September 27, 2023
United States:
Fed May Do Less If Risks Like Shutdown Hit, Kashkari Says
A US government shutdown or prolonged strike by automotive workers could slow the economy, meaning the Federal Reserve wouldn’t have to use its tools to ease price growth, Minneapolis Fed President Neel Kashkari said.
“If these downside scenarios hit the US economy, we might then have to do less with our monetary policy to bring inflation back down to 2% because the government shutdown or the auto strike may slow the economy for us,” he said in an interview Wednesday on CNN. “I’m not hoping for that, but there’s an interaction there.”
Europe:
ECB’s Holzmann Floats Tenfold Hike in Minimum Reserves
The European Central Bank should increase the amount of money it requires lenders to park with it interest-free by as much as 10 times, Governing Council member Robert Holzmann told the WirtschaftsWoche magazine.
“Banks benefited significantly from unconventional monetary policy during the crisis,” Holzmann said in an interview published Wednesday. “If we’re forced to take similar measures again in the future, we’ll need reserves in our balance sheet. I therefore suggest the banks deposit more money with us without interest as minimum reserves.”
Asia:
China Property Stocks Slide to Lowest Since 2011 as Rout Extends
Chinese property stocks tumbled to their lowest levels since October 2011 as worries about liquidity and weak housing demand intensified ahead of a weeklong trading break on the mainland.
A Bloomberg Intelligence gauge of developer shares closed down 3.5% on Wednesday. The biggest drag was CIFI Holdings Group Co., which plunged 59% as trading resumed following months of suspension. The gauge is down more than a third for the year, compared with the 9% decline in the broader Hang Seng China Enterprises Index.
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