April 5, 2023
United States:
Fed’s Mester Says Rates Should Rise Above 5%, Stay for Some Time
Federal Reserve Bank of Cleveland President Loretta Mester said policymakers should move their benchmark rate above 5% this year and hold it at restrictive levels for some time to quell inflation, with the exact level depending on how quickly price pressures ease.
To put inflation on a steady path down to 2%, monetary policy needs to move “somewhat further into restrictive territory this year, with the fed funds rate moving above 5% and the real fed funds rate staying in positive territory for some time,” Mester said at an event Tuesday in New York with the Money Marketeers of New York University.
Europe:
UK Bank Rules Architect Says SVB Rescue Punches Hole in System
The founding father of Britain’s current system of banking regulation has raised concerns about the exception granted to HSBC Holdings Plc when it rescued the UK arm of Silicon Valley Bank.
The comments from John Vickers – who led the government’s independent commission that proposed so-called ring-fencing in the UK – relate to rules forcing banks to separate their retail and investment banking activities put in place as one of the key lessons of the global financial crisis.
Asia:
BOJ Could End Yield Curve Control in April, Ex-Official Says
A recent drop in global bond yields has created favorable conditions for the Bank of Japan to scrap its yield curve control program this month, according to a former BOJ executive director in charge of monetary policy.
“There’s a possibility in April if you consider the current circumstances objectively,” former director Kazuo Momma said in an interview Tuesday. “Long-term yields won’t rise abruptly even if the YCC is scrapped” as long as the market environment continues to have little momentum for higher yields.
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