Abstract:The U.S. Federal Reserve's decision to accelerate reduction of bond purchases is "a well-calibrated" response to rising wage and price pressures but increases risks for emerging markets, IMF spokesman Gerry Rice said on Thursday.
The U.S. Federal Reserve's decision to accelerate reduction of bond purchases is “a well-calibrated” response to rising wage and price pressures but increases risks for emerging markets, IMF spokesman Gerry Rice said on Thursday.
Rice told a news briefing a day after the Fed signaled three rate hikes in 2022 and said it would end pandemic-era bond purchases in March but that the faster pace of Fed monetary policy normalization increases risks faced by emerging market and developing countries that are reliant on dollar funding.
Fed Response 'Well-Calibrated'
“The Federal Reserve has announced a well-calibrated, proportionate response to rising wage and price pressures by accelerating the reduction in its asset purchases and signaling a more front-loaded path for the federal funds rate,” Rice said. “Continuing to set policy in such a data dependent way will help keep inflation expectations anchored.”
“However, this faster pace of Fed normalization does increase the risks faced by countries reliant on dollar funding, especially emerging and developing economies,” Rice said.
The IMF has grown more concerned in recent weeks about inflation leading to a more abrupt tightening of monetary policy in advanced countries, and has urged central banks to contain inflation before wage-price spirals take hold.
On Thursday, the Bank of England became the world's first major central bank to raise interest rates since the coronavirus pandemic hammered the global economy, lifting its Bank Rate to 0.25% from 0.1%.
The Fund on Tuesday had urged the Bank of England to avoid an inaction bias when it comes to raising interest rates, forecasting British inflation at a 30-year high of 5.5% next year, and called for the bank to begin carefully communicating an approach that includes more frequent monetary policy tightening.
For more blockchain news, please download WikiBit - the Global Blockchain Regulatory Inquiry APP.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
According to the US Census Bureau, retail sales in the US rose by 0.6% on monthly basis in February. This reading followed a 1.1% decline registered in the initial month of the year, amounting to $696.7 billion, and fell below the anticipated 0.8% increase. In January, the unemployment rate unexpectedly rose to 3.9% from December's 3.8%, while wage growth slowed in the UK labor market, signaling weaknesses consistent with a broader economic slowdown. In Feb, Canada experienced an unexpected
The article suggests positive prospects for Malaysia's Ringgit (MYR) based on projections by BMI, indicating potential strengthening trends in the latter half of 2024 and early 2025. Factors such as anticipated policy relaxation, stability in yield differentials, and favourable external conditions contribute to this outlook. However, whether this constitutes "good news" for the MYR ultimately depends on various factors, including economic performance, policy decisions, and external developments, which may impact currency movements.
The focus of this week's economic calendar will be the release of U.S. employment data on Friday, as investors hope for signs that the economy is heading for a smooth landing. Following a strong performance for stocks in the first quarter, attention now turns to the beginning of the second quarter. Monitoring of intervention possibilities continues for the yen and the yuan, while market participants keep a close eye on data releases from the Eurozone and China. Here's a rundown of key developments to kickstart your week.
West Texas Intermediate (WTI) oil price pauses its two-day winning streak but is anticipated to conclude the week on a positive note, trading near $77.00 per barrel during the Asian session on Friday.