Sudden departure of India’s central bank chief raises questions

The sudden departure of India’s central bank governor Urjit Patel on Monday has raised a number of questions about the Reserve Bank of India’s ongoing struggles. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector. Patel’s resignation comes less than three years after his predecessor Raghuram Rajan was not confirmed for a second term as central bank governor in 2016, likely due to growing tensions between him and India’s gov


The sudden departure of India’s central bank governor Urjit Patel on Monday has raised a number of questions about the Reserve Bank of India’s ongoing struggles. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector. Patel’s resignation comes less than three years after his predecessor Raghuram Rajan was not confirmed for a second term as central bank governor in 2016, likely due to growing tensions between him and India’s gov
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Sudden departure of India's central bank chief raises questions

The sudden departure of India’s central bank governor Urjit Patel on Monday has raised a number of questions about the Reserve Bank of India’s ongoing struggles.

The primary focus for investors is whether Patel resigned due to growing pressure from India’s government to lower rates and conduct looser monetary policy as the countdown to next year’s general election kicks off. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector.

“Investors’ concerns over the independence of the RBI are now higher than ever, but it is unlikely that the government will name another figure with a reputation for independence to lead the Bank,” said Sasha Riser-Kositsky, a senior analyst at Eurasia Group.

Patel’s resignation comes less than three years after his predecessor Raghuram Rajan was not confirmed for a second term as central bank governor in 2016, likely due to growing tensions between him and India’s government.

“Investor confidence will be roiled due to this (losing two independently minded central bank governors within one term is not a great image for foreign investors),” said Akhil Bery, a senior research associate in McLarty Associates’ India & South Asia practice.

Experts say the timing of Patel’s departure from his post as central bank governor comes at a challenging time for two reasons.

India’s government lead by Prime Minister Narendra Modi is facing reelection next year. One factor that helped Modi in 2014 was the backing of investors who supported his pro-business policies. However analysts say Patel’s departure could have an impact on Modi’s image.

On Tuesday, results from four state elections in India will shed light on whether Modi is losing support from his base ahead of the national election in April 2019.

At same time, India is trying to attract new investors and companies while also fending off competition from China. Analysts say any uncertainty in India’s governance of monetary policy could be a setback.

Alyssa Ayres, a senior fellow at the Council on Foreign Relations and author of “Our Time Has Come: How India is Making Its Place in the World,” told CNBC over email: “The widely-discussed allegation that the Modi government is pushing for greater authority over the RBI and diminishing its traditional independence is further cause for concern. The Indian economy has done well with an RBI that functions independently and through its own economic, not political, decisions. It should be allowed to continue without political interference.”

The next monetary policy meeting in India is set for Friday.


Company: cnbc, Activity: cnbc, Date: 2018-12-10  Authors: seema mody, dhiraj singh, bloomberg, getty images
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India’s cenbank governor Urjit Patel steps down, stuns markets

“Quite clearly the resignation of Urjit Patel shows that nothing has changed,” Yashwant Sinha, a former finance minister and member of the ruling Bharatiya Janata Party, told CNBC-TV18. The Modi government has stacked the RBI’s 18-member board with its own nominees, in what critics say is a move to exert greater control over the central bank’s regulatory powers. Patel’s sudden resignation is expected to roil financial markets on Tuesday. Investors will be keen to know who is Patel’s replacement


“Quite clearly the resignation of Urjit Patel shows that nothing has changed,” Yashwant Sinha, a former finance minister and member of the ruling Bharatiya Janata Party, told CNBC-TV18. The Modi government has stacked the RBI’s 18-member board with its own nominees, in what critics say is a move to exert greater control over the central bank’s regulatory powers. Patel’s sudden resignation is expected to roil financial markets on Tuesday. Investors will be keen to know who is Patel’s replacement
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India's cenbank governor Urjit Patel steps down, stuns markets

Analysts and market watchers said the recent dispute between the RBI and the government could have been a major factor in Patel’s decision to resign.

“Quite clearly the resignation of Urjit Patel shows that nothing has changed,” Yashwant Sinha, a former finance minister and member of the ruling Bharatiya Janata Party, told CNBC-TV18.

“The resignation is a clear sign of the government trying to interfere with the working of the RBI,” he added.

Prime Minister Narendra Modi’s government has been putting pressure on the RBI to ease its regulatory curbs on some banks, infuse more liquidity and relax capital norms as it faces a slowing economy ahead of general elections due by May.

