There are various reports from central bank officials, including ECB President Lagarde, BoJ Governor Ueda, Saudi Arabia and Russia, Fed’s Cook, ECB’s Holzmann, BoE’s Pill, and Fed’s Kashkari.
ECB President Lagarde from a Greek newspaper over the weekend reaffirmed the commitment to bring inflation down to target by 2025, stating “We are determined to bring inflation down to 2%. According to our projections we will get there in 2025. Our mandate is to ensure price stability, and this is the best contribution we can make to social peace and to society, to the most vulnerable of its members in particular.”
BoJ Governor Ueda reiterated the need to see sustained wage growth in order to hit the 2% inflation target and exit the easy monetary policy, stating “Japan’s economy recovering moderately. Long-term rates may rise somewhat but what’s important is to look at real interest rate that takes into account inflation expectations.”
Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year.
Fed’s Cook touched on the rise of long-term yields and the risks around real estate, stating “Residential and commercial property prices remain above levels historically associated with fundamentals.”
ECB’s Holzmann reaffirmed his commitment to hike rates further if needed as he remains cautious on the inflation outlook, stating “I definitely belong to those that think we should be very careful, that we should stand ready to hike again if needed. Not really worried about the growth outlook because despite rate hikes, we still have stagflation.”
BoE’s Pill expressed his concern about keeping restrictive policy for too long, stating “UK inflation remains too high. UK rate policy does remain restrictive. Sees more signs of slowing activity. Higher UK rates are hitting the supply side.”
The Fed released the Senior Loan Officer Opinion Survey (SLOOS) for Q3, with banks reporting tighter lending standards and weaker demand for commercial and industrial loans across all firm sizes in the third quarter of 2023.
Fed’s Kashkari expressed his concern about undertightening, stating “Undertightening will not get us back to 2% in a reasonable time. Have concerns about inflation ticking up again.”
Japanese September wage data beat expectations, with Average Cash Earning YoY at 1.2% and Real wages (inflation adjusted) YoY at -2.4%.
The RBA raised the cash rate by 25 bps as expected, stating “Board remains resolute in its determination to return inflation to target. CPI inflation is now…”
