Us Monetary Policy News

The US central bank plans to reduce its pace of quantitative tightening. Don’t read too much into this. It’s not about an economic weakness. Rather, it looks like liquidity management to prevent a scramble among banks that could result in an interest rate spike.

Slowing its balance-sheet runoff means the Fed will buy more Treasuries. But don’t look for any big downdraft in yields.

Trump’s options include depriving the US Fed of autonomy, taxing Treasury bonds held abroad, buying other currencies and pushing for a Plaza Accord-like pact. All these ideas have flaws, even if tariff threats are used against trade partners.

Retail inflation was 5.2% in December, down from 5.5% the month earlier. The hope is that it cools off further and India’s upcoming budget doesn’t stoke price pressures.

The US central bank must focus attention more tightly on incoming data and not on plans about the policy rate path that aren’t actually plans, promises or even coherent consensus forecasts. It should also dump its confusing dot plot.

It should embrace clear monetary-policy rules and explain its reasoning for departing from them.

Having delivered another quarter-point cut in its policy rate on Wednesday, Fed chair Jerome Powell chose not to dwell on Trump uncertainty. But then, nobody knows what to expect of the next president in terms of inflation-impacting policy.

What will the US central bank do with its interest rate policy? Growth isn’t really flagging while inflation risks may go up next year if the White House shifts America’s tariff and immigrant policies. RBI will be watching closely too.

Credit scores and other factors have a growing impact on borrowing cost.

The head of JPMorgan Chase questioned the “soft landing” talk but said his bank is ready no matter what.