RBI Deputy Governor Viral Acharya said in a speech in October that undermining a central bank’s autonomy could be “catastrophic”, prompting a public dispute that added to the rift between the bank and government.

The Modi government has stacked the RBI’s 18-member board with its own nominees, in what critics say is a move to exert greater control over the central bank’s regulatory powers.

Patel’s sudden resignation is expected to roil financial markets on Tuesday.

Investors will be keen to know who is Patel’s replacement and the direction of the central bank’s financial and monetary policy, analysts said.

“Markets certainly will be concerned unless there is further clarification that come through tonight,” said R. Sivakumar, head of fixed income at Axis Mutual Fund.

“I think tomorrow and over the next few days we can expect heightened volatility in the markets,” he added.


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Japan faces risk of falling back into deflation, BOJ’s Wakatabe warns

Wakatabe, a vocal advocate of aggressive monetary easing, said it was important to maintain the BOJ’s massive stimulus program to ensure the economy remains strong enough to nudge up prices and wages. “Doing so would enhance the sustainability of our policy and heighten the chance of achieving 2 percent inflation.” As an academic, Wakatabe had repeatedly called for stronger steps to drive up inflation. If downward pressure is exerted on the economy again, it may revert to deflation,” Wakatabe sa


Wakatabe, a vocal advocate of aggressive monetary easing, said it was important to maintain the BOJ’s massive stimulus program to ensure the economy remains strong enough to nudge up prices and wages. “Doing so would enhance the sustainability of our policy and heighten the chance of achieving 2 percent inflation.” As an academic, Wakatabe had repeatedly called for stronger steps to drive up inflation. If downward pressure is exerted on the economy again, it may revert to deflation,” Wakatabe sa
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Japan faces risk of falling back into deflation, BOJ's Wakatabe warns

Bank of Japan Deputy Governor Masazumi Wakatabe said on Wednesday the country could slide back into deflation if the economy comes under downward pressure again, highlighting risks such as the fallout from U.S.-China trade frictions.

Wakatabe, a vocal advocate of aggressive monetary easing, said it was important to maintain the BOJ’s massive stimulus program to ensure the economy remains strong enough to nudge up prices and wages.

But he noted the central bank would be vigilant to the side-effects of prolonged easing, as its huge purchases dry up bond market liquidity and near-zero interest rates hurt financial institutions’ profits.

“It’s necessary to continuously examine not only the effects of our policy on inflation, but also the impact on financial markets and the banking system,” Wakatabe said in a speech to business leaders in Niigata, northern Japan.

“Doing so would enhance the sustainability of our policy and heighten the chance of achieving 2 percent inflation.”

As an academic, Wakatabe had repeatedly called for stronger steps to drive up inflation. But he has toned down his demands for more stimulus since joining the BOJ board in March.

The central bank is now at a crossroads because it has been pursuing radical quantitative easing for more than five years with only mixed results.

Wakatabe said while Japan’s economic expansion would continue, it faced various risks such as the effects of next year’s scheduled tax hike to 10 percent from 8 percent and the U.S.-China trade dispute.

“Japan is only half way to achieving 2 percent inflation. If downward pressure is exerted on the economy again, it may revert to deflation,” Wakatabe said.

“The BOJ will seek to accelerate inflation to levels deemed appropriate for the economy by continuing large-scale monetary easing,” he said.

Under a policy dubbed yield curve control, the BOJ guides short-term interest rates at minus 0.1 percent and long-term rates around zero percent to achieve its 2 percent price goal.

Subdued inflation has forced the BOJ to maintain its huge stimulus program despite the rising costs, such as the hit to financial institutions’ profits from years of near-zero rates.

The BOJ took steps in July to make its policy framework more sustainable, such as allowing bond yields to move more flexibly around its target.

The central bank’s nine-member board is split between those who see room to ramp up stimulus, and those who are becoming increasingly worried about the dangers of prolonged easing.


