September 23, 2024
United States:
Fed’s Bostic Says Large Cut Bolsters Labor Market, Pace Not Set
Federal Reserve Bank of Atlanta President Raphael Bostic said starting the central bank’s cutting cycle with a large move will help bring interest rates closer to neutral levels as the risks between inflation and employment become more balanced.
But officials should not commit to a cadence of outsize moves given uncertainty over where the so-called neutral rate is — where the Fed is neither stimulating nor slowing the economy — and out of concern that inflation could return, Bostic said.
Europe:
Euro Zone’s Teetering Economy Fuels Bets on Faster ECB Rate Cuts
A shock decline in the euro zone’s main survey of the private sector economy just gave the European Central Bank a reason to speed up interest-rate cuts — at least in the eyes of investors.
Whether that means another reduction next month is unclear — markets assign a 40% chance to such a move. But Monday’s unexpectedly large decline in the region’s composite Purchasing Managers’ Index has them pricing 43 basis points of monetary easing by year-end — up from 38 earlier — suggesting a bigger step at December’s meeting is also possible.
Asia:
China Stimulus Hopes Rise as PBOC Cuts Rate, Plans Briefing
China announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fueling speculation officials are preparing to ramp up efforts to revive growth.
Authorities announced Monday that central bank governor Pan Gongsheng will hold a press conference tomorrow on financial support for economic development, alongside two other officials. Minutes later, the People’s Bank of China lowered the 14-day reverse repurchase rate, catching up with reductions initiated in July.
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