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2024-01-31 11:40:40
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#Afraid #political #chaos #Thai #stocks #fall #points #Bank #Thailand #plans #cut #GDP #3PlusNews
2024-01-31 11:41:21
© Reuters. FILE PHOTO: U.S. Federal Reserve Board Chair Jerome Powell holds a news conference following the Fed raised interest rates by a quarter of a percentage point following a two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy in Wa
By Ann Saphir
(Reuters) – Federal Reserve Chair Jerome Powell has a tough task on Wednesday as he wraps up the U.S. central bank’s first policy meeting of 2024: signaling an end to interest-rate hikes and teeing up future cuts without unleashing financial market exuberance that might undermine progress on inflation.
On one level the job is straightforward. Though the Fed has left its benchmark rate at between 5.25% and 5.5% since July and is expected to keep it there on Wednesday, its policy statement has continued to include a reference to “additional policy firming” as a reminder that any future adjustments would be upward.
Many analysts expect the Fed to delete that phrase this time around. Powell laid the groundwork for the change last month, when he said policymakers think another rate hike is unlikely to be needed.
“It’s become dated,” said Oxford Economics’ Ryan Sweet, citing quickly cooling inflation.
Dropping it would give room to cut rates as soon as March if price pressures or economic growth ease faster than expected, said High Frequency Economics’ Rubeela Farooqi – though she, like many economists, believe rate cuts won’t start until June.
But analysts disagree on what the Fed will say instead, in part because there is such wide agreement that removing the phrase will be seen not just as opening the door to a rate cut, but practically walking through it. A resulting rally in markets might ease financial conditions and encourage spending and investment that might potentially reignite waning price pressures.
To forestall that possibility, Fed policymakers may opt to characterize current policy as “sufficiently restrictive” or add a word like “patient” or “cautious” to signal a longer hold at the current policy-rate level, analysts said.
Several economists expect the Fed simply to swap in a more neutral phrase for coming moves, such as “in determining appropriate policy” or “any future adjustments,” and rely on Powell, in his post-meeting press conference, to clarify what that means.
But change is fraught.
“The risk is for markets to run with a generic ‘adjustments’ line as a signal that March is very much on the table,” wrote economists at BNP Paribas (OTC:), whose view is that while it’s a close call they think the “firming” phrase will stay, given recent Fed official commentary.
Removing it, even with the addition of a promise of patience, “would heighten focus on the press conference, potentially complicating Powell’s task,” they wrote.
CURBING ENTHUSIASM
Powell is known for his plainspoken explanations of complicated economic dynamics and an unruffled demeanor in the face of sharp political criticism.
Dealers on Wall Street assess communications under his watch as being more effective than under either of his two most recent predecessors.
But he’s had his share of miscues and miscalculations.
In October 2018 he signaled more rate hikes ahead despite what investors perceived as a swiftly weakening outlook. Then in 2021 he stuck with calling inflation “transitory” despite accumulating data that it was gaining more lasting traction.
Toward the end of that year he retired “transitory” and moved to slow the Fed’s bond purchases to prepare for eventual rate hikes, but critics blame the subsequent climb in inflation to 40-year highs in part on the Fed not starting its rate-hike campaign until March 2022.
The picture is now dramatically different. By some measures inflation has been at the Fed’s 2% target for months now, though by the yardstick the Fed targets, the annual change in the personal consumption expenditures price index, it is still above target at 2.6%.
But complicating matters is the strong consumer spending that helped the economy grow 3.1% last year, measured on a fourth quarter to fourth quarter basis, versus the 2.6% Fed officials penciled in at their last public projections, published mid-December.
That’s despite the Fed’s aggressive interest rate hikes that, at the start of 2023, most economists and the Fed’s own staff thought would trigger a recession.
“The consumer has been downright defiant,” says KPMG’s Diane Swonk, and that will keep officials from projecting too much confidence in the timing of rate cuts. “Powell will be cautious to curb his enthusiasm at the press conference so that he does not inadvertently trigger a major financial market rally,” she said.
Last month Fed policymakers signaled they saw 75 basis-points of rate cuts this year as likely appropriate; Swonk says that by March, they may up that forecast to a full percentage point, and start delivering reductions in May.
“The Fed is trying to normalize rates for a robust economy, not overstimulate,” she said. “That is a tough line to walk.”
