Daily Archives: November 4, 2009

Krishna Guha

Krishna Guha of the Financial times on whether to classify the Fed’s statement as hawkish or dovish 

Krishna Guha

The Fed also shaved $25bn off its planned agency debt purchases, writes Krishna Guha of the Financial Times 

Krishna Guha

The Fed made a change to its key guidance on interest rates – even if it was only a baby step, writes Krishna Guha of the Financial Times 

Krishna Guha

Will they / won’t they? All eyes will be on the Fed statement issued around 2pm EST Wednesday to see if there is any change to the “extended period” language the US central bank uses to guide market expectations of the future path of interest rates (last FOMC statement).

The current formula is as follows: “the Committee…continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Translated from Fedspeak: the committee does not expect to raise interest rates from the current level of near zero for a period some officials define as at least six months, others as longer than this.

As I first reported in the FT ten days ago – and my excellent competitor Jon Hilsenrath of the WSJ subsequently confirmed – Fed officials are starting to mull changing the “extended period” language. I/we know this for a fact. The question is whether they are far enough along in this process to make a change at this meeting.

Unlike most analysts, I don’t think we can rule this out. But I do agree that the likelihood of a change this time is a good deal less than 50-50 – for two reasons 

Chris Giles

It is very difficult to predict whether the Bank of England will extend its programme of quantitative easing tomorrow becasue the Bank has been so unclear about the criteria it will use to judge the success of QE and the state of the economy. All bets are off writes Chris Giles of the Financial Times 

Ralph Atkins

The ECB does not see economic growth as an objective of stronger regulation, writes Ralph Atkins in a Financial Times blog 

Chris Giles

Pity the poor finance ministers and central bank governors of the Group of 20 leading countries. They have to hike up to St Andrews in Scotland on Friday, with ghastly weather predicted, to hold a pretty pointless meeting writes Chris Giles of the Financial Times 

Bad news for RBS, less-bad-than-recent news for the United States, and good news for Asia, all rounded off with a warning on asset bubbles. And the market price of water in Yemen has quadrupled in four years 

Economics news headlines from around the web 

Mure Dickie

Masaaki Shirakawa, governor of the Bank of Japan, offered a concise defence of the central bank’s calm response to the return of deflation.