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☆ Fed's Kashkari wants to see 'many more months' of positive inflation data before a rate cut
▼ + stars: | 2024-05-28 | by ( Karen Gilchrist | ) www.cnbc.com time to read: +1 min

LONDON — The Federal Reserve should wait for significant progress on inflation before cutting interest rates, Minneapolis Federal Reserve President Neel Kashkari told CNBC Tuesday. Asked what conditions were needed for the Fed to cut rates once or twice this year, Kashkari said: "Many more months of positive inflation data, I think, to give me confidence that it's appropriate to dial back." He said the central bank could potentially even hike rates if inflation fails to come down further. He noted that the central bank may consider raising its target rate in the future, but said it was not appropriate to "move the goal posts" at this stage. The Bank of England is also broadly expected to cut rates this summer.

Persons: Neel Kashkari, Kashkari Organizations: Minneapolis Federal, CNBC, Fed, European Central Bank, ECB, Bank of England Locations: U.S

☆ Dollar ebbs as markets await key global inflation reports
▼ + stars: | 2024-05-28 | by ( ) www.cnbc.com time to read: +3 min

In this photo illustration, a person is seen holding 100, 50, and 5 U.S. dollar bills in his hand. The dollar waned on Tuesday following a slight pick up in risk appetite, but it held tight ranges against its peers ahead of key inflation data from major economies this week that markets are looking to for guidance on the global interest rate outlook. The euro was a touch firmer at $1.0860 despite some dovish comments from European Central Bank policymakers on Monday and data showing German business morale stagnated in May. Down Under, the Aussie edged 0.03% higher to $0.6657, with the country's monthly consumer price index data also due on Wednesday. BOJ Governor Kazuo Ueda said on Monday the central bank will proceed cautiously with inflation-targeting frameworks, noting that some challenges are "uniquely difficult" for Japan after years of ultra-easy monetary policy.

Persons: Rodrigo Catril, Sterling, NAB's, Kazuo Ueda, bitcoin Organizations: U.S, European Central Bank, ECB, National Australia Bank, New Zealand, Down, Bank of Japan Locations: Asia, Britain, United States, U.S, Tokyo, Japan

☆ European stocks close higher; UK and U.S. markets closed
▼ + stars: | 2024-05-27 | by ( Katrina Bishop | ) www.cnbc.com time to read: +1 min

European markets closed slightly higher on Monday as traders searched for direction on a quiet day for markets. U.K. markets are closed for the late May bank holiday, while stateside, U.S. markets are shut for Memorial Day. It comes as speculation over when interest rates might start to come down dominates the news flow once again. On Monday, two key European Central Bank figures threw their weight behind the prospect of a June interest rate cut. It indicates that the European Central Bank is going to act in June — sooner than the U.S. Federal Reserve, which usually leads the way in monetary policy decisions.

Persons: Germany's Dax, Olli Rehn, Philip Lane, Goldman Sachs Organizations: CAC, European Central Bank, ECB, Financial Times, U.S . Federal Reserve, Federal Locations: U.S

☆ European banks in Russia face 'awful lot of risk', Yellen says
▼ + stars: | 2024-05-25 | by ( ) www.cnbc.com time to read: +2 min

Kent Nishimura | Getty ImagesU.S. Treasury Secretary Janet Yellen told Reuters that European banks face growing risks operating in Russia and the U.S. is looking at strengthening its secondary sanctions on banks found to be aiding transactions for Russia's war effort. "We are looking at potentially a tougher stepping-up of our sanctions on banks that do business in Russia," Yellen told Reuters in an interview, declining to provide specifics and not identifying any banks at which they could be aimed. Speaking on the sidelines of a G7 finance leaders meeting in northern Italy, Yellen said that sanctions related to banks' dealings in Russia would only be imposed "if there was a reason to do so, but operating in Russia creates an awful lot of risk," she added. European Central Bank policymaker Fabio Panetta had clear instructions for Italian banks on Saturday telling reporters that lenders must "get out" of Russia because staying in the country brings a "reputational problem." Raiffeisen is the largest European lender doing business in Russia, followed by UniCredit.

