China central bank interest rate

Share to Twitter Share to Linkedin Topline Federal Reserve Chairman Jerome Powell pledged in testimony before Congress on Wednesday that the central bank is “moving expeditiously” to raise interest rates and remains “strongly committed” to doing so until there is “compelling evidence” that inflation is normalizing. Key Facts In his semiannual testimony on monetary policy to Congress, Powell faced questions from lawmakers about how the central bank will proceed as it looks to combat surging inflation, which remains at 41-year highs. The Fed raised rates by 75 basis points last week—its largest increase since 1994, with Powell also signaling that a similarly large rate hike is likely at the next policy meeting in July. Speaking to Congress on Wednesday, Powell pledged that the Fed wouldn’t hesitate to keep raising rates at a fast clip—and further than projected—if higher inflation continues to persist. “It is essential that we bring … [Read more...] about Powell Says Fed Will Continue Hiking Rates Until There Is ‘Compelling Evidence’ That Inflation Is Slowing

UOB: Room for Bank Negara to hike OPR by another 50bps before end-September - A + A KUALA LUMPUR (June 22): There is growing pressure on Bank Negara Malaysia to hike rates faster in the face of an aggressive US Federal Reserve, while there is widening consensus that global food and energy prices will continue to stay elevated for longer, with any potential supply shocks seen capable of driving prices and inflation even higher. In a note on Wednesday, UOB Global Economics and Market Research cautioned that the key takeaway is that "doing nothing or acting too slow" could sow seeds of more persistent and elevated inflation in the future, with more negative effects on demand and the economy. "Rate hikes would then also need to be sharper and more abrupt in that scenario. There may also be a need to act faster now in order to have sufficient policy buffers in preparation for the next recession (when it happens). A lagged policy response by BNM relative to peers … [Read more...] about Growing pressure on Bank Negara to hike rates faster

- A + A (June 23): Chinese stocks rose to a near four-month closing high on Thursday (June 23), while Hong Kong's share benchmark gained over 1%, as Chinese tech companies and automakers jumped on Beijing's policy support. The market also drew inspiration from a surge in Chinese battery giant Contemporary Amperex Technology Co Ltd (CATL), following its US$6.7 billion (about RM29.52 billion) private placement and China's planned introduction of new stock index derivatives. US and European central banks "have been raising interest rates and shrinking balance sheets, but China has been loosening monetary policies to stabilise growth", said Linus Yip, the chief strategist at First Shanghai Group. In addition, "valuations of China and Hong Kong stocks are lower than their US peers". China's blue-chip index of CSI 300 rose 1.7% to the highest closing level since early March. The Shanghai Composite Index climbed 1.6%, also hitting a near four-month closing high. Hong … [Read more...] about China, HK stocks gain on Beijing’s support to tech, auto

Share to Twitter Share to Linkedin Memories of the Federal Reserve’s 1994 tightening cycle still tend to trigger financial PTSD here in Asia. Under the direction of then-Chairman Alan Greenspan, the Fed doubled short-term interest rates in just 12 months. The ferocity of the moves racked up some serious collateral damage: Mexico’s economic meltdown; the bankruptcy of Orange County, California; the death of 129-year-old bond dealer Kidder, Peabody & Co.; and developing Asia. It took a few years, but the dollar’s powerful rally in response to higher U.S. rates made currency pegs in Bangkok, Jakarta and Seoul impossible to maintain. The resulting devaluations in 1997 set the region back decades in terms of living standards and economic confidence. Now, the Jerome Powell-led Fed seems set to outdo the worst of the Greenspan era. Not because of the magnitude of the rate hikes Team Powell might engineer, but because of how far it’s fallen behind the … [Read more...] about Federal Reserve Is Losing Asia Faster Than In 1994

Gold traded lower on Thursday as a stronger dollar and remarks from U.S. Federal Reserve Chair Jerome Powell about the central bank’s commitment to tame rising prices dimmed its safe-haven appeal. Spot gold fell 0.4% to $1,829.89 per ounce by 1056 GMT. U.S. gold futures inched 0.4% lower to $1,830.70. While the precious metal is considered a hedge against inflation and economic instability, it also contends with the dollar as a safe-store of value. Therefore, a firmer dollar makes greenback-priced bullion more expensive for overseas buyers. [USD/] Gold is expected to face gradual downward pressure and move towards $1,800, with Powell reiterating the rate hike path and the dollar also strengthening, Bank of China International analyst Xiao Fu said. ”Because gold’s a safe haven asset, it will attract buying on (recession risk) demand, but the rising rates are very powerful in terms of impacting other asset classes and including gold.” Close Higher US … [Read more...] about Gold dips as dollar gains upper hand after Powell remarks