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: kiyoshi ota, bloomberg, getty images
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China and the US can ease trade differences in 90 days, former central bank governor says

Washington and Beijing can make progress on their trade differences within three months, the formerPeople’s Bank of China (PBOC) governor Zhou Xiaochuan told CNBC on Wednesday. In exchange, the White House claimed that China would buy a “very substantial” amount of agricultural, industrial and energy products. One of the main issues raised by the U.S. is a perceived unfair transfer of American technology and intellectual property to China. Zhou said that for China it had also become “very import


Washington and Beijing can make progress on their trade differences within three months, the formerPeople’s Bank of China (PBOC) governor Zhou Xiaochuan told CNBC on Wednesday. In exchange, the White House claimed that China would buy a “very substantial” amount of agricultural, industrial and energy products. One of the main issues raised by the U.S. is a perceived unfair transfer of American technology and intellectual property to China. Zhou said that for China it had also become “very import
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China and the US can ease trade differences in 90 days, former central bank governor says

Washington and Beijing can make progress on their trade differences within three months, the formerPeople’s Bank of China (PBOC) governor Zhou Xiaochuan told CNBC on Wednesday.

“I see there is a pretty high possibility to reach some sort of success during the 90-day negotiation window,” Zhou told CNBC’s Geoff Cutmore at The Boao Forum and Ambrosetti Meeting in Rome, Italy.

The U.S. has hit $250 billion of Chinese goods with tariffs since July, while China has retaliated by imposing duties of its own on $110 billion of American products.

At a post-G-20 summit meeting in Argentina last weekend, President Donald Trump agreed not to boost tariffs on Chinese goods from 10 to 25 percent on January 1. In exchange, the White House claimed that China would buy a “very substantial” amount of agricultural, industrial and energy products.

Markets have gyrated over the value of that meeting, but Trump said Wednesday that he believed that Chinese President Xi Jinping would fulfil his pledges.

One of the main issues raised by the U.S. is a perceived unfair transfer of American technology and intellectual property to China. Zhou said that for China it had also become “very important to protect intellectual property rights.”

Zhou added that Beijing had already ended technology transfer as a policy, but conceded there could still be cause for U.S. complaint at a local government and business-to-business level.

“But those sorts of things are, relatively, not so difficult for China to improve on and strengthen the existing laws,” he said.

The former PBOC governor also said that Beijing could help to crack down on “bad guys” who were using the internet to export high-strength opioids such as Fentanyl to the United States.

On fears that another 90 days of uncertainty could impact capital flow into China, Zhou said that while foreign direct investment into the country was a welcome addition, the domestic economy was a far bigger driver.


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: david reid
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India keeps rates on hold; to gradually reduce SLR

The monetary policy committee (MPC) kept the repo rate unchanged at 6.50 percent on Wednesday as predicted by 64 of 70 analysts in a Reuters poll. All six members of the MPC voted to keep the rates on hold. The central bank said starting in the January-March quarter of 2019 it would begin to lower banks’ mandatory bond holding ratios by 25 basis points each quarter until it reaches 18 percent of deposits. The so-called statutory liquidity ratio (SLR) currently stands at 19.50 percent and the mov


The monetary policy committee (MPC) kept the repo rate unchanged at 6.50 percent on Wednesday as predicted by 64 of 70 analysts in a Reuters poll. All six members of the MPC voted to keep the rates on hold. The central bank said starting in the January-March quarter of 2019 it would begin to lower banks’ mandatory bond holding ratios by 25 basis points each quarter until it reaches 18 percent of deposits. The so-called statutory liquidity ratio (SLR) currently stands at 19.50 percent and the mov
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India keeps rates on hold; to gradually reduce SLR

The monetary policy committee (MPC) kept the repo rate unchanged at 6.50 percent on Wednesday as predicted by 64 of 70 analysts in a Reuters poll. The central bank also retained its “calibrated tightening” stance as expected.

All six members of the MPC voted to keep the rates on hold.

“Even as inflation projections have been revised downwards significantly and some of the risks pointed out in the last resolution have been mitigated, especially of crude oil prices, several uncertainties still cloud the inflation outlook,” said the MPC in its statement.

The central bank said starting in the January-March quarter of 2019 it would begin to lower banks’ mandatory bond holding ratios by 25 basis points each quarter until it reaches 18 percent of deposits.

The so-called statutory liquidity ratio (SLR) currently stands at 19.50 percent and the move to lower the SLR should prod banks to lend more rather than park their cash in safe-haven government securities.

After the RBI policy announcement, India’s 10-year benchmark bond yield fell to 7.48 percent from 7.54 percent before the policy statement.

The Indian rupee strengthened to 70.46 to the dollar from 70.50 before the policy statement, while the broader NSE stock index was down 0.68 percent at 0905 GMT.


