China’s Vice Premier Liu He calls for more measures to support economy

Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019. Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure. Beijing has plenty of policy tools and is capable of deali


Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019. Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure. Beijing has plenty of policy tools and is capable of deali
China’s Vice Premier Liu He calls for more measures to support economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13
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China's Vice Premier Liu He calls for more measures to support economy

Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019.

Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure.

Beijing has plenty of policy tools and is capable of dealing with various challenges, Liu said at a financial forum in Shanghai.

Despite a slew of support measures and policy easing since last year, China’s cooling economy is still struggling to get back on firm footing, and last month’s sudden escalation in U.S.-Sino tensions has raised fears of a full-blown trade war that could trigger a global recession.

Liu’s comments came after a day after data showed China’s credit growth was weaker than expected in May, reinforcing market expectations that more monetary easing is needed. Factory activity contracted in May and imports fell the most in nearly three years, highlighting soft demand.

“At present, we do have some external pressures, but those external pressures will help us boost our self-reliance in innovation and accelerate the pace of high-speed development,” said Liu, who is also the lead negotiator in the U.S.-China trade talks.

The government will roll out more strong measures to promote reforms and opening up, added Liu.

People’s Bank of China chief Yi Gang said last week that there was “tremendous” room to make policy adjustments if the trade war worsens.

“We have plenty of room in interest rates, we have plenty of room in the required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous,” Yi said.

Earlier on Thursday, China Daily, citing economists, said China is expected to adjust money and credit supply in coming weeks, including cuts to interest rates or reserve ratio requirements, to counter “downside risks” if trade tensions escalate.

Further cuts in banks’ reserve requirement ratios (RRR) were already expected this year, especially after the trade conflict escalated last month. Both sides hiked tariffs on each other’s goods, and Washington is threatening more.

Last month, the PBOC stepped up efforts to increase loan growth and business activity, announcing a three-phase cut in regional banks’ reserve requirements to reduce financing costs for small and private companies.

It has now cut six RRR times since early 2018.

Unlike previous downturns, however, the central bank has been reluctant to cut benchmark interest rates so far. Analysts believe it is held off on more aggressive measures due to concerns that such a move could risk adding a mountain of debt leftover from past stimulus sprees.

More forceful easing could also trigger capital outflows and add pressure on the Chinese yuan, which has slid nearly 3 percent against the dollar since the trade flare-up last month.

Sources told Reuters in February that the PBOC considered a benchmark rate cut a last resort. But some analysts now think one or more cuts are likely if the trade dispute spirals out of control and the U.S. Federal Reserve starts cutting its rates, giving the PBOC more room to manoeuvre.

Citing experts, China Daily said financial institutions were facing tighter liquidity in June, and said authorities want to spur faster credit growth to meet economic growth targets.

Beijing has set a growth target of around 6 to 6.5 percent for this year, easing from 6.6 percent in 2018, which was the slowest rate of expansion the country has seen in nearly 30 years.

Analysts at Bank of America Merrill Lynch believe China’s GDP growth could fall to 5.8 percent this year and 5.6 percent in 2020 if the trade war intensifies.


Company: cnbc, Activity: cnbc, Date: 2019-06-13
Keywords: news, cnbc, companies, support, liu, chinas, calls, premier, room, vice, trade, cut, policy, rates, reserve, economy, growth, easing, measures


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Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s


When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s
Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, insurance, history, fed, economy, market, cut, equity, usually, morgan, markets, rate, easing, panigirtzoglou, shows, stock, fine


Fed 'insurance' rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well.

So-called “insurance ” rate cuts with a backdrop of strong growth — which happened in 1995 and 1998 — resulted in solid equity market performance, according to analysis by J.P. Morgan. But not all rate cuts are created equal. The stock market reaction depends on the justification for slashing rates.

“If the reason is weakening growth then this is not a good environment for equities overall, especially cyclical sectors, even as defensive and bond like equities do relatively well in such environment,” J.P. Morgan global markets strategist Nikolaos Panigirtzoglou said in a note to clients Monday.

