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Wall Street Journal
a day ago
- Business
- Wall Street Journal
Watch Live: Fed Chair Powell to Talk Policy With Global Central-Bank Chiefs
Federal Reserve Chair Jerome Powell is participating in a 9:30 a.m. ET panel on central-bank policy this morning. Watch here . Powell is speaking at the 2025 ECB Forum on Central Banking in Sintra, Portugal alongside his counterparts from monetary authorities in the eurozone, the U.K., Japan and South Korea.
Yahoo
a day ago
- Business
- Yahoo
Euro zone facing increased inflation volatility, Lagarde says
SINTRA, Portugal (Reuters) -Uncertainty is bound to remain a key feature of the global economy, likely making inflation more volatile and requiring the ECB to act more forcefully to keep prices around its target, ECB President Christine Lagarde said on Monday. The ECB unveiled an updated strategy on Monday and concluded that major deviations from its target in either direction would require "appropriately forceful or persistent" policy action to ensure price growth comes back to 2%. Explaining this conclusion, Lagarde argued that the global environment had changed fundamentally in the post-pandemic years, as firms changed prices more quickly in this new period of uncertainty and supply shocks. "The world ahead is more uncertain – and that uncertainty is likely to make inflation more volatile," Lagarde told the ECB Forum on Central Banking in Sintra, Portugal. Inflation in the euro zone is now around 2%, right on the bank's target, after a decade of first undershooting this figure despite massive stimulus, then overshooting it. While the ECB sees inflation staying around these levels over the next several years, Lagarde admitted there were risks as corporate pricing behaviour has changed. "Firms tend to react more quickly to shocks – especially supply ones – in order to protect against potential future losses," Lagarde said in a speech. "They are more likely to adopt more flexible pricing strategies, which means prices may respond not just to major shocks, but also to smaller frictions and local disruptions." Another problem was that pricing adjustment may not be linear, meaning that inflation could quickly accelerate or slow. The way to tackle such risks, Lagarde argued, was by acting forcefully early, including tightening policy quickly to prevent a feedback loop between prices and wages. Similarly, early action against too-low inflation would minimise the time the ECB would have to spend at ultra-low interest rates. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
3 days ago
- Business
- CNBC
The global week ahead: A hectic half first heralds a volatile second
"Politics isn't wagging the tail – it's shaking the entire dog." These strong words from one wealth manager to CNBC last week capture a hectic first half of trading. They also set the stage for an uncertain second half, where "geoeconomics" looks set to remain a dominant market force. This week, expect attention to return to monetary policy, as central bankers from across the globe — who have kept their heads down amid political tensions — prepare to speak at the ECB Forum in Sintra, Portugal. A lot has happened in the last six months, with trade tensions and truces sending equity markets across the globe haywire. The VIX volatility index — also known as the Wall Street fear gauge — spiked in April as tariff threats, followed by tariff pauses, caused huge intraday swings across major indices. Meanwhile, "black swan" moments in the Middle East also kept investors on edge. Amid all the uncertainty, some stock markets showed remarkable resilience: Germany's Dax remains the outperformer in Europe, up over 18% so far this year, followed by London's FTSE 100 up around 9%, while the French CAC 40 lags with around 5% gains. But what does this all mean for trading in the second half of the year? Goldman Sachs warns that, "elevated policy uncertainty paired with a worsening macro backdrop are likely to support higher equity volatility in the next months."As Goldman's warning rings loudly in investors' ears, the stage is set for central banks to return to the limelight. This week, the town of Sintra in Portugal plays host to the annual ECB Forum, where European central bankers are joined by their international counterparts to exchange views on current policy issues. The sun may well be shining in Portugal — but President Donald Trump's recent comments will no doubt cast a shadow over the meeting, as he continues to put unprecedented pressure on Federal Reserve Chair Jerome Powell. Just last week, Trump's name-calling of Powell ramped up, sparking talk of a so-called "shadow Fed chair," who could keep an eye on things until taking over as chair next year. Powell also put the pressure on his monetary policy peers, calling on central bankers to hold steady until they see the impact of trade tariffs: "We are well positioned to wait and learn more about the likely course of the economy before considering any adjustments to our policy stance." Europe will need to decide how much it lets the U.S. approach dictate its policy, with ECB President Christine Lagarde opening proceedings in Sintra with a speech on Monday evening. Expect a punchy tone; her recent op-ed in the Financial Times saw her call for the euro to take advantage of the current environment and "gain global prominence." Next Friday marks the first anniversary of the Labour Party taking power in the U.K., following 14 years of Conservative rule. A landslide victory saw a jubilant Labour return to Downing Street with the promise of change and growth. But the honeymoon period was short-lived. Fast-forward 12 months and Prime Minister Keir Starmer looks set to reach his first year in office with plummeting approval ratings which put him below his rival party leaders, including Reform's Nigel Farage, Liberal Democrat Sir Ed Davey and Conservative leader Kemi Badenoch. Starmer has faced a lot of external pressure, ranging from a public spat with Elon Musk to a slew of foreign policy challenges in Ukraine and the Middle East. Even three trade deals — with Europe, India and the very first U.S. agreement — did little to improve his popularity. But the economic challenges at home are causing the most discontent, with pressure even from within his own party to review certain reforms.
