December 9, 2022
United States:
Fed Expected to Keep Peak Rates for Longer, Dashing Hopes for 2023 Cuts
The Federal Reserve is set to disappoint Wall Street as it keeps rates at their peak throughout 2023, dashing hopes markets have priced in for rate cuts in the second half and making a recession very likely.
That’s the forecast of economists surveyed by Bloomberg ahead of a decision and forecasts due from the Federal Open Market Committee on Wednesday. Policymakers will raise rates by 50 basis points next week, following four consecutive 75 basis-point hikes, and by quarter points at the following two meetings, the survey found. Policymakers will announce their decision and forecasts at 2 p.m. in Washington.
Europe:
Euro-Zone Banks Return Another €447.5 Billion in ECB Funding
Euro-area banks are returning another €447.5 billion ($472 billion) in cheap loans to the European Central Bank after officials toughened the terms of the program to help fight double-digit inflation.
The repayment will shrink the outstanding amount of so-called TLTRO loans, which were used during the pandemic to keep credit flowing to households and businesses, by about 25%.
Asia:
China’s Muted Inflation Leaves Room for Policy Stimulus
China’s factory-gate prices contracted again in November while consumer inflation eased as Covid disruptions suppressed demand, giving the central bank some room to ease policy as the economy tries to recover.
The producer price index fell 1.3% in November from a year earlier after declining by the same magnitude in October, the National Bureau of Statistics said Friday. Economists surveyed by Bloomberg had expected a 1.5% drop in prices.
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