Aurelia Butler

Both Janice Eberly and Karen Dynan served as the chief economist at Treasury during Barack Obama’s presidency and are well regarded by current Treasury Secretary Janet Yellen, the paper said, citing unnamed sources familiar with the matter.President Joe Biden is weighing whom to appoint as vice chair at the Fed after bringing Lael Brainard from the central bank to be one of his chief economic advisers. Brainard, who had been on the Fed Board of Governors since 2014 and had been vice chair beginning last May, left the Fed in the last week.Eberly has a Phd in economics from Massachusetts Institute of Technology and is currently senior associate dean at Northwestern (NASDAQ:NWE) University’s Kellogg (NYSE:K) School of Management. Dynan’s doctorate in economics is from Harvard University, where she is a professor. She previously worked as an economist at the Fed for 17 years ending in 2009.The White House declined to comment but has previously said it expects to make a nomination soon.Last week, the Journal reported that Austan Goolsbee, another Obama administration veteran who took over in January as president of the Federal Reserve Bank of Chicago, was under consideration. On Wednesday, the paper said Goolsbee had faced resistance from some Democrats who have urged Biden to appoint a woman or person of color to the job. More

The producer price index rose 5.1% in January from a year earlier, while it had climbed 5.8% in December, according to the Bank of Korea. It was the slowest annual rise since March 2021.The annual rate continued its slowing trend for a seventh straight month, after hitting a near 14-year high of 10.0% in June 2022.The index rose 0.4% over a month, however, after two straight months of declines, driven mostly by higher utility costs. More

WASHINGTON (Reuters) -Nearly all Federal Reserve policymakers rallied behind a decision to further slow the pace of interest rate hikes at the U.S. central bank’s last policy meeting, but also indicated that curbing unacceptably high inflation would be the “key factor” in how much further rates need to rise.In language that suggested a compromise between officials worried about a slowing economy and those convinced inflation would prove persistent, minutes from the Jan. 31-Feb. 1 meeting said policymakers agreed rates would need to move higher, but that the shift to smaller-sized hikes would let them calibrate more closely with incoming data.”Almost all participants agreed that it was appropriate to raise the target range of the federal funds rate 25 basis points,” with many of those saying that would let the Fed better “determine the extent” of future increases, said the minutes, which were released on Wednesday.At the same time, “participants generally noted that upside risks to the inflation outlook remained a key factor shaping the policy outlook,” and that interest rates would need to move higher and stay elevated “until inflation is clearly on a path to 2%.” Only “a few” participants outright favored a larger half-percentage-point increase at the meeting, or said they “could have supported” it.The Fed delivered a string of 75-basis-point and 50-basis point rate hikes in 2022 in its battle to curb inflation that had climbed to 40-year highs. The central bank’s policy rate is currently in the 4.50%-4.75% range. The minutes’ reference to inflation risks as a “key” to policy means recent data – showing less progress than hoped for – could mean a higher projected stopping point for the federal funds rate when policymakers issue new projections at the end of the March 21-22 meeting, said Omair Sharif, president of Inflation Insights.Recent inflation data and upward revisions to earlier figures means the “upside risks to inflation” cited by policymakers in the minutes “are clearly much higher today than they were when the (Federal Open Market) Committee last met,” Sharif said, referring to the central bank’s policy-setting committee. “The March dots will move higher,” with the median projected year-end policy rate perhaps pushed up to as much as 5.6%, compared with the median 5.1% “dot plot” projection in December. Bond yields rose following the release of the minutes and the U.S. dollar also advanced against a basket of currencies. A modest rally in U.S. stocks fizzled out.The yield on the 2-year Treasury note, the government bond maturity most sensitive to Fed policy expectations, rose about 4 basis points from its level before the release to about 4.69%. The S&P 500 index, up about 0.25% before the minutes came out, closed lower.Traders of futures tied to the Fed policy rate added to bets on at least three more quarter-percentage-point rate hikes at upcoming meetings, with contract pricing pointing to a top federal funds rate range of 5.25%-5.50%. RECESSION RISKThe minutes showed the Fed navigating towards a possible endpoint to its current rate increases, at once slowing the pace in order to more cautiously approach a possible stopping point while also leaving open just how high rates will ultimately rise in the event inflation does not slow.The readout of the meeting included particularly pointed back-and-forth references to sets of developments in the economy that contributed to a still large degree of uncertainty about where things are heading.While “some” participants saw an “elevated” likelihood of a recession in the United States this year, and pointed to a drop in consumer spending at the end of 2022, others noted that households continued to sit on excess savings and that some local governments had “sizeable budget surpluses” that could also help stave off a painful downturn.Business investment was “subdued” at the end of the year. Still, “a couple” participants at the last Fed policy meeting said businesses “appeared more confident” that supply bottlenecks had been eliminated, and that the global economic environment was improving and “could provide support to final demand in the United States.”    The minutes said the labor market remained hot, with businesses – at least outside the tech sector – “keen to retain workers even in the face of slowing demand,” a factor that would help sustain household incomes and spending. ‘VERY TIGHT’ LABOR MARKETThe Fed’s Feb. 1 policy statement said “ongoing increases” in rates would still be needed, but shifted the focus from the pace of coming hikes to their “extent,” a nod to the fact that policymakers feel they may be approaching a rate that is adequate to ensure steady progress in reducing inflation.Data since the last meeting have shown an economy continuing to grow and adding jobs at an unexpectedly rapid pace, while making less progress back towards the Fed’s 2% inflation target. Inflation by the central bank’s preferred measure was running in December at two and a half times the target, with data for January due to be released on Friday. The minutes showed Fed officials still attuned to the risk they may have to do more in order to keep inflation falling, a hawkish tilt that may come into more precise view when policymakers issue new interest rate and economic projections at the meeting.”Participants concurred that the Committee had made significant progress over the past year in moving toward a sufficiently restrictive stance of monetary policy,” the minutes said, describing an economy that continued to grow amid a tight labor market.”Even so, participants agreed that, while there were signs that the cumulative effect of the Committee’s tightening of the stance of monetary policy had begun to moderate inflationary pressures, inflation remained well above the Committee’s longer-run goal of 2% and the labor market remained very tight.” More

