Avsnitt
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Financial market-based measures and surveys proved more reliable than macroeconomic models at estimating the neutral real rate of interest during the abrupt economic fluctuations of the pandemic, European Central Bank economists told MNI, adding that r-star is now at similar levels to pre-Covid times.
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Saknas det avsnitt?
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Former Fed board governor Kevin Warsh thinks the Fed's signaling of rate cuts this year prematurely loosened financial conditions, making its own job of bringing inflation back to 2% harder.
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Former Ontario forecaster and Canada Director at Oxford Economics Tony Stillo says the central bank will want to avoid public backlash against any misstep towards lower interest rates, and says that will delay a rate cut until June and keep it well above neutral all year.
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Federal Reserve officials will probably wait until midyear before lowering interest rates despite market hopes for cuts as early as March, as inflation data stay choppy in coming months before resuming a downward trend, former Fed board economist Seth Carpenter told MNI
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The eurozone economy is likely to avoid recession, but inflation should slow sufficiently for the European Central Bank to reduce its benchmark deposit rate by around 150 basis points this year, former ECB economist Riccardo Trezzi told MNI.
Markets are moving rapidly to price in cuts, noted Trezzi, who said that while January’s Governing Council meeting should produce little change the possibility of downward surprises to inflation meant that cuts could begin to be considered by as early as March.
“When markets understand that something has changed, in this case for the good, they always go ahead of the curve and try to anticipate because it’s the way you make money,” said Trezzi, who worked on the Federal Reserve Board’s inflation desk before taking on a similar role at the ECB. -
The Fed's next move is likely a cut but won't come until later in 2024 because policymakers must be totally sure inflation is not going to plateau around 3% or even reverse recent declines, former St. Louis Fed President James Bullard tells MNI.
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Stanford Graduate School of Business professor Darrell Duffie cheers the SEC's expansion of mandated central clearing in U.S. Treasury trades, saying the landmark new rule will ultimately lead to a significant improvement in market liquidity.
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Export Development Canada Chief Economist Stuart Bergman discusses how sentiment about the global economy has weakened and why companies still face difficulties with inflation.
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The Federal Reserve will remain reluctant to cut interest rates too soon or too quickly lest it allow recent progress on inflation to reverse, Priya Misra of JP Morgan Asset Management tells MNI.
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The Federal Reserve is likely done raising interest rates as inflation continues a steady decline and policymakers worry about the lagged effects of past hikes, former Kansas City Fed President Esther George tells MNI.
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The European Central Bank hopes to publish a new series of questions about firms’ expectations for consumer price inflation as part of its Survey on the Access to Finance of Enterprises next year, and to increase the frequency of SAFE to quarterly from twice a year, ECB senior lead economist Annalisa Ferrando told MNI. A quarterly SAFE will better coordinate it with the ECB’s Bank Lending Survey, Ferrando said in an MNI podcast together with fellow senior lead economist Petra Kohler-Ulbrich.
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The Federal Reserve could be done raising interest rates but only if the economy slows and inflation keeps cooperating, former New York Fed economist Matthew Raskin tells MNI. There's a good chance this will not happen in coming months, forcing the Fed to raise rates further, potentially to 6% or higher.
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Ahead of Canada's fall fiscal update, Institute of Fiscal Studies and Democracy President Page sees limited fiscal room even as Canada's finances outshine G7 peers. The government has shown little inclination to set genuine fiscal targets but appears on track for limited moves to tackle voter anger over a housing squeeze, the former parliamentary budget officer says.
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The Fed has already raised interest rates too far but could even hike them further given misplaced concerns about inflation persistence, ex-Boston Fed research director Jeff Fuhrer tells MNI. We also discuss his new book, "The Myth That Made Us."]
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The Federal Reserve's desire to pause rate hikes is driven by a belief that recent disinflation would proceed unabated, and could "turn on a dime" if progress appears to stall as it did in the August CPI report, former Fed board economist Steven Kamin tells MNI.
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Tyler Meredith says housing squeeze "has become a real metaphor issue of middle-class success” and Justin Trudeau's Liberal government needs a large-scale solution to regain political support lost to the Conservatives. Public anger also radiates towards the Bank of Canada but the central bank isn't being singled out, he says.
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Elliot Hughes at Summa Strategies discusses Canadian Prime Minister Justin Trudeau's efforts to convince voters upset over the surge in housing costs, saying his recent comments suggest a potential expansion of more direct federal involvement in homebuilding.
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Robert Asselin, adviser to the Business Council of Canada and previously to the prime minister and finance minister, says the central bank likely needs high-for-long interest rates that will further crimp badly needed investment. He also says a recent cabinet shuffle put communication ahead of strong policy as Justin Trudeau girds for the next election.
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The Federal Reserve is likely to keep tightening monetary policy despite an economy that is already effectively in a downturn, which is being masked by rising consumer borrowing and strong fiscal policy, former Dallas Fed advisor Danielle DiMartino Booth told MNI.
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