US Fed On Hold (But For How Long?)
ECB - 3.50% in December?
BOJ Taking Everything into Account
US Fed On Hold (But For How Long?)<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
William Poole, who has been one of the more hawkish on the FOMC, has been tapped to temporarily replace moderate Jack Guynn as a voter on Wednesday:
William Poole, St. Louis Federal Reserve President
The current economic outlook is such that policy makers are just as likely to raise rates as lower them. The outlook for the federal funds rate is approximately symmetrical. October 17, 2006
Said that bad things happen when inflation gets out of hand. He did acknowledge, though, that inflation has been more stable in recent years. October 19, 2006
Robert Kimmitt, <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />US Deputy Treasury Secretary
It's true we've seen a certain slowdown due to the housing market, but in the end we believe that in the short and medium term by controlling inflation and unemployment, economic growth in the US will continue to be good. October 23, 2006
Janet Yellen, San Francisco Federal Reserve President
It makes sense for the Federal Reserve to hold monetary policy stable for a time because the full effect of 17 increases to the federal funds rate starting in 2004 has yet to be seen. October 17, 2006
ECB - 3.50% in December?
Central bankers have talked up second-round inflation effects quite a bit, but EU Commissioner Almunia doesnt seem so concerned:
Jean-Claude Trichet, ECB President
In a letter to a member of the European Parliament, Mr. Trichet said the ECB is monitoring price expectations and that it is decisive that the Governing Council avoids the emergence of second-round effects and monitors closely the anchoring of inflation expectations, as well as developments in the wage formation process. He also added that while inflation declined sharply in September, it has been at elevated levels for some time and that the ECB is firmly committed to its mandate of delivering price stability over the medium term. October 24, 2006
Nout Wellink, ECB Governing Council Member
With inflation above 2 percent, the real interest rate in a historic perspective is still very low?[The economy] is gradually reaching full capacity, which will of course somewhat increase pressure on wages and prices. October 20, 2006
Jose Manuel Gonzalez-Paramo, ECB Executive Board Member
Everything points to inflation rising once again at the end of this year and the beginning of next. It is likely that 2006 will close with inflation of over 2 percent and that this will be repeated in 2007. The ECB must continue to follow this very attentively. October 19, 2006
Klaus Liebscher, ECB Governing Council Member
Noted that he saw increased risk of second round effects, and that the ECB would act to preempt them. Additionally, he said there is no reason to change market expectations regarding rate hikes, but that he does not have a preconceived idea about 2007, that the ECB doesn't pre-commit on interest rates and that much will depend on the December staff forecast. October 18, 2006
Joaquin Almunia, EU Monetary Affairs Commissioner
There is no reason to imagine that inflation is going to pick up. Our inflation forecasts for this are year are moderate forecasts, at 2.3 percent. October 19, 2006
BOJ Taking Everything into Account
<?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" />
While Governor Fukui maintains that the economy and prices are the BOJs focus, it appears that yen weakness (and its causes) are an issue as well:
Toshihiko Fukui, Bank of Japan Governor
We will continue to aim to achieve sustainable economic growth with stability in prices?As for the outlook for the economy, a long-lasting economic expansion on the basis of a favorable mechanism led by production, income and consumption will continue. October 19, 2006
We will conduct policy while carefully examining the economy and prices. October 20, 2006
The domestic economy is expanding moderately and that such prolonged economic expansion is expected to continue. October 20, 2006
Hiroshi Watanabe, Japanese Vice Finance Minister
I see no reason for a further deterioration in the yen given the strength in the Japanese economy. October 23, 2006
CPI still remains very weak even though it is positive?The end of deflation is in sight. October 23, 2006
Tokiko Shimizu, Bank of Japan Financial Markets Department Director
It is not true that we've recently started a survey specifically on the carry trade. The BOJ is monitoring movements of financial markets daily and we are interested in the carry trade too. October 18, 2006