Vladimir Putin and Wang Yi, China’s top diplomat, vowed to strengthen ties between their two countries despite “pressure from the international community” ahead of the first anniversary of Russia’s invasion of Ukraine. Wang’s visit to Moscow, the first by a senior Chinese official since Putin ordered the invasion last year, highlights the deepening relationship between the Russian president and his Chinese counterpart Xi Jinping as the war drags into its second year. “We are prepared to maintain our strategic focus and determination alongside Russia,” Wang said as he met Putin on Wednesday. He added that the two sides would deepen “political mutual trust and strategic co-operation”. Beijing has provided an economic lifeline to Moscow as western sanctions bite, stepping up its purchase of Russian energy exports. It has also increased its supply of technical components that Russia can no longer import from western countries because of sanctions.Five more stories in the news1. Missing Chinese banker planned Singapore family office Missing Chinese dealmaker and billionaire Bao Fan, who founded investment bank China Renaissance, was preparing to move some of his fortune from China and Hong Kong to a family office in Singapore in the months leading up to his disappearance, according to sources. Many Chinese executives view Singapore as a haven to park their money after crackdowns at home.2. Imran Khan supporters arrested in Pakistan protests Former Pakistan prime minister Imran Khan’s party said yesterday that up to 700 of its activists and leaders had been arrested during protests designed to destabilise the government, which is urgently seeking an IMF bailout to avert a default. Khan and his allies said last week that they wanted their supporters to be detained en masse to force early elections.3. Toyota raises Japanese wages by most in two decades Toyota has granted 68,000 unionised workers in Japan their highest pay rises in about 20 years, giving a boost to prime minister Fumio Kishida’s campaign for wage increases to address rising living costs. The move by Japan’s largest carmaker, a bellwether of its manufacturing sector, is expected to put pressure on other companies to follow suit.4. Google claims breakthrough in quantum computer error correction The company’s latest research marks an early but potentially significant step in overcoming the biggest technical barrier to a revolutionary new form of computing. The internet company’s findings, published in the journal Nature, mark a “milestone on our journey to build a useful quantum computer”, said Hartmut Neven, head of Google’s quantum efforts.5. Most Fed officials backed quarter-point rate rise The vast majority of Federal Reserve officials supported slowing the pace of US interest rate rises to 0.25 percentage points last month, according to an account of their most recent meeting that showed the central bank is still determined to bring inflation back to target.Markets news: US stocks fluctuated as investors pored over the minutes of the Federal Reserve’s last meeting.The day aheadJapanese Emperor’s birthday The Japanese stock market will be closed today for the public holiday marking Emperor Naruhito’s birthday. Turkey interest rate decision Turkey’s central bank is set to announce interest rates today. Economists expect policymakers to revive a rate-cutting cycle in a bid to boost economic activity after this month’s devastating earthquakes.Earnings Companies reporting results today include Alibaba Group, Deutsche Telekom, Intuit, Dr Pepper Snapple Group, Budweiser, Warner Bros Discovery, BAE Systems, Telefónica, Live Nation, Qantas and Anglo American. What else we’re reading and listening to Iran’s supreme leader takes centre stage Ayatollah Ali Khamenei has embraced a more active role in public life as he seeks to shore up the authority of the Iranian regime after the most intense demonstrations since the Islamic revolution. But rather than being a sign of change within the theocratic regime, it shows an attempt to manage his image.🎧 The costs of Russia’s invasion of Ukraine One year since Russia launched its full-scale invasion of Ukraine, our latest episode of the Behind the Money podcast examines the costs of this war: How individuals’ lives have been uprooted, how the country’s economy has been turned upside down, and how global markets such as food and energy have been transformed.Newcomer disrupts Nigerian presidential race A few months ago, most Nigerians assumed Saturday’s election would come down to two wealthy and seasoned septuagenarian politicians. But Peter Obi, a businessman and former governor with a carefully crafted reputation for shunning the accoutrements of power, has electrified young voters and made the outcome of the election much more unpredictable.