J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The late 1990s rate cuts were used as insurance against Mexican and Russian default and collapse of hedge fund Long-Term Capital Management at the time, bolstered the equity market. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. At the time, there was an 8.5% reduction in the Fed funds rate from 20% to 11.5% — a level of monetary easing that is “obviously not possible in the current conjuncture,” Panigirtzoglou said.

The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. Distinguishing which type of easing cycle 2019 will turn out to be “is the challenge for equity markets going forward,” he said. For now, markets appear to be assuming that Federal Reserve officials’ dovish comments are signs of a preemptive, rather than reactive move.

Investors have been focused on the likelihood of an “insurance” interest-rate cut this year. That would theoretically provide a buffer against any economic weakness caused by an ongoing trade war and tariffs with China.

Weaker employment data last week added to the investors’ hopes of a rate cut. The economy added only 75,000 jobs in May, less than half of what economists had expected. Now that the job market is showing signs of strain, economists and investors now firmly believe the Federal Reserve will move to cut rates this year. The market is now pricing in a 95 percent chance of a quarter-point cut in July, according to BMO rate strategist Jon Hill. The Fed next meets June 18-19 and July 30-31.

On the other hand, if the central bank ends up being “reactive,” markets may not see the same benefits, Panigirtzoglou said. This could play out if the Federal Reserve decides to wait until later in the year, or it proves to be “too late” and the U.S. economy has already entered a weak phase, he said.

“Then the equity market could follow a weak trajectory similar to more typical previous Fed easing cycles rather than the strong trajectory seen during 1995 or 1998,” Panigirtzoglou said.

Other asset classes have mixed reactions. U.S.Treasury have historically rallied, and the curve continued to steepen for up to six months on average after a Fed rate cut. The dollar rallied for up to three months, but eventually tended to give up previous gains, according to the J.P. Morgan analysis.

— CNBC’s Patti Domm and Jeff Cox contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
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Bank of Japan’s aggressive easing has created a tough environment for some banks: MUFG

Economic initiatives undertaken by the Japanese government and aggressive easing policies from the country’s central bank have injected new growth momentum into the economy. According to Hirano, as the central bank acquires more Japanese government bonds, the liquidity in that market is drying up. Meanwhile, the Bank of Japan’s purchase of exchange-traded funds in stock markets is affecting the price mechanism, he added. For its part, MUFG, which is one of Japan’s largest banks, has undertaken a


Economic initiatives undertaken by the Japanese government and aggressive easing policies from the country’s central bank have injected new growth momentum into the economy. According to Hirano, as the central bank acquires more Japanese government bonds, the liquidity in that market is drying up. Meanwhile, the Bank of Japan’s purchase of exchange-traded funds in stock markets is affecting the price mechanism, he added. For its part, MUFG, which is one of Japan’s largest banks, has undertaken a
Bank of Japan’s aggressive easing has created a tough environment for some banks: MUFG Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, environment, tough, created, financial, undertaken, japanese, japans, banks, easing, policy, hirano, mufg, bank, market, aggressive


Bank of Japan's aggressive easing has created a tough environment for some banks: MUFG

Economic initiatives undertaken by the Japanese government and aggressive easing policies from the country’s central bank have injected new growth momentum into the economy. According to a senior banking executive, however, that’s come with some negative consequences.

The Bank of Japan’s quantitative and qualitative easing policy has created market disruption and has hurt the safety and stability of Japanese financial markets, Nobuyuki Hirano, chairman of Mitsubishi UFJ Financial Group, told CNBC’s Nancy Hungerford in Tokyo.

According to Hirano, as the central bank acquires more Japanese government bonds, the liquidity in that market is drying up. Meanwhile, the Bank of Japan’s purchase of exchange-traded funds in stock markets is affecting the price mechanism, he added.

While Hirano said it is important to “carefully analyze” the balance between the benefits and adverse side effects, he added that the current interest rate policy means it is a “really tough environment for the banks, in particular regional banks.”

Lower margins due to the Bank of Japan’s long-running negative interest rate policy are giving many financial institutions, especially those focused mainly on the domestic market, a “real tough time,” Hirano added.

Regional banks in Japan are medium and small-sized lenders that serve mostly people who live outside the major cities. In recent years, they have seen a decline in their profits from core lending and fees and they face dwindling prospects of growing their loan books due to Japan’s rapidly aging and shrinking population.

