Evelyn Reynolds

The BOJ said in its statement it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled to be held on July 30 and 31.
During the intermeeting period, the BOJ said it will collect views from market participants and will decide on a detailed plan for the reduction of its purchase amount during the next one to two years or so.

The Bank of Japan is largely expected to hold interest rates steady at the end of its 2-day meeting ending June 14, 2024. Seen here, the Japanese flag flying high at the BOJ headquarters in Tokyo.
Kazuhiro Nogi | Afp | Getty Images

The Bank of Japan kept its benchmark interest rate unchanged on Friday, but indicated it’s considering the reduction of its purchase of Japanese government bonds.
The central bank left short-term rates unchanged at between 0% to 0.1% at the end of its two-day policy meeting, as widely expected.

But notably, the bank said in its statement it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled for July 30 and 31.
The decision was passed with an 8-1 majority vote, with board member Nakamura Toyoaki dissenting.
Toyoaki was in favor of reducing JGB purchases, but is of the view that the BOJ should only decide to reduce them after reassessing developments in economic activity and prices in the July 2024 outlook report, slated for July 31.
Ahead of the next meeting, the BOJ said it will collect views from market participants and will decide on a detailed plan for the reduction of its purchase amount for the next one to two years.
Purchases of JGBs, commercial paper and corporate bonds will also continue as decided in the March monetary policy meeting.

Following the BOJ decision, the Japanese yen weakened 0.52% to 157.84 against the U.S. dollar, while the yield on 10-year JGB fell 44 basis points to 0.924.
The benchmark Nikkei 225 rose 0.68%, reversing earlier losses, while the Topix was 0.71% higher.

Bold policy moves

In March, the BOJ raised interest rates for the first time in 17 years — ending the world’s last negative rate regime — and scrapped the yield curve control policy in a radical policy move.
However, the central bank said at that time it would continue to purchase JGBs at a pace of about 6 trillion yen ($38.17 billion) per month.
While the large scale purchases of JGBs achieved the effect of stabilizing 10-year JGB yields at around the 1% level, it indirectly put additional downward pressure on the weak yen, according to a note by advisory firm Teneo published on June 13.

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On May 8, BOJ governor Kazuo Ueda said the central bank will scrutinize the yen’s recent declines in guiding monetary policy, according to a Reuters report.
It came after the yen slipped to a 34-year low, trading at 160 against the dollar in late April, which prompted the BOJ to intervene to prop up the currency.
“Sharp, one-sided yen falls are negative for the economy and therefore undesirable,” as it makes it difficult for companies to set business plans, Ueda told parliament.
“If currency volatility affects, or risks affecting, trend inflation, the BOJ must respond with monetary policy,” he added. More

In a blow to the National Labor Relations Board, the justices made it more difficult to order employers to reinstate fired workers.The Supreme Court ruled in favor of Starbucks on Thursday in a challenge against a labor ruling by a federal judge, making it more difficult for a key federal agency to intervene when a company is accused of illegally suppressing labor organizing.Eight justices backed the majority opinion, which was written by Justice Clarence Thomas. Justice Ketanji Brown Jackson wrote a separate opinion that concurred with the overall judgment but dissented on certain points.The ruling came in a case brought by Starbucks over the firing of seven workers in Memphis who were trying to unionize a store in 2022. The company said it had fired them for allowing a television crew into a closed store. The workers, who called themselves the Memphis Seven, said that they were fired for their unionization efforts and that the company didn’t typically enforce the rules they were accused of violating.After the firings, the National Labor Relations Board issued a complaint saying that Starbucks had acted because the workers had “joined or assisted the union and engaged in concerted activities, and to discourage employees from engaging in these activities.” Separately, lawyers for the board asked a federal judge in Tennessee for an injunction reinstating the workers, and the judge issued the order in August 2022.The agency asks judges to reinstate workers in such cases because resolving the underlying legal issues can take years, during which time other workers may become discouraged from organizing even if the fired workers ultimately prevail.In its petition to the Supreme Court, the company argued that federal courts had differing standards when deciding whether to grant injunctions that reinstate workers, which the N.L.R.B. has the authority to seek under the National Labor Relations Act.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

The producer price index, a gauge of prices that producers get for their goods and services in the open market, declined 0.2% for the month against expectations for a 0.1% increase.
PPI was held back by a 0.8% decrease in final demand goods prices, which was the largest decline since October 2023.
In other economic news, initial claims for unemployment insurance jumped to 242,000 for the week ended June 8. That’s the highest level since August 2023.

A measure of wholesale prices unexpectedly decreased in May, adding another piece of evidence that inflation is pulling back.
The producer price index, a gauge of prices that producers get for their goods and services in the open market, declined 0.2% for the month, the Labor Department’s Bureau of Labor Statistics reported Thursday. That reversed a 0.5% increase in April and compared with the Dow Jones estimate for a 0.1% rise.