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#Fed #Chair #Powell #faces #tough #communications #task #rate #cuts #ahead #Reuters
Risks of Direct Mortgage Installments to Developers: What Home Buyers Need to Know
Jakarta – Buying a dream home is almost always included in someone’s life plans. Not infrequently people are willing to take various methods to be able to buy it. Because it is so important to own a house, many people are not careful when getting offers for easy home financing schemes, one of which is … Read more
The post Risks of Direct Mortgage Installments to Developers: What Home Buyers Need to Know appeared first on World Today News.
https://www.world-today-news.com/risks-of-direct-mortgage-installments-to-developers-what-home-buyers-need-to-know/
False identification of the driver fined for Traffic may be a crime | My Rights | Economy
2024-01-30 09:21:10 GETTY IMAGES Drivers fined by the General Directorate of Traffic (DGT) have a voluntary…
The post False identification of the driver fined for Traffic may be a crime | My Rights | Economy appeared first on TIme News.
https://time.news/false-identification-of-the-driver-fined-for-traffic-may-be-a-crime-my-rights-economy/
Revolutionizing Car Technology: The Rise of 3D Holographic Controls for Safer Driving
A Safer Alternative to Touchscreens in Cars: 3D Holographic Technology In recent years, touchscreens have become a…
The post Revolutionizing Car Technology: The Rise of 3D Holographic Controls for Safer Driving appeared first on Breaking Latest News.
https://www.breakinglatest.news/business/revolutionizing-car-technology-the-rise-of-3d-holographic-controls-for-safer-driving/
Samsung Galaxy S24 Series: New Features, Market Dynamics, and Pricing Information
Recently, Samsung announced the Galaxy S24 series, its flagship mobile phone for the first half of 2024. This time, Taiwan has entered the first wave of sales markets, and it will be launched at the same time as certain markets worldwide today (31st). to updated hardware specifications, this year’s S24 series has several Galaxy AI […]
The post Samsung Galaxy S24 Series: New Features, Market Dynamics, and Pricing Information appeared first on News Directory 3.
https://www.newsdirectory3.com/samsung-galaxy-s24-series-new-features-market-dynamics-and-pricing-information/
2024-01-31 10:49:41
Industrial activity trends in 2023
Manufacturing -3.9%, Semiconductor -5.3%
Retail sales and investment are both sluggish
▲ Page 16 As semiconductor exports fell into a recession last year, Korea’s manufacturing production decreased by the largest amount in 25 years since the 1998 foreign exchange crisis. Retail sales, an indicator of consumption, declined by the largest amount in 20 years due to high inflation. Even facility investment has decreased by the largest amount in four years, and the slump in domestic demand appears to be worsening.
According to ‘December 2023 and annual industrial activity trends’ announced by Statistics Korea on the 31st, last year’s overall industrial production index (2020 = 100) was 110.9, an increase of 0.7% from the previous year. The All-Industrial Production Index maintained an upward trend for three consecutive years following increasing 5.3% in 2021.
Service industry production increased by 2.9% and construction industry increased by 7.7%, leading the overall increase. However, the mining industry showed a sluggish performance, declining by 3.8%. The semiconductor recession in the first half of last year had a significant impact, with manufacturing production decreasing by 3.9%. This is the largest decline since the 6.5% drop in 1998.
Semiconductor production decreased by 5.3%, turning negative for the first time since falling 15.3% in 2001. The average operating rate of the manufacturing industry was 71.3%, the lowest since 1998. However, the semiconductor industry’s ‘up and down’ trend last year (sluggish first half, rebound in the second half) was clear. Semiconductor production turned to an increase, recording +4.7% in the third quarter, following -33.8% in the first quarter and -18.6% in the second quarter of last year. Production in the fourth quarter was provisionally calculated to be 35.6%, showing a U-shaped flow.
Due to the effects of high inflation and high interest rates, people’s wallets are tightly closed. Last year’s retail sales index decreased by 1.4% from a year ago. Sales of durable goods such as passenger cars increased by 0.2%, but non-durable goods such as foodstuffs decreased by 1.8% and semi-durable goods such as clothing decreased by 2.6%, dragging down the overall index.
Last year’s retail sales decline was the largest in 20 years since -3.2% in 2003. Gong Mi-sook, economic trend statistics reviewer at Statistics Korea, analyzed, “Considering that semi-durable goods and non-durable goods have decreased, the consumption pattern appears to be shifting from goods to the service industry.”
Sluggish investment also accelerated the slump in domestic demand. Facility investment recorded -7.2% in machinery and -0.4% in transportation equipment, down 5.5% from the previous year. Kim Gwi-beom, head of the economic analysis department at the Ministry of Strategy and Finance, said, “We plan to focus policy efforts to ensure that the warmth of economic recovery centered on manufacturing production and exports can quickly spread to all sectors.”
Sejong Reporter Kwak So-young
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#Semiconductor #export #bonanza #shrunk #year #Largest #cold #wave #manufacturing #industry #years
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