For its part, MUFG, which is one of Japan’s largest banks, has undertaken a number of initiatives to strengthen its position in the market, according to Hirano.

“In (the) domestic market, we’re trying very hard to transform our business model from lending-oriented to more service-oriented, such as wealth management or money advisory services, and so on,” he said, adding that the company is also focusing on technological developments and digital transformation.

Abroad, MUFG is trying to expand its geographical coverage to “capture the growth opportunity” in other markets.

For example, MUFG holds a 94.1% stake in Indonesia’s Bank Danamon as well a controlling stake in Thailand’s Bank of Ayudhya.

— CNBC’s Yen Nee Lee contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: saheli roy choudhury
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People are buying up the asset class that loves trade wars, central bank easing and volatility

Fear about slowing growth and the prospect of lower interest rates have been pushing the price of gold higher. That also increased worries about economic growth, sent buyers into Treasurys, and raised expectations that the Fed would now not only lower interest rates. The gold buying also drove up ETFs, and SPDR Gold shares is up 4% since early May. “I do think the rally has some legs,” said Steel, head of precious metals analysis at HSBC. The increase in financial market volatility, and trade-re


Fear about slowing growth and the prospect of lower interest rates have been pushing the price of gold higher. That also increased worries about economic growth, sent buyers into Treasurys, and raised expectations that the Fed would now not only lower interest rates. The gold buying also drove up ETFs, and SPDR Gold shares is up 4% since early May. “I do think the rally has some legs,” said Steel, head of precious metals analysis at HSBC. The increase in financial market volatility, and trade-re
People are buying up the asset class that loves trade wars, central bank easing and volatility Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: patti domm
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People are buying up the asset class that loves trade wars, central bank easing and volatility

Fear about slowing growth and the prospect of lower interest rates have been pushing the price of gold higher.

But analysts say the metal may be nearing the top of its run for now, and whether it continues to gain depends on whether the markets continue to fear trade wars will dampen global growth.

Gold futures had been struggling this year to hold above $1,300 and once the price broke $1,279 in recent sessions, analysts said that set the stage for a move higher. Gold futures for August were higher by more than $5 to $1,334 per ounce Wednesday afternoon, and are up 5% since the beginning of May.

On Wednesday, the dollar was higher and Treasury yields were lower. Stocks were also higher, both on expectations the Fed would cut interest rates and hopes the U.S. would not slap tariffs on all Mexican goods next week, as threatened by President Donald Trump.

“Right now you have to take into account that it had a good run and also that we still have a firm dollar going forward,” said James Steel, chief commodities analyst at HSBC. The dollar and gold often move in opposite directions. Steel said he expects gold to reach a high of $1,372 by the end of the year, but it may stop for a period before it heads higher.

‘I think the market is in need of some consolidation right now, ” said Steel.

Bart Melek, head of commodities strategy at TD Securities, said he also sees the rally getting close to a peak for now.

“It’s been a nice run,” he said, adding he does not see the market breaking above the year highs of $1,346. “I think the market is a little overly optimistic on their Fed view. A lot of people expect as many as three cuts this year, starting in June. I don’t think that’s on. Yes the U.S. economy is slowing, and Mr. Trump has added to the uncertainty.”

Strategists say the buying interest in the metal picked up dramatically right after President Donald Trump tweeted that he would put tariffs on all Mexican goods. That also increased worries about economic growth, sent buyers into Treasurys, and raised expectations that the Fed would now not only lower interest rates. but maybe even cut twice this year.

The gold buying also drove up ETFs, and SPDR Gold shares is up 4% since early May.

“I do think the rally has some legs,” said Steel, head of precious metals analysis at HSBC. “It’s gone sharply higher in just a few days so one has to accept that the rally may need some period of consolidation. The increase in financial market volatility, and trade-related and geopolitical risks are what’s behind this.”


Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: patti domm
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Aussie dollar rallies as central bank holds rates, cut still on the menu

The Australian dollar rallied on Tuesday after the country’s central bank defied pressure for an immediate cut in interest rates, though it left the door wide open for an easing should the jobs market not stay strong. The Reserve Bank of Australia (RBA) ended its monthly policy meeting by keeping rates unchanged at 1.5 percent, where they have been since mid-2016. If the RBA does eventually cut, markets will automatically assume it will go again, as the bank has never moved rates just once and s


The Australian dollar rallied on Tuesday after the country’s central bank defied pressure for an immediate cut in interest rates, though it left the door wide open for an easing should the jobs market not stay strong. The Reserve Bank of Australia (RBA) ended its monthly policy meeting by keeping rates unchanged at 1.5 percent, where they have been since mid-2016. If the RBA does eventually cut, markets will automatically assume it will go again, as the bank has never moved rates just once and s
Aussie dollar rallies as central bank holds rates, cut still on the menu Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-07
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Aussie dollar rallies as central bank holds rates, cut still on the menu

The Australian dollar rallied on Tuesday after the country’s central bank defied pressure for an immediate cut in interest rates, though it left the door wide open for an easing should the jobs market not stay strong.

The Aussie dollar popped up almost half a cent to $0.7042 on the decision, giving it a gain for the day of 0.7 percent. It faces tough resistance around $0.7070, however.

The Reserve Bank of Australia (RBA) ended its monthly policy meeting by keeping rates unchanged at 1.5 percent, where they have been since mid-2016.

There had been much speculation it would ease given recent weak inflation outcomes.

Yet the central bank set the conditions for an easing by noting that inflation was too low and unemployment would have to fall further to get it rising.

“The Board … recognized that there was still spare capacity in the economy and that a further improvement in the labour market was likely to be needed for inflation to be consistent with the target,” RBA Governor Philip Lowe said in a statement.

Investors reacted by lengthening the odds on a cut in the next couple of months, though it was fully priced for September.

“The Bank noted that it will be paying close attention to developments in the labour market at its upcoming meetings, so if the unemployment rate doesn’t fall any further, we suspect that the Bank will start to cut,” said Marcel Thieliant, a senior economist at Capital Economics.

Interbank futures had implied a 36 percent chance of a quarter-point cut this week, while 17 of 42 analysts polled by Reuters have tipped an easing with the rest on hold.

The July futures contract now implies a 52 percent probability of an easing, compared to 100 percent before the meeting. August shows a 90 percent chance of a cut.

Australian government bond futures surrendered some of their recent gains, with the three-year contract off 8.5 ticks at 98.685. The 10-year contract fell 5 ticks to 98.2000.

Yields on three-year bonds rose to 1.31 percent, having touched an all-time low of 1.23 percent on Monday.

If the RBA does eventually cut, markets will automatically assume it will go again, as the bank has never moved rates just once and stopped. It eased twice in 2016 and twice in 2015.

The case for more stimulus was underlined by data showing retail sales were surprisingly soft in the March quarter, falling 0.1 percent when adjusted for inflation.

That posed a downside risk to economic growth in the quarter and offset another strong reading on international trade.

Australia’s trade surplus for March beat expectations at A$4.9 billion ($3.43 billion) and set the seal on a record-breaking total of A$14.7 billion for the quarter.

The flood of cash might almost be enough to give the country a current account surplus, the first in modern history.

Across the Tasman Sea, the New Zealand dollar edged up to $0.6614, but was still close to recent lows of $0.6581.

Both it and the Aussie had taken a hit on Monday after U.S. President Donald Trump’s threats of more tariffs on China threatened to derail chances of a trade deal anytime soon and sent stock markets sliding.

The Reserve Bank of New Zealand (RBNZ) holds its policy meeting on Wednesday and again markets are unsure if it will cut rates or hang on for a while longer.