Excluding food, energy and trade services, the PPI was unchanged, compared with expectations for a 0.3% increase.
On an annual basis, the all-items PPI rose 2.2%.
Stock market futures saw some modest gains following the report while Treasury yields moved lower.
The release comes a day after the BLS reported that the consumer price index, a widely watched gauge of inflation that measures what consumers actually pay for goods and services, was unchanged on the month.
From the wholesale perspective, the PPI was held back by a 0.8% decrease in final demand goods prices, which was the largest decline since October 2023. Within the category, the energy index tumbled 4.8%. Food prices fell 0.1%.

On the services side, fuels and lubricants retailing margins surged 12.2%, but that was offset in part by a 4.3% plunge in airline passenger services prices.
The release comes a day after the Federal Reserve noted “modest further progress” in bringing inflation back down to its 2% target, but not enough for the central bank to start lowering interest rates. The Fed has held its benchmark borrowing rate in a targeted range of 5.25%-5.5% since July 2023 as it awaits more evidence that inflation is heading back to the central bank’s 2% target.
In other economic news Thursday, the Labor Department reported that initial claims for unemployment insurance jumped to 242,000 for the week ended June 8. That’s the highest level since August 2023 and an increase of 13,000 from the previous period. Economists surveyed by Dow Jones had been looking for 225,000.
Continuing claims, which run a week behind, totaled 1.82 million, up 30,000 from the previous week.

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Treasury Secretary Janet Yellen on Thursday said the swelling national debt is manageable as long as it stays around where it is relative to the rest of the economy.
In a CNBC interview, Yellen also noted that high interest rates are adding to the burden as the U.S. manages its massive $34.7 trillion debt load.

“If the debt is stabilized relative to the size of the economy, we’re in a reasonable place,” she told CNBC’s Andrew Ross Sorkin during a “Squawk Box” live interview. “The way I look at it is that we should be looking at the real interest cost of the debt. That’s really what the burden is.”
During the 2024 fiscal year, net interest costs on the debt have totaled $601 billion — more than the government has spent on health care or defense and more than four times what it has laid out for education.
Multiple Congressional Budget Office reports have warned about the soaring costs of debt and deficits, cautioning that over the next decade the public share of the national debt — currently about $27.6 trillion — will hit a new record as a share of the total economy over the next decade.
The public share of the national debt as a share of GDP is running at about 97% but is expected to soon top 100% at current spending rates.
Yellen touted President Joe Biden’s plans to manage the situation.

“In the budget the president presented for this coming fiscal year he proposes $3 trillion of deficit reduction over the next decade,” she said. “That’s sufficient to basically keep the debt to income ratio stable, and this interest burden would be stabilized.”
The budget deficit for 2024 is running at $1.2 trillion with four months left in the fiscal year. In 2023, the shortfall totaled $1.7 trillion.
The rising financing costs for the debt have come as the Federal Reserve pushed interest rates higher to bring down an inflation rate that had hit its highest level in more than 40 years in mid-2022. Inflation since has pulled back, but the Fed has held benchmark rates higher as it awaits more evidence that the rate of price increases is moving convincingly back to the central bank’s 2% target.
Following its policy meeting this week, the Fed said it has seen “modest” progress on inflation but is not ready to start reducing rates. Yellen, a former Fed chair, declined to comment on the central bank’s actions. More

Cole Mannix, of Old Salt Co-op, is trying to change local appetites and upend an industry controlled by multibillion-dollar meatpackers.“Making It Work” is a series is about small-business owners striving to endure hard times.While many people can conjure up romantic visions of a Montana ranch — vast valleys, cold streams, snow-capped mountains — few understand what happens when the cattle leave those pastures. Most of them, it turns out, don’t stay in Montana.Even here, in a state with nearly twice as many cows as people, only around 1 percent of the beef purchased by Montana households is raised and processed locally, according to estimates from Highland Economics, a consulting firm. As is true in the rest of the country, many Montanans instead eat beef from as far away as Brazil. Here’s a common fate of a cow that starts out on Montana grass: It will be bought by one of the four dominant meatpackers — JBS, Tyson Foods, Cargill and Marfrig — which process 85 percent of the country’s beef; transported by a company like Sysco or US Foods, distributors with a combined value of over $50 billion; and sold at a Walmart or Costco, which together take in roughly half of America’s food dollars. Any ranchers who want to break out from this system — and, say, sell their beef locally, instead of as anonymous commodities crisscrossing the country — are Davids in a swarm of Goliaths.“The beef packers have a lot of control,” said Neva Hassanein, a University of Montana professor who studies sustainable food systems. “They tend to influence a tremendous amount throughout the supply chain.” For the nation’s ranchers, whose profits have shrunk over time, she said, “It’s kind of a trap.” Cole Mannix is trying to escape that trap.Mr. Mannix, 40, has a tendency to wax philosophical. (He once thought about becoming a Jesuit priest.) Like members of his family have since 1882, he grew up ranching: baling hay, helping to birth calves, guiding cattle into the high country on horseback. He wants to make sure the next generation, the sixth, has the same opportunity.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Federal Reserve officials signaled that interest rates could stay higher this year as policymakers pause to ensure they’ve stamped out inflation.Federal Reserve officials left interest rates unchanged at their June meeting on Wednesday and predicted that they will cut borrowing costs just once before the end of 2024, taking a cautious approach as they try to avoid declaring a premature victory over inflation.While the Fed had been expected to leave rates unchanged, its projections for how interest rates may evolve surprised many economists.When Fed officials last released quarterly economic estimates in March, they anticipated cutting interest rates three times this year. Investors had expected them to revise that outlook somewhat this time, in light of stubborn inflation early in 2024, but the shift to a single cut was more drastic.Jerome H. Powell, the Fed chair, made clear in a postmeeting news conference that officials were taking a careful and conservative approach after months of bumpy inflation data.With price increases proving volatile and the job market remaining resilient, policymakers believe they have the wiggle room to hold interest rates steady to make sure they fully stamp out inflation without running too much of a risk to the economy. But the Fed chair also suggested that more rate cuts could be possible depending on economic data.“Fortunately, we have a strong economy, and we have the ability to approach this question carefully — and we will approach it carefully,” Mr. Powell said. He added that “we’re very much keeping an eye on downside economic risks, should they emerge.” More