Persons: Janet Yellen, Kent Nishimura, Yellen, Central Bank policymaker Fabio Panetta, Joe Biden's Organizations: Treasury Department, Getty, Treasury, Reuters, Bank International, Central Bank, UniCredit, United Arab Locations: Washington , DC, Russia, U.S, Italy, Ukraine, China, United Arab Emirates, Turkey

☆ Ukraine war live updates: Russia cannot swallow the West whole, Orban says; G7 finance chiefs meet with Ukraine on agenda
▼ + stars: | 2024-05-24 | by ( Natasha Turak | ) www.cnbc.com time to read: +1 min

Governor of the Bank of Italy Fabio Panetta (L), Italy's Minister of Economy and Finance Giancarlo Giorgetti (R) and President of the European Central Bank Christine Lagarde pose on the sidelines of the G7 Finance Ministers meeting in Stresa on May 24, 2024. Earlier this week, U.S. Treasury Secretary Janet Yellen told Sky News she saw the "possibility" that G7 nations could assist Ukraine with as much as $50 billion in loans linked to frozen Russian assets. "The Russian assets are not earning interest anymore, but they are generating returns for Euroclear. That alone could be given to Ukraine that would be repaid over several years by that flow of interest," Yellen added. It remains to be seen whether G7 nations can strike consensus on such a loan and what final sum will be extended to support Kyiv's military effort.

Persons: Bank of Italy Fabio Panetta, Finance Giancarlo Giorgetti, European Central Bank Christine Lagarde, Janet Yellen, Yellen Organizations: Bank of Italy, Italy's, Economy, Finance, European Central Bank, Ukraine, Treasury, Sky News, Euroclear Locations: Stresa, Italy, Ukraine

☆ Dollar holds firm as traders trim U.S. rate cut bets
▼ + stars: | 2024-05-24 | by ( ) www.cnbc.com time to read: +3 min

"The carry of holding dollars is far juicier," he said, while policymakers' rhetoric has also made traders nervous about inflation and the risk rate cuts would be distant or small. Traders have pushed out the timing of the first Fed rate cut to December. Thursday's business surveys from S&P Global supported the conviction among many traders that the Fed may keep rates higher for longer. But not for traders who are positioned for Fed cuts. Rates markets still price a near 90% chance the ECB cuts rates next month.

Persons: Martin Whetton, Matt Simpson, Sterling, Christopher Waller Organizations: U.S, Westpac, Federal, Traders, P Global, European Central Bank, Federal Reserve Locations: Sydney

☆ Fed officials aren’t easing Wall Street’s nerves
▼ + stars: | 2024-05-22 | by ( Bryan Mena | ) edition.cnn.com time to read: +4 min

Optimism spurred by the latest inflation data pushed all three major stock indexes to new record highs. But now Wall Street, eager for rate cuts, is on edge again. But some financial leaders remain doubtful that the Fed is feeling confident enough to cut rates soon. “I think we’re set up for stickier inflation.”Some Fed officials say another rate hike isn’t likelyFed officials have mostly sounded a little more optimistic about inflation recently, after the Consumer Price Index for April finally provided some welcome news. Cleveland Fed President Loretta Mester told Bloomberg on Monday that she also thinks interest rates are high enough to deal with inflation.

Persons: they’re, Dow, Christopher Waller, ” Waller, Goldman Sachs, David Solomon, “ I’m, ”, “, Philip Jefferson, Mary Daly, Axios, Jerome Powell, Klaas Knot, Loretta Mester, Chris Larkin Organizations: Washington CNN, Federal Reserve, CNBC, ”, Peterson Institute for International Economics, Boston College, Mortgage, Association, ” San Francisco Fed, European Central Bank Governing, Cleveland Fed, Bloomberg, “ Locations: ” San

☆ Opinion: We Germans are making Trump ‘thunderstorm’ plans
▼ + stars: | 2024-05-21 | by ( Opinion Anna Sauerbrey | ) edition.cnn.com time to read: +12 min

That’s scary.” If Trump is elected, Jörg is convinced, he would withdraw American troops from Europe and stop aid to Ukraine. Jim Bourg/AFP/Getty ImagesSix months ahead of the vote, this soccer field conversation reflects the German view of the US elections quite well. Kirill Kudryavtsev/AFP/Getty ImagesIt’s an optimistic view, based on the assumption that Trump will act rationally, as a deal-maker, if elected. What if Trump tries to take America out of NATO or creates a “dormant NATO,” a NATO existent only in name? Another Trump presidency would not only put Germany’s security at risk, but also manifest this view of the US for another four years.

