September 17, 2024
United States:
Markets Hinge on Powell Emulating Greenspan to Avoid a Recession
Traders are harking back on 1995, when Alan Greenspan led the Federal Reserve in pulling off a rare soft landing, for a playbook on trading the first interest-rate cut in four years.
Like nearly three decades ago, bonds and stocks are rallying ahead of a critical Fed meeting. But this time, the central question for Chair Jerome Powell is which approach — reducing rates by 25 basis points or 50 basis points — is most beneficial for the US economy.
Europe:
ECB’s Simkus Says Likelihood of October Rate Cut Is ‘Very Small’
There’s little chance that the European Central Bank will lower interest rates again next month, according to Governing Council member Gediminas Simkus.
While officials want to maintain flexibility and to continue to make data-driven decisions, another reduction in the deposit rate so soon after this month’s quarter-point cut would be “hard,” the Lithuanian official said Tuesday.
Asia:
BOJ Faces Task of Flagging Rate Hike Path While Standing Pat
Bank of Japan Governor Kazuo Ueda faces the delicate task this week of making sure investors are firmly aware of interest rate hikes to come without ruffling markets even as he stands pat on policy.
All 53 economists surveyed by Bloomberg said Ueda’s board will leave the benchmark rate at 0.25% when its two-day meeting concludes Friday. Almost 70% of them forecast a rate hike by December, making the BOJ’s messaging crucial, particularly after it drew criticism for a lack of communication leading up to the July 31 rate increase and the market mayhem that followed.
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