Fed Officials Say More QE May Lack Punch, Fiscal Aid Needed
“Federal Reserve officials kept up pressure for Washington to renew fiscal support for the virus-ravaged economy even as hopes of a deal between Democrats and Republicans continued to look dim. Without additional fiscal relief, the recovery will likely be a lot weaker, Dallas Fed President Robert Kaplan said in a Bloomberg Television interview with Kathleen Hays Thursday. He said the Fed likely won’t increase large-scale asset purchases right now as it wouldn’t do much to help the real economy.”
U.K.’s Disappointing Growth Puts BOE Forecasts in Deep Jeopardy
“The U.K. economy’s poor performance in August means it looks set to fall short of Bank of England forecasts, boosting the likelihood of more monetary stimulus. Output would have to jump a near-record 8% in September, almost four times as much as the previous month, to meet the BOE prediction of an 18.3% third-quarter expansion. That seems unlikely given new coronavirus restrictions. August proved lackluster even with restraints at their weakest and the government subsidizing meals out.”
India’s RBI Ramps Up Market Rhetoric as It Boosts Liquidity
“India’s central bank Governor Shaktikanta Das ramped up his rhetoric to the bond market and backed those words with actions as he sought to reduce borrowing costs without cutting the benchmark interest rate. Hamstrung by above-target inflation, the Reserve Bank of India’s Monetary Policy Committee retained its main repurchase rate at 4% on Friday, in line with economists’ forecasts. It turned to non-interest rate tools, such as bond purchases, to keep yields under control, and lowered banks’ lending rates to spur consumption. The RBI has provided the bulk of stimulus to an economy it now sees contracting 9.5% this fiscal year as the coronavirus pandemic continues to surge across the nation.”
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