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Fitch downgrades Sri Lanka as political crisis dents confidence

Credit rating agency Fitch downgraded Sri Lanka on Tuesday, citing refinancing risks and an uncertain policy outlook, after President Maithripala Sirisena’s sacking of his prime minister in October triggered a political crisis. The move, criticized by the country’s central bank, comes two weeks after a similar downgrade by Moody’s. “We have to come out of this dragging political crisis. The central bank said both Fitch and Moody’s have been too hasty in their decisions. Such uncertainties could


Credit rating agency Fitch downgraded Sri Lanka on Tuesday, citing refinancing risks and an uncertain policy outlook, after President Maithripala Sirisena’s sacking of his prime minister in October triggered a political crisis. The move, criticized by the country’s central bank, comes two weeks after a similar downgrade by Moody’s. “We have to come out of this dragging political crisis. The central bank said both Fitch and Moody’s have been too hasty in their decisions. Such uncertainties could
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Fitch downgrades Sri Lanka as political crisis dents confidence

Credit rating agency Fitch downgraded Sri Lanka on Tuesday, citing refinancing risks and an uncertain policy outlook, after President Maithripala Sirisena’s sacking of his prime minister in October triggered a political crisis.

The move, criticized by the country’s central bank, comes two weeks after a similar downgrade by Moody’s.

A bitter row over the sacking of Prime Minister Ranil Wickremesinghe in October and the competing influences of China and India have shattered the island’s fragile ruling coalition.

The rating agency said the downgrade, by one notch to B from B+, reflects the risk of a slowdown in debt reduction as a result of the crisis, noting Sri Lanka has a heavy external debt repayment schedule between 2019 and 2022.

“Investor confidence has been undermined, as evident from large outflows from the local bond market and a depreciating exchange rate,” Fitch said in a statement.

The rating agency said that plans to raise funds through bilateral and commercial borrowing, or through the exercise of foreign currency swaps, could be challenging in the current political climate. The 2019 budget has already been pushed back.

“It is a mess at the moment,” an official in the country’s finance ministry told Reuters, adding the downgrade would raise borrowing costs by a few percent.

“We have to come out of this dragging political crisis. The borrowing cost is anyway going to rise with this,” said the official, who declined to be named.

The central bank said both Fitch and Moody’s have been too hasty in their decisions.

“We are of the view that actions by both rating agencies are too hasty as their decisions are based on short term political uncertainties. Such uncertainties could be very short lived only for couple of weeks,” Central Bank Senior Deputy Governor Nandalal Weerasinghe told Reuters.

The rupee currency has weakened nearly 17 percent so far this year, while yields on Sri Lanka’s dollar bonds due in 2022 have risen by more than a percentage point to 8.24 percent since the crisis began.


Company: cnbc, Activity: cnbc, Date: 2018-12-04  Authors: paula bronstein, getty images
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Chinese central bank chief says will keep monetary policy flexible

China’s central bank will keep its monetary policy flexible and appropriately adjust it according to changes in the country’s economic situation, bank governor Yi Gang said in a magazine article published late on Monday. Yi said that tools he described as a “slow release of air” and “soft landing” must be used when the economy begins overheating or a bubble in asset prices starts developing, but that financial markets must be stabilised and public confidence enhanced if a recession or external s


China’s central bank will keep its monetary policy flexible and appropriately adjust it according to changes in the country’s economic situation, bank governor Yi Gang said in a magazine article published late on Monday. Yi said that tools he described as a “slow release of air” and “soft landing” must be used when the economy begins overheating or a bubble in asset prices starts developing, but that financial markets must be stabilised and public confidence enhanced if a recession or external s
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Chinese central bank chief says will keep monetary policy flexible

China’s central bank will keep its monetary policy flexible and appropriately adjust it according to changes in the country’s economic situation, bank governor Yi Gang said in a magazine article published late on Monday.

Yi said that tools he described as a “slow release of air” and “soft landing” must be used when the economy begins overheating or a bubble in asset prices starts developing, but that financial markets must be stabilised and public confidence enhanced if a recession or external shock occurred.

China’s central bank has recently eased monetary policy in the face of slowing economic and credit growth, with moves that included bringing down market interest rates and four cuts in bank reserve requirements so far this year.

Yi made his comments in an article in the China Finance magazine, which is published by the People’s Bank of China, to commemorate the 40th anniversary of its landmark economic reforms and opening up under former Chinese leader Deng Xiaoping.

He also said the central bank would continue to promote the opening up of China’s financial industry to technology, improve governance and develop a macro policy framework that will enhance international confidence in the renminbi.