Company: cnbc, Activity: cnbc, Date: 2019-05-07
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The Fed is looking at a new program that could be another version of ‘quantitative easing’

In some quarters, the idea is viewed as a natural extension of current Fed policy. The idea comes as central bank policymakers look for ways to cut the bond holdings on its balance sheet without being disruptive to markets. A subsequent Fed policy pivot that included an intention to end the balance sheet roll-off in September assuaged the market. Former Fed Chair Janet Yellen had characterized the balance sheet roll-off as akin to “watching paint dry” as it would run “in the background.” The Fed


In some quarters, the idea is viewed as a natural extension of current Fed policy. The idea comes as central bank policymakers look for ways to cut the bond holdings on its balance sheet without being disruptive to markets. A subsequent Fed policy pivot that included an intention to end the balance sheet roll-off in September assuaged the market. Former Fed Chair Janet Yellen had characterized the balance sheet roll-off as akin to “watching paint dry” as it would run “in the background.” The Fed
The Fed is looking at a new program that could be another version of ‘quantitative easing’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-29  Authors: jeff cox
Keywords: news, cnbc, companies, reserves, sheet, easing, policy, version, quantitative, treasurys, program, looking, trillion, fed, market, balance, facility, banks


The Fed is looking at a new program that could be another version of 'quantitative easing'

Federal Reserve Chairman Jerome Powell holds a news conference following the two-day Federal Open Market Committee (FOMC) policy meeting in Washington, U.S., March 20, 2019. Jonathan Ernst | Reuters

Federal Reserve officials are considering a new program that would allow banks to exchange Treasurys for reserves, a move aimed at ensuring liquidity during difficult times that also would help the central bank decrease the size of its nearly $4 trillion balance sheet. The so-called standing repo facility is in its early discussion phases. Respected St. Louis Fed economists David Andolfatto and Jane Ihrig have authored two papers on the plan, which they say would ease the regulatory burden for banks that feel pressured into holding ultra-safe assets. In some quarters, the idea is viewed as a natural extension of current Fed policy. Others, though, think it in essence could be a repackaged form of quantitative easing and thus yet another iteration of the Fed’s decadelong tinkering in financial markets. The idea comes as central bank policymakers look for ways to cut the bond holdings on its balance sheet without being disruptive to markets.

“With this facility in place, banks should feel comfortable holding Treasuries to help accommodate stress scenarios instead of reserves,” Andolfatto and Ihrig wrote in March. “The demand for reserves would decline substantially as a result. Ample reserves — and therefore the size of the Fed’s balance sheet — could in fact be much closer to their historical levels.” In a follow-up a few weeks ago, the duo wrote that the first paper “generated a considerable amount of discussion among industry experts. Many people seemed broadly sympathetic to the proposal, while others expressed skepticism.”

A question of balance

Determining an appropriate size for the bond portfolio has been an ongoing headache at the central bank. Fed Chairman Jerome Powell’s comments in December that a program to cut the balance sheet was on “autopilot” contributed to a market meltdown that lasted through the fourth quarter. Since October 2017, the Fed has been allowing a set level of proceeds from Treasurys and mortgage-backed securities holdings to roll off each month, resulting in a reduction of just shy of $500 billion. A subsequent Fed policy pivot that included an intention to end the balance sheet roll-off in September assuaged the market. However, the question of where the level of bonds, and reserves, ends up over the long run remains. Instituting a standing repo facility would encourage banks to hold more Treasurys and thus reduce the demand for reserves, which escalated after the financial crisis when big Wall Street institutions faced a crippling liquidity shortage. Congress responded to the crisis with reforms that mandated higher holdings of safe assets. While Treasurys are considered safe, they aren’t as liquid during times of stress. The Fed ideally would like to see a lower reserve level, with the New York Fed putting the desired number from banks around $784 billion. The level of bank reserves at the Fed peaked at nearly $2.8 trillion in mid-2014 and is currently $1.55 trillion, or some $1.41 trillion above the required amount. Reserves and the bond assets are on opposite sides of the balance sheet and thus tend to move in sync. Backers see the repo facility as a relatively risk-free way of giving banks a release valve in times of financial tightness while providing at least a stealthy form of QE. “It makes it a much easier transition. The banks would not feel obligated to hold these reserves if the could get the reserves quickly by selling Treasurys to the Fed,” said David Beckworth, a research fellow at the Mercatus Center and former economist at the Treasury Department. “This would be a much more market-driven QE. The banks could quickly get reserves. You could see a big balance sheet again, but that would be driven by the banks.” Under three previous QE stages — another called “Operation Twist” was balance sheet neutral — the Fed credited itself with funds that it then used to acquire Treasurys and mortgage-backed securities. The total of the operations was about $3.8 trillion and is widely felt to have stemmed liquidity issues, held interest rates low, and juiced up the prices of risky assets like stocks and corporate bonds. Over the past year and a half or so, the Fed has sought to shed some of those assets and restore some normalcy to monetary policy. Former Fed Chair Janet Yellen had characterized the balance sheet roll-off as akin to “watching paint dry” as it would run “in the background.” Reality, though, hasn’t been so smooth, and the Fed has sought ways to allay market fears that the new policy regime would be disruptive.