(Representative image: Reuters) Dear Reader, A whiff of change wafted through the markets this week. The focus shifted from worrying over inflation to concerns about growth. The advance Purchasing Managers Indices (PMIs) for the current month for the US and the Eurozone showed slowing growth, but while they indicated inflation was cooling in the US, it continued to rise relentlessly in the Eurozone. They also reflected stalling demand and falling business confidence. The New York Fed’s economic model predicted an 80 percent chance of a hard landing for the US. UK consumer confidence hit a record low. In China, housing starts and property transactions reached extreme lows. The worries over an imminent recession in the US, the UK and the Eurozone sent commodity prices sharply lower. Copper prices have moved down dramatically. My colleague Ravi Ananthanarayanan wrote about the dark clouds hovering over steel . Crude oil prices too fell. That dissipated some of the … [Read more...] about MC Pro Weekender | A new narrative

Prateek Agrawal is the Business Head & CIO at ASK Investment Managers “Overall, I would stay focussed on earnings and valuations and policy making in India rather than what is happening elsewhere. This should be especially true because the influence of foreign capital on the Indian market is reducing,"  Prateek Agrawal - Business Head and Chief Investment Officer (CIO) of ASK Investment Managers, told Moneycontrol in an interview. Large FPI selling has been readily absorbed by MFs, insurance, Pension and PF funds and this is a structural change that has taken place, he believes. Agrawal's preferred valuation methodology, at present, is to look at 5-year PE averages and earnings yield to bond yield indicators. "These indicators point to an index target of 18,250 to 18,500 over 2022. This leaves just about 7 percent upside from the present levels," says Agrawal, who has over 27 years of experience in capital markets, with long, distinguished stints in sell side research, … [Read more...] about Daily Voice | With valuations no longer cheap, volatility could recur: Prateek Agrawal of ASK Investment Managers

KUALA LUMPUR: Despite opening higher at the start of the opening bell, the FBM KLCI succumbed to profit taking activities as the key index lingered mostly in the negative territory. At 5pm, the 30-stock index plunged 26.78 points, or 1.84% to 1,431.10. The index opened 3.25 points higher at 1,461.13 this morning. Market breadth turned negative as losers overpowered the gainers on a ratio of 640-to-255 stocks. Traded volumes rose to 2.72 billion shares, valued at RM1.9bil as profit taking activities took control Along with investors' profit-taking, dealers said investors were also concerned about the the risk of recession arising from global inflation. Mercury Securities expects global equities to remain volatile in the short-term amid fears of persistently high inflation forcing central banks across the world to raise rates at a more rapid pace. On Bursa Malaysia, Nestle tumbled RM2 to RM132.50, Malaysian Pacific Industries shed RM1.92 to RM26.86, Kuala Lumpur Kepong lost … [Read more...] about KLCI plunges 26.78 points on heavy selling pressure

It's reality check time and we are opening the holiday-shortened trading week in a bear market in the S&P 500 after U.S. stocks had their worst week last week since March of 2020. The Federal Reserve hiked the federal funds rate by three quarters of a percent last week as it tries to cool inflation. I know, I said that would be "out of character" and "off script" on last week's podcast . So, you know the situation is pretty serious, and the Federal Reserve does not have inflation under control. No central bank does, for that matter. It's going to take aggressive interest rate hikes to get to what the Fed calls a normal rate environment (3.4%), which means we may very well see another 75 basis point hike at the Fed's next meeting in July. While that 3.4% may be normal, if you look at the last 50 years, it is not normal when you look at the past decade, which has been characterized by accommodative monetary policy via low interest rates and low inflation well under 2%. This is new … [Read more...] about Investing in Wine With the NBA’s Elite Players

US Federal Reserve Chair Jerome Powell Jerome Powell, chair of the Federal Reserve, said Wednesday that the central bank was committed to wrestling rapid price increases under control and that it might be able to pull that off without tipping the economy into a painful downturn. This would be “very challenging” to achieve, he said. “We’re not trying to provoke, and don’t think that we will need to provoke, a recession,” Powell said while testifying before the Senate Banking Committee. “But we do think it’s absolutely essential that we restore price stability, really for the benefit of the labor market, as much as anything else.” Powell, testifying before senators Wednesday, will speak to the House Financial Services Committee on Thursday. His trip to Capitol Hill comes at a challenging moment for the central bank. Inflation as measured by the Consumer Price Index is running at 8.6%, the fastest pace in more than four decades, having reaccelerated in May thanks to surging … [Read more...] about Powell says Fed is ‘not trying to provoke’ a recession