Latest news with #policyMeeting
Yahoo
25-06-2025
- Business
- Yahoo
Most Hawkish BOJ Member Flags Rate Hike Risk as Inflation Gains
(Bloomberg) -- The Bank of Japan's most hawkish member said it may be necessary to raise interest rates should inflation risks rise even if economic uncertainty lingers. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags 'When the likelihood of achieving the price stability target increases, or when upside risks to prices grow, I believe that the bank may face a situation where it should act decisively, despite heightened uncertainties,' Naoki Tamura said Wednesday in a speech to local business leaders in the northeast city of Fukushima. He spoke soon after the release of a summary of opinions from the BOJ's policy meeting last week. The brief record showed policymakers saw little need to rush on their next rate hike along with a broadening view that price gains have been stronger than expected, indicating a chance the central bank could revise up its inflation forecasts at next month's policy meeting. The BOJ is waiting to see the impact of US tariff measures and how trade negotiations between Japan and the US play out, and has cited 'extremely' high uncertainty ahead in recent communications. Tamura said he doesn't expect the situation will be 'entirely cleared up.' Speaking to reporters in the afternoon, Tamura said it's unlikely the bank would raise rates while the trade talks are still underway, although the chance of a hike isn't zero if authorities fear they face the risk of falling behind the curve to address inflation. 'There is a possibility,' Tamura said. 'But the likelihood isn't that high in reality for upside prices risks to rise so much when the talks are underway.' Tamura's remarks in the morning helped strengthen the yen against the US dollar temporarily as they suggested the central bank could move earlier on rates than a majority of traders expect. In the afternoon, his comments weakened the yen as they suggested no imminent policy action. Tamura has been a consistent hawk, and at the December 2024 meeting at which the BOJ held rates steady he was the lone dissenter in favor of a hike. Governor Kazuo Ueda's board raised borrowing costs to 0.5% at the following meeting in January. On Wednesday Tamura said that recent inflation data have been stronger than expected. Japan's key price measure hit a fresh two-year high in May, leaving the Asian nation with the fastest price gains among Group of Seven economies. In a February speech, Tamura, a former senior executive at Sumitomo Mitsui Financial Group, said he estimates that Japan's neutral rate is at least around 1% and that borrowing costs need to be set around that level when the inflation target is met. The central bank currently expects to meet its sustainable inflation goal around the second half of a three-year projection period ending in March 2028. Tamura flagged the possibility it may happen sooner. 'I believe there is a good possibility that the price stability target will be achieved earlier than expected,' Tamura said. Traders are pricing in around a 30% chance of a rate hike by the October meeting and a more than 70% probability of an increase by year-end, according to overnight index swaps. (Updates with comments from Tamura's afternoon press conference from the sixth paragraph.) Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P.
Yahoo
25-06-2025
- Business
- Yahoo
Most Hawkish BOJ Member Flags Rate Hike Risk as Inflation Gains
(Bloomberg) -- The Bank of Japan's most hawkish member said it may be necessary to raise interest rates should inflation risks rise even if economic uncertainty lingers. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags 'When the likelihood of achieving the price stability target increases, or when upside risks to prices grow, I believe that the bank may face a situation where it should act decisively, despite heightened uncertainties,' Naoki Tamura said Wednesday in a speech to local business leaders in the northeast city of Fukushima. He spoke soon after the release of a summary of opinions from the BOJ's policy meeting last week. The brief record showed policymakers saw little need to rush on their next rate hike along with a broadening view that price gains have been stronger than expected, indicating a chance the central bank could revise up its inflation forecasts at next month's policy meeting. The BOJ is waiting to see the impact of US tariff measures and how trade negotiations between Japan and the US play out, and has cited 'extremely' high uncertainty ahead in recent communications. Tamura said he doesn't expect the situation will be 'entirely cleared up.' Speaking to reporters in the afternoon, Tamura said it's unlikely the bank would raise rates while the trade talks are still underway, although the chance of a hike isn't zero if authorities fear they face the risk of falling behind the curve to address inflation. 'There is a possibility,' Tamura said. 'But the likelihood isn't that high in reality for upside prices risks to rise so much when the talks are underway.' Tamura's remarks in the morning helped strengthen the yen against the US dollar temporarily as they suggested the central bank could move earlier on rates than a majority of traders expect. In the afternoon, his comments weakened the yen as they suggested no imminent policy action. Tamura has been a consistent hawk, and at the December 2024 meeting at which the BOJ held rates steady he was the lone dissenter in favor of a hike. Governor Kazuo Ueda's board raised borrowing costs to 0.5% at the following meeting in January. On Wednesday Tamura said that recent inflation data have been stronger than expected. Japan's key price measure hit a fresh two-year high in May, leaving the Asian nation with the fastest price gains among Group of Seven economies. In a February speech, Tamura, a former senior executive at Sumitomo Mitsui Financial Group, said he estimates that Japan's neutral rate is at least around 1% and that borrowing costs need to be set around that level when the inflation target is met. The central bank currently expects to meet its sustainable inflation goal around the second half of a three-year projection period ending in March 2028. Tamura flagged the possibility it may happen sooner. 'I believe there is a good possibility that the price stability target will be achieved earlier than expected,' Tamura said. Traders are pricing in around a 30% chance of a rate hike by the October meeting and a more than 70% probability of an increase by year-end, according to overnight index swaps. (Updates with comments from Tamura's afternoon press conference from the sixth paragraph.) Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. 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
CNA
17-06-2025
- Business
- CNA
Bank of Korea to lower interest rates cautiously, minutes show
SEOUL :Board members of South Korea's central bank said it was necessary to continue to ease monetary policy to support economic growth, but with caution over associated risks, minutes of their May 29 policy meeting showed on Tuesday. Last month, the Bank of Korea lowered interest rates by 25 basis points to 2.50 per cent in an unanimous decision.
