February 1, 2024
United States:
Fed’s Powell Cements Pivot But Pushes Back on Timing of Cuts
Federal Reserve officials cemented the end of their aggressive campaign to push up interest rates, and sought to reset expectations for how soon and how fast they’ll cut this year as inflation pressures fade.
While policymakers are shifting their focus to when to start easing policy amid a favorable pullback in inflation, it’s clear they’re in no rush to lower rates. Against a backdrop of a still-solid economy, Chair Jerome Powell said officials would move patiently and doused speculation that rate cuts would start at the next meeting.
Europe:
Euro-Area Prices Slow Less Than Expected, Clouding ECB Cuts
Euro-zone inflation eased less than anticipated at the start of the year — testing investor expectations that the European Central Bank will begin lowering interest rates as soon as the spring.
After a pick-up in December driven by base effects, consumer prices rose 2.8% from a year ago in January, Eurostat said Thursday. That’s above the 2.7% median estimate in a Bloomberg survey of economists. Core inflation, which omits volatile components such as food and energy, also abated less than envisaged, to 3.3%.
Asia:
China Vows to Keep Up Spending in 2024 After Stimulus Cut
China pledged to keep spending this year despite a property market slump weighing on key government revenue sources, raising hopes that fiscal expansion can provide more support for a slowing economy.
Fiscal spending in 2024 will be maintained at a “necessary intensity,” Ministry of Finance officials said Thursday. Hours later, data showed that Beijing withdrew stimulus last year, with 2023’s overall deficit at 8.84 trillion yuan ($1.2 trillion). That was lower both in absolute terms and as a share of gross domestic product than the previous year, according to Bloomberg calculations based on official data.
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