Archive

March 27, 2024
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Waller - There’s Still No Rush


In his speech, Christopher Waller discusses the outlook for the U.S. economy and its impact on monetary policy. He expresses uncertainty about the speed of continued progress towards the inflation target of 2 percent. Waller cites recent economic data, including job gains and inflation measures, which reinforce his view that there is no rush to cut the policy rate. He believes that further progress will make it appropriate to reduce the target range for the federal funds rate, but until that progress materializes, he is not ready to take that step. Waller emphasizes the importance of avoiding premature policy actions that could risk squandering progress on inflation. He acknowledges the strength of the U.S. economy and the resilience of the labor market, which supports the decision to wait for a better understanding of the trajectory of inflation before easing policy.


Positivity: 90
Uncertainty: 70

March 27, 2024
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Cipollone - The confidence to act

Speech by Piero Cipollone, Member of the Executive Board of the ECB, at an event organised by the House of the Euro and the Centre for European Reform

In Piero Cipollone's speech, he discusses the recent economic conditions in the euro area and their impact on inflation and monetary policy. He highlights that the euro area has experienced a series of demand and supply shocks, resulting in high inflation. However, the reversal of these shocks, along with the restrictive monetary policy, has led to a decline in inflation. Cipollone emphasizes that the decisions of the ECB are based on the inflation outlook and risks. He mentions the concern about high labour costs and their potential impact on inflation. Despite this, he believes that a catch-up in wages in real terms is compatible with reaching the inflation target. Cipollone also mentions that the current environment of disinflation has reduced uncertainty, allowing for more confidence in the inflation projections. As a result, the ECB has decided to wait for further data before normalizing policy rates to ensure inflation is converging to the target.


Positivity Score: 80
Uncertainty Score: 70

March 25, 2024
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Cook - The Dual Mandate and the Balance of Risks


In this speech, Lisa Cook discusses the Federal Reserve's dual mandate goals for monetary policy, recent indicators of progress toward meeting those goals, and the evolving "balance of risks." She notes that inflation has fallen considerably while the labor market remains strong, and as a result, the risks to achieving employment and inflation goals are moving into better balance. Cook emphasizes the benefits of maximum employment and price stability, highlighting how they promote economic growth and prosperity. She discusses the evolution and international comparisons of both price stability and maximum employment objectives. Cook also discusses the tradeoffs between these goals and how monetary policy should navigate them. She provides an analysis of inflation indicators, including core inflation and its components, as well as labor market indicators such as the unemployment rate, labor force participation, and available jobs. Cook concludes by stating that a cautious approach to easing monetary policy may be necessary to fully restore price stability.


Positivity: 80
Uncertainty: 60

March 25, 2024
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Oil: A Fine Line

  • The IEA’s recent shift in its 2024 supply/demand forecast closer to Opec’s is premised on relatively bullish estimates for the Chinese and US economies coupled with continued Opec+ discipline. None of these is a given.

By Alastair Newton