Arab News
08-05-2025
- Business
- Arab News
US Fed sees rising risks to economy as it leaves rates unchanged
WASHINGTON: The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the US economic outlook as its policymakers grapple with the impact of President Donald Trump's tariffs. At this point, Fed Chair Jerome Powell said, it isn't clear if the economy will continue its steady pace of growth, or wilt under mounting uncertainty and a possible coming spike in inflation. With so much unsettled about what Trump will ultimately decide and what of that survives possible court and political battles, 'the scope, the scale, the persistence of those effects are very, very uncertain,' Powell said in a press conference at the end of a two-day policy meeting. 'So it's not at all clear what the appropriate response for monetary policy is at this time ... It's really not at all clear what it is we should do,' he said, adding: 'I don't think we can say which way this will shake out.' It was Powell's subtle way of saying the US central bank, a key actor in shaping the economy, was effectively sidelined until Trump's sweeping policy agenda takes full effect. The Fed's policy statement, which held the benchmark overnight rate steady in the 4.25 percent-4.50 percent range, noted that since the central bank's last meeting in March 'uncertainty about the economic outlook has increased further,' and that risks were increasing that both inflation and unemployment could increase. Thomas Simons, chief US economist at Jefferies, said the language downplayed just how much disruption had occurred since the Fed's March 18-19 meeting, and how unpredictable the outlook had become. 'All of the 'Liberation Day' tariff news, the April 9 announcement of a 90-day delay, the back and forth on trade deals and tariff exemptions in the headlines, and the resultant negativity expressed in business and consumer surveys make it impossible to judge what the economic outlook is, let alone whether the skew of risks around it has changed,' Simons wrote, calling Powell 'predictably noncommittal' given the situation. Risks to dual mandate The Fed's statement, and much of Powell's comments to reporters as well, vouched for the economy's continued resilience, with job gains continuing and the economy still growing at a 'solid pace.' The recently reported decline in gross domestic product in the first quarter, Powell said, was skewed by a record rush of imports as businesses and households tried to front-run expected import taxes, with measures of domestic demand still growing. But even that data demonstrated the dilemma facing the Fed. The rush of front-loading to buy goods and stock shelves won't likely be repeated, and it is unclear whether underneath it all demand and investment are starting to weaken — and how that will eventually express itself in 'hard' data on inflation and jobs. The Fed's own 'Beige Book' of anecdotal reports about the economy recently gave a dour picture of suspended business deals, falling demand, and rising prices. 'Businesses and households are concerned ... and postponing economic decisions of various kinds,' Powell said. 'If that continues and nothing happens to alleviate those concerns, you would expect that to show up in economic data.' The Fed can't respond, however, until it is clear which way the economy pivots, and how it assesses the risks to its two goals of holding inflation to 2 percent and sustaining maximum employment. 'The current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments,' Powell said, affirming a wait-and-see approach that has become the central bank's calling card in the first months of the Trump administration. US stock prices extended gains after the release of the Fed's unanimous policy decision and ended higher on the day. Treasury yields fell, while the dollar gained against a basket of currencies. Holding pattern The direction of Fed policy will depend on which of the job and inflation risks develop, or, in the more difficult outcome, whether inflation and unemployment increase together and force the central bank to choose which risk is more important to try to offset with monetary policy. A weaker job market would typically strengthen the case for rate cuts; higher inflation would call for monetary policy to remain tight. 'For the time being the Fed remains in a holding pattern as it waits for uncertainty to clear,' said Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, adding that 'recent better-than-feared jobs data has supported the Fed's on-hold stance, and the onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle.' The Fed's policy rate has been unchanged since December as officials struggle to estimate the impact of Trump's tariffs, which have raised the prospect of higher inflation and slower economic growth this year. When policymakers last updated their economic and policy projections in March, they anticipated reducing the benchmark rate by half a percentage point by the end of this year.
