Economic Update – Fed Officials Talk Up Rate Hikes, EU Bankers Criticise Trump

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Bloomberg: Many Fed Officials See Rate Hike ‘Fairly Soon,’ Minutes Show

  • Federal Reserve officials expressed confidence they can raise interest rates gradually, while a hike “fairly soon” might be appropriate to avoid the risk of an overheated economy, minutes of Federal Open Market Committee’s latest meeting showed.
  • “Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the committee’s maximum-employment and inflation objectives increased,” the minutes released Wednesday in Washington said.

Market Watch: Fed’s Powell says risks facing economy are now more in balance

  • After years of facing a renewed downturn, the risks facing the U.S. economy are more in balance, allowing the Federal Reserve to gradually raise interest rates, said Federal Reserve Governor Jerome Powell on Wednesday.
  • In a speech to the Forecasters Club of New York, Powell said the economy is moving toward the central bank’s goals of low unemployment and stable inflation.
  • “I expect the economy to continue broadly along its current path, which implies further labor market tightening and inflation edging closer to 2%,” Powell said.

Market Watch: Treasury seriously studying issuing 50-year or 100-year bonds: Mnuchin

  • Treasury Secretary Steven Mnuchin said Thursday he has asked his staff to explore having the U.S. government issue debt maturities as long as 50 years or 100 years.
  • In an interview on CNBC, Mnuchin said he was not ready to make a “formal announcement” of a 50-year or a 100-year bond but added, “I’ve already begun to talk to the staff about looking at that.”
  • “I think it is something that is a very serious issue of whether we should explore, whether we can raise 50- or 100-year money at a very slight premium is something that makes sense for Treasury to look at,” he said.

Alt-Market: In A Battle Between Trump And The Federal Reserve, Who Really Wins?

  • As a part of the increasingly obvious set-up of conservative movements by international banking interests and globalist think-tanks, I have noticed an expanding disinformation campaign which appears to be designed to wash the Federal Reserve of culpability for the crash of 2008 that has continued to fester to this day despite the many claims of economic “recovery.” I believe this program is meant to set the stage for a coming conflict between the Trump Administration and the Fed, but what would be the ultimate consequences of such an event?

Market Watch: EU central bankers blast Trump’s view on trade

  • Two top European central bankers had harsh words about the economic policy coming from the U.S. in remarks Thursday.
  • The establishment of protectionist policies in the U.S. risks undermining a key element to wealth, the head of Germany’s central bank said.
  • “The United States erecting trade barriers leading to other countries becoming more protectionist would, I firmly believe, potentially call into question one of the key pillars of our prosperity,” said Jens Weidmann in the opening of the central bank’s annual report.

CNBC: Treasury Secretary Mnuchin: We’re committed to ‘very significant’ tax reform by August recess

  • Treasury Secretary Steven Mnuchin said Thursday that he wants to see “very significant” tax reform passed before Congress’ August recess, in what could prove a tough task as lawmakers work through a complex agenda.
  • “We want to get this done by the August recess. We’ve been working closely with the leadership in the House and the Senate and we’re looking at a combined plan,” he told CNBC in his first television interview since assuming office.

Bloomberg: Jens Weidmann Says 2019 Rate Expectations Are Not Absurd

 


Reuters: ECB rate setters play down recovery, indicating steady policy

  • Europe’s economic recovery may be picking up speed but underlying inflation remains weak, European Central Bank rate setters said on Thursday, adding to signs that its ultra-loose monetary policy will not be scaled back any time soon.
  • With recent indicators from manufacturing to confidence pointing to accelerating growth, politicians and rate setters in the hawkish camp – notably in Germany – are increasingly calling on the ECB to at least open a discussion about rolling back stimulus.
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