ECB’s Draghi hints at a possible dip in inflation

Patience and persistence in our monetary policy are still needed, says ECB’s Draghi 2 Hours Ago | 02:05Mario Draghi, the president of the European Central Bank (ECB), hinted at the possibility of inflation not rising as quickly as expected due to euro zone firms dealing with a slew of uncertainties. “If firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent,” Draghi said at a banking conference in Frankfurt Friday. “This wo


Patience and persistence in our monetary policy are still needed, says ECB’s Draghi 2 Hours Ago | 02:05Mario Draghi, the president of the European Central Bank (ECB), hinted at the possibility of inflation not rising as quickly as expected due to euro zone firms dealing with a slew of uncertainties. “If firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent,” Draghi said at a banking conference in Frankfurt Friday. “This wo
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Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: matt clinch
Keywords: news, cnbc, companies, dip, end, bond, central, euro, hints, zone, rose, possible, draghi, firms, inflation, yields, ecbs


ECB's Draghi hints at a possible dip in inflation

Patience and persistence in our monetary policy are still needed, says ECB’s Draghi 2 Hours Ago | 02:05

Mario Draghi, the president of the European Central Bank (ECB), hinted at the possibility of inflation not rising as quickly as expected due to euro zone firms dealing with a slew of uncertainties.

“If firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent,” Draghi said at a banking conference in Frankfurt Friday.

“This would affect the speed with which underlying inflation picks up and therefore the inflation path that we expect to see in the quarters ahead.”

Draghi’s speech was generally positive about the region and he reiterated that the central bank’s massive crisis-era bond-buying scheme is still due to be wound down at the end of this year. He said there was no reason why the current expansion in the euro area — which is now in its fifth year — should abruptly come to an end, adding that the economic cycle was resilient.

German bond yields rose on Friday on the back of these comments. The country’s 10-year bond yield rose to session highs at 0.376 percent, extending earlier rises, according to Reuters.


Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: matt clinch
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US Treasury yields little changed amid report showing inflation coming in as expected

At last week’s Fed meeting, the bank left rates unchanged as expected, but said it sees “further gradual increases” ahead, sticking to its guns on policy. President Donald Trump has criticized the Fed for raising rates, going as far as to call the institution “crazy” for doing so. ET, Federal Reserve Chairman Jerome Powell and Dallas Federal Reserve Bank President Robert Kaplan will be speaking on global economic issues in Texas. Meanwhile, in international debt markets, Italian bond yields jump


At last week’s Fed meeting, the bank left rates unchanged as expected, but said it sees “further gradual increases” ahead, sticking to its guns on policy. President Donald Trump has criticized the Fed for raising rates, going as far as to call the institution “crazy” for doing so. ET, Federal Reserve Chairman Jerome Powell and Dallas Federal Reserve Bank President Robert Kaplan will be speaking on global economic issues in Texas. Meanwhile, in international debt markets, Italian bond yields jump
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Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: ryan browne, drew angerer, getty images
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US Treasury yields little changed amid report showing inflation coming in as expected

At last week’s Fed meeting, the bank left rates unchanged as expected, but said it sees “further gradual increases” ahead, sticking to its guns on policy. President Donald Trump has criticized the Fed for raising rates, going as far as to call the institution “crazy” for doing so.

Traders will likely monitor upcoming inflation data on Wednesday. Consumer Price Index (CPI) and core CPI inflation figures are due today at 8:30 a.m. ET.

Two big Fed speeches are expected on Tuesday. At 6 p.m. ET, Federal Reserve Chairman Jerome Powell and Dallas Federal Reserve Bank President Robert Kaplan will be speaking on global economic issues in Texas.

Meanwhile, in international debt markets, Italian bond yields jumped after the government resubmitted its draft budget to the European Commission. Rome stuck to its 2019 deficit target of 2.4 percent of annual economic output, a move which is likely to set the stage for a standoff with Brussels. The news send Italy’s 10-year bond yield to a three-week high.

Correction: This story has been updated to reflect that Federal Reserve Chairman Jerome Powell and Dallas Federal Reserve Bank President Robert Kaplan will be speaking on global economic issues in Texas at 6 p.m. ET.


Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: ryan browne, drew angerer, getty images
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Billionaire Ray Dalio: Why saving in cash is ‘the worst thing you could do’

But actually, just holding your money in cash is a bad idea, according to billionaire hedge fund magnate Ray Dalio. “That’s the worst thing you could do because it is the surest tax on your money,” Dalio tells CNBC Make It. “When you put your money in cash or short-term deposit, look at the interest rate you’re getting in relationship to the inflation rate,” Dalio, founder of Bridgewater Associates, explains. “You will see that your after tax return will be below the inflation rate. Don’t miss:


But actually, just holding your money in cash is a bad idea, according to billionaire hedge fund magnate Ray Dalio. “That’s the worst thing you could do because it is the surest tax on your money,” Dalio tells CNBC Make It. “When you put your money in cash or short-term deposit, look at the interest rate you’re getting in relationship to the inflation rate,” Dalio, founder of Bridgewater Associates, explains. “You will see that your after tax return will be below the inflation rate. Don’t miss:
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Billionaire Ray Dalio: Why saving in cash is 'the worst thing you could do'

Amid headlines of turmoil in the stock market, heightened global trade tensions and political tumult, it may seem like the safest place to store your money is in a savings account.

But actually, just holding your money in cash is a bad idea, according to billionaire hedge fund magnate Ray Dalio.

“That’s the worst thing you could do because it is the surest tax on your money,” Dalio tells CNBC Make It. “You will bleed slowly to death, because the after-tax returns are lower than inflation by a little per year.”

Here’s what he means: Over time, inflation causes the goods and services you buy every day to become more expensive relative to the value of the dollars in your wallet. For example, it would take saving over $1,495 in September 2018 (the latest data available) to match the buying power of $1,000 in January of 2000, according to the BLS’ Inflation Calculator.

And over the long term, inflation becomes increasingly powerful. It would take about $10,742 in September 2018 to match the buying power of $1,000 in January of 1950, according to the calculator.

Although you do earn interest on money deposited in a savings account at a bank, the amount is far too low to keep up with the negative impact of inflation, Dalio points out.

“When you put your money in cash or short-term deposit, look at the interest rate you’re getting in relationship to the inflation rate,” Dalio, founder of Bridgewater Associates, explains. “You will see that your after tax return will be below the inflation rate. That means that you’re experiencing a tax on that [money] equal to that difference. So you can’t keep your money in cash. If you think that’s safe, you’re looking at it wrong — it’s a sure losing strategy.”

Right now, the national average interest rate for a savings account is only 0.09 percent, according to data from Bankrate. Meanwhile, the Consumer Price Index — which measures inflation — rose 2.7 percent in the past year.

Since keeping your money in a savings account is a guaranteed way to lose money, you have to turn your savings into investments, Dalio says. Then, your money is growing while you sleep.

“Over a longer period of time, equities [or stocks] will have a higher return, bonds will have a higher return, real estate will have a higher return than cash,” he explains. While there are no guarantees in the stock market, from 1928 through 2017, the S&P 500 index produced a 9.8 percent average annualized total return.

“People with great ideas create productivity and get paid for it,” Dalio says. “It is better to invest in productivity than to not invest in productivity, because otherwise your money will lose buying power.”

Don’t miss: Billionaire Ray Dalio remembers the moment he saw the financial crisis coming: ‘This is the big one’

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Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: ali montag, scott eells, bloomberg, getty images
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Companies struggling to fill jobs ‘should try paying more,’ Fed’s Kashkari says

Companies should try digging in their pockets if they’re looking to find workers for unfilled jobs, Minneapolis Fed President Neel Kashkari said Tuesday. With the unemployment rate falling to its lowest level in 49 years, there are nearly 1 million more job openings than available workers, according to the Labor Department. “Now, I’m not entirely sympathetic with that view, because I’ve been saying you should try paying more, and you may be able to attract more workers.” “But nonetheless, the un


Companies should try digging in their pockets if they’re looking to find workers for unfilled jobs, Minneapolis Fed President Neel Kashkari said Tuesday. With the unemployment rate falling to its lowest level in 49 years, there are nearly 1 million more job openings than available workers, according to the Labor Department. “Now, I’m not entirely sympathetic with that view, because I’ve been saying you should try paying more, and you may be able to attract more workers.” “But nonetheless, the un
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Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: jeff cox, kate rooney, richard drew
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Companies struggling to fill jobs 'should try paying more,' Fed's Kashkari says

Companies should try digging in their pockets if they’re looking to find workers for unfilled jobs, Minneapolis Fed President Neel Kashkari said Tuesday.