Shadows of the crisis

Beckworth said that under another recession or significant pullback “it’s almost guaranteed the Fed is quickly going back to QE. You can easily imagine the Fed doing QE4, QE5. The Fed’s balance sheet, if I had to bet money, is going to get pretty large in the next recession. It’s a really poor form of debt management.” Supporters of the reverse repo facility said it would correct some of the mistakes of the past and stand as a bulwark against market disruptions like what happened during the financial crisis in 2008. “There’s that old saying about liquidity is always there except when you need it most. If you’re a banker, what you’re most concerned about is that we’ll have another episode like what happened at the height of the financial crisis,” said Peter Ireland, an economics professor at Boston College and member of the Shadow Open Market Committee, which monitors Fed policy. “The nice thing about the standing repurchase facility would be that the Fed would say to banks, ‘Look, we stand ready in times of stress to supply reserves on demand. … This would enable banks to decrease their hold of excess reserves, which is what the Fed wants them to do, increase their holdings of Treasurys, which is what [banks] want to do, while still guarding against a freeze-up of markets during times of stress.” How quickly the Fed might take up the idea is uncertain. Ireland said he expects the central bank likely wouldn’t act until it became necessary, for fear of “unintended consequences.” The policymaking Federal Open Market Committee meets Tuesday and Wednesday, so the item could come up on the agenda. The committee is almost certain to not raise rates, but faces several questions. Fed watchers have been wondering whether the committee will make a technical adjustment to the interest it pays on excess reserves, which is now running 4 basis points behind the funds rate, a unique relationship for the two rates.


Company: cnbc, Activity: cnbc, Date: 2019-04-29  Authors: jeff cox
Keywords: news, cnbc, companies, reserves, sheet, easing, policy, version, quantitative, treasurys, program, looking, trillion, fed, market, balance, facility, banks


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China says its economic growth is improving, but analysts warn it still needs stimulus

China’s claim of stronger-than-expected economic growth in the first part of this year may be tempting policymakers to pare back stimulus. It said those sectors should be closely monitored for possible risks, suggesting worries about possible overheating. Mainland Chinese equity markets fell Monday on concerns stimulus could be reduced. But, Nomura cautioned, China’s growth recovery is “not solid yet” and growth could falter again. “We believe the pace of monetary easing will slow, but it is sti


China’s claim of stronger-than-expected economic growth in the first part of this year may be tempting policymakers to pare back stimulus. It said those sectors should be closely monitored for possible risks, suggesting worries about possible overheating. Mainland Chinese equity markets fell Monday on concerns stimulus could be reduced. But, Nomura cautioned, China’s growth recovery is “not solid yet” and growth could falter again. “We believe the pace of monetary easing will slow, but it is sti
China says its economic growth is improving, but analysts warn it still needs stimulus Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-23  Authors: kelly olsen, getty images
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China says its economic growth is improving, but analysts warn it still needs stimulus

China’s claim of stronger-than-expected economic growth in the first part of this year may be tempting policymakers to pare back stimulus. Analysts say that would be a mistake.

The world’s second-largest economy expanded 6.4% in the first quarter from the same period in 2018, the government announced last week, slightly beating analyst predictions. An array of policies, including encouraging banks to make more loans, put in place last year as the economy took a hit from the U.S.-China trade war have been credited with helping boost activity.

But pronouncements since last week’s GDP figure, including after a meeting of the Communist Party’s powerful politburo, indicate that officials see the growth outlook improving, feeding speculation of a rethink in how much of a boost the economy may need.

A politburo statement issued Monday and reported by the official Xinhua news agency emphasized the economy’s strong start to the year but appeared to express concern about financial and real-estate markets. It said those sectors should be closely monitored for possible risks, suggesting worries about possible overheating.