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Bank of Korea lifts rates as expected, seen on hold in 2019

South Korea’s central bank raised its policy interest rate on Friday for the first time in a year in a widely expected move aimed mainly at containing a boom in parts of the country’s property market. The Bank of Korea’s monetary policy committee increased the base rate, which applies to its seven-day repurchase agreement deals, by 25 basis points to 1.75 percent, a media official at the central bank said without elaborating. “Given the global uncertainties that we’ve had of late, I think the ce


South Korea’s central bank raised its policy interest rate on Friday for the first time in a year in a widely expected move aimed mainly at containing a boom in parts of the country’s property market. The Bank of Korea’s monetary policy committee increased the base rate, which applies to its seven-day repurchase agreement deals, by 25 basis points to 1.75 percent, a media official at the central bank said without elaborating. “Given the global uncertainties that we’ve had of late, I think the ce
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Bank of Korea lifts rates as expected, seen on hold in 2019

South Korea’s central bank raised its policy interest rate on Friday for the first time in a year in a widely expected move aimed mainly at containing a boom in parts of the country’s property market.

The Bank of Korea’s monetary policy committee increased the base rate, which applies to its seven-day repurchase agreement deals, by 25 basis points to 1.75 percent, a media official at the central bank said without elaborating.

Governor Lee Ju-yeol is due to hold a news conference starting at 0220 GMT.

Analysts said heightened global markets turmoil over the past few months has made it difficult for the BOK to find the perfect timing to adjust policy.

“Given the global uncertainties that we’ve had of late, I think the central bank chose the best timing,” said Kong Dong-rak, strategist at Daishin Securities, adding that the central bank would likely keep the rate on hold throughout next year.

Market reaction to the widely expected move was modest as investors await further comments from the governor for guidance on future policy direction.

As of 0126 GMT, the Seoul stock market’s KOSPI was down 0.1 percent on the day while the front-month 3-year treasury bond futures were down 0.03 points.

The decision, tipped by 15 out of 16 economists in a Reuters survey, marked the first tightening in policy since November last year and brought the benchmark rate to its highest level since mid-2015.

Policymakers have been concerned about a property boom in the Seoul area and a surge in consumer finance, prompting various property restrictions.

Still, analysts expect the central bank to stand pat at least throughout next year with the domestic property market already cooling at a time when Asia’s fourth-largest economy is slowing and inflation remains low.


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Pakistani rupee plunges about 6 percent in what traders say could be a central bank devaluation

The Pakistani rupee plunged about 6 percent on Friday in what dealers suspected was the sixth currency devaluation by the central bank in the past 12 months, linking the move to ongoing bailout talks with the International Monetary Fund (IMF). The rupee tumbled to about 143 per dollar in early trading before paring some of the losses to trade at 141/142 level, or about 5.5 percent weaker by 0515 GMT, market participants said. The rupee has lost about 35 percent since the first devaluation in Dec


The Pakistani rupee plunged about 6 percent on Friday in what dealers suspected was the sixth currency devaluation by the central bank in the past 12 months, linking the move to ongoing bailout talks with the International Monetary Fund (IMF). The rupee tumbled to about 143 per dollar in early trading before paring some of the losses to trade at 141/142 level, or about 5.5 percent weaker by 0515 GMT, market participants said. The rupee has lost about 35 percent since the first devaluation in Dec
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Pakistani rupee plunges about 6 percent in what traders say could be a central bank devaluation

The Pakistani rupee plunged about 6 percent on Friday in what dealers suspected was the sixth currency devaluation by the central bank in the past 12 months, linking the move to ongoing bailout talks with the International Monetary Fund (IMF).

The rupee tumbled to about 143 per dollar in early trading before paring some of the losses to trade at 141/142 level, or about 5.5 percent weaker by 0515 GMT, market participants said.

The rupee has lost about 35 percent since the first devaluation in December 2017, as officials have sought to bring under control a ballooning current deficit that threatens to trigger a balance of payments crisis.

This month Pakistani and the IMF failed to agree on a bailout package during a visit by an IMF delegation, with Pakistani officials setting mid-January as the target date for the country to obtain its second assistance package since 2013, when the IMF loaned Pakistan$6.7 billion.

“It’s positive. If they’re doing what IMF is telling them, and they go for the bailout, it’s a good thing for the economy,” said Saad Hashemy, chief economist at local brokerage Topline Securities.


