December 27, 2023
United States:
Fed Likely to End Bank Funding Program in March, Wrightson Says
The growing gap between the rate on the Federal Reserve’s nascent funding facility and what the central bank pays institutions parking reserves suggests officials will let the program expire in March, according to Wrightson ICAP.
The Fed introduced the Bank Term Funding Program, or BTFP, earlier this year as the banking crisis roiled markets. The program allows banks and credit unions to borrow funds for up to one year, pledging US Treasuries and agency debt as collateral valued at par. The rate for these loans — one-year overnight index swaps plus 10 basis points — is currently 4.84% and 56 basis points lower than the rate for interest on reserve balances.
Europe:
Russia Expects Brent Price to Average $80-$85 a Barrel Next Year
Russia expects Brent prices to average between $80 and $85 a barrel next year amid OPEC+ output cuts, Deputy Prime Minister Alexander Novak said in a TV interview.
The outlook is based on several analysts’ estimates and shaped forecasts for the nation’s social and economic development, Novak said on the state-run Rossiya 24 channel.
Asia:
BOJ Summary Suggests Ueda Can Wait for Wages Before Hiking
Bank of Japan board members discussed the potential timing of the nation’s first interest rate hike since 2007 during their meeting last week, with several members indicating they see no rush to make the move.
“It would not be too late even if the bank makes a decision after it sees developments in labor-management wage negotiations next spring,” one of nine board members said at the December 18-19 gathering. There is only a small risk of underlying inflation overshooting its 2% target by a significant degree, the same member said.
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