September 22, 2017
Escalated saber-rattling between North Korea and the United States drove the dollar lower overnight. The greenback lost 0.6% against the peso, 0.5% versus the yen, loonie and Aussie currency, 0.3% vis-a-vis the euro and 0.2% against the kiwi and Swiss franc. The yuan is steady, and sterling dipped 0.1%. General elections will be held this […] Read Article
September 22, 2017
Central Banks: Monetary policy meetings in New Zealand, Mexico, Thailand, Sri Lanka, the Czech Republic, Sri Lanka, and Colombia. Bank of Japan publishes minutes from its July Board meeting and a summary of the September meeting. Various Fed officials will speak publicly including Yellen, George, Rosengren, Harker, Dudley, Evans, Bullard, and Kashkari. Governors of the […] Read Article
September 22, 2017
A follow-up cut in the seven-day reverse repo rate to 4.25% was announced today. An earlier cut a month ago of 25 basis points had been the first reduction since the sixth such move in 2016 was made in October. While easing today, Indonesian monetary officials claimed that their rate had now fallen to their […] Read Article
September 18, 2017
This week’s Federal Open Market meeting is not expected to raise the 1.00-1.25% federal funds target but is nonetheless anticipated as an event that may shed many clues regarding future policy. The disconnection between a tightening labor market yet continuing sub-target inflation has kindled speculation that there may not be any further interest rate increases […] Read Article
September 21, 2017
A 25-basis point cut in the SARB policy interest rate to 6.75% in July was a response to a then-perceived improved inflation outlook and it was the first reduction in many years. The rate had been hiked six times from January 2014 to March 2016 and by 200 basis points in all to 7.0%. At […] More
September 21, 2017
Three years have now elapsed since the last change in the Filipino overnight reverse repo rate, which was the second of two 25-basis point hikes in July and September 2014. The latest policy review kept the key central bank rate in The Philippines at 3.0%. Projected inflation remains 3.2% for 2017, 2018 and 2019. This […] More
September 21, 2017
Following four hours and 52 minutes of deliberation over two days, the Bank of Japan’s nine-person Board agreed to leave policy as is, with a -0.1% marginal short-term interest rate, a target of “around zero percent” in the 10-year JGB sovereign debt yield, and continuing quantitative stimulus for “as long as it is necessary for […] More
September 21, 2017
A released statement from Norges Bank’s Executive Board after the latest policy review defends keeping Norway’s key monetary policy rate at 0.50% in the period ahead, suggests that the initial increase may need to occur somewhat sooner than projected back in June, but also maintains that persistent uncertainties will require a careful and gradual eventual […] More
September 21, 2017
Taiwan’s central bank discount rate has been left at 1.375%, its level since a 12.5-basis point cut in June 2016. A statement released after this week’s quarterly policy review observes sub-potential economic growth and low and well-anchored actual and expected inflation. As before, a role for currency market intervention on occasion is defended: “In principle, […] More
September 21, 2017
FOMC officials still expect to hike the fed funds rate one more time in 2017 and three times next year. The current range of 1-1.25% was not changed, but balance sheet reduction begins next month. Lower-than-expected inflation has been a mystery, but the economy and U.S. labor markets are behaving well enough not to deter […] More
September 20, 2017
The FOMC statement kept the existing interest rate target with no dissenting votes. Officials do not expect the hurricane storm damages to “alter the course of the national economy over the medium term. The statement includes a two-page addendum of modifications to a balance sheet normalization program that will begin to be implemented next month. […] More
September 20, 2017
Eight weeks have elapsed since the last FOMC meeting at which time committee members signaled that a program of balance sheet normalization would commence “relatively soon.” The assessment of employment growth was upgraded then, but the discussion of economic conditions otherwise was little changed from the previous June 14th meeting. Since the July 26 meeting, […] More
September 20, 2017
Puerto Rico is being hammered by a Cat 4 hurricane with 155 MPH winds. Mexico is reeling from a 7.2 magnitude earthquake that struck yesterday. Around 25o people confirmed dead. U.S. Republican senators are scrambling to pass a repeal and replace healthcare bill by monthend that’s even more dysfunctional than previous efforts. In a speech […] More
September 19, 2017
The U.S. current account deficit, the broadest measure of net foreign demand, has been manageable in size and comparatively steady relative to GDP in the years since the Great Recession. The current account comprises trade in goods and services, net investment income, and transfer payments. As a percentage of nominal GDP, the deficit equaled 2.4% […] More
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