With the unemployment rate falling to its lowest level in 49 years, there are nearly 1 million more job openings than available workers, according to the Labor Department. Even though payrolls have been growing at a solid clip, complaints persist from companies that they are having a hard time finding qualified workers to fill positions because of a skills gap.

Kashkari, though, said he doesn’t completely buy the argument that there aren’t enough bodies out there.

“I oftentimes hear businesses saying I just can’t find the workers that I need,” the central bank official said during a conference on immigration in his home district. “Now, I’m not entirely sympathetic with that view, because I’ve been saying you should try paying more, and you may be able to attract more workers.”

“But nonetheless, the unemployment rate is going down, and there is a question about where the workforce is going to come from,” he added.

Immigration would be one answer to solving the issue, with low population and productivity growth, Kashkari said.

In talking to business contacts around his district, he said, “You realize that immigration does have a role to play in helping both those problems.”

Wage growth has been nudging higher lately, with average hourly earnings growth at 3.1 percent in October from the same period a year ago. That has helped the Fed stay around its 2 percent inflation goal as central bank officials maintain that the unemployment rate is below the long-term normal level.

The Fed has been gradually raising short-term rates in an attempt to tamp down a future inflation threat. Kashkari did not address monetary policy at the event Tuesday.

WATCH: Five market experts break down how to invest as interest rates spike


Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: jeff cox, kate rooney, richard drew
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Venezuelan inflation approaches 150,000% as Maduro’s efforts to curb huge price increases fail

Venezuelan President Nicolas Maduro’s most-recent attempt to stop his country’s massive inflation problems is failing, at least according to one measure. The Bloomberg Café Con Leche Index, which gauges Venezuela’s inflation through the price of a cup of coffee, showed an annual inflation rate of 149,900 percent after its latest reading. The staggering inflation print comes after the Venezuelan government issued a new currency, the “sovereign bolivar.” One sovereign bolivar was worth 100,000 “ol


Venezuelan President Nicolas Maduro’s most-recent attempt to stop his country’s massive inflation problems is failing, at least according to one measure. The Bloomberg Café Con Leche Index, which gauges Venezuela’s inflation through the price of a cup of coffee, showed an annual inflation rate of 149,900 percent after its latest reading. The staggering inflation print comes after the Venezuelan government issued a new currency, the “sovereign bolivar.” One sovereign bolivar was worth 100,000 “ol
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Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: fred imbert, marco bello, getty images
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Venezuelan inflation approaches 150,000% as Maduro's efforts to curb huge price increases fail

Venezuelan President Nicolas Maduro’s most-recent attempt to stop his country’s massive inflation problems is failing, at least according to one measure.

The Bloomberg Café Con Leche Index, which gauges Venezuela’s inflation through the price of a cup of coffee, showed an annual inflation rate of 149,900 percent after its latest reading.

The staggering inflation print comes after the Venezuelan government issued a new currency, the “sovereign bolivar.” One sovereign bolivar was worth 100,000 “old” bolivars. The purpose of the new currency was to normalize day-to-day transactions as the country battles through years of hyperinflation. The new currency is also pegged to petro, a digital currency issued by the Venezuelan government that many consider is illegal.

These efforts initially helped as the sovereign bolivar held in a range between 95 and 115 per U.S. dollar, Bloomberg reported citing data from Monitor Dolar. On Monday, however, the bolivar traded at 276.53 per dollar, Monitor Dolar data showed.

Venezuela’s troubles come as the country with the biggest oil reserves in the world deals with an ongoing humanitarian crisis. Venezuela faces shortages of food, medicine and other basic goods.

On top of that, the Trump administration has sanctioned dozens of Venezuelans associated with Maduro’s regime, including his wife, Cilia Flores. The Treasury Department also seized a $20 million private jet belonging to Diosdado Cabello — the vice president of Venezuela’s socialist party — back in September.

