showed. The S&P Global India services purchasing managers' index (PMI) (INPMIS=ECI) rose to 58.5 in December from 56.4 in the previous month, confounding expectation in a Reuters poll for a fall to 55.5. The index was above the 50-mark separating growth from contraction for the 17th straight month - the longest stretch of growth since June 2013. Hiring hit a five-month low, albeit in expansionary territory, even though the new business sub-index rose to a four-month high due to strong demand. Thanks to the growth in services as well as in manufacturing, the composite index rose to 59.4 in December, the highest since January 2012, from 56.7 in November.

☆ Italy's government wins lower house confidence vote on 2023 budget
▼ + stars: | 2022-12-23 | by ( ) www.reuters.com time to read: +2 min

[1/3] Italy's lower house of the parliament holds a confidence vote over the 2023 budget in Rome, Italy December 23, 2022. REUTERS/Remo CasilliROME, Dec 23 (Reuters) - The Italian government on Friday comfortably won a vote of confidence in the Chamber of Deputies, which it called to speed up approval of its expansionary 2023 budget before a year-end deadline. The government won the vote by 221 to 152. If a confidence vote is lost the government must resign but Meloni, with her ample parliamentary majority, ran no risk of this. Opposition parties have accused the right-wing ruling coalition of giving parliament insufficient time to review the budget.

Headline inflation slowed in November for the first time in 1-1/2 years, to 10%, raising hopes that sky-high price growth has passed. ECB President Christine Lagarde will likely be careful about calling a peak after last year's "big mistake" of insisting surging prices were "transitory," said Pictet's Ducrozet. ECB Chief Economist Philip Lane reckons wages would be a "primary driver" of price inflation even after energy price shocks fade. Closely-watched business activity data points to a mild recession and latest forecasts should show how the ECB views the coming slowdown. Lane believes record price growth will start to subside next year.

☆ Hungary central bank chief sees 15%-18% inflation in 2023, urges end to price caps
▼ + stars: | 2022-12-05 | by ( Krisztina Than | ) www.reuters.com time to read: +2 min

BUDAPEST, Dec 5 (Reuters) - Hungary's inflation could be between 15% and 18% next year, the National Bank of Hungary's governor said on Monday, sharply criticising the government's price caps imposed on fuels, basic foodstuffs and mortgages. He said the price caps had prompted retailers to raise the prices of other, non-capped-price products, adding 3% to 4% to inflation. "We have said this to the government several times," Matolcsy said referring to ending the price control measures. November consumer price data are due on Thursday, with a Reuters poll of analysts seeing annual inflation at 22.2%. Matolcsy said inflation was the "number one enemy", adding that the NBH would fight it with all possible means.

☆ Italy's Meloni to unveil budget with 30 bln euros to lift economy
▼ + stars: | 2022-11-21 | by ( Giuseppe Fonte | ) www.reuters.com time to read: +3 min

Expansionary measures total more than 30 billion euros ($30.8 billion), with Rome planning to fund around 70% of the package by driving up next year's budget deficit to 4.5% of gross domestic product (GDP) from 3.4% forecast in September. Some 3 billion euros will come from a windfall tax on profits of energy companies that have benefited from the surge in oil and gas prices, the officials said. Further potential sources of funding are a tax on home deliveries to help shopkeepers hit by Amazon (AMZN.O), and a cut to the nine billion euros previously earmarked in 2023 for Italy's "citizens' wage" poverty relief scheme. SLOWING ECONOMYMeloni will spend more than 21 billion euros next year to help firms and households pay electricity and gas bills, the officials said. One of the most contentious measures in the budget is an amnesty on tax arrears of up to 1,000 euros stemming from before 2016.

WASHINGTON, Nov 13 (Reuters) - The global economic outlook is even gloomier than projected last month, the International Monetary Fund said on Sunday, citing a steady worsening in purchasing manager surveys in recent months. The global lender last month cut its global growth forecast for 2023 to 2.7% from a previous forecast of 2.9%. In a blog prepared for a summit of G20 leaders in Indonesia, the IMF said recent high-frequency indicators "confirm that the outlook is gloomier," particularly in Europe. "The challenges that the global economy is facing are immense and weakening economic indicators point to further challenges ahead," the IMF said, adding that the current policy environment was "unusually uncertain." That in turn posed "increasing risks of a sovereign debt crisis for vulnerable economies," the IMF said.