Nigeria’s Labour party presidential candidate Peter Obi © Sunday Alamba/AP

Illiberal democracy comes to Israel The programme of prime minister Benjamin Netanyahu’s latest government is of evident importance for the future of Israel. But it is also of wider significance, argues Martin Wolf, and raises questions about how a democracy can turn into an autocracy via unbridled majoritarianism.Women at the centre of a new Bengaluru museum In India, goddesses are ubiquitous and worshipped widely in the country’s mythology. But reporting shows it is also the most dangerous nation for women across a range of parameters. It’s this paradox that’s at the centre of the inaugural exhibition of Bengaluru’s new Museum of Art and Photography.Take a break from the newsQuality time — an Amy Hwang cartoon. See more of Amy’s work here. More

WASHINGTON (Reuters) -At their last monetary policy meeting, Federal Reserve officials mulled financial stability risks that existed in part due to their aggressive campaign of rate rises, as they also expressed concern over the political fight among elected officials over raising the country’s debt limit. At the Federal Open Market Committee meeting held on Jan. 31-Feb. 1, officials flagged what they saw as potential vulnerabilities in things like commercial real estate and non-bank financial companies, according to meeting minutes released Wednesday. Some Fed officials were also worried about overseas shocks hitting the U.S. financial system. Others “noted the importance of orderly functioning of the market for U.S. Treasury securities and stressed the importance of the appropriate authorities continuing to address issues related to the resilience of the market.” The health of the Treasury market has been an issue for some time and was thrown into stark relief by the tumult seen in the sector three years ago when the coronavirus pandemic first struck. A huge rise in government borrowing coupled with a reduced Fed footprint has raised questions about how this market, critical to global credit, will function, especially if faced with new stresses. At the most recent Fed meeting, officials lifted their overnight target rate range by a quarter percentage point to between 4.5% and 4.75%, as they downshifted the pace of their rate rises aimed at bringing high inflation under control. The meeting minutes showed that officials believed more rate rises were needed to cool inflation, as policymakers flagged the considerable uncertainty that surrounded the economic outlook. COLLATERAL DAMAGE RISKS The Fed has raised rates very aggressively since last March when its target rate stood at near zero levels. While Fed officials have long noted this process could bring pain to the economy, some have said the central bank is mindful of avoiding actions that would break something in the financial system. That said, many market participants have been worried the swift rise in the cost of borrowing could cause trouble for investors and financial firms, and asset markets have been under considerable pressure from Fed actions, which also include a contraction of central bank bond holdings. The minutes showed Fed policymakers were also worried about the unsettled efforts by elected officials to raise the nation’s debt ceiling. Raising the debt limit allows the government to borrow to pay expenses Congress has already approved, but some Republicans are seeking to use the limit to extract concessions from Democrats, even as a wide array of private sector analysts warn of the huge risks that strategy poses. Fed officials appear to agree. “A number of participants stressed that a drawn-out period of negotiations to raise the federal debt limit could pose significant risks to the financial system and the broader economy,” the minutes said. The minutes also showed officials taking stock of the ongoing massive inflows of cash into what the central bank calls its overnight reverse repo facility, which helps set a floor underneath short-term interest rates. That facility has taken in over $2 trillion per day since last June. Fed officials have long expected usage of the tool to shrink over time but that has not happened in any meaningful fashion yet. The minutes did not signal what policymakers think will happen next for the reverse repo tool, but they did note that it’s possible as the Fed presses forward with its balance sheet drawdown there could be some turbulence in money markets. Both Fed staff and policymakers noted the Fed has tools to address wobbly markets. But if significant pressures in funding markets were to arise, “several participants also noted the challenges of addressing potential disruptions in U.S. core market functioning.” More

