Fed leadership questions aside, policy outlook getting clearer
[TOKYO] The surprise departure of Federal Reserve Vice Chairman Stanley Fischer has added to uncertainty about a transition in leadership at the US central bank in coming months, along with a report that White House adviser Gary Cohn is unlikely to be tapped as the next chief.
Yet the most important news Wednesday for the immediate Fed policy outlook was arguably the deal between President Donald Trump and lawmakers to kick the debt-ceiling can down the road by three months.
Recall that the Fed already has a plan in place to shrink its US$4.5 trillion balance sheet by scaling back reinvestment of maturing bonds and is just waiting to put it into action.
With smooth sailing ensured for the next several weeks in the Treasuries market, thanks to the debt-ceiling deal, that may make current Fed policy makers more comfortable about getting started next month.
The next policy decision comes Sept 20, set to be Mr Fischer's last.
BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
US core capital goods orders rise moderately in March
Chinese tourists are again embracing international travel
Abu Dhabi raises US$5 billion with first eurobonds in three years
Thailand’s 500 billion baht handout aims to boost overall economy, not geared to poor: official
German business sentiment rises more than expected in April: Ifo
Indonesia’s central bank surprises with “pre-emptive” rate hike to cushion falling rupiah