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ECB's Holzmann: Certain chance that ECB won't cut rates this year
❖ ECB'S HOLZMANN: CERTAIN CHANCE THAT ECB WON'T CUT RATES THIS YEAR
— *Walter Bloomberg (@DeItaone) February 8, 2024
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Thank you for that kind introduction and for having me here today. I thought I would speak about the economy and where we may be headed. I caution you these are my thoughts alone and not necessarily those of anyone else on the Federal Open Market Committee or in the Federal Reserve System. The recent data have been remarkable. Twelve-month PCE inflation is at 2.6 percent. Core is down to 2.9 percent. Six-month and even seven-month core inflation are even lower, just below our target at 1.9 percent. The 12-month numbers will almost assuredly get even better over the next five months, as we cycle over last year’s inflationary winter and spring. At the same time, contrary to most forecasts (including mine), the progress on inflation has come while the economy has remained healthy. The unemployment rate remains low at 3.7 percent. On Friday, we added another 353,000 jobs. And GDP growth in the last quarter of 2023 was an impressive 3.3 percent. If you had told me a year ago we would end 2023 with 2.6 percent inflation and 3.7 percent unemployment, I would have taken it. As you may know, I don’t like to depend solely on published data. I spend a lot of my time talking to businesses across the Fifth District. And there, too, I’m hearing good news. With the exception of interest-sensitive sectors like banking and real estate, the tone has shifted decisively away from talking about a recession. They may not be hiring as much, but they’re not firing either. And while price-setters continue to try, they seem more and more convinced that price increases will be smaller, less frequent, and less likely to stick. I take a lot of signal from the major consumer products manufacturers. In their most recent earnings reports, I was happy to see their realized price increases have finally moderated, from double digits a year ago to low single digits today. So now the phrase “soft landing” enters every conversation, suggesting a scenario where inflation returns to our 2 percent targ post: <=USD>: *BARKIN REITERATES FED CAN TAKE ITS TIME BEFORE CUTTING RATES *BARKIN: DEMAND, INFLATION, JOBS ON `GOOD' PATH BUT NO CERTAINTY *BARKIN:SENTIMENT REBOUND, LOOSER FINANCIAL CONDITIONS POSE RISK *BARKIN: TIGHT JOB MARKET MEANS WAGE PRESSURE LIKELY TO PERSIST post: Fed's Barkin: Ample Evidence Americans Continue To Spend - In Aggregate, Past Rate Hikes Still Working Way Into Economy post: Fed's Barkin: Would Like To See A Broadening In Forces Lowering Inflation - Would Like To See Rents, Service Prices Cool More post: FED'S BARKIN Q&A AT ECON CLUB OF NY: WITH ECONOMY AS STRONG AS IT IS, 'HARD TO FEEL URGENCY ON TAKING RATES DOWN' #InterestRates
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- Posted: Feb 8, 2024 12:06pm
- Submitted by:Category: Low Impact Breaking NewsComments: 0 / Views: 2,287