Peoples Bank of China
A Focus on Central Banks, Particularly the Fed
March 20, 2024
At 14:00 EDT (18:00 GMT), the Federal Open Market Committee will telegraph the decisions from its second scheduled policy meeting of 2024. The federal funds rate target will be left at 5.25-5.50% where such has been since last July. An updated set of forecasts also at 14:00 EDT will provide the first indication of any […] More
Chinese 5-Year Loan Prime Rate Reduction
February 20, 2024
The biggest central banking development of the day was the decision by officials at the People’s Bank of China to lower their 5-year Loan Prime Rate by a record 25 basis points to 3.95%. Analysts had anticipated an easing gesture but were looking for a cut of only 15 bps to buoy the economy’s increasingly […] More
Seemingly Contradictory Themes
February 20, 2024
Contradictory financial news headlines this Tuesday do not paint a consistent story. For a couple of months, Fed watchers with encouragement from top FRS officials have been trying to discern when and how quickly interest rates will be lowered. Out of the blue today, there’s a headline that the highly credentialed economist and former Treasury […] More
Divergent Investor Sentiment Regarding U.S. and Chinese Economies
January 22, 2024
It’s become increasingly evident that the Xi Jinping-led Chinese Communist government is less pre-disposed to stimulating economic growth than had been hoped and assumed earlier. Premier Li Qiang recently signaled a reluctance to unveil a big fiscal stimulus, and the People’s Bank of China again left its 1-year and 5-year Loan Prime Rates unchanged at […] More
Financial Markets Remain Unsettled in Wake of Powell and Biden Speeches
October 20, 2023
Despite conceding that officials are carefully monitoring the recent sharp increase in bond yields, Federal Reserve Chairman Powell’s message remained hawkish overall. Inflation is still too high, a restrictive stance will be needed for quite a while longer, and further rate hikes may be required. The U.S. economy has shown resilience in the face of […] More
Disinflationary News from U.K. and Germany Ahead of FOMC Statement
September 20, 2023
The dollar slipped overnight by 0.4% against the Australian and New Zealand currencies, 0.2% versus the euro and peso, and 0.1% relative to the Canadian dollar and Swiss Franc. Equities closed down 1.2% in India, 0.7% in Japan, 0.6% in Taiwan and Hong Kong and 0.5% in China but are currently showing overnight gains of […] More
Central Banks and U.S. Data Setting the Tone
September 14, 2023
The European Central Bank will announce its interest rate decision and revised macroeconomic forecasts within the hour. Expectations are narrowly divided between a rate hike to counter inflation and leaving policy unchanged in light of recessionary conditions and monetary restraint in the pipeline. Growth and inflation projections are apt to be respectively upward and downward. […] More
People’s Bank of China Cuts One Loan Prime Rate but Not the Other
August 21, 2023
Policymakers at the Central Reserve Bank of China took a halfway approach to enhancing policy stimulus at the August fixing of the 1- and 5-year loan prime rates for corporate borrowing and house mortgages, respectively. It was expected that each rate would be cut further following 10-basis point reductions in each done two months ago. […] More
U.S. Debt Ceiling Standoff Into the Eleventh Hour
May 22, 2023
Without a higher debt ceiling, the U.S. federal government will begin to not meet all its spending obligations by the start of June, prompting a default by mid-month, if not somewhat sooner. Biden and McCarthy are to resume talks to avert such a crisis today. Fed Chairman Powell again insinuated that banking system strains could […] More
More Banking Uncertainty
March 20, 2023
The share price of First Republic Bank plunged 32.8% on March 17, and over the weekend Swiss authorities arranged for UBS to acquire Suisse Bank. Market expectations of the Federal Reserve’s interest rate decision this Wednesday range from an increase of only 25 basis points to no change at all in the federal funds target. […] More