Mainland Chinese equity markets fell Monday on concerns stimulus could be reduced.

“The slight change in tone is understandable due to the rapid build-up of debt and a potential irrational exuberance in stock markets and big cities’ property markets,” economists at Japanese investment bank Nomura said in a note Monday regarding the politburo statement.

Chinese stocks have been on a tear in 2019 after recording their worst performance in a decade in 2018. The benchmark Shanghai index is up about 29% so far in 2019 after losing almost 25% last year.

But, Nomura cautioned, China’s growth recovery is “not solid yet” and growth could falter again.

“We believe the pace of monetary easing will slow, but it is still too early to withdraw monetary easing measures despite the limited monetary policy scope,” they said.


Company: cnbc, Activity: cnbc, Date: 2019-04-23  Authors: kelly olsen, getty images
Keywords: news, cnbc, companies, nomura, analysts, growth, possible, china, needs, warn, economy, improving, politburo, including, markets, stimulus, economic, monetary, easing


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China’s defense spending is growing more slowly. But that doesn’t mean military tensions are easing

China announced Tuesday that military spending will grow at a slower pace than last year, but one analyst cautioned that it should not be interpreted to mean that military tensions with the United States will ease. At its annual parliamentary meeting, the National People’s Congress, Beijing set its 2019 defense spending at 7.5 percent higher than a year ago — or 1.19 trillion yuan ($177.61 billion). Military tensions between the U.S. and China have been on the rise in recent years as Beijing tak


China announced Tuesday that military spending will grow at a slower pace than last year, but one analyst cautioned that it should not be interpreted to mean that military tensions with the United States will ease. At its annual parliamentary meeting, the National People’s Congress, Beijing set its 2019 defense spending at 7.5 percent higher than a year ago — or 1.19 trillion yuan ($177.61 billion). Military tensions between the U.S. and China have been on the rise in recent years as Beijing tak
China’s defense spending is growing more slowly. But that doesn’t mean military tensions are easing Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-05  Authors: kelly olsen, str, afp, getty images, vcg
Keywords: news, cnbc, companies, doesnt, tensions, mean, military, heath, sea, growing, easing, beijing, defense, slowly, china, chinas, spending, slower


China's defense spending is growing more slowly. But that doesn't mean military tensions are easing

China announced Tuesday that military spending will grow at a slower pace than last year, but one analyst cautioned that it should not be interpreted to mean that military tensions with the United States will ease.

At its annual parliamentary meeting, the National People’s Congress, Beijing set its 2019 defense spending at 7.5 percent higher than a year ago — or 1.19 trillion yuan ($177.61 billion).

That’s lower than the 8.1 percent growth in 2018 and far below double-digit increases of previous years — though analysts have long questioned how accurately the budget reflects actual spending.

Military tensions between the U.S. and China have been on the rise in recent years as Beijing takes a more assertive stance on territorial claims in the South China Sea and East China Sea, as well as over Taiwan — a self-ruled territory which Beijing claims as its own.

But slower growth in defense spending doesn’t mean tensions with Washington have ceased, warned Timothy Heath, senior international defense researcher at U.S. think tank Rand Corporation.

In fact, the stated amount is less important than what it’s used for, Heath told CNBC’s “Squawk Box” on Tuesday.


Company: cnbc, Activity: cnbc, Date: 2019-03-05  Authors: kelly olsen, str, afp, getty images, vcg
Keywords: news, cnbc, companies, doesnt, tensions, mean, military, heath, sea, growing, easing, beijing, defense, slowly, china, chinas, spending, slower


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Japan’s central bank says it’s ready to ramp up stimulus if a strong yen derails inflation target

Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank was ready to ramp up stimulus if sharp yen rises hurt the economy and derail the path towards achieving its 2 percent inflation target. “If (currency moves) are having an impact on the economy and prices, and if we consider it necessary to achieve our price target, we’ll consider easing policy,” he said. Kuroda made the remarks in response to a question by an opposition lawmaker on whether the BOJ had the necessary tools to


Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank was ready to ramp up stimulus if sharp yen rises hurt the economy and derail the path towards achieving its 2 percent inflation target. “If (currency moves) are having an impact on the economy and prices, and if we consider it necessary to achieve our price target, we’ll consider easing policy,” he said. Kuroda made the remarks in response to a question by an opposition lawmaker on whether the BOJ had the necessary tools to
Japan’s central bank says it’s ready to ramp up stimulus if a strong yen derails inflation target Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: akio kon, bloomberg, getty images
Keywords: news, cnbc, companies, remarks, inflation, tools, policy, central, yen, derails, sharp, ramp, economy, ready, japans, target, stimulus, easing, boj, impact, strong


Japan's central bank says it's ready to ramp up stimulus if a strong yen derails inflation target

Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank was ready to ramp up stimulus if sharp yen rises hurt the economy and derail the path towards achieving its 2 percent inflation target.

But he said the BOJ would carefully weigh the benefits and costs of any further policy easing, suggesting that the hurdle for topping up stimulus would be high given how financial institutions’ profits have been hurt by years of near-zero interest rates.

“Currency moves could have an impact on the economy and prices, so it’s crucial we take into account these factors when guiding monetary policy,” Kuroda told parliament.

“If (currency moves) are having an impact on the economy and prices, and if we consider it necessary to achieve our price target, we’ll consider easing policy,” he said.

Kuroda made the remarks in response to a question by an opposition lawmaker on whether the BOJ had the necessary tools to boost stimulus to counter the pressure from a sharp yen rise.

The dollar received a mild lift versus the yen after Kuroda’s remarks. It stood little changed at 110.655 yen after dipping as low as 110.45 earlier in the day.

Kuroda repeated that possible monetary easing tools the BOJ could deploy included cutting short- and long-term interest rates, expanding asset buying or accelerating the pace of money printing.

“Whatever we do, however, we need to carefully balance the benefits and the costs of the step such as the impact on financial intermediation and market functioning.”


Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: akio kon, bloomberg, getty images
Keywords: news, cnbc, companies, remarks, inflation, tools, policy, central, yen, derails, sharp, ramp, economy, ready, japans, target, stimulus, easing, boj, impact, strong


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A key tax deduction for telecommuters is gone. Here are options for easing the pain

Telecommuters who used to be able to write off the cost of working from home could face a higher tax bill this year. The Tax Cuts and Jobs Act, which took effect in 2018, eliminated the ability for employees to write off business expenses that are unreimbursed by their company. For workers whose employer allows them (or wants them) to telecommute full-time, losing that tax break might be painful. “For people who work 100 percent at home, the loss of that deduction could be substantial,” said Car


Telecommuters who used to be able to write off the cost of working from home could face a higher tax bill this year. The Tax Cuts and Jobs Act, which took effect in 2018, eliminated the ability for employees to write off business expenses that are unreimbursed by their company. For workers whose employer allows them (or wants them) to telecommute full-time, losing that tax break might be painful. “For people who work 100 percent at home, the loss of that deduction could be substantial,” said Car
A key tax deduction for telecommuters is gone. Here are options for easing the pain Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-29  Authors: sarah obrien, marc romanelli, getty images
Keywords: news, cnbc, companies, easing, unreimbursed, pain, workers, wants, options, working, yearthe, used, work, gone, write, tax, deduction, weston, key, telecommuters


A key tax deduction for telecommuters is gone. Here are options for easing the pain

Telecommuters who used to be able to write off the cost of working from home could face a higher tax bill this year.

The Tax Cuts and Jobs Act, which took effect in 2018, eliminated the ability for employees to write off business expenses that are unreimbursed by their company. For workers whose employer allows them (or wants them) to telecommute full-time, losing that tax break might be painful.

“For people who work 100 percent at home, the loss of that deduction could be substantial,” said Cari Weston, a CPA and director of tax practice and ethics for the American Institute of CPAs.


Company: cnbc, Activity: cnbc, Date: 2019-01-29  Authors: sarah obrien, marc romanelli, getty images
Keywords: news, cnbc, companies, easing, unreimbursed, pain, workers, wants, options, working, yearthe, used, work, gone, write, tax, deduction, weston, key, telecommuters


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