Rate Cut Financial News

Asian markets stumbled on Monday after China delivered a smaller cut to lending rates than markets had counted on, continuing Beijing's run of disappointing stimulus steps. China's central bank trimmed its one-year lending rate by 10 basis points and left its five-year rate unmoved, a surprise to analysts who had expected cuts of 15 basis points to both. Disappointment at the meagre move saw Chinese blue chips ease 0.3%, while the Australian dollar took a dip as a liquid proxy for China risk.

BRICS group of major emerging economies - Brazil, Russia, India, China and South Africa - in South Africa this week, where Chinese President Xi Jinping will attend. But whatever Xi says will likely be more political in nature. The assurances investors want from Chinese officials probably center more on monetary and fiscal policy.

By Prerana Bhat and Indradip Ghosh

RBI) upper tolerance limit of 6%, driven by high food and vegetable prices. The retail inflation in June was 4.81%. However, core inflation data was seen as a relief.

People’s Bank of China on Tuesday lowered the rate on its one-year loans — or medium-term lending facility — by 15 basis points to 2.5%, the steepest cut in three years. The move came shortly before the release of July data that showed weak consumer spending growth, sliding investment and rising unemployment.

By Joice Alves and Samuel Indyk

The People’s Bank of China cut the rate on the medium-term lending facility (MLF) overnight, with a 15bp cut down to 2.5%.

banking system liquidity reasonably ample", the PBOC said in an online statement. The MLF rate serves as a guide to China’s lending benchmark loan prime rate (LPR) and markets mostly use the medium-term policy rate as a precursor to any changes to the lending benchmarks.

Icra on Monday said it expects a rate cut by the Reserve Bank to happen only in the July-September quarter next year. The overall cuts in the cycle will be a «shallow» 0.50-0.75 per cent, the agency said.

inflation projection for the current fiscal by the Reserve Bank of India (RBI) on Thursday, while highlighting the global economic conditions, has dashed Dalal Street investors’ hope of a rate cut any time in the near future. Until the last policy meet, expectations were building for a longer pause and possibly, a rate cut later in FY24.

RBI MPC Meeting: Growth resilient but inflation remains a risk; key takeaways from RBI policy decision RBI is concerned due to uneven monsoon in some parts of the country which has contributed to an increase in vegetable prices. The central bank expects that headline inflation will increase in the next couple of months. That is why the RBI raised the CPI (consumer price index) inflation, also known as retail inflation, targets to 5.4 per cent for FY24 versus an earlier projection of 5.1 per cent.

Fed to cut rates sooner than it currently states. A rate cut combined with higher-than-average inflation will result in a structural up move in gold prices, said Chirag Mehta and Ghazal Jain of Quantum Mutual Fund. Gold started July on a subdued note, trading near $1900 per ounce levels with the backdrop of the Fed’s hawkish hold in June. Prices gradually moved up during the month as investors stuck to bets of one final interest rate hike in July. The probability that the Fed will raise its benchmark rate by 25 basis points to a range of 5.25%-5.50% in July was above 90% for most of the month, according to Interest Rate Futures. International gold prices ended the month around 2.7% higher. Domestic prices moved up by around 2.9%. However, there was some volatility along the way. The minutes from the Fed’s June 13-14 meeting revealed that a majority of Federal Reserve officials saw the need for further interest rate hikes in 2023, given the above-target inflation and labour market resilience. Next, the US Bureau of Labor Statistics published the private sector jobs data, which showed 209,000 jobs were added in June, below the market expectation of 225,000. May's increase of 339,000 also got revised lower to 306,000. The weaker-than-expected rise in private sector jobs was positive, but the unemployment rate edged lower to 3.6% from 3.7% and the annual wage inflation stood unchanged at 4.4%, compared to analysts' estimates of 4.2%, pointing to still tight labor market conditions. These events sharply pushed 10-year Treasury yields above the 4% threshold and weighed on gold prices, which traded in the early-$1900s.

US Federal Reserve raising interest rates to a 22-year high level, says Kanika Pasricha, economist with Standard Chartered Bank. However, she expects the Indian central bank to cut key policy rates by 50 bps in H1FY25. In an interview with Livemint, the economist also shared views on domestic inflation, currency moves and the impact of Bank of Japan’s yield control policy shift.

MUMBAI : The surprise surge in retail inflation for June has prompted economists to raise their forecast for July amid firming vegetable prices, dashing hopes of a rate cut anytime soon. Inflation measured on the Consumer Price Index (CPI) came in at 4.81% in June, higher than 4.6% predicted by Mint poll of 19 economists, led by food inflation. After the June price rise data was released, economists now believe inflation could average 5-5.4% in the current fiscal year, higher than their previous estimates.

The Gartman Letter Publisher Dennis Gartman on the outlook for Federal Reserve policy.

India’s policymakers are unlikely to tweak interest rates immediately to ease the plight of citizens who are paying in hundreds for even staple vegetables and pulses. India’s policymakers are unlikely to tweak interest rates immediately to ease the plight of citizens whose food bills have soared due to a spike in vegetable and pulses’ prices. The rate-setting members may just be forced to revise their inflation forecasts, economists told ET Online.

Financial services giant Nomura now believes the Federal Reserve is done with interest rate hikes and that it could even cut rates at its meeting next week.

Bitcoin (BTC) and other bulls will not benefit from a major change in United States inflation policy in 2023, one analyst says.

New York Federal Reserve President John Williams said Tuesday he expects interest rates to continue higher and to remain at those levels until inflation is subdued.

SINGAPORE—China’s economy stumbled in July as a two-month boost from easing lockdowns faded, prompting the country’s central bank to unexpectedly cut two key interest rates in an effort to shore up faltering growth.

SINGAPORE—China’s central bank cut a key interest rate while keeping another unchanged, an unexpected policy shift that economists said would likely help the country’s moribund housing market but bring only limited relief to its struggling economy.