Persons: Thomas Ernst Editor’s, Anna Sauerbrey, Read, ’, ”, Jörg, Miguel, Donald Trump, “, “ Trump, Trump, “ I’m, Piero, Joe Biden, Jim Bourg, Europe’s, Russia “, Olaf Scholz, Michael Kappeler, ” Scholz, mums, Annalena Baerbock, Greg Abbott, Biden, Kirill Kudryavtsev, George H, Bush’s, Barack Obama, Obama, Heinz M, Schahina Gambir, Gambir, Roe, Wade, Bob Parent Organizations: Zeit, Berlin CNN —, Köpenicker FC, CNN, Biden, Trump, Getty, NATO, Republican, European Union, European Central Bank, EU, ”, Dallas Mavericks, Mavericks, LA Clippers, NBA, Green, Bundestag Locations: Berlin, America, Taiwan, Europe, Ukraine, Italy, AFP, Gaza, Germany, Russia, United States, Trump, Texas, China, Poland, France, Frankfurt, Kabul, New York City, New York

☆ Britain's inflation rate could be about to drop below the Bank of England's 2% target
▼ + stars: | 2024-05-21 | by ( Jenni Reid | ) www.cnbc.com time to read: +3 min

Bloomberg | Bloomberg | Getty ImagesLONDON — U.K. inflation could be about to hit a major milestone, with some forecasting that a sharp fall in the April print will take the headline rate below the Bank of England's 2% target. That would represent a plunge from the current level of 3.2% and could "make or break" a June interest rate cut, economists say. Ashley Webb, U.K. economist at Capital Economics, said that if the headline rate does fall below 2% in April, as he expects, it would be "momentous." "This will be crucial in determining whether the first interest rate cut from 5.25% will happen in June (as we expect) or in August. We think inflation will fall further, perhaps even to 1.0% later this year," Webb said in a Friday note.

Persons: Ashley Webb, What's, Webb, —, BOE Governor Andrew Bailey, BOE, Ben Broadbent, James Smith, ING's Organizations: Bloomberg, Getty, Bank of England's, Capital Economics, Bank of England, European Central Bank, ING Locations: Kingston, London, U.K

☆ Dollar calm as traders await clues on U.S. rate path
▼ + stars: | 2024-05-20 | by ( ) www.cnbc.com time to read: +4 min

In this photo illustration, a person seen holding a 100 US dollar bill in his hand. The dollar was broadly steady on Monday as investors awaited further clues to help chart the U.S. interest rate path in the wake of cautious comments from Federal Reserve officials, even as inflation shows signs of cooling. The Japanese yen was flat at 155.74 per dollar, with traders on alert for any signs of government intervention. That has prompted traders to trim the amount of easing expected this year to about 46 bps, with only a rate cut in November fully priced in. In other currencies, sterling touched a two-month high of $1.2711 ahead of the crucial UK inflation report due on Wednesday.

Persons: Brian Jacobsen, Powell, Jackson, Flash PMIs, Paul Mackel, BoE, Charu Chanana Organizations: Federal Reserve, Annex Wealth Management, ANZ, European Central Bank, Bank of England, HSBC, New Zealand, Reserve Bank of New, Saxo Locations: Tokyo, Germany, U.S, Reserve Bank of New Zealand

☆ European Central Bank appears to be closer to rate cuts than U.S. Federal Reserve
▼ + stars: | 2024-05-20 | 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 EmailEuropean Central Bank appears to be closer to rate cuts than U.S. Federal ReserveCNBC's Steve Liesman reports on the latest from the Federal Reserve.

Persons: Steve Liesman Organizations: Central Bank, . Federal, Federal Reserve

☆ ECB board member reportedly cautions against back-to-back rate cuts, cites 'risk of easing prematurely'
▼ + stars: | 2024-05-17 | by ( Lee Ying Shan | In Ying-Shan-Lee | ) www.cnbc.com time to read: +2 min

European Central Bank board member Isabel Schnabel warned against back-to-back rate cuts amid lingering inflation risks, Nikkei reported Friday, as the central bank gears for its June meeting amid expectations of a rate cut. While a rate cut in June could be warranted depending on incoming data and projections, things are less certain beyond that, Schnabel told Nikkei. "After so many years of very high inflation and with inflation risks still being tilted to the upside, a front-loading of the easing process would come with a risk of easing prematurely," the ECB board member added. Geopolitical tensions and policy uncertainty amid a slew of elections worldwide this year also pose risks to euro area financial stability, the ECB said in a recent financial stability review. The review, however, highlighted that financial stability conditions have improved.

