September 23, 2022
United States:
Fed’s Hawkishness Casts Doubt on Bank of Canada’s Soft Landing
The Federal Reserve’s efforts to step up its fight against inflation will cast doubt on the Bank of Canada’s ability to limit its own interest rate hikes.
At a decision Wednesday, Chairman Jerome Powell signaled Fed officials are poised to increase borrowing costs by more than expected, and are willing to tolerate much slower growth in the process.
Europe:
Germany Steps Up Preparations for Emergency Gas Rationing
Germany is stepping up preparations for a gas emergency that would require rationing for the country’s biggest companies this winter as Russia’s squeezes flows to Europe.
In a sign of growing urgency, the regulator will next Wednesday present to lawmakers a digital security platform to identify the “non-protected” consumers that will bear the brunt of rationing. That includes Germany’s 2,500 biggest gas users, which must register on Bundesnetzagentur’s platform by the end of October.
Asia:
China Drip Feeds Liquidity Before Quarter-End Amid Yuan Slide
China took small steps to boost short-term liquidity before quarter-end as it seeks to support its Covid-battered economy without spurring further yuan weakness.
The People’s Bank of China net injected 92 billion yuan ($13 billion) into the banking system via reverse repos this week, the most since June. While the move was aimed at avoiding a cash crunch at quarter-end, the gradual additions signal that authorities also want to avoid flooding the banking system with cash and weakening the currency further.
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