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May 22, 2015

Fed on track to hike rates as economic headwinds wane: Yellen

WASHINGTON/PROVIDENCE (Reuters) – Federal Reserve Chair Janet Yellen on Friday said she expected the central bank to raise interest rates this year, as the U.S. economy was on course to bounce back from a sluggish first quarter and headwinds at home and abroad waned.

Yellen spoke amid growing concern at the Fed about possible market volatility once it begins to raise rates, and a desire to begin coaxing skeptical investors towards accepting the inevitable: ending a 6-1/2-year stretch of near-zero interest rates.

May 21, 2015

Fed still seen in lift-off mode as Yellen takes center stage

NEW YORK (Reuters) – The U.S. Federal Reserve is likely to stick with plans to raise interest rates later this year, with progress toward its employment and inflation goals helping allay concerns over the economy’s recent weakness, current and former Fed officials say.

Fed Chair Janet Yellen, who on Friday will talk about the economy’s prospects, is expected to acknowledge the recent sluggishness, including near stagnant performance in the first few months of the year.

May 19, 2015

Central banks playing with fire in growth push – RBI’s Rajan

NEW YORK (Reuters) – The “spectre of deflation” is spurring the world’s major central banks into a dangerous struggle for stronger domestic growth that imperils financial markets and ignores the needs of developing nations, the head of India’s central bank said on Tuesday.

Reserve Bank of India Governor Raghuram Rajan, making a familiar argument for better global coordination on monetary policy, said central bankers in developed economies should take more seriously their international responsibilities.

May 19, 2015

Economy’s weak spell puts Fed at crossroads over liftoff plans

WASHINGTON (Reuters) – The Federal Reserve’s plan to raise interest rates this year, forged over months of strong jobs growth and a seemingly durable expansion, now faces an economy that no longer follows the script and may push the “liftoff” far into the future.

The world’s largest economy slowed to a crawl in the first quarter and may actually have contracted.

May 19, 2015

Despite dip, rupee relatively stable – RBI’s Rajan

NEW YORK (Reuters) – The depreciation of the rupee is due in part to the U.S. dollar’s strength and it has fallen less, and in a less volatile fashion, than other currencies, Reserve Bank of India (RBI) Governor Raghuram Rajan said on Tuesday.

While the rupee has slid against the strengthening dollar, he told a New York audience, “it has actually strengthened against other countries.”

May 19, 2015

Despite dip, Indian rupee relatively stable -RBI’s Rajan

NEW YORK, May 19 (Reuters) – The depreciation of the Indian
rupee is due in part to the U.S. dollar’s strength and it has
fallen less, and in a less volatile fashion, than other
currencies, Reserve Bank of India Governor Raghuram Rajan said
on Tuesday.

While the rupee has slid against the strengthening dollar,
he told a New York audience, “it has actually strengthened
against other countries.”

May 14, 2015

U.S. rejects Canada’s claim that Volcker rule violates NAFTA

By Jonathan Spicer

(Reuters) – The White House has dismissed the Canadian
government’s claim that a ban on some proprietary trading on
Wall Street violates a free-trade agreement, saying it has the
legal right to protect its financial system.

The U.S. response came after Canadian Finance Minister Joe
Oliver said on Wednesday that the so-called Volcker rule’s ban
on U.S. banks’ use of their own money to trade Canadian
government bonds probably did not comply with the North American
Free Trade Agreement.

May 13, 2015

Canadian minister says U.S. Volcker trading ban violates NAFTA

NEW YORK, May 13 (Reuters) – The U.S. ban on its banks doing
proprietary trading of Canadian debt likely violates an
international agreement between the nations, Canadian Finance
Minister Joe Oliver said on Wednesday, urging American lawmakers
to adjust the so-called Volcker Rule.

The rule, meant to curb risky Wall Street trading seen to
worsen the 2007-2009 financial crisis, would stop U.S. banks
from trading of non-U.S. government bonds with their own money
unless exemptions are met.

May 12, 2015

Fed’s ability to delay rate hike now ‘more limited’: Williams

NEW YORK (Reuters) – The Federal Reserve’s ability to delay its initial interest rate hike to head off economic shocks is now “more limited” than its ability to quickly tighten monetary policy in response to positive surprises, a top Fed policymaker said on Tuesday.

San Francisco Fed President John Williams, addressing economists in New York, added that he is now “reasonably confident” inflation will rise to the U.S. central bank’s 2-percent target over the medium term, and that the labor market would continue to improve.

May 7, 2015

Wary of bond ‘cliff,’ Fed plans cautious cuts to portfolio

NEW YORK/SAN FRANCISCO (Reuters) – The Federal Reserve is sketching out plans to prevent an abrupt contraction in its massive balance sheet next year, when some $500 billion in bonds expire and risk disrupting markets and the U.S. economic recovery.

Though it ended a stimulative asset-purchase program last October, the Fed is still buying mortgage and Treasury bonds to replenish its $4.5-trillion portfolio as holdings mature. The central bank has said it will keep reinvesting until some time after it begins raising interest rates later this year.