☆ Analysis: Bank of England's recession warning turns spotlight to UK budget plan
▼ + stars: | 2022-11-04 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

That would be a longer and shallower economic contraction than the ones that followed the COVID-19 lockdowns and the global financial crisis of 2007-09. But the backdrop of high inflation this time is limiting the policy options available to the government. Hunt has warned of tough decisions on taxes and spending as he prepares to announce the new government's first budget programme on Nov. 17. "This is not a recession we should be offsetting with lower interest rates and expansionary fiscal policy," Chadha said. Additional reporting by David Milliken;Writing by William Schomberg; Editing by Jon BoyleOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of England set for biggest rate hike in 33 years, but economists expect dovish tilt
▼ + stars: | 2022-11-02 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

New Prime Minister Rishi Sunak has scrapped the controversial tax cuts at the heart of predecessor Liz Truss' fiscal policy agenda, meaning fiscal and monetary policy are no longer pulling in opposite directions. Deutsche Bank also expects a split vote on Thursday in favor of a 75-basis-point hike, taking the key interest rate to 3%. Deutsche Bank now expects the Bank Rate to reach 4.5% by May next year, down from its previous projection of 4.75%, on account of retreating fiscal stimulus and a push toward fiscal consolidation. watch nowBank of England Deputy Governor for Monetary Policy Ben Broadbent said in a recent speech that GDP would take a "pretty material" hit from such aggressive policy tightening. The Bank's August growth forecasts, which already pointed to a five-quarter recession, were based on a much lower Bank Rate of around 3%.

Gross domestic product grew by 0.5% in the third quarter from the second and 2.6% year on year, national statistics bureau ISTAT said. Both preliminary readings were around half a percentage point higher than expected in Reuters survey of analysts, while the Treasury had said last month it expected a third quarter contraction. The government plans to raise next year's budget deficit to 4.5% of GDP, up from the 3.4% projected last month under current trends, a senior official said. Italian inflation hit 12.8% in October, the highest level since the country's EU-harmonised index was launched in 1996. Full year growth this year will come in at 3.7%, Federico forecast, above Rome's official 3.3% target.

☆ EXCLUSIVE Energy trader Mercuria buys back ChemChina stake
▼ + stars: | 2022-10-25 | by ( Julia Payne | Loucoumane Coulibaly | ) www.reuters.com time to read: +1 min

LONDON, Oct 25 (Reuters) - Trading house Mercuria Energy Group has bought back the minority stake that Chinese state-owned ChemChina held in the Geneva-based company since 2016, a spokesperson for Mercuria said on Tuesday. ChemChina was China's largest chemical group and owned 530,000 barrels per day (bpd) of refining capacity when it bought a 12% stake in Mercuria during an expansionary phase by many Chinese firms. ChemChina bought Swiss fertiliser and pesticide maker Syngenta the same year for $43 billion. Before the merger, ChemChina was poised to increase its stake in Mercuria in 2018. In return, Mercuria was set to gain a stake in the Chinese giant, but the deal did not go ahead.

☆ US stocks finish lower as Fed official's dour inflation outlook pushes key bond yields to fresh 14-year highs
▼ + stars: | 2022-10-20 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

US stocks fell Thursday, stretching their losses into a second consecutive session. A "disappointing lack of progress on curtailing inflation" will keep the Fed raising interest rates, said Philadelphia Fed President Patrick Harker. IBM and AT&T rose after their earnings reports while Tesla shares dropped. Investors sold off bonds, propelling the 10-year Treasury yield to 4.23%, a fresh 14-year high. Weekly US jobless claims unexpectedly fell to 214,000, compared with an Econoday estimate of 235,000 new filings for unemployment benefits.