Rishi Sunak was accused by the Labour party of being at the mercy of “malcontent” Tory MPs on Wednesday, as the prime minister’s efforts to land a Brexit deal on Northern Ireland hit further problems.Sunak had hoped to present a deal to reform Northern Ireland’s trading rules by now, but his allies admit he has had to go back to Brussels to discuss ways to satisfy his critics.The prime minister has told Northern Ireland’s Democratic Unionist party and Eurosceptic Tory MPs that he has secured a key deal to return control of VAT and state-aid rules from Brussels to Westminster.But the DUP and Tory European Research Group, which are co-ordinating their tactics, want to see the legal detail before they welcome any agreement and in the meantime are increasing their demands.Sir Jeffrey Donaldson, the DUP leader, told Sunak he did not want just a tweak of the Northern Ireland protocol, part of Boris Johnson’s 2019 Brexit deal, but wanted to rewrite “the legally binding treaty”.EU member states insist they will not reopen the protocol but were willing to improve its implementation. “We can’t,” said one EU diplomat. “What we are doing is in the framework of the protocol and withdrawal agreement.”Donaldson also said this week he wanted Sunak to create a dual regulatory regime in Northern Ireland, so that manufacturers in the region could choose to produce goods under UK rules for sale in the UK market only, rather than under EU single market rules.The ERG is backing the DUP’s calls for a big overhaul of the protocol, the trade rules that leave Northern Ireland as part of the single market to avoid the creation of a hard border on the island of Ireland.Sir Keir Starmer, Labour leader, told MPs: “It’s the same old story: the country has to wait while the prime minister plucks up the courage to take on the malcontents, the reckless and the wreckers on his own benches.”Sir Simon Fraser, former head of the Foreign Office, tweeted: “How come Number 10 let Rishi Sunak get so exposed on Northern Ireland when there was so much heavy political lifting still to do?”Sunak did not brief the DUP on his plan until the end of last week and brought the ERG into his confidence only this week, leaving some of his critics saying they were being “bounced” into accepting the outline agreement.One veteran of Brexit negotiations said: “It’s incredible they left it this late. They should have started bringing the DUP on board weeks or months ago.” Labour leader Sir Keir Starmer told MPs: ‘The country has to wait while the prime minister plucks up the courage to take on the malcontents, the reckless and the wreckers on his own benches’ © Jessica Taylor/UK ParliamentThe prime minister said parliament would be able to “express a view” on the deal but did not specify how exactly this would take place.Sunak, who briefed Northern Ireland business leaders on Wednesday, has tried to allay concerns over the application of EU state aid and VAT rules to the region, saying they would in future be run from Westminster.The development, first reported by Sky News and confirmed by DUP and Tory officials, would remove one of the irritations of the protocol from the point of view of pro-UK unionists.But Sammy Wilson, DUP chief whip, said his party had seen “no details to assess if there are any exemptions”. A senior Tory MP said: “On the face of it, it’s good news, but how will they actually deliver it?”

An EU official confirmed that the UK would have more freedom to set VAT, tax and state-aid rules in Northern Ireland but said there would be “strings attached”.The prime minister also pledged to address the “democratic deficit” in the deal, giving the Stormont assembly a say over EU rules affecting the region and ensuring the European Court of Justice arbitrates only as a last resort.Stephen Kelly, head of the industry group Manufacturing NI, said Sunak appeared to have “an intimate understanding” of the issues when he briefed business leaders on a video call on Wednesday.But Kelly said he feared relations with the EU could sour if Sunak lost his nerve and retreated from the outline deal taking shape in the face of political opposition.“I think there’s real jeopardy here, a risk of going back rather than going forward, unless this thing is done in the next number of days,” he said. More