Archive for September 13th, 2012

Central Bank Watch

Central Bank of Chile: No Rate Change

September 13, 2012

A statement after Chilean monetary authorities left their key interest rate at 5.0% asserts that production and demand in Chile are growing at near-trend rates.  A stronger peso and slightly sub-target inflation (2.6%) are noted, too, but so are tight labor markets and some moderation of euro area financial tensions.  The present policy stance is […] More

Deeper Analysis

The Bernanke Press Conference: What it Tells Me

September 13, 2012

The return to quantitative easing was driven by disappointment over the rate of labor market improvement.  Fed officials are looking at the totality of labor market data, not just the jobless rate and growth of employment but also the participation rate, the length of long-term unemployment, the full time/part time composition of unemployment and estimates […] More

Central Bank Watch

FOMC Statement

September 13, 2012

The rumored steps of fresh monetary stimulus were essentially correct despite a statement that upgraded the assessment of overall economic activity as well as views of household spending and the housing sector.  Inflation was ruled “subdued” after the prior observation on August 1 that such had “declined since earlier this year.”  Jeffrey Lacker, Richmond Fed […] More

Central Bank Watch

FOMC Preview: Markets Counting on Easing Gesture

September 13, 2012

Analysts expect a concrete easing action of some sort from the Federal Reserve, particularly after Chairman Bernanke’s dovish remarks at Jackson Hole that expressed dissatisfaction with the U.S. Labor market.  Gestures can take any number of forms: tweaking the projected likely date of an initial fed funds rate increase, cutting the interest on bank reserves, […] More

Central Bank Watch

Swiss National Bank Frustrated the Franc Isn’t Weaker

September 13, 2012

In August 2011, Swiss monetary authorities cut the 3-month Libor target to zero to 0.25% with a point objective of 0.0%.  This imposition of ZIRP (zero interest rate policy) was followed one month later by a euro floor of CHF 1.2000 that the central bank has enforced with currency intervention and other steps.  These actions […] More

Central Bank Watch

The Philippines: Interest Rate Policy on Hold Amid Balanced Risks

September 13, 2012

Officials Bangko Sentral ng Pilipinas implemented three cuts of the overnight borrowing rate or reverse repo earlier this year in January, March and July, which depressed such to a record low of 3.75%.  That stimulus, according to a statement after today’s meeting, continues to work its way through the economy.  Monetary authorities feel that the […] More

Central Bank Watch

Bank Indonesia Leaves Reference Interest Rate Steady at 5.75%

September 13, 2012

The last three interest rate changes, all cuts totaling 100 basis points, were administered in October 2011, November 2011 and February of this year.  The current level of 5.75% is below the Great Recession trough of 6.50% and represents a record low.  A statement from the central bank’s Board of Governors projects ample growth consistent […] More

Central Bank Watch

Bank of Korea

September 13, 2012

Analysts didn’t get the 25-basis point Korean interest rate cut that was expected, but such a move in the future seemingly remains in play.  A statement on the Bank of Korea web site is sufficiently dovish to have justified an easing now.  Commenting on growth elsewhere, “the Committee expects the pace of global economic recovery […] More

New Overnight Developments Abroad - Daily Update

Eye on the Federal Reserve

September 13, 2012

Ahead of the eagerly awaited FOMC policy decision and press conference at 16:30 GMT and 18:15 GMT respectively, stocks are down, and five other central banks have announced their policy decisions. The Reserve Bank of New Zealand’s Official Cash Rate was left at 2.5%, its level since March 2011.  Officials suggested a change is unlikely […] More

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