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Yannis Stournaras, a member of the European Central Bank Governing Council, indicated that the euro zone is nearing a sustainable 2% inflation target, expected to be achieved by early 2025. He emphasized the need for policymakers to shift focus from controlling prices to addressing potential risks to economic growth.
Bank of England Deputy Governor Dave Ramsden indicated he might support quicker interest rate cuts if economic uncertainty diminishes in the coming months. Despite October's inflation rising above the BOE's 2% target, he anticipates a trend toward low and stable inflation as the economy normalizes.
Federal Reserve Governor Michelle Bowman emphasized the need for a cautious approach to further interest-rate cuts, citing a slowdown in progress toward reducing inflation. She expressed a preference to carefully assess the distance from the end point of policy adjustments while monitoring the labor market closely.
Egypt has requested a review of the targets set in its $8 billion program with the International Monetary Fund, according to Prime Minister Mostafa Madbouly. He noted that IMF officials have shown understanding of these practical requests. The fund is expected to complete its latest review of Egypt's 46-month program in the coming days.
Federal Reserve Governor Lisa Cook indicated that interest rates should be gradually reduced to achieve a more neutral stance, driven by progress in inflation and a strong labor market. She noted that while the risks to employment and inflation goals are balanced, the timing and extent of rate cuts will rely on incoming economic data.
Euro-area banks are increasingly reliant on US dollar markets for liquidity, with their use of dollar repos nearly doubling to €1.6 trillion ($1.7 trillion) over the past two years. This reliance poses risks to financial stability, as dollar-denominated assets now represent 17% of their funding.
Inflation poses a significant threat to the real economy, particularly impacting industry and exports, according to the Reserve Bank of India's November bulletin. The October CPI inflation was unexpectedly high, following a concerning spike in September, highlighting the risks of complacency after sub-target outcomes in July and August. Urban consumption demand and corporate earnings are already feeling the effects, raising alarms about unchecked inflation's potential consequences.
Germany has the fiscal capacity to increase spending to bolster its struggling economy, according to European Central Bank Vice President Luis de Guindos. He emphasized that this financial flexibility sets Germany apart from other countries, presenting a significant advantage for the future.
Iceland’s central bank governor, Asgeir Jonsson, announced a significant half-point key rate cut, the largest in over three years, to alleviate economic restrictions following a period of overheating. He indicated that the pace of easing may slow next year, as the Atlantic economy shows resilience despite high borrowing costs in western Europe, with stagnation anticipated for 2024.
Turkish President Recep Tayyip Erdogan has committed to ensuring that minimum wage increases will surpass inflation in 2025, aiming to protect workers" purchasing power amid ongoing price pressures. These wage adjustments are expected to significantly influence inflation rates, with hopes for a measured increase that aligns with the central bank"s forecast of a 21% inflation rate by year-end.
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