☆ IMF welcomes UK's fast-tracked budget plan, urges government to work with Bank of England
▼ + stars: | 2022-10-12 | by ( Matt Clinch | ) www.cnbc.com time to read: +2 min

The tax cuts came as the Bank of England was looking to start selling bonds into the market, unwinding years of quantitative easing. The International Monetary Fund urged lawmakers and central bank policymakers to work in lockstep with each other to mitigate the effects of the slowing economic environment. Speaking more generally, however, he said it's very important that fiscal policy doesn't go in the opposite direction of monetary policy. So that was directly contradicting the objective of monetary policy," he said. His central message was that fiscal policy is hugely important but that it should be done in a way consistent with what central banks are trying to accomplish.

☆ The Bank of England is snapping up bonds to stabilize debt markets — but that goes against its aim of stemming inflation. Here's what you want to know.
▼ + stars: | 2022-09-29 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Friday eve means the weekend's just around the corner, but it seems like nobody told the British bond market. The balancing act, at worst, could mean a calamity for the British economy and prolonged volatility in markets. And at best, policymakers thread the needle and stabilize markets, tame inflation, and regain the confidence of traders and everyday folks dealing with a tough economy. A weaker currency means imports get more expensive, and higher bond yields mean government borrowing gets more expensive. What will it take for bond market traders to regain confidence in the UK debt market?

☆ Here's why U.S. fiscal policy is undermining the Fed's aggressive efforts to fight inflation
▼ + stars: | 2022-09-23 | by ( Zev Fima | ) www.cnbc.com time to read: +7 min

Central bank tightening — under the umbrella of monetary policy — is only one side of the equation when it comes to managing inflation. The other is fiscal policy, which is controlled by lawmakers in Congress. Coordinated fiscal- and monetary policy can have a compounding effect in stamping out inflation. But given that U.S. fiscal policy is not acting in concert with monetary policy, the Fed's efforts to bring down inflation have become all the more complicated. In the years since the 2007-2009 global financial crisis, expansionary fiscal policy — and monetary policy for that matter — has not posed much of a problem due to overall low inflation.

☆ Costco's quarterly results indicate the retailer is thriving despite high inflation
▼ + stars: | 2022-09-22 | by ( Jeff Marks | ) www.cnbc.com time to read: +6 min

Margins Merchandise gross margins on a reported basis were 10.18% and down 74 basis points from last year, but excluding the impact of gas inflation it would have been lower by only 20 basis points. Core merchandise margins fell 67 basis points on a reported basis and were down 23 basis points ex gas inflation. Ancillary and other businesses' margins increased 20 basis points on a reported basis and 34 basis points excluding gas inflation. Elsewhere, "2% reward" reported margins were flat on a reported basis and fell 5 basis points ex gas inflation. LIFO — last in, first out — margins fell 27 basis points on a reported basis and 29 basis points excluding gas.

☆ Putin speech sends sterling to fresh 37-year low ahead of Fed, BoE meetings
▼ + stars: | 2022-09-21 | by ( Lucy Raitano | ) www.reuters.com time to read: +3 min

Pound and U.S. dollar banknotes are seen in this illustration taken January 6, 2020. An expected interest rate hike by the U.S Federal Reserve (Fed) later in the day played into market sentiment, with eyes also on a Bank of England rate decision and a new government mini-budget this week. By 1143 GMT, the pound was down 0.31% against the dollar at $1.13460 pence , having earlier hit $1.13040 - its lowest since 1985. Register now for FREE unlimited access to Reuters.com Register"This morning’s dip is primarily a function of the Russia news. The Office for National Statistics said public sector borrowing excluding state-owned banks stood at 11.82 billion pounds ($13.44 billion) last month.

Low interest rates impact finances in different ways: good for borrowers, tough on savers and income investors. The theory is that low interest rates stimulate the economy, encouraging companies and consumers to borrow, spend, and expand. Here's what you need to know to make the most of low interest rates. How to benefit from low interest ratesThere are several key moves you to make when interest rates are low or falling — to take advantage of "money being cheaper," as the financial pros like to say. You can consider a low interest credit card with a favorable ongoing interest rate or a balance transfer credit card.

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