MONETARY POLICY COMMUNICATION
RBI focus is on clarity in communication since it adopted flexible inflation targeting: Deputy governor Michael Patra
The Reserve Bank of India (RBI) is prioritizing clear communication in its monetary policy, aligning with global practices. While the RBI emphasizes transparency, it refrains from providing specific forward guidance on inflation. Research indicates that the RBI's communication tone significantly influences market expectations, particularly during periods of monetary policy tightening.
RBI wary of more than just food inflation: What else is a headache for Das & Co
The Reserve Bank of India is concerned about rising core inflation. Core inflation, excluding volatile items, rose to 3.8 percent in October. The central bank says rising costs are impacting consumers and businesses. The RBI's Monetary Policy Committee may consider this trend in its December meeting. The government is urging the RBI to cut interest rates to boost the economy.
FM Nirmala Sitharaman flags mis-selling of insurance, calls for collateral free loans to MSMEs
Indian Finance Minister Nirmala Sitharaman raised concerns about insurance mis-selling, emphasizing its contribution to higher borrowing costs for customers. She urged banks to focus on affordable lending rates to support industrial growth and advocated for digital financial inclusion. Sitharaman highlighted India's economic resilience and the need for transparency in banking practices.
If data doesn't suit them, they'll change it altogether: Congress' swipe at govt over Piyush Goyal's remarks
Congress criticized Union Minister Piyush Goyal's suggestion that the RBI should disregard food inflation when deciding on interest rate cuts. Goyal believes the RBI should lower rates, while Congress argues that food inflation significantly impacts Indian families and must be considered in monetary policy decisions.
Wall Street indexes dip with focus on Trump policies, economic data
U.S. stocks fell on Tuesday as investors locked in profits from a post-election rally and awaited inflation data. Concerns about the impact of Trump's policies on inflation and global growth dampened investor enthusiasm. European shares also tumbled, while rising U.S. Treasury yields added pressure to equities.
US stocks close higher after Fed cuts interest rates
US stock market closed higher after the Federal Reserve cut interest rates. The rate cut followed Donald Trump's return as US president. Market reacted positively to Trump's policies. The Dow Jones Industrial Average remained flat. The S&P 500 and Nasdaq Composite gained. Communication services sector led the gains. Financials sector declined.
No monetary policy overreaction, please
A new article argues that major economies overreacted with their monetary policies after the pandemic, negatively impacting emerging markets like India. While acknowledging the global inflation challenges, the author suggests that India's central bank skillfully managed the situation with a balanced approach, emphasizing the importance of data-driven decisions and clear communication for stable economic growth.
The two things US needs from the Federal Reserve right now
Federal Reserve officials are advised to recall past lessons about overconfidence in economic 'fine-tuning' and maintain steady policy decisions. Emphasizing a strategic, forward-looking approach, the Fed should ensure consistent interest rate adjustments and recognize the broader economic influence of other policymakers.
Russia fines Google more than Earth¡¯s entire wealth: Can the tech giant avoid paying?
A Russian court has fined Google an astronomical $20 decillion for blocking Russian state channels on YouTube, marking one of the highest penalties ever imposed globally. The fine, which significantly exceeds the world¡¯s GDP, has escalated as Google refused to lift restrictions on specific Russian media. The case, rooted in Google¡¯s decision to block Russian state-linked channels, reflects the growing tension between tech companies and governments on content regulation.
Four Fed policymakers favor more rate cuts, but differ on pace
Four Federal Reserve policymakers express support for interest-rate cuts but differ on speed and extent. Three prefer gradual reductions, citing economic strength and uncertainty, while San Francisco Fed President Mary Daly favors continued cuts given falling inflation. The Fed's decision is expected at the November policy meeting.
Inflation to align to the 4 percent target by FY'25-26: Michael Patra
Inflation is projected to align with the 4 percent target in the coming fiscal, according to Reserve Bank deputy governor Michael Patra. He mentioned climate change and digitisation as future challenges to monetary policy. Patra noted that inflation, which peaked at 7.8 percent in April 2022, is expected to average 4.5 percent in 2024-25.
'Substantial majority' of Fed favoured large cut in Sept
Supporters of the half-point cut "observed that such a recalibration of the stance of monetary policy would begin to bring it into better alignment with recent indicators of inflation and the labour market", said the minutes of the September 17-18 session, at which the Fed lowered the benchmark policy rate to a range of 4.75% to 5.00% from the 5.25% to 5.50% range it had maintained since July of 2023. Others noted there had been a "plausible case" to have cut rates at the July meeting and the data since then had only buttressed the case for easier policy.
Fed to go big on first rate cut, traders bet
Traders on Tuesday kept bets the Federal Reserve will start an expected series of interest rate cuts with a half-percentage-point move downward on Wednesday, an expectation that may itself put pressure on central bankers to deliver just that.
Trading in Asian markets is mixed and muted ahead of a key Fed chair speech
Asian markets experienced mixed trading as investors looked forward to guidance from Federal Reserve Chair Jerome Powell on possible rate cuts. Japan's Nikkei 225 rose slightly, while stocks in Australia and South Korea saw minor losses. U.S. markets also faced declines amid mixed economic signals, with Powell's upcoming speech in focus.
Inflation in India: There's too much food on table to make Indians and RBI worry
India Inflation RBI: India faces a challenge with high food inflation, significantly impacting the Consumer Price Index. The RBI has maintained its stance on inflation, focusing on preventing spillovers from persistent food price hikes. The government and RBI are working to balance price stability, but food inflation remains a significant concern for policymakers and consumers.
Should India review its inflation targeting framework or not?
India has observed 8 years of inflation targeting (IT) since its implementation in September, yielding positive outcomes like stable headline inflation and enhanced monetary policy transmission. Despite these successes, there have been calls to modify the IT framework, particularly by targeting core inflation instead of the CPI headline, which includes volatile food prices. Proponents argue that monetary policy struggles to control supply-driven food inflation and that core inflation is a more stable target.
Central banks should have independence to deliver on price stability: John C Williams
Central banks ought to own up for delivering on price stability and must be given the independence to act for achieving it, a top official from the Federal Reserve Bank of New York said on Friday.
Incomplete transmission of policy rates could delay reversal of rate cycle by RBI
RBI faces challenges in rate transmission due to incomplete hikes. Banks show varied transmission rates. Governor Das stresses effective transmission. Rate cuts may come post-October with clearer risk insights.
IMF lauds Sri Lanka for strong progress
Sri Lanka's macroeconomic policy reforms are showing positive results as the IMF anticipates agreements with external commercial creditors soon, signaling progress towards the country's $2.9 billion bailout program. The International Monetary Fund praised Sri Lanka's advancements in debt restructuring, highlighting the nation's strong efforts in addressing its financial challenges.
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