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Fed’s Paese Says She Backed Rate Pause, May Need to Tighten More
Federal Reserve Bank of St. Louis interim president Kathleen O’Neill Paese suggested policymakers should be ready to raise interest rates further if progress on inflation slows. Paese said on Thursday she supported the decision to leave rates steady at the central bank’s last policy meeting but also said it was important for officials to have the option to hike further if needed to cool inflation. “With policy currently exerting modest downward pressure on inflation, and given the balance of risks, we can afford to await further data before concluding that additional policy tightening is appropriate,” Paese ... (full story)
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post: Ransomware attack on ICBC disrupts US Treasury market: FT A ransomware attack on the Industrial and Commercial Bank of China has disrupted the US Treasury market, according to market participants. The Securities Industry and Financial Markets Association told members on…
table post: 30Y auction: biggest tail on record pic.twitter.com/JxHjkq7pgw US treasury auctions off $24 billion of 30 year bonds at a high yield of 4.769% US Treasury auctioned off $24B of 30-year bonds • WI level at the time of the auction: 4.716% • Tail 5.3 basis points: 6-auction average 0.9bps, prev. 3.7bps • Bid-to-Cover 2.24X: 6-auction avg. 2.44x, prev. 2.35x • Dealers 24.73%: 6-auction avg. 12.7%, prev. 18.2% • Directs (a measure of domestic demand) 15.16%: 6-auction avg. 18.6%, prev. 16.7% • Indirects (a measure of international demand) 60.11% : 6-auction avg. 68.6%, prev. 65.1% Auction Grade: F • Tail of 5.3 basis points. Ouch. • The bid to cover is below the 6 month average. • The dealers are stuck with 24.73% well above the 6 month average of 12.7%. Ouch. • Directs - a measure of domestic demand - was well below the 6 month average. Ouch • Indirects - a measure of international demand - was well below the 6 month average. Ouch. There was nothing good about this auction. A look at the treasury curve currently shows: 2-year yield 4.997% up 5.9 basis points 5-year yield 4.625% +10.4 basis points 10-year yield 4.634% +12.6 basis points 30-year yield 4.810% +15.5 basis points
The Japanese Yen continues to trade near the yearly extremes against the US Dollar with USD/JPY struggling just below multi-year resistance. The advance comes amid weakness in the ...
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On November 9, Gita Gopinath, Jerome Powell, Ken Rogoff, Amir Yaron, and Pierre-Olivier Gourinchas will discuss the challenges of monetary policy in a global economy.
Thank you for the opportunity to participate in today's panel discussion. My assigned topic is U.S. monetary policy in the current global inflation episode. I will briefly address the U.S. outlook and then turn to three broader questions raised by the historic events of the pandemic era. U.S. inflation has come down over the past year but remains well above our 2 percent target (figure 1).1 My colleagues and I are gratified by this progress but expect that the process of getting inflation sustainably down to 2 percent has a long way to go. The labor market remains tight, although improvements in labor supply and a gradual easing in demand continue to move it into better balance.2 Gross domestic product growth in the third quarter was quite strong, but, like most forecasters, we expect growth to moderate in coming quarters. Of course, that remains to be seen, and we are attentive to the risk that stronger growth could undermine further progress in restoring balance to the labor market and in bringing inflation down, which could warrant a response from monetary policy. The Federal Open Market Committee (FOMC) is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance. We know that ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further, we will not hesitate to do so. We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening. We are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks, determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time. We will keep at it until the job is done. With that, I will turn to three questions that have arisen from the receding but still elevated inflation we are experiencing today. The first question is, with the benefit of 2‑1/2 years to look back, what we can say about the initial causes and ongoing policy implications of the current inflation. After running below our 2 percent target over the first year of the pandemic, core PCE (personal post: Powell: 'Gratified' by Lower Inflation but Sees 'Long Way to Go' -- WSJ Powell: 'We Are Not Confident That We Have Achieved Such a Stance' -- WSJ post: FED'S POWELL: WE EXPECT GDP GROWTH TO MODERATE IN COMING QUARTERS, BUT REMAINS TO BE SEEN. post: FED'S POWELL: WE ARE ATTENTIVE TO THE RISK THAT STRONGER GROWTH COULD UNDERMINE INFLATION PROGRESS, WHICH COULD WARRANT A MONETARY POLICY RESPONSE. post: FED'S POWELL: IT IS TOO SOON TO KNOW IF POLICY CHALLENGES OF EFFECTIVE LOWER BOUND WILL BE A THING OF THE PAST.
post: FED'S POWELL: A GREATER SHARE OF PROGRESS ON INFLATION AHEAD MAY HAVE TO COME FROM TIGHT MONETARY POLICY, NOT JUST SUPPLY-SIDE IMPROVEMENT. post: FED'S POWELL EMPHASIZES BEING ATTENTIVE TO THE RISKS OF MISINTERPRETATION BY DATA AND THE DANGER OF OVERTIGHTENING. HE NOTES THAT "INFLATION HAS GIVEN US A FEW HEAD FAKES post: FED'S POWELL LEAVES THE STAGE AT THE IMF EVENT AFTER ARRIVAL OF CLIMATE PROTESTORS. post: POWELL RETAKING STAGE AT IMF EVENT; "WHERE WAS I?" #News #Markets #POWELL #live
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- Posted: Nov 9, 2023 1:44pm
- Submitted by:Category: Fundamental AnalysisComments: 0 / Views: 2,621