May 12, 2023
United States:
Fed Needs More Hikes If Inflation, Labor Stay Hot, Bowman Says
The Federal Reserve will likely need to raise interest rates further and hold them higher for some time if US price pressures don’t cool off and the jobs market shows no sign of slowing, Governor Michelle Bowman said.
“Should inflation remain high and the labor market remain tight, additional monetary policy tightening will likely be appropriate to attain a sufficiently restrictive stance of monetary policy,” Bowman said in remarks for delivery on Friday. “I also expect that our policy rate will need to remain sufficiently restrictive for some time to bring inflation down and create conditions that will support a sustainably strong labor market.”
Europe:
BOE Chief Economist Says UK Inflation Is at a ‘Turning Point’
Bank of England Chief Economist Huw Pill gave the clearest indication yet that officials think they might be able to pause their rate-hiking cycle, saying inflation has hit a “turning point” and is likely to fall.
The remarks follow the BOE’s decision on Thursday to lift its base interest rate for a 12th consecutive time to 4.5% in an effort to ward off a wage-price spiral. Inflation hit the highest in four decades last year and remains stuck in double digits, five times the BOE’s 2% target.
Asia:
Singapore Extends MAS Chief Menon’s Term For Up to Two Years
Singapore extended the term of its central bank chief Ravi Menon by up to two years.
The re-appointment of Menon, 59, is valid until May 31, 2025 or his retirement from the public service, whichever is earlier, the Monetary Authority of Singapore said in a statement Friday. The MAS doesn’t typically flag the possibility of an earlier departure in such announcements, leaving the door open for the career central banker to exit before the end of his renewed term.
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