Wash emphasizes Fed independence, avoids answering interest rates

1) Wash emphasizes Fed independence, avoids answering interest