Latest news with #monetaryPolicy
Bloomberg
10-07-2025
- Business
- Bloomberg
Fed's Waller Backs Balance Sheet Runoff, Shift in Composition
Federal Reserve Governor Christopher Waller said the US central bank should continue reducing the size of its balance sheet, including shifting its composition to include more short-term assets, but that it likely doesn't need to fall too much. 'I believe we can likely continue to let a share of maturing and prepaying securities roll off our balance sheet for some time, reducing reserve balances,' Waller said Thursday in remarks prepared for an event hosted by the Dallas Fed.
Yahoo
10-07-2025
- Business
- Yahoo
Fed's Waller sees some ways to go in shrinking central bank's holdings
By Michael S. Derby NEW YORK (Reuters) -Federal Reserve Governor Christopher Waller said on Thursday the U.S. central bank still has some ways to go in shrinking the size of its holdings, in comments that offer a potential resting size for the ongoing drawdown, while flagging a desire to move the holdings to shorter-dated securities. "Given my rough estimate of the level of reserves needed to be ample, I believe we can likely continue to let a share of maturing and prepaying securities roll off our balance sheet for some time, reducing reserve balances," Waller said in the text of a speech to be presented at the Dallas Fed. Against a Fed balance sheet that now stands at $6.7 trillion, with $3.3 trillion in bank reserves, Waller said the ongoing effort to reduce the holdings may have a visible target in view. Waller said a "hypothetical" Fed balance sheet might stand at $5.8 trillion, with $2.7 trillion in reserves and $780 billion in the Treasury Department's account with the central bank. He noted money market turbulence in the fall of 2019 suggests a drop in reserves to below 8% of GDP is an issue, so that metric helped inform his rough estimate of where overall Fed holdings might need to fall. After more than doubling the size of its balance sheet to a peak of $9 trillion due to COVID-19 era bond purchases, the Fed has over the last three years been steadily shedding Treasury and mortgage bonds as part of a broader normalization of monetary policy. 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
Bloomberg
10-07-2025
- Business
- Bloomberg
African Central Banks Weigh Policy Options Amid Trump's Tariffs
Key African economies are set to stake out different approaches to interest rates in the coming weeks as they gauge the impact of US President Donald Trump's new tariff proposals and their domestic influences on their economies and inflation. 'Upcoming monetary policy decisions across African central banks will be shaped by a common theme: the tension between easing inflation and persistent structural vulnerabilities,' according to Angelika Goliger, EY Africa chief economist. 'While headline inflation is receding in several economies, the pace and scope of monetary easing will vary significantly, reflecting domestic political dynamics, external risks, and reform agendas.'
Yahoo
10-07-2025
- Business
- Yahoo
ARC Capital Venture Analysts Weigh RBA's Pause at 3.85% Amid Mixed Inflation Signals
Australian Market Reactions and Policy Implications Unpacked as ARC Capital Venture Interprets Central Bank's Strategic Hold in a Complex Inflationary Landscape MELBOURNE, AU / / July 9, 2025 / ARC Capital Venture (Australia) Pty Ltd, a specialist fixed income and private market investment firm serving sophisticated Australian investors, provides commentary following the Reserve Bank of Australia's unexpected policy decision. In a decision that surprised markets and defied consensus forecasts, the Reserve Bank of Australia (RBA) opted to hold the official cash rate steady at 3.85%, pausing its easing cycle after two consecutive reductions earlier this year. The move, supported by a 6-3 majority within the board, reflects a nuanced response to a maturing disinflationary trend and resilient domestic demand. Key Takeaways Inflation Trajectory Easing: The RBA acknowledged that underlying inflation has decelerated meaningfully, with core measures reaching 2.4% YoY in May, the lowest level since late 2021. This suggests monetary policy has gained traction, particularly in curbing demand-driven price pressures. Labour Market Remains Robust: Despite a cooling housing sector and patchy retail activity, employment metrics remain strong. The unemployment rate continues to hover near historical lows, and wage growth is proving sticky, providing a buffer to household consumption. Board's Stance: Data-Dependent: For the first time, the RBA published a breakdown of board member votes, signalling a shift toward greater transparency. The majority's preference to pause was framed as a prudent wait-and-see approach ahead of the Q2 CPI release later this month, which will be pivotal in shaping the policy path into year-end. In our view, the RBA's decision marks an inflection point in the easing cycle narrative - one that prioritizes policy credibility over premature accommodation. While inflation appears to be converging toward the 2-3% target range, structural components such as services inflation, housing input costs, and administered pricing remain elevated and could re-accelerate if policy becomes too loose too quickly. "We believe this hold is not an end to easing, but a recalibration. It underscores that further cuts will be contingent on persistent evidence that inflation is not just falling, but staying anchored - particularly in sectors less sensitive to interest rates," said Marios Anastasiou, Chief Executive Officer at ARC Capital Venture (Australia) Pty Ltd. The RBA's approach maintaining optionality while reinforcing its inflation-fighting mandate resonates with recent positioning by other global central banks navigating similar post-peak inflation environments. The market's expectation for up to two more cuts by year-end remains intact, but conviction has clearly diminished. Implications for Investors Bond Markets: Yields on Australian government bonds rose slightly following the announcement, with traders revisiting pricing for a September cut. We continue to see medium-dated government and investment-grade corporate bonds as attractive in this environment, especially as real yields remain positive. Mortgage and Property Sector: While borrowers may feel the disappointment of no immediate relief, we caution against over leveraging in anticipation of imminent rate cuts. Refinancing into more competitive loan packages and managing household liquidity remain prudent. Equities and Allocation: The RBA's pause supports a soft-landing thesis, but earnings sentiment will hinge on real economic momentum and forward inflation reads. We maintain a selective overweight in income-generating equities and defensive sectors that benefit from stable rates. With four more monetary policy meetings scheduled this year - the next on Aug. 12 - investors should brace for a data-dependent and gradualist central bank. The road to "neutral" remains long, but so too does the runway for long-term allocation opportunities in fixed income and quality equities. ARC Capital Venture (Australia) Pty Ltd (ABN 97 687 134 121 | AFS Representative No. 001315577) is a Corporate Authorised Representative of Titan Securities Pty Ltd (AFSL No. 307040). The information contained in this release is general in nature and does not take into account your investment objectives, financial situation or particular needs. Before making any investment decision, you should consider whether the information is appropriate to your circumstances. Investment in financial products involves risk, and past performance is not a reliable indicator of future results. ARC Capital Venture (Australia) Pty Ltd recommends that you seek independent financial, tax, and legal advice before acting on any information provided. Contact Information Max Harrington Head of 3 9998 0440 SOURCE: ARC Capital Venture (Australia) Pty Ltd View the original press release on ACCESS Newswire Sign in to access your portfolio
The Standard
10-07-2025
- Business
- The Standard
Fed minutes show little support for interest rate cut later this month
The Federal Reserve building is seen in Washington, U.S., January 26, 2022. REUTERS/Joshua Roberts/File Photo
