April 3, 2024
United States:
Fed’s Bostic Expects One Rate Cut This Year, in Fourth Quarter
Federal Reserve Bank of Atlanta President Raphael Bostic said it will likely be appropriate to lower interest rates in the fourth quarter, emphasizing the bumpy nature of inflation progress.
Bostic reiterated his expectation for just one rate cut this year, pointing to the strength of the economy and a slower decline in inflation. The Atlanta Fed chief is a voting member of the Fed’s policy-setting committee this year.
Europe:
Euro-Area Inflation Inches Toward 2% With Focus on June Cut
Euro-area inflation slowed more than expected, cementing prospects for an interest-rate cut by the European Central Bank in June.
Consumer prices rose an annual 2.4% last month, down from 2.6% in February, in line with a Bloomberg Economics Nowcast model. Analysts predicted an increase of 2.5%. A measure excluding volatile items such as food and energy also eased more than anticipated, to 2.9%.
Asia:
Yuan Sinks Toward Limit of Allowed Range, Risking PBOC Pushback
China’s defense of its currency is heading toward a milestone moment that may trigger a more forceful response from authorities to punish short-sellers.
Having weakened the yuan to within a whisker of its fixed range against the dollar on Wednesday, traders are now in danger of being slapped with anything from direct intervention to a dramatic liquidity squeeze in the offshore market. Over the past decade, the People’s Bank of China has stepped in aggressively to stabilize the yuan on each of the five occasions it neared that policy red line.
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