Overseas Headlines – April 4, 2022

United States:

Fed Seeking to Find Where ‘Phantom Menace’ Neutral Rate Sits

“Federal Reserve Chair Jerome Powell and his colleagues are on the march to return ultra-loose monetary policy and accommodative financial conditions to more normal levels. The trouble is, their destination is uncertain and the terrain may be shifting as they forge forward with higher interest rates. Policy makers differ on what the neutral rate — the rate that neither restricts nor spurs economic growth — is and couch it in terms that don’t take account of the current high inflation environment.”



European Farmers Turn to GM Feed to Replace Corn From Ukraine

“European farmers are set to buy more genetically modified animal feed from the U.S. and South America after Russia’s invasion cut off corn shipments from Ukraine. The war in Ukraine is already pushing companies to turn to alternatives to sunflower oil, and that shift in trade flows is also likely to include corn, which is mainly used as animal feed. Ukraine’s non-GM corn accounts for about half the European Union’s imports. However, 92% of U.S. corn is GM, according to the Center for Food Safety, with similar levels in Brazil.”



Ex-Japan Forex Chief Sees Kuroda Standing Firm Despite Weak Yen

“Bank of Japan Governor Haruhiko Kuroda won’t change his ultra-low interest rate policy in the coming quarters, even though he’ll come under political pressure to do so over the weak yen, according to one of the country’s former chief currency officials. “The political pressure from the people, parliament and media is going to be a bit higher,” said Hiroshi Watanabe, who served as currency chief in the 2000s in a Bloomberg TV interview Monday. “But I think there isn’t going to be a big change in monetary policy.”




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