November 17, 2022
United States:
Fed’s Bullard Says More Hikes Needed to Get to Restrictive Level
Federal Reserve Bank of St. Louis President James Bullard urged policymakers to raise interest rates further, saying the level will need to be higher to meet the central bank’s goal to be “sufficiently restrictive” to bring down inflation.
“Even under these generous assumptions, the policy rate is not yet in a zone that may be considered sufficiently restrictive,” Bullard said Thursday in Louisville, Kentucky at an event hosted by Greater Louisville Inc. “To attain a sufficiently restrictive level, the policy rate will need to be increased further.”
Europe:
ECB Officials Weigh Slower Rate-Hike Tempo With Half-Point Move
European Central Bank policy makers may slow down interest-rate hiking with only a 50 basis-point increase next month, according to people with knowledge of the matter.
Initial discussions suggest a lack of momentum for another 75 basis-point move at present, the people said, declining to be identified because Governing Council deliberations are private. Barring another surprise surge in inflation, the consensus might well favor the less aggressive step, they said.
Asia:
China Asks Banks to Report on Liquidity After Bond Slump
Chinese regulators asked banks to report on their ability to meet short-term obligations after a rapid selloff in bonds triggered a flood of investor withdrawals from fixed-income products, according to people familiar with the matter.
The unscheduled regulatory queries coincided with the biggest decline in China’s short-term government bonds since mid-2020. The slump — spurred by a shift toward riskier assets including stocks — prompted retail investors to pull money from wealth-management products, fueling a spiral of price declines and accelerating withdrawals. Losses also spread to top-rated corporate bonds, stoking a record surge in yields this week.
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