US Fed: Mum on the Rate Front

Published August 8th, 2006 - 02:53 GMT
Al Bawaba
Al Bawaba

Dont expect to hear anything particularly hawkish or dovish from FOMC when confusion over the Feds upcoming decision is at its peak.

Some will talk about inflation targets?

 Frederic Mishkin, Federal Reserve Governor-designate

"Inflation band targeting, in which the central bank is assigned a target range and bears some cost if inflation goes outside the range, presents an alternative and more feasible approach to address the time-inconsistency problem." August 3, 2006

 Michael Moskow, Reserve Bank ofChicago President

"Financial markets and the public do not seem to be overly bothered by the lack of an explicit number for future inflationary expectations and at the present time, inflationary expectations are well anchored."   August 3, 2006

Some will talk about the greenback as it weakens?

 Henry Paulson, U.S. Treasury Secretary

"A strong dollar is in our nation's interest." August 1, 2006

Some will just express confidence the Fed Chairman?

 George W. Bush, President of the US

When asked on Fox News Channel to comment on concerns that Federal Reserve Chairman Ben Bernanke has had an uneven tenure since taking over from Alan Greenspan, said "They're both excellent. I've got confidence in Ben Bernanke and his team to be able to balance inflation with growth." August 1, 2006

ECB: No More Accommodation?

The Central Bank appears to be lending itself scope to consider tightening rates further?

 Jean-Claude Trichet, European Central Bank President

"If our assumptions and baseline scenario are confirmed, a progressive withdrawal of monetary accommodation will be warranted." August 3, 2006

 Guy Quaden, ECB Governing Council Member

"It is possible for the European Central Bank to control inflation at the same time as promoting growth. These two objectives do not seem irreconcilable to me." August 4, 2006

"We have contained inflationary pressures while permitting economic growth to develop, because, fortunately, economic growth has strengthened since the end of last year." August 4, 2006

 Lorenzo Bini Smaghi, ECB Executive Board Member

Also after the increase decided last Thursday, you can't deny that the current level 3% represents a still very accommodative monetary policy, given that nominal yields are rising at more than 4%. For this reason, it ought to be expected that the process of aligning interest rates continues in the next months. The pace will depend on developments in the European economy." August 7, 2006

 Klaus Liebscher, ECB Governing Council Member

Upward risks to price stability haven't receded but rather worsened?If we see, based on the data, that a further tightening of the relatively accommodative course is needed, then it will happen. We'll do what's needed at the right time. August 7, 2006

 Frank J. Weise, German Labor Office Chief

"The current labor market data confirm that the economic recovery has apparently reached the labor market." August 1, 2006

Oil: No Respite in Sight

Issues extending from Alaska to Iran have been exacerbating oil prices?

 Mohammad Hadi Nejad-Hosseinian, Iran's Deputy Oil Minister

"Global crude oil prices could touch $100 a barrel due to geopolitical problems and soaring winter demand." August 4, 2006

 Edmund Daukoru, OPEC President

Referring to ongoing hostilities between Israeli forces and Hezbollah militia in Lebanon, the start of the hurricane season in the U.S. and refining constraints were among factors supporting high prices, he said, If I put all those factors together?I don't see prices falling much below $70 (a barrel), to be honest with you, until the end of this year. August 6, 2006

 Ali Larijani, Irans Chief Nuclear Negotiator

We will expand nuclear technology at whatever stage it may be necessary and all of Irans nuclear technology...will be expanded.... We will expand nuclear activities where required. It includes all nuclear technology including the string of centrifuges. We wont accept suspension...We will react in a way that would be painful for them. They should not think that they can hurt us and we would stand still without a reaction.... We do not want to use the oil weapon. Do not force us to do something that will make people shiver in the cold. We do not want that. August 7, 2006

 Bob Malone, BP America Chairman and President

We regret that it is necessary to take this action and we apologize to the nation and the State of Alaska for the adverse impacts it will cause." August 7, 2006

BOJ: More of the Same

As usual, we are seeing opposing views from the Central Bankers vs. the government.

Reiterating in a hawkish tone?

 Toshihiko Fukui, Bank of Japan Governor

When I said at a news conference on July 14 that we are not seeking consecutive rate hikes, I meant there should not be expectations of moves at regular intervals in the wake of the end to quantitative easing and the end to zero rates. August 1, 2006

 Atsushi Mizuno, Bank of Japan Board Member

What concerns me is that when the bank sends out the message of 'slow interest rate adjustment,' there is a risk that it could be misunderstood as 'no more rate hike this year' and cause long-term interest rates to fall despite improvement in economic fundamentals. August 2, 2006

Avoiding the issue?

 Sadakazu Tanigaki, Japanese Finance Minister

"The Group of Seven has been trying to cope with financial imbalances mainly through efforts to solve structural problems of each country. And I think this should be the main tool." He acknowledges that exchange rate adjustments can help in addressing the problem, but he emphasizes that it would be hard to solve the issue through currency rate realignment alone.  He also said, "The IMF has been long arguing for currency adjustments and the reference (in the recent report on the USeconomy) is probably in line with the IMF argument. But the G7 stance is a little different." August 1, 2006

 Kaoru Yosano, Japanese Economic and Fiscal Policy Minister

"I haven't heard that higher crude oil prices are hurting the purchasing power of consumers. However, there are reports of that already starting to impact the lifestyle of people in the US. But I don't have any reports of that happening in Japan." August 1, 2006

" talked about. But higher crude oil prices are starting to have an impact on people's daily existence through increased consumer prices." August 1, 2006



You may also like