Venezuela’s inflation is expected to keep spiraling out of control, too. The International Monetary Fund said in June it expected inflation in Venezuela to hit 1 million present in 2018, noting the country is “stuck in a profound economic and social crisis.”


Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: fred imbert, marco bello, getty images
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Goldman’s ‘bear market risk indicator’ signals returns will be zero the next 12 months

Goldman Sachs’s bear market prediction tool is at an “elevated” level that has historically signaled a zero average return over the next 12 months and a “substantial” risk of drawdown. Amazon, thought by many to be at the intersection of technology and consumer discretionary stocks, closed in a bear market and is down more than 20 percent from recent highs. But while the Goldman indicator may be suggesting tougher times ahead, Oppenheimer said there many be reason not to jump to conclusions abou


Goldman Sachs’s bear market prediction tool is at an “elevated” level that has historically signaled a zero average return over the next 12 months and a “substantial” risk of drawdown. Amazon, thought by many to be at the intersection of technology and consumer discretionary stocks, closed in a bear market and is down more than 20 percent from recent highs. But while the Goldman indicator may be suggesting tougher times ahead, Oppenheimer said there many be reason not to jump to conclusions abou
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Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: thomas franck, jacob w frank, getty images
Keywords: news, cnbc, companies, stock, strategist, signals, returns, zero, 12, inflation, risk, oppenheimer, indicator, bear, growth, market, goldmans, goldman, correction, months


Goldman's 'bear market risk indicator' signals returns will be zero the next 12 months

Goldman Sachs’s bear market prediction tool is at an “elevated” level that has historically signaled a zero average return over the next 12 months and a “substantial” risk of drawdown.

Goldman’s bear market indicator — which takes into account the unemployment rate, manufacturing data, core inflation, the term structure of the yield curve and stock valuation based on the Shiller PE ratio — is at a rare 73 percent, its highest level since the late 1960s and early 1970s.

The indicator is “flashing red,” wrote Goldman chief global equity strategist Peter Oppenheimer. “Historically, when the Indicator rises above 60 percent it is a good signal to investors to turn cautious, or at the very least recognize that a correction followed by a rally is more likely to be followed by a bear market than when these indicators are low.”

The caution from one of Wall Street’s banking bellwethers came as the Dow Jones Industrial Average and S&P 500 each added to steep losses over the past few weeks. The Dow finished Monday’s session down 602 points — or 2.3 percent — while the broader S&P’s slid 1.9 percent, bringing its three-month move to a loss of 3.7 percent.

“Coupled with tighter financial conditions, the impact of U.S. trade tariffs and rising oil prices have slowed global growth momentum,” the Goldman stock strategist added. “We often see slightly higher volatility and a peak followed by a correction, and then another peak around the top of a bull market. We have seen corrections twice this year: in January and then again in October.”

Though nearly every sector lost ground on Monday, the pain was worst in technology, consumer discretionary, energy and financials, which all dropped more than 1.9 percent. Amazon, thought by many to be at the intersection of technology and consumer discretionary stocks, closed in a bear market and is down more than 20 percent from recent highs.

The Nasdaq Composite finished the day in correction territory.

But while the Goldman indicator may be suggesting tougher times ahead, Oppenheimer said there many be reason not to jump to conclusions about an upcoming bear market.

“There remain good reasons why this indicator has been consistent with a sharp correction rather than the start of a prolonged bear market,” he wrote. “We continue to expect a sustained period of low returns rather than a sustained bear market.”

For his part, Oppenheimer expected economic growth to slow, but does not forecast a recession. In order for the stock strategist to ring the alarm about impending recession, he said he’d need to see a sharp rise in inflation and interest rates. But because of lethargic inflation, there has been a trend lower in volatility and longer expansion phases.

The Fed’s preferred inflation gauge, the PCE price index excluding the volatile food and energy components, rose 0.2 percent in September after being flat in August.

That left the year-on-year increase in the so-called core PCE price index at 2.0 percent for a fifth straight month. The metric rose above the central bank’s 2 percent inflation target in March for the first time since April 2012.

