Under pressure from Wall Street and the White House, the Federal Reserve lowered interest rates on Wednesday for a second straight meeting, but declined to signal if it would continue to drop rates in the future.
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Donald Trump escalated his attacks on China on Friday, bumping up tariffs on Chinese imports and ordering US companies to leave China.
Trump’s announcements on Friday – all on Twitter – came after the president launched another blistering criticism of the Federal Reserve chairman, Jerome Powell, asking: “Who is our bigger enemy, Jay Powell or [China’s] Chairman Xi?”
Continue reading...Signs of a global economic slowdown roiled the markets on Wednesday as shares dived and investors fled to bonds with such intensity that short-term yields rose above longer-term ones for the first time since the crisis of a decade ago – an inversion many market-watchers saw as a strong signal of an approaching recession.
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Continue reading...The US Federal Reserve snubbed Donald Trump’s call for a cut in interest rates on Wednesday as the central bank noted economic activity was still rising at “a solid rate”.
After a two-day meeting the Fed board unanimously decided to hold rates steady at a range between 2.25% and 2.5%.
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Continue reading...Central banks in spotlight amid Brexit uncertainty and growth concerns
The Bank’s reticence to raise rates has been hinted at by Gertjan Vlieghe and Silvana Tenreyro, two of the nine-member monetary policy committee.
Weaker growth prospects have come on top of concerns about Brexit, according to Martin Beck, lead UK economist at Oxford Economics, a consultancy. He expects a 9-0 vote to keep policy unchanged, saying:
The economy’s recent performance has been broadly in line with the MPC’s expectations. But public pronouncements by some committee members on downside risks have indicated a dovish shift around the pace of future rate hikes.
In light of the continued failure to get a Brexit deal through Parliament, Brexit uncertainty remains a key block on action by the MPC.
The Bank of England will also be in action later this week, with a monetary policy announcement on Thursday at midday.
Anything other than a unanimous vote to keep interest rates on hold would be a shock, for fairly obvious reasons.
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