IMF Commends Fiji’s Economic Rebound but Warns of Vulnerabilities
The International Monetary Fund commended Fiji for its economic rebound driven by tourism but warned of vulnerabilities. Directors stressed the need for sound macroeconomic management, fiscal consolidation, and addressing structural challenges. Authorities were praised for revenue-enhancing measures but urged to improve revenue mobilization, expenditure efficiency, and oversight of state-owned enterprises. The IMF recommended shifting monetary policy to a neutral stance and advised reversing pandemic-related exchange restrictions while enhancing financial sector oversight.
Bond Traders Brace for Hawkish Turn from Federal Reserve
Bond traders are preparing for a potentially hawkish turn from the Federal Reserve, adjusting their strategies amid poor US Treasury performance. With expectations shifting towards higher rates and doubts about future cuts, traders are increasing short positions. Market data shows a rise in bearish sentiment, with hedge funds and CTAs actively building short positions. As the market braces for a potentially hawkish pivot, the bond market sees a resurgence in short bond exposure.
Eurozone Inflation Declines in March, Setting Stage for Potential Rate Cut
Eurozone inflation dropped to 2.4% in March, potentially paving the way for a rate cut by the European Central Bank. Core inflation also decreased, while the US economy showed steady growth with inflation concerns. UK inflation eased less than expected, raising worries about persistent inflation pressures. Analysts are closely watching service inflation as an indicator of domestic price trends.
Challenges and Solutions for Federal Reserve’s Forecasting Methods
The Federal Reserve is reevaluating its forecasting methods in light of economic surprises, with scenario analysis emerging as a promising alternative. By exploring a spectrum of risks and potential responses, central banks can enhance transparency and better prepare stakeholders for future policy actions amidst evolving economic dynamics.
US Fed should avoid climate change ‘mission creep’: Powell
Jerome Powell, head of the US central bank, warns that the Federal Reserve should avoid getting involved in politically-charged issues like climate change without Congressional approval in order to maintain public trust. Powell emphasized the importance of avoiding ‘mission creep’ and staying within the Fed’s mandate of setting monetary policy and banking regulation.
Market Volatility Expected with Central Bank Decisions and U.S. Jobs Report
This week’s potential market volatility is driven by high-impact events from central bank decisions to the all-important U.S. jobs report. Key catalysts to watch include the U.S. ISM Services PMI, Bank of Canada and Fed announcements, and the European Central Bank decision.
Fed’s Plans for Balance Sheet Reduction
Max is back on top: Here’s what’s worth streaming in February 2024 Investors are eager to hear more on Wednesday about when the Federal Reserve might pivot to lower interest rates. But that won’t be the only focus after the…
Fed’s Potential Pivot and Inventory Glut Impact
An Early Pivot for the Fed Could Have Costly Consequences According to a recent report, the Federal Open Market Committee (FOMC) is expected to maintain steady rates in the upcoming week. However, due to progress on inflation despite the Red…