Overseas Headlines – March 29, 2022

United States:

Fed Pivots Toward Jumbo Hikes After Being Slammed as Too Slow

“Federal Reserve officials, rattled by persistent inflation and criticism that they’re behind the curve, have pivoted toward an even more aggressive plan of interest-rate hikes than they signaled earlier this month to ensure price increases cool. In the days after the March 15-16 Federal Open Market Committee meeting, Chair Jerome Powell and his colleagues shifted from a long-standing preference for slow and gradual interest-rate increases to front-loading policy with a half-point hike on the table in May and more to come.”



European Gas Pares Gains as Russia Flags Some Ukraine Pullback

“European natural gas trimmed gains after Russia said it would cut some military operations in Ukraine, reducing concerns over halts to flows from the region’s top producer. Benchmark Dutch next-month futures rose as much as 12% earlier but dropped back after Moscow said a “sharp reduction” in military operations in the Kyiv and Chernihiv areas would take place immediately. Russia is willing to consider a presidential meeting at the same time as foreign ministers meet to initial a preliminary deal, according to results of talks held by the Russian and Ukrainian negotiators on Turkey.”



Japan Faces Down Market Testing Limits of Yield Curve Control

“Japanese officials beat back market speculation on all sides, striving to keep a lid on borrowing costs while containing a selloff in the yen. As the Bank of Japan showed its determination to cap bond yields with a pledge of unlimited purchases, government officials signaled concerns over the currency’s recent decline on Tuesday. While the double act worked for the day, Japan’s commitment to an ultra-loose monetary policy in a world of rising interest rates means policymakers have to choose between defending their currency or yield-curve control.”



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