“Our view about the prospects for low returns is based on the idea that, without a recession, a bear market is not very likely,” Oppenheimer concluded. “While the likelihood of negative returns rises as growth slows, it doesn’t

become high until GDP growth is below 1 percent.”


Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: thomas franck, jacob w frank, getty images
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US wholesale prices jump 0.6% in Oct, the most in 6 years

U.S. wholesale prices rose by the most in six years last month, led higher by more expensive gas, food, and chemicals. The Labor Department said Friday that the producer price index — which measures price increases before they reach the consumer — leapt 0.6 percent in October, after a smaller 0.2 percent rise in September. Producer prices increased 2.9 percent from a year earlier. Excluding the volatile food and energy categories, core wholesale prices rose 0.5 percent in October and 2.6 percent


U.S. wholesale prices rose by the most in six years last month, led higher by more expensive gas, food, and chemicals. The Labor Department said Friday that the producer price index — which measures price increases before they reach the consumer — leapt 0.6 percent in October, after a smaller 0.2 percent rise in September. Producer prices increased 2.9 percent from a year earlier. Excluding the volatile food and energy categories, core wholesale prices rose 0.5 percent in October and 2.6 percent
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US wholesale prices jump 0.6% in Oct, the most in 6 years

U.S. wholesale prices rose by the most in six years last month, led higher by more expensive gas, food, and chemicals.

The Labor Department said Friday that the producer price index — which measures price increases before they reach the consumer — leapt 0.6 percent in October, after a smaller 0.2 percent rise in September. Producer prices increased 2.9 percent from a year earlier.

Excluding the volatile food and energy categories, core wholesale prices rose 0.5 percent in October and 2.6 percent from a year earlier.

Despite last month’s increase, the figures suggest inflation pressures are mostly in check. The year-over-year price increase is lower than it was in the summer, when it topped 3 percent. And oil prices declined in October, which will likely to lower gas costs in the coming months.

The Federal Reserve is keeping a close eye on price changes as it monitors the economy for signs of overheating. The unemployment rate is at a five-decade low of 3.7 percent and companies are raising wages and salaries to attract and keep workers. Average hourly pay rose in October from a year earlier at the fastest pace in nearly a decade.

Companies may have to raise prices to offset the costs of higher pay, which could spur higher inflation. But businesses could also invest in more machinery and software to make their employees more efficient, which would enable them to pay more without raising prices.


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Treasury yields rise for week amid Fed decision, higher inflation

ET, the yield on the 10-year Treasury note was seen trading lower at around 3.223 percent, while the yield on the 30-year Treasury bond dipped to 3.423 percent. The yield on the two-year Treasury note hit its highest level since June 2008 on Thursday, following the latest monetary policy decision from the Fed. Inflation has been drifting higher in recent months, with a measure of U.S. business prices rising steadily in October. Producer prices rose 0.6 percent during the month; headline PPI was


ET, the yield on the 10-year Treasury note was seen trading lower at around 3.223 percent, while the yield on the 30-year Treasury bond dipped to 3.423 percent. The yield on the two-year Treasury note hit its highest level since June 2008 on Thursday, following the latest monetary policy decision from the Fed. Inflation has been drifting higher in recent months, with a measure of U.S. business prices rising steadily in October. Producer prices rose 0.6 percent during the month; headline PPI was
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Treasury yields rise for week amid Fed decision, higher inflation

U.S. government debt yields were poised for weekly gains on Friday following the Federal Reserve’s decision to stand by its plans for further rate hikes and signs of inflation among producers.

As of 8:44 a.m. ET, the yield on the 10-year Treasury note was seen trading lower at around 3.223 percent, while the yield on the 30-year Treasury bond dipped to 3.423 percent. Bond yields move inversely to prices.

The yield on the two-year Treasury note hit its highest level since June 2008 on Thursday, following the latest monetary policy decision from the Fed. The U.S. central bank left rates unchanged as expected, but maintained its plans to hike interest rates, saying it saw “further gradual increases” ahead. The bank did, however, note that business investment had “moderated from its rapid pace earlier in the year.”

“The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term,” FOMC members said in statement, using the exact language they’d used prior.

