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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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German Ifo index improves in March

Is this a new discovery of optimism? Germany’s most prominent leading indicator, the Ifo index, just pointed to some signs of life and increased to 87.8 in March from 85.7 in February. But before popping the corks, let’s not forget that today’s reading is still far lower than levels seen last summer. Today’s increase was driven by both improved current assessment and expectations components. Together with yesterday’s PMI reading, which showed a further weakening in the manufacturing sector but improvements in the services sector, the message is clear: the German ...

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Falling fertility rates pose major challenges for the global economy, report finds

Falling fertility rates are set to spark a transformational demographic shift over the next 25 years, with major implications for the global economy, according to a new study. By 2050, three-quarters of countries are forecast to fall below the population replacement birth rate of 2.1 babies per female, research published Wednesday in The Lancet medical journal found. That would leave 49 countries — primarily in low-income regions of sub-Saharan Africa and Asia — responsible for the majority of new births. “Future trends in fertility rates and livebirths will propagate shifts ...

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German home prices tumble record 8% in 2023 amid property rout

Residential property prices in Germany dropped 8.4% in 2023 from a year earlier, data on Friday showed, in a further grim sign for the real-estate sector in Europe’s largest economy. The fall was the biggest since Germany’s statistics office began keeping records in the year 2000, underscoring the nation’s biggest property crisis in decades. It was also the first annual decline since 2007. For years, the property sector in Germany and elsewhere in Europe boomed as interest rates were low and demand strong. But a sharp rise in rates and ...

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EU leaders to back tighter euro zone fiscal stance in 2025

European Union leaders will back on Friday a slightly tighter fiscal policy for the euro zone next year, to help bring down inflation and make public finance more stable after the excess spending of the COVID pandemic and the energy price crisis. The endorsement comes after finance ministers of the 20 countries using the euro agreed on March 11 on fiscal policy guidelines for 2025 to take into account new fiscal rules that give more time to cut debt while maintaining investment. “The European Council endorses … the …recommendation on ...

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U.S. companies’ stock purchases via buybacks, M&A to hit 6-year high in 2024, Goldman says

U.S. companies’ purchases of domestic equities through more stock buybacks and corporate acquisitions will hit a six-year high of $625 billion this year, about as much as mutual funds and pension houses will offload, Goldman Sachs said. “A surge in share buybacks and continued growth in cash mergers and acquisitions (M&A) will be the primary drivers of corporate equity demand,” Cormac Conners, U.S. equity strategist at Goldman, said in a note dated March 21. Earlier this month, the Wall Street bank said it expects S&P 500 companies’ .SPX share repurchases ...

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Over half of economists expect BOJ to hike rates further this year: Reuters poll

More than a half of economists expect the Bank of Japan will raise interest rates further this year, a Reuters poll showed on Friday, possibly taking them to as high as 0.25%. The BOJ on Tuesday ended eight years of negative interest rates and other remnants of its unorthodox policy, hiking rates for the first time in 17 years to around zero in a historic shift away from decades of massive monetary stimulus. But the survey reflected conviction among market players that the central bank will go slow on additional ...

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