The latest data could help to restore policymakers’ conviction that inflation is in the process of returning to the Federal Reserve’s goal.Just hours before the release of the Federal Reserve’s latest rate decision, fresh inflation data showed that price increases slowed notably in May.The new report is a sign that inflation is cooling again after proving sticky early in 2024, and it could help to inform Fed officials as they set out a future path for interest rates. Policymakers had embraced a rapid slowdown in price increases in 2023, but have turned more cautious after inflation progress stalled early this year. The latest data could help to restore their conviction that inflation is in the process of returning to the central bank’s goal.Here’s what to know: More

The consumer price index held flat in May though it increased 3.3% from a year ago. Both numbers were 0.1 percentage point below market expectations.
Excluding volatile food and energy prices, core CPI increased 0.2% on the month and 3.4% from a year ago, compared to respective estimates of 0.3% and 3.5%.
Price increases were held in check by a 2% drop in the energy index and just a 0.1% increase in food.

The consumer price index showed no increase in May as inflation slightly loosened its stubborn grip on the U.S. economy, the Labor Department reported Wednesday.
CPI, a broad inflation gauge that measures a basket of goods and services costs across the U.S. economy, held flat on the month though it increased 3.3% from a year ago, according to the department’s Bureau of Labor Statistics.

Economists surveyed by Dow Jones had been looking for a 0.1% monthly gain and a 3.4% annual rate.
Excluding volatile food and energy prices, core CPI increased 0.2% on the month and 3.4% from a year ago, compared to respective estimates of 0.3% and 3.5%.

Following the report, stock market futures pushed higher while Treasury yields slid.
Though the top-line inflation numbers were lower for both the all-items and core measures, shelter inflation increased 0.4% on the month and was up 5.4% from a year ago. Housing-related numbers have been a sticking point in the Federal Reserve’s inflation battle and make up a heavy share of the CPI weighting.
Price increases were held in check, though, by a 2% drop in the energy index and just a 0.1% increase in food. Within the energy component, gas prices tumbled 3.6%. Another nettlesome inflation component, motor vehicle insurance, saw a 0.1% monthly decline though still up more than 20% on an annual basis.

“Finally, some positive surprises as both headline and core inflation beat forecasts,” said Robert Frick, corporate economist with Navy Federal Credit Union. “There was relief at the pump, but unfortunately home and apartment costs continue to rise and remain the main cause of inflation. Until those shelter costs begin their long-awaited fall, we won’t see major drops in CPI.”
The release comes at an important juncture for the economy as the Federal Reserve weighs its next moves on monetary policy, which will be based heavily on where inflation is heading.
Later Wednesday, the rate-setting Federal Open Market Committee will wrap up its two-day policy meeting. Markets widely expect the Fed to keep its benchmark overnight borrowing rate targeted in a range of 5.25%-5.5%, but will be looking for clues about where the central bank is heading.
Following the CPI release, futures traders upped the chances of the Fed cutting in September, which would be the first move lower since the early days of the Covid pandemic. However, the market outlook has been volatile, and Fed officials have stressed that they need to see more than a month or two of positive data before easing policy.
“You’re going to need three more months of very friendly inflation data to cut” in September, said Joseph LaVorgna, chief economist at SMBC Nikko Securities. “If they start easing or talk about easing more, I think they’re going to complicate their own their own goals of getting inflation back to 2%.”
Durable inflation has kept the Fed on the sidelines since it last hiked rates in July 2023. At the March meeting, FOMC members indicated the likelihood that they could rate cuts three times this year for a total of 0.75 percentage point, but they are expected to amend that down to either two or even just one reduction.
In addition, committee members will update their projections on gross domestic product growth as well as inflation and unemployment, all of which could be influenced by the CPI numbers. Economists expect the Fed to raise its projections for inflation and lower the outlook for broad economic growth as reflected by GDP.
Though the Fed doesn’t use CPI as its main inflation indicator, it still figures into the calculus. Policymakers focus more on the Commerce Department’s personal consumption expenditures price index, a broader gauge that takes into account changes in consumer behavior. More