Aurelia Butler

“How much can the economy take in terms of rate increases so we can get the policy rate to a level that’s reasonable to bring inflation down? And how can we do that without tipping the labor market over?” Daly said at an event in Chicago. She was describing the balancing act the Fed faces after raising the short-term policy rate from near zero to 5.25%-5.5% over a span of about 18 months.”I would say now the risks of how we balance those things are roughly balanced — over-tightening versus under-tightening — but we still have high inflation and the labor market’s still strong,” she said. Daly repeated her view that the recent run-up in long-term bond yields could substitute for a further Fed rate hike because the higher yields make it more expensive to borrow and can slow spending and investment.Treasury yields reversed some of their recent rise on Tuesday as investors bought U.S bonds following the eruption of the Palestinian-Israel conflict over the weekend. “Right now, geopolitical uncertainty is adding to already some domestic uncertainty” that is making businesses cautious, Daly said, adding that the Fed will monitor what war might do to oil prices or export demand, for instance. “It’s part of a large dashboard of data,” she said, to which the Fed needs to be able to respond to with agility. More

Kashkari pointed to changing expectations about the Federal Reserve’s actions as a possible reason for the higher yields, suggesting that meeting these expectations could be necessary to maintain the yields. He also found the recent yield increase perplexing, attributing it to either growing economic optimism or increased US government borrowing.Three other Federal Reserve officials recently hinted that rising Treasury yields might reduce the need for additional rate hikes. Pricing in futures markets indicates less than a 20% chance of another quarter-point hike at the Oct. 31 and Nov. 1 meeting, a significant shift from Kashkari’s previous prediction of a 60% likelihood of one more rate hike this year to return inflation to its 2% target without causing significant economic damage.The president’s comments reflect an ongoing debate within the Federal Reserve about the best way to respond to changing economic conditions. As policymakers grapple with these issues, market participants will likely continue to closely monitor their public statements for clues about future policy directions.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

TOKYO (Reuters) – Business morale at large Japanese manufacturers was subdued in October, although the services-sector mood edged up, the Reuters Tankan poll showed, as upbeat domestic demand helped partly offset the hit to the economy from global headwinds.The prospect of higher U.S. interest rates has weakened the Japanese yen, hurting the country’s terms of trade, while concerns about a spike in oil prices are also weighing on sentiment.All in all, downside risks from the global economy have sapped confidence in Japan’s trade-reliant economy, which is otherwise gradually recovering from the pandemic with tourists from China and elsewhere returning.The Reuters poll, which tracks the Bank of Japan’s (BOJ) closely watched tankan quarterly survey, saw manufacturers’ mood flat at +4 index points in October, although it was expected to inch up over the coming three months.The service-sector index rose to +24, slightly improving from +23 from the previous month, according to the survey conducted Sept. 27 to Oct. 6. Underscoring the fragility of corporate morale, the sentiment index was seen falling to +20.”Our business conditions are not so good, because there’s a divide among those who benefit from recovery in car production and those who suffer from China’s overall economic slowdown,” an industrial ceramic maker manager wrote.”Uncertainty around the outlook is high,” the manager added.In the Reuters poll of 502 large- and mid-sized companies, in which 249 firms responded, many complained about the rising cost of doing business due to surging raw materials prices that were aggravated by a weak yen. The respondents spoke on the condition of anonymity.The BOJ’s tankan out on Oct. 2 found Japan’s business sentiment improved in the third quarter, suggesting conditions for a durable economic revival are falling into place even as a global slowdown keeps policymakers cautious about the outlook.The Reuters Tankan indexes are calculated by subtracting the percentage of pessimistic respondents from optimistic ones. A positive reading means optimists outnumber pessimists. More

The two photovoltaic plants will be located in the mining areas of Khouribga and Benguerir with a combined capacity of 400 megawatts and a storage capacity of up to 100 megawatt-hours, OCP said in a statement.This green loan is the second offered by the IFC to OCP within a year after a similar 100 million-euro loan last April to build four plants with a combined capacity of 202 megawatts in the same mining areas.Last year, OCP announced an investment plan worth 130 billion dirhams ($13 billion) to fully rely on renewable energies for its fertiliser production by 2027.In June, OCP told Reuters it plans to invest $7 billion in an ammonia plant using green hydrogen, produced from renewable fuel. More