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Fed’s Kashkari says rates should not go up when job creation is strong and inflation is tame

Minneapolis Federal Reserve President Neel Kashkari told CNBC on Friday that central bankers should not be raising rates while job creation continues to be strong and inflation remains tame. Furthering his case for holding rates steady, Kashkari said “there’s still slack” in the labor market. Unless wages really go up or inflation spikes, a wait-and-see posture at the Fed makes sense, he suggested. Trump told The Washington Post Tuesday that he blames Fed policies for the stock market declines a


Minneapolis Federal Reserve President Neel Kashkari told CNBC on Friday that central bankers should not be raising rates while job creation continues to be strong and inflation remains tame. Furthering his case for holding rates steady, Kashkari said “there’s still slack” in the labor market. Unless wages really go up or inflation spikes, a wait-and-see posture at the Fed makes sense, he suggested. Trump told The Washington Post Tuesday that he blames Fed policies for the stock market declines a
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Fed's Kashkari says rates should not go up when job creation is strong and inflation is tame

Minneapolis Federal Reserve President Neel Kashkari told CNBC on Friday that central bankers should not be raising rates while job creation continues to be strong and inflation remains tame.

“For the three years since I’ve been at the Fed, we have been surprised by the labor market. We keep thinking we’re at maximum employment. And then wage growth is tepid. And the headline unemployment rate drops further. Inflation has been well under control,” he said. “If the U.S. economy is creating 200,000 a jobs a month, month-after-month, we’re not at maximum employment.”

With neither pillar of the Fed’s dual mandate from Congress — to promote maximum employment and keep inflation from getting too high — throwing off warnings signs, the Fed should pause on rate increases at this point, Kashkari said. He added that hiking too forcefully before necessary could risk causing a recession in the U.S. economy. He believes rates are “close to neutral.”

Furthering his case for holding rates steady, Kashkari said “there’s still slack” in the labor market. Unless wages really go up or inflation spikes, a wait-and-see posture at the Fed makes sense, he suggested.

Kashkari is not a voting member on the central bank’s policymaking committee this year or next year. But as a voter in 2017, he was against all three rate hikes last year, saying at the time there was no need to move because inflation wasn’t a problem.

Over the long term, he thinks the economy won’t grow much more than 2 percent. While that’s been seen as a base case for some time, he said Friday that 2 percent growth at the near zero percent rates of the past is far more difficult to maintain with rates so much higher nowadays.

Kashkari appeared on “Squawk Box” as debate raged in the investment community on whether Fed Chairman Jerome Powell’s speech this week really departed materially from the comments he made last month that led to widespread concern about the path higher next year for interest rates and an October market rout.

In Wednesday’s address to the Economic Club of New York, Powell said rates are “just below” neutral, which appeared to be a sharp turn from his Oct. 3 remarks that rates were long way from neutral, a level neither stimulative nor restrictive to the economy.

The stock market ripped higher Wednesday on the thought that Powell softened his stance and thus signaled that the Fed may not be as aggressive as feared on rates. Stocks pulled back slightly Thursday. While U.S. stock futures were lower Friday, on the last day of the month, the market stands a chance at holding on to the small gains made in volatile trading in November.

Despite the initial optimism in the market, some prominent Wall Street economists said they did not see a major difference in what Powell said this week compared to last month.

The central bank has already increased rates three times this year, with one more expected in December. The target range for the central bank’s benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most recent hike, in September, the Fed projected three rate increases for next year.

In recent months, Powell has been under constant pressure from President Donald Trump to halt rate hikes. Trump told The Washington Post Tuesday that he blames Fed policies for the stock market declines and General Motors’ plan to cut production at several U.S. plants.

Kashkari on CNBC Friday defended the Fed’s independence.

“Inflation expectations are so anchored because of the political independence of the Fed, because the Fed has done a good job over the last 20 or 30 years. That to me is something that is enabling this economy to continue strengthen, enabling the job market to continue to strengthen without inflation taking off. And so, let’s let it continue.”

Kashkari, who unsuccessfully ran as a Republican for governor of California in 2014, served as the administrator of TARP, the Troubled Asset Relief Program, at the Treasury Department during the financial crisis. After leaving Washington, he joined Pimco as a managing director and head of global equities. Before his time at Treasury, he was a vice president at Goldman Sachs.


Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: matthew j belvedere
Keywords: news, cnbc, companies, job, powell, tame, central, rates, strong, inflation, economy, stock, fed, creation, market, feds, president, kashkari, rate


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