Persons: Isabel Schnabel, Schnabel, Luis de Guindos Organizations: European Central Bank, Nikkei, ECB Locations: disinflation

☆ Dollar sags as slower U.S. inflation boosts rate cut expectations
▼ + stars: | 2024-05-16 | by ( ) www.cnbc.com time to read: +3 min

The dollar skidded to multi-month lows on Thursday after U.S. core inflation hit its slowest in three years and retail sales turned flat, which pulled forward expectations for rate cuts in the world's biggest economy. The dollar skidded to multi-month lows on Thursday after U.S. core inflation hit its slowest in three years and retail sales turned flat, which pulled forward expectations for rate cuts in the world's biggest economy. Stocks and other risk-sensitive assets such as the Australian dollar led gains in the wake of the data release. The New Zealand dollar hit a two-month high at $0.6131. Softer-than-expected retail sales figures, which were flat last month instead of the 0.4% gain that economists had forecast, reinforced the newfound confidence in rate cuts.

Persons: Sterling, Bart Wakabayashi, China's, Bitcoin Organizations: Australian, New Zealand, U.S, State, European Central Bank Locations: Asia, Tokyo, Treasuries

☆ Economic outlook has improved but markets underestimate geopolitical risk: ECB's De Guindos
▼ + stars: | 2024-05-16 | 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 EmailEconomic outlook has improved but markets underestimate geopolitical risk: ECB's De GuindosLuis de Guindos, vice-president of the European Central Bank, discusses the institution's latest Financial Stability Review and market perceptions of geopolitical risk.

Persons: De Guindos Luis de Guindos Organizations: European Central Bank

☆ Markets underestimate geopolitical risk as raft of elections looms, ECB's De Guindos says
▼ + stars: | 2024-05-16 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

And simultaneously, we are referring to geopolitical risks. I think that, you know, markets sometimes are underestimating the potential impact of geopolitical risks that are there," Luis de Guindos told CNBC's Annette Weisbach. Rising geopolitical risks present "considerable downside risks," the ECB warned in the report. The report attributes the rally in financial markets to analyst expectations of interest rate cuts from major central banks this year. "And that's the element that you cannot ignore, you cannot overlook this potential impact that could affect risk aversion, risk attraction, commodity prices, growth, overall growth in the global economy."

Persons: Luis de Guindos, CNBC's Annette Weisbach, De Guindos Organizations: European Central Bank, Stock, U.S, ECB Locations: U.S, Europe, East, Ukraine

☆ Fed’s Powell is unfazed by the latest hot inflation reading
▼ + stars: | 2024-05-14 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

Tuesday’s wholesale inflation data, which jumped to its highest rate in a year, certainly wasn’t a source of comfort. “I wouldn’t call it hot, I would call it sort of mixed,” Powell said Tuesday, referring to the new wholesale inflation data. Federal Reserve Chair Jerome Powell (center) spoke Tuesday at an event hosted by the Foreign Bankers' Association alongside European Central Bank Governing Council member Klaas Knot. Another troubling sign for US central bankers is consumers’ belief that inflation will move higher in the year ahead, according to two surveys Fed officials monitor closely. That can lead to higher prices.

Persons: Jerome Powell, Powell, Price, ” Powell, ”, Klaas, Michelle Bowman Organizations: New, New York CNN, Foreign Bankers ’ Association, European Central Bank Governing, Federal, Foreign Bankers, Association alongside European Central Bank Governing, Foreign Bankers Amsterdam, ” Locations: New York

☆ Forget U.S. stocks — UBS says Europe's are a better bet. Here's why
▼ + stars: | 2024-05-14 | by ( Sophie Kiderlin | In | ) www.cnbc.com time to read: +2 min

Michael M. Santiago | Getty ImagesEuropean stocks are now more attractive than their U.S. counterparts, according to Swiss Bank UBS , with factors such as economic data, interest rates and earnings playing a key role. In a note entitled: "A U-Turn: Favouring Europe over US equities," the bank's strategists said European stocks excluding the U.K. now outrank the U.S. on its "regional scorecard." UBS outlined a number of reasons for its "U-turn," especially given U.S. markets tend to outperform European ones. Indicators tracked by the bank — such as purchasing managers' index (PMI) data — suggest an upside risk to European GDP, and a downside risk to U.S. GDP, the bank said. Some of Europe's central banks have already begun easing, and the European Central Bank is expected to do so as soon as June.

