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Federal Reserve expected to cut rates, lift Biden’s prospects

The U.S. Federal Reserve looks on track to cut interest rates as the presidential campaign season heats up, potentially delivering President Joe Biden a boost as polls show Americans dislike his handling of the economy. The Fed could play an outsized – and potentially uncomfortable – election-year role by helping shape attitudes about stubbornly high inflation and mounting housing costs that have been a drag on Biden’s reelection efforts. Rate cuts will also invite critics – Republican challenger Donald Trump chief among them – to argue an agency set up ...

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AI will fundamentally transform the job market but the risk of mass unemployment is low

The rise of AI has sparked intense debate about the impact it could have on the labour market and future employment. On the one hand, if digital technologies complement labour, they could enhance or improve human skills and create space for more social interaction and creative work. On the other hand, certain types of jobs could disappear if these technologies replace human skills and take the place of labour. However, the fear of job losses is nothing new. Previous technological progress has always been controversial, even sparking riots. Yet, mass ...

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Fed’s Cook says cautious approach needed to policy easing

The U.S. central bank needs to proceed carefully as it decides when to begin cutting interest rates, Federal Reserve Governor Lisa Cook said on Monday, citing, as many of her colleagues have, the rough balance now between the dangers of easing monetary policy too soon and those of moving too slowly. With inflation falling but still high, and the labor market still strong, “the risks to achieving our employment and inflation goals are moving into better balance,” Cook said in remarks prepared for delivery to an event hosted by Harvard ...

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China pushes banks to speed approvals of new loans to private developers, say sources

Chinese regulators are pushing banks to speed up approvals of new loans to cash-starved private property developers, people with knowledge of the matter said, a bid to revive homebuyer sentiment that risks denting lenders’ asset quality. The effort uses the “whitelist” mechanism, Beijing’s latest support measure aimed at easing the sector’s unprecedented liquidity squeeze and spurring home purchases, as new home prices fell in February for an eighth straight month. Most top domestic banks have so far shied away from significantly bolstering credit exposure to the crisis-hit sector despite repeated ...

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ECB moving towards rate cut, Italy’s Panetta says

The European Central Bank (ECB) is moving towards an interest rate cut as inflation is falling rapidly and approaching the bank’s 2% target, Bank of Italy Governor Fabio Panetta said on Monday. Addressing an event in Rome, Panetta said the inflation trend was making a rate cut “possible.” “The consensus emerging – especially in recent weeks – within the ECB governing council points in this direction,” he said. Source: Reuters

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China job ad sparks social media outcry over ‘middle-age’ unemployment

A job advertisement in China seeking cashiers aged 18 to 30 at a grocery store has ignited debate on social media about the perils of “middle-age unemployment”, amid a scramble to fill jobs across age groups and energise a sluggish economy. With tens of millions of college graduates set to join the workforce in the next few years, the nation of 1.4 billion is grappling with the threat of high youth unemployment, but people over 30 also face unrelenting pressure in finding jobs. “It’s not easy,” said a commenter in ...

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Fed gets an earful about ‘stranglehold’ from high rates

Federal Reserve Chair Jerome Powell and fellow Fed governors on Friday heard firsthand from business and community leaders how the Fed’s interest rate hikes, along with ongoing price and labor market pressures, are affecting Americans. Higher interest rates together with instability in commodity prices “has a stranglehold on the American agriculturalist right now, which leads to a stranglehold on all of rural America,” said Whitney Ferris-Hansen, who owns and operates J/W Farms and Ranch in Burlington, Colorado. “An increase in rates is always expected and planned for, but the speed ...

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Greek current account turns to surplus in January

Greece’s current account turned to surplus in January compared to the same month last year on strong tourism and an improvement in secondary income account, the Bank of Greece said on Friday. Central bank data showed the current account surplus was 1.7 billion euros ($1.84 billion) in January, compared with a deficit of 162 million euros in January 2023. “The surplus of the secondary income account rose considerably compared with January 2023, due to higher net receipts in the other sectors of the economy,” the bank said. Tourism receipts rose ...

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BoE’s Bailey says rate cuts in play, FT reports

Bank of England Governor Andrew Bailey said expectations of interest rate cuts this year were not “unreasonable” and he struck an optimistic tone about the UK economy, the Financial Times reported on Friday. “The fact that we have a curve that has cuts in it for the year as a whole is not unreasonable to me,” Bailey told the FT in an interview, adding he was encouraged by recent signs that inflation in Britain was on the wane. “All our meetings are in play. We take a fresh decision every ...

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Trump broadsides re-heat Fed independence question: Mike Dolan

It may seem odd to have a central bank boss clinch a rare soft landing of the U.S. economy and then face the sack – but that very real possibility has many investors fretting about potential post-election risks to Federal Reserve independence. Several banks have recently delved into claims by former President and Republican presidential candidate Donald Trump – neck and neck in opinion polls with incumbent Joe Biden – that if he’s elected in November he would not reappoint Jerome Powell on the expiry of the Fed chair’s term ...

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US House passes $1.2 trln bill to avoid shutdown, angers hardline Republican

The U.S. House of Representatives on Friday passed a $1.2 trillion government funding bill with more support from Democrats than the majority Republicans, leading to a fresh threat by a hardline conservative lawmaker to oust Speaker Mike Johnson. The House’s 286-134 vote sends the measure to the Democratic-majority Senate, which has hours to act ahead of a midnight deadline (0400 GMT Saturday) when parts of the Department of Homeland Security, Internal Revenue Service and Justice Department to Treasury and State departments would begin to close. The move marks a critical ...

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Euro zone inflation may be stickier than those eyeing June rate cut think -Holzmann

Many people on the European Central Bank’s Governing Council believe economic data will allow a rate cut in June but inflation could well turn out to be stickier than they think, ECB policymaker Robert Holzmann said on Friday. While a rate cut is in preparation the time has not yet been set and will depend on data, Holzmann told a news conference. That is why he is waiting to see the data for June, added Holzmann, who also heads the Austrian central bank. Source: Reuters (Reporting by Francois Murphy; Editing ...

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German business sentiment rises in March, Ifo says

German business morale improved in March and beat expectations, a survey showed on Friday, though probably not enough to prevent Europe’s biggest economy from slipping into another recession. The Ifo institute said its business climate index stood at 87.8 compared with a reading of 86.0 forecast by analysts in a Reuters poll. “The German economy glimpses light on the horizon,” said Ifo president Clemens Fuest. Companies’ expectations turned much less pessimistic in March and assessments of the current business situation also improved, the survey showed. “The strong gain in the ...

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France sees budget deficit over target in 2024 if nothing done, senator says

France’s finance ministry expects the public sector budget deficit to overshoot its 2024 target by a wide margin if no corrective action is taken, a senator said on Thursday after consulting estimates from the ministry. Senator Jean-Francois Husson told reporters that the 2023 public accounts, which are to be published on Tuesday, would show the 2023 budget deficit reached 5.6% of gross domestic product in 2023, well in excess of the government’s 4.9% target. So far the government had only indicated that the 2023 deficit would be “significantly” above its ...

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UK shoppers defy forecasts for a weak February as recovery signs grow

British retail sales unexpectedly held steady in February, according to data that chimed with improving confidence among consumers about the outlook for their finances with inflation slowing and interest rates likely to come down too. Retail sales volumes were flat and remained 1.3% below levels before the COVID-19 pandemic in 2020, the Office for National Statistics said on Friday. But economists polled by Reuters had forecast that sales volumes would fall by 0.3% on the month. The stronger-than-expected figures added to signs that the economy is recovering from last year’s ...

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