Central Banks

  • 2019-05-21 12:10

    By Jean Yung

    WASHINGTON (MNI) - Federal Reserve Bank of Boston President Eric Rosengren said Tuesday that uncertainty over U.S.-China trade relations in light of otherwise healthy growth and a temporary decline in inflation calls for the Fed to be patient in raising or lowering short-term interest rates.

    "I see no clarion call to alter current policy in the near term. I view current policy as slightly accommodative and likely to be consistent with inflation returning to the Fed's 2% inflation target over time. This is likely to occur more rapidly if tariffs are imposed," he said in remarks prepared for The Economic Club of New York.

  • 2019-05-21 12:03

    By Jean Yung

    WASHINGTON (MNI) - Recent weakness in U.S. inflation was likely exaggerated by one-off price moves in isolated categories, and low rates of increases in health care prices will continue to restrain overall levels, Federal Reserve economists said in interviews over the past week.

    While President Donald Trump's latest tariff hikes on Chinese imports could result in a modest boost to inflation, the effects are difficult to pinpoint and would be viewed as transitory, they said.

    Cyclical components of the Fed's favored personal consumption expenditures inflation gauge have stayed high, in line with a healthy economy and tight labor market, said San Francisco Fed economist Adam Shapiro.

  • 2019-05-20 12:53

    By David Robinson

    LONDON (MNI) - Bank of England Deputy Governor Ben Broadbent said that the negative impact of the Brexit process on business investment would be worse if business executives continued to take the view that the end was in sight.

    In a speech at Imperial College Business School Broadbent said that the evidence showed businesses which were expecting uncertainty to evaporate in the near future held off investing more than if uncertainty was expected to persist.

    Persistent speculation that there could be a resolution of Brexit soon only amplifies the hit to business investment.

    The following are key points from the speech:

    -The Brexit deadline for a deal to be agreed between the UK and the EU, allowing a transition period, was originally set for

  • 2019-05-20 11:12

    -BOE Carney And Colleagues Hearing Tues Cancelled; Problem Not With BOE

    LONDON (MNI) - Tuesday's scheduled hearing with Bank of England Governor Mark Carney and colleagues at the Treasury Select (TSC) Committee has been cancelled.

    A TSC official confirmed the cancellation but did not offer a reason, although Market News understands that the cancellation was triggered by the TSC and not by the Bank.

    Mark Carney, Deputy Governor Ben Broadbent, and external MPC members Silvana Tenreyro and Michael Saunders were scheduled to give evidence on the May Inflation Report at 0930 GMT.

    All TSC meetings scheduled for Tuesday have been cancelled and no alternative date for the MPC hearing has yet been proposed.

    --MNI London Bureau; tel: +44 203-586-2223; ema

  • 2019-05-20 01:05

    BEIJING (MNI) - China's central bank is confident and capable of maintaining the stability of the yuan exchange rate at a balanced level, according to Pan Gongsheng, vice governor of the People's Bank of China.

    In a statement on the PBOC website posted late on Sunday, Pan said that foreign capital inflows have increased and forex reserves have risen steadily since the beginning of this year.

    Pan, who is also the director of the State Administration of Foreign Exchange told the PBOC-run newspaper Financial News that healthy macroeconomic fundamentals, rapid credit growth and moderate monetary and financial conditions would provide strong support for the forex market and the yuan.

    He said the PBOC would carry out the necessary counter-cyclical adjustments and strength

  • 2019-05-17 11:35

    By Luke Heighton

    FRANKFURT (MNI) - The eurozone slowdown may prove temporary, the governor of the Bulgarian National Bank told MNI, but whether Europe emerges from the current soft patch by the second half of 2019 is uncertain.

    "The euro area's economy beat many economists' expectations in the first quarter.

  • 2019-05-16 13:30

    By David Robinson

    LONDON (MNI) - Bank of England Monetary Policy Committee member Jonathan Haskel said in a speech in York that the growth of intangible assets could impact both policy transmission and financial stability.

    The following are key points from the speech, which did not address current monetary policy setting:

    --Haskel focussed on his signature research topic: the rapid growth in firms' intangible assets such as software, reputation and knowledge relative to tangible capital, such as hardware and buildings.

    Haskel had previously said that Brexit uncertainty could be a key factor behind recent weakness in UK investment but here he floated the idea that it may also reflect under-recorded investment in intangibles.

    "Intangibles appear to be part of t

  • 2019-05-16 12:15

    By Jean Yung

    WASHINGTON (MNI) - The Federal Reserve should move cautiously in adjusting policy, given low neutral interest rates and inflation below target, Fed Governor Lael Brainard said Thursday.

    She again called for the central bank to guard against financial imbalances through the active use of countercyclical tools such as the countercyclical capital buffer.

  • 2019-05-16 08:07

    By Jean Yung

    WASHINGTON (MNI) - A standing repo facility allowing banks to swap safe assets for reserves on demand could be priced at a rate equal to the top of the Federal Reserve's target range, St. Louis Fed economist David Andolfatto said in an interview.

    This pricing would enable such a facility - now under consideration by the FOMC -- to function as a ceiling on short-term money market rates, while remaining low enough to attract usage in the event of a stress scenario, Andolfatto, who has written in favor of the idea, told MNI.

    Overnight repo rates have mostly posted below the Fed's current upper bound of 2.50% in 2019, but occasional spikes have contributed to "optics that the Fed does not have full control over the policy rate," he said.

  • 2019-05-14 13:20

    By Jean Yung

    WASHINGTON (MNI) - The Federal Reserve's patient approach to adjusting monetary policy remains appropriate despite persistently below-target inflation, given the context of a growing economy and tight labor markets, Kansas City Fed President Esther George said Tuesday.

    "This wait-and-see approach is appropriate because we have not seen upward pressures building on inflation, even though we have experienced above trend growth and a further tightening of labor markets," she said in remarks prepared for the Economic Club of Minnesota.

    "With the current outlook for the economy remaining positive, monetary policy settings look appropriate to me," she said.

    The current "benign inflation outlook" gives policymakers an opportunity to test the degree of slack i