Persons: Michael M Organizations: New York Stock Exchange, Santiago, Getty, Swiss Bank UBS, UBS, U.S, European Central Bank Locations: New York City, U.S, Europe, Japan, Swiss

☆ Ukraine Needs Money to Fight. Can Seized Russian Assets Help?
▼ + stars: | 2024-05-14 | by ( Steven Erlanger | ) www.nytimes.com time to read: +1 min

As much as $300 billion in Russian assets, frozen in the West since the invasion of Ukraine, is piling up profits and interest income by the day. Now, Europe and the United States are considering how to use those gains to aid the Ukrainian military as it wages a grueling battle against Russian forces. There has been a debate for months about whether it would be legal or even wise to confiscate the frozen assets altogether. They argue that confiscation would be a bad precedent, a violation of sovereignty and could lead to legal challenges, financial instability and retaliatory seizures of Western assets abroad. But proposals to seize and use the profits earned on those Russian assets — the interest on accumulated cash stemming from the sanctions, said Euroclear, a financial services company — are gaining considerable ground.

Persons: Christine Lagarde, Euroclear Organizations: Russian, European Central Bank Locations: West, Ukraine, Europe, United States, Britain, France, Germany, Indonesia, Italy, Japan, Saudi Arabia

☆ Dollar holds its ground as key inflation data looms
▼ + stars: | 2024-05-09 | by ( ) www.cnbc.com time to read: +2 min

U.S. one hundred dollar bills are being shown in this picture illustration taken in Buenos Aires, Argentina, on Dec. 15, 2023. Against the Japanese yen, the dollar slowly inched up after it fell more than 3% last week, its biggest weekly percentage drop since early December 2022. Japan's top currency diplomat Masato Kanda on Thursday reiterated a warning that Tokyo is ready to take action in the currency market. The dollar index rose to 0.05% to 105.55, while the Japanese yen was mostly flat at 155.59 per greenback. The BOE is likely to take another step towards its first interest rate cut in four years as inflation falls.

Persons: Masafumi Yamamoto, Masato Kanda, Susan Collins, Sterling, BOE, bitcoin Organizations: Federal Reserve, Bank of, Mizuho Securities, Traders, PPI, Fed Bank of Boston, European Central Bank Locations: Buenos Aires, Argentina, Japan, U.S, United States, Tokyo, —

☆ Golden visas attracted wealthy Americans to Southern Europe. Then their housing crisis followed.
▼ + stars: | 2024-05-09 | by ( Eliza Relman | ) www.businessinsider.com time to read: +8 min

This is in part the doing of so-called "golden visas," hugely popular residency visas for foreign investors. And they purchased more Portuguese golden visas than any other nationality in 2022. Related storiesBut as Portugal has experienced a worsening housing affordability crisis, Portuguese public opinion on golden visas has soured. Last year, the country changed the terms of its golden visa program to exclude real estate investment. Other southern European countries are following suit, similarly pointing to skyrocketing real estate prices.

Persons: —, They're, they're, João Pereira dos Santos, Pereira dos Santos, Nuno Fazenda, Holger Schmieding, Schmieding, David Zorrakino Organizations: Service, Business, The New York Times, School of Economics, Finance, Queen Mary University of London, State, Tourism, Trade, Services, Bloomberg, Berenberg Bank, Getty, European Central Bank, Paris Locations: Greece, Portugal, Tourism, Lisbon, Athens, Spain, Southern Europe, Portuguese, London, Ramblas, Barcelona, Catalonia, Europe, Germany, Netherlands, France

☆ The EU will soon get a new leadership team. Here are the names currently in the mix
▼ + stars: | 2024-05-09 | by ( Silvia Amaro | ) www.cnbc.com time to read: +1 min

BRUSSELS, Belgium — European diplomats have already started key negotiations on who will take the main jobs at the European Union following elections next month. Voters across the 27-member EU are heading to the polls between June 6 and 9 to choose the next set of representatives in the European Parliament. The very top EU jobs, which aren't directly elected, then get dished out in the weeks following. Diplomats within the EU are already trying to figure out who will be leading the three big institutions in the coming years: The European Commission, the European Council and the European Parliament. "Von der Leyen has a lot of support from European heads of state," one of the three sources told CNBC via telephone.

Persons: aren't, Ursula von der Leyen, Von der Leyen, Emmanuel Macron, Christine Lagarde Organizations: European, Voters, EU, Parliament, Diplomats, European Commission, European Council, CNBC, European Central Bank Locations: BRUSSELS, Belgium, policymaking, Brussels

"The Fed is the central bank most able to chart its own course," Citi economist Andrew Hollenhorst said in a client note Wednesday. It was the first time the Riksbank had cut since 2016 and takes its main policy rate down to 3.75%. The Riksbank's move was the second central bank cut of the year, as the Swiss National Bank reduced its key rate a quarter point in March in what was seen as a surprise action. Reductions from the Bank of England and European Central Bank are expected to come next, possibly within a month. "With the exception of Japan, developed markets are embarking on a program of rate cuts," Hollenhorst said.