Fed officials, who attempt to keep unemployment low and inflation moderate, have gradually increased interest rates under Fed Chair Jerome Powell as they try to prevent the U.S. economy from overheating.

Fed Vice Chairman of Supervision Randal Quarles will speak at 9 a.m. ET.

Inflation has been drifting higher in recent months, with a measure of U.S. business prices rising steadily in October.

The U.S. producer price index posted its largest monthly gain since September 2012 during the month of October, the Labor Department said Friday. Producer prices rose 0.6 percent during the month; headline PPI was expected to match last month’s increase and show an increase of 0.2 percent.

Excluding the volatile food and energy components, prices rose 0.5 percent in October from the prior month. Barring food, energy and trade services, prices grew 0.2 percent last month.

— CNBC’s Ryan Browne contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2018-11-09  Authors: thomas franck, saul loeb, afp, getty images
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New Zealand central bank shifts to neutral tone and warns of growth risks

New Zealand’s central bank struck a neutral tone as it marked two full years of steady policy on Thursday, saying its next move would depend on how the economy fared and cautioned of downside risks to growth from global trade frictions. As widely expected, the Reserve Bank of New Zealand kept the official cash rate (OCR) at 1.75 percent, where it has remained since late 2016, and reiterated it expected to hold rates into 2020. The central bank removed a line from its previous statements that its


New Zealand’s central bank struck a neutral tone as it marked two full years of steady policy on Thursday, saying its next move would depend on how the economy fared and cautioned of downside risks to growth from global trade frictions. As widely expected, the Reserve Bank of New Zealand kept the official cash rate (OCR) at 1.75 percent, where it has remained since late 2016, and reiterated it expected to hold rates into 2020. The central bank removed a line from its previous statements that its
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Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: mark coote, bloomberg, getty images
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New Zealand central bank shifts to neutral tone and warns of growth risks

New Zealand’s central bank struck a neutral tone as it marked two full years of steady policy on Thursday, saying its next move would depend on how the economy fared and cautioned of downside risks to growth from global trade frictions.

The New Zealand dollar rallied briefly and bonds sold off as the markets priced out any chance of a near term rate cut and instead focused on when New Zealand would join some of its global counterparts in raising rates.

As widely expected, the Reserve Bank of New Zealand kept the official cash rate (OCR) at 1.75 percent, where it has remained since late 2016, and reiterated it expected to hold rates into 2020.

“The timing and direction of any future OCR move remains data dependent,” Governor Adrian Orr said in a statement, and in a press conference later in the day he refused to rule out a rate cut if economic conditions deteriorated.

The central bank removed a line from its previous statements that its next rate move could be either up or down, but noted both upside and downside risks remained to growth and inflation projections.

“We don’t agree that the RBNZ needs to maintain the fence-sitting dual approach to policy,” said Citibank economist Paul Brennan.

“While our own forecasts show a near-term moderation in GDP growth, we expect CPI inflation to exceed the RBNZ’s latest forecasts and maintain the view that the OCR will need to rise from Q3 next year.”

A run of stellar economic data including a surprise drop in third-quarter jobless rate to 10-year lows, better-than-expected growth and inflation numbers over recent months, has given the RBNZ some breathing room.

However, Orr pointed to temporary factors for the pick-up in second-quarter economic growth and cautioned of headwinds to growth.

“Weak business sentiment could weigh on growth for longer. Trade tensions remain in some major economies, raising the risk that trade barriers increase and undermine global growth.”

The New Zealand dollar hit a fresh three-month high of $0.6820 immediately after the rate decision but quickly retreated from those levels to last hover around $0.6785.

Government bonds were sold off for a second straight day as investors priced out the risk of a cut with yields on the long-end of the curve up about 5 basis points.


Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: mark coote, bloomberg, getty images
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Fed is set to keep rates on hold before a hike later in the year

So far this year, the central bank has raised rates three times. As it happens, this week’s meeting will be the last that will not include a news conference by the Fed chairman. In its most recent forecast, the Fed projected that it would raise rates three additional times in 2019 but private economists are split. But President Donald Trump has sharply disagreed, and since the stock market started tumbling last month, he has attacked the Fed’s rate hikes as well as Powell’s leadership. While Tru


So far this year, the central bank has raised rates three times. As it happens, this week’s meeting will be the last that will not include a news conference by the Fed chairman. In its most recent forecast, the Fed projected that it would raise rates three additional times in 2019 but private economists are split. But President Donald Trump has sharply disagreed, and since the stock market started tumbling last month, he has attacked the Fed’s rate hikes as well as Powell’s leadership. While Tru
Fed is set to keep rates on hold before a hike later in the year Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: saul loeb, afp, getty images, richard drew
Keywords: news, cnbc, companies, inflation, rates, later, fed, hikes, recent, hike, raised, set, statement, feds, meeting, hold, rate


Fed is set to keep rates on hold before a hike later in the year

The Federal Reserve appears on track to raise interest rates once more this year but will likely hold off on any action when its latest policy meeting ends Thursday.

Still, investors will be parsing the statement the Fed will issue after its meeting for any sign that it might be rethinking its probable pace of credit tightening in the coming months. So far this year, the central bank has raised rates three times.

At their most recent meeting in late September, Fed officials collectively projected that they would end up raising their key short-term rate four times this year and three times in 2019. The Fed’s benchmark rate affects many consumer and business loans, and when it raises it, borrowing can become more expensive for many.

In recent weeks, financial markets have been gripped by worry and volatility, and some analysts think that in its statement Thursday the Fed may take note of that anxiety as a potential risk to economic growth.

As it happens, this week’s meeting will be the last that will not include a news conference by the Fed chairman. Beginning in 2019, Chairman Jerome Powell has said he will hold a news conference after each of the Fed’s eight meetings each year, rather than only at every other meeting.

In its statement, the Fed is all but sure to announce that it will keep its key rate unchanged in a range of 2 percent to 2.25 percent, the level it reached in September when the Fed raised it for the third time this year.

Beginning in late 2015, the central bank has gradually raised its key rate from a record low near zero, where it had held it since the 2008 financial crisis to try to stabilize the financial system and stimulate growth. With the economy growing briskly and in its 10th year of expansion — the second-longest stretch on record — the Fed is aiming to keep future inflation under control.

Some analysts say they think the fundamental message from the Fed on Thursday will be that with a strong economy and unemployment at a near five-decade low of 3.7 percent, steady if modest rate hikes should remain in place for now. Last week, the government said that employers added a robust 250,000 jobs in October and that average pay grew 3.1 percent over the previous 12 months — the best year-over-year gain in a decade.

“Look for the statement following the meeting to highlight the recent and welcome pickup in wages and the further drop in the unemployment rate,” said Diane Swonk, chief economist at Grant Thornton.

The quickened pace of economic growth — a 3.5 percent annual rate in the July-September quarter, after a 4.2 percent rate the previous quarter — has raised the risk that inflation could begin accelerating. So far, though, inflation has remained around the Fed’s 2 percent target for annual price increases.

In its most recent forecast, the Fed projected that it would raise rates three additional times in 2019 but private economists are split. Some believe there will be four hikes in 2019 as the Fed responds to continued strong growth while some see only one or two hikes next year as the boost from the $1.5 trillion in tax cuts passed last year begins to fade.

Powell has stressed that the Fed is determined to follow a centrist approach: Keep gradually nudging up rates to control inflation but avoid tightening too aggressively and perhaps triggering a recession.

But President Donald Trump has sharply disagreed, and since the stock market started tumbling last month, he has attacked the Fed’s rate hikes as well as Powell’s leadership.

Trump’s public criticism has aroused concern that he is intruding on the political independence the Fed needs to assure markets that it will make tough choices when needed to keep inflation under control.

While Trump has called the Fed’s rate hikes his “biggest threat,” Powell, who was Trump’s hand-picked choice to lead the Fed, has avoided responding directly to the criticism. He has instead expressed determination to pursue the Fed’s mandate of maximizing employment and stabilizing prices without regard to political considerations.

WATCH:Five market experts break down how to invest as interest rates spike


Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: saul loeb, afp, getty images, richard drew
Keywords: news, cnbc, companies, inflation, rates, later, fed, hikes, recent, hike, raised, set, statement, feds, meeting, hold, rate


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