North America

  • 2020-02-19 14:00

    WASHINGTON (MNI) - The following is an excerpt of the Federal Open Market Committee minutes describing committee's policy action, published Wednesday for the January meeting:

    Since year-end, money market rates remained stable, with the Desk's longer-term repos maturing with no discernible effect on market conditions and reserve management purchases of Treasury bills proceeding smoothly. At the current pace of $60 billion per month, the staff's estimates suggested that after April of this year, the Desk's reserve management purchases will restore the permanent base of reserves to levels above those prevailing in early September 2019.

  • 2020-02-19 14:00

    WASHINGTON (MNI) - The following is an excerpt of the Federal Open Market Committee minutes describing committee's policy action, published Wednesday for the January meeting:

    The staff's briefing on considerations regarding the use of an inflation range focused on three different concepts of an inflation range. First, an uncertainty range could communicate the magnitude of the inherent variability of inflation that would still be consistent with achieving the Committees symmetric inflation objective.

  • 2020-02-14 10:11

    By Greg Quinn

    OTTAWA (MNI) - Canada's housing market remained tight in January with average prices rising the most since mid-2016 and measures of the inventory of properties for sale the lowest in more than a decade.

    The average price of $504,350 was up 11.2% from a year earlier, the Canadian Real Estate Association said Friday from Ottawa. The Toronto area is among the hottest markets while declines in Vancouver are fading, with quality-adjusted prices in both cities up more than 50% from five years ago.

    The return of housing market strain is a big reason the BOC is reluctant to cut the G7's highest interest rate of 1.75%, because faster growth now could come at the expense of a bigger setback down the road.

  • 2020-02-11 15:46

    By Jean Yung

    WASHINGTON (MNI) - With the U.S. economy in a "good position" and fears of coronavirus gutting global growth yet to materialize, Federal Reserve Bank of St. Louis President Jim Bullard told reporters Tuesday that U.S. interest rates are "steady as she goes."

    Futures markets are rightly pricing in "some tail risk" from the Chinese outbreak but the epidemic will likely subside within one to two months as in past episodes, he said.

    "Markets have what's called a peso problem, where they have to decide about the low probability of a high impact event, so I think that's skewing the forecast a little bit toward Fed easing," he said.

  • 2020-02-11 13:40

    --Soft Landing Still Reasonable Forecast for U.S. Economy in 2020

    WASHINGTON (MNI) - China's coronavirus outbreak adds to other risks threatening a soft landing for the U.S. economy this year, St. Louis Fed President Jim Bullard said Tuesday.

    "Experience with previous viral outbreaks suggests that the effects on U.S. interest rates can be tangible and last until the outbreak is clearly contained," he said, pointing to the effects on the 10-year Treasury yield of other viral outbreaks such as SARS, swine flu, avian flu and Ebola.

    In the case of swine flu, the 10-year yield fell nearly 60 bps about a month into the outbreak before rebounding.

  • 2020-02-07 05:00

    By Evan Ryser

    WASHINGTON (MNI) - The U.S. Commerce Department's new rule to impose duties on products from countries that undervalue their currencies "almost assuredly" violates World Trade Organization subsidy obligations, Jeffrey Schott says in a new blog post published Friday by the Peterson Institute for International Economics.

    "Bluntly put, Commerce has manipulated the definition of currency manipulation for protectionist purposes," said Schott, a former Treasury official and member of the delegation who negotiated the GATT Subsidies Code.

    "[T]his regulatory change conflicts with current Treasury practice and almost assuredly violates World Trade Organization (WTO) subsidy obligations, which I helped write 40 years ago," he wrote.

    --NEW RULE

    The U.S.

  • 2020-02-05 12:15

    By Greg Quinn and Anahita Alinejad

    OTTAWA (MNI) - The Bank of Canada is studying a nominal GDP target and putting more weight on past inflation during a review of its 2% inflation goal that's up for renewal next year, Senior Deputy Governor Carolyn Wilkins said Wednesday.

    The global use of tools like QE and negative rates is also being studied, and it's still unclear what their long-term effects are, Wilkins said in a speech in Toronto. Canada avoided most of those extraordinary tools in the 2008 financial crisis, and some of them are still in use abroad more than a decade later.

  • 2020-02-04 11:58

    --Former Fed Chair Sees A Less Dynamic American Economy

    WASHINGTON (MNI) - Former Federal Reserve Chair Janet Yellen on Tuesday called China's coronavirus a significant risk to the global economic outlook this year.

    "It is a potential influence on the global economy, it seems certain to have a significant effect, at least for a quarter or two, on Chinese growth," Yellen said. "China is such a significant piece of the global economy. That's bound to have spillovers."

    "We don't know where this is going. To my mind, it is clearly a source of uncertainty and risk to the global outlook," she said at a panel discussion at George Washington University in Washington.

  • 2020-02-03 15:00

    By Evan Ryser

    WASHINGTON (MNI) - The U.S. Treasury said Monday it expects to borrow USD367 billion during the first quarter of 2020, USD22 billion less than previously estimated.

    The department said it assumes an end-of-March cash balance of USD400 billion.

    Treasury also expects to pay down USD56 billion in net marketable debt in the April to June period. In the fourth quarter of 2019, Treasury borrowed USD330 billion through credit markets, slightly below estimates in October, and ended the quarter with a cash balance of USD404 billion.

    The decrease in borrowing resulted "primarily from the lower end-of-quarter cash balance and higher net issuances of State and Local Government securities," Treasury said in a statement.

  • 2020-01-30 13:54

    --Independent Staff Paper Says Household Credit Biggest Challenge

    OTTAWA (MNI) - Central banks can blunt the "tail risk" of an economic slump if their policy moves aren't so dramatic they throw GDP growth off course, according to a paper by BOC researchers published Thursday.

    Macroprudential regulations can head off the rapid expansion of household credit, the major growth risk in the medium term, according to an independent paper by Thibaut Duprey and Alexander Ueberfeldt in the BOC's financial stability branch.

    Their work may help policymakers communicate reasons why they would choose a policy aimed more toward longer-term financial risks than economic growth, the authors wrote.