Persons: Andrew Hollenhorst, BOE, Mark, Bailey, Citi's Hollenhorst, Christine Lagarde, CNBC's Sara Eisen, Lagarde, Hollenhorst Organizations: U.S . Federal, Citigroup, Citi, Sweden's, Swiss National Bank, Bank of England, European Central Bank, Bank of America Locations: U.S, Japan

☆ Inflation-hit Germans are demanding a legal cap on the price of a doner kebab. They're not joking.
▼ + stars: | 2024-05-07 | by ( Mikhaila Friel | ) www.businessinsider.com time to read: +3 min

A German political party proposed a government cap on doner kebabs. Around €7 billion, or around $7.5 billion, worth of doner kebabs are sold every year in Germany, according to The Guardian and The Independent. The party plans to propose a government price cap of €4.90 (around $5.30) or €2.90 (around $3.10) for young people, The Guardian reported. If those decrease, then kebab prices also decrease," Gebel told BI. "The kebab price will remain high if the government does not change anything," she said.

Persons: Chancellor Scholz, —, Kathi, Gebel, Olaf Scholz, Virginia Mayo, Scholz, Putin … I'm Organizations: Guardian, Service, Independent, Left Party, AP, European Central Bank, Federal Statistical Office Locations: Germany, Brussels, Virginia

☆ Welcome to ‘the Tepid Twenties’? The US economy’s strength won’t be enough to boost global growth
▼ + stars: | 2024-05-05 | by ( Bryan Mena | ) edition.cnn.com time to read: +7 min

Invigorating growth is critical: When the economy expands, it improves standards of living, promotes innovation and makes households wealthier. Economic growth in Spain and France was stronger than expected last year. But the US is outperforming mainly for one key reason: Robust productivity growth. Productivity growth came in well below expectations in the first three months of the year, according to Labor Department data released last week. A “course correction” isn’t an even stronger US economy: Economic policymakers around the world need to address a range of key issues.

Persons: ” Kristalina Georgieva, ” Georgieva, ” Stephen Gallagher, Gallagher, “, ”, Hande Atay Alam, Recep Tayyip Erdogan, Israel Katz, John Williams, Neel Kashkari, Lisa Cook, Krispy Kreme, John’s, Austan Goolsbee Organizations: Washington CNN, Monetary, IMF, European Central Bank, Labor Department, Societe Generale, CNN, Reuters, Palantir Technologies, Tyson Foods, Marriott Worldwide, New York Fed, Disney, UBS, Duke Energy, Suncor, Bros, Minneapolis, Toyota, Uber, Anheuser, Busch InBev, Airbnb, Fox Corporation, News Corporation, Duolingo, Icahn Enterprises, New York Times Company, AMC Entertainment, Honda, Warner Bros Discovery, Warner Music Group, Hyatt, Hilton, Bank of England, US Labor Department, United Kingdom’s, National Statistics, University of Michigan, . Chicago Fed, China’s National Bureau of Statistics Locations: Europe, China, United States, Spain, France, Russia, Ukraine, Turkey, Israel, Gaza, Olesya, “ Turkey, Lyft, TripAdvisor

☆ Fed and ECB divergence on rate cuts could spell trouble for the euro, economist says
▼ + stars: | 2024-05-03 | by ( Sam Meredith | In Samuelmeredith | ) www.cnbc.com time to read: +2 min

The prospect of the European Central Bank diverging from the Federal Reserve on interest rate cuts is likely to be "particularly negative" for the 20-nation euro zone, according to one economist. The ECB appears on course to cut interest rates in June, barring any major surprises, and recent inflation data has since bolstered the case for an imminent reduction in borrowing costs. It leaves the ECB firmly on track to cut interest rates before the Fed. "The problem of cutting rates right now is that the ECB takes for granted the strength of the euro . Lacalle said a June rate cut from the ECB was not going to make German, French or Spanish businesses take more credit "because a small rate cut is not the driver of credit demand."

Persons: Christine Lagarde, Daniel Lacalle, Gestion, CNBC's, Lacalle Organizations: European Central Bank, ECB, Federal Reserve, CNBC Locations: Frankfurt, Germany, U.S

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