February 20, 2024
United States:
Markets Start to Speculate If the Next Fed Move Is Up, Not Down
Investors are beginning to war-game how the Federal Reserve can manage a US economy that just won’t land, with some even debating whether interest-rate hikes will be needed only weeks after a steady run of reductions appeared all but certain.
Bets on lower rates coming soon were so prevalent a few weeks ago that Fed Chair Jerome Powell publicly cautioned that policymakers were unlikely to be in position to cut as of March. Less than three weeks later, traders have not only removed March as a possibility but May also looks improbable, and even conviction about the June Fed meeting is wavering, swaps trading shows.
Europe:
Russia’s Crude-Export Data Show Compliance with OPEC+ Cuts Pledge
Russia met its target for crude-export cuts in January, complying with its pledge to allies in OPEC+, according to data from the country’s Energy Ministry.
The nation’s daily crude exports last month were 42,000 tons lower than the May-June average, according to people familiar with the data. That’s equivalent to about 307,000 barrels a day, based on the usual 7.33 barrels-per-ton conversion ratio for Russian oil.
Asia:
China’s Bold Mortgage Rate Cut Met With Lukewarm Reaction
China ramped up support for the troubled property sector with its biggest-ever cut to a key mortgage reference rate. But it was met with a muted response from investors, raising expectations that more aggressive measures to support the economy will be needed in the months to come.
Chinese lenders slashed their five-year loan prime rate by 25 basis points to 3.95%, the People’s Bank of China announced Tuesday. It was the first cut since June and the largest reduction since a revamp of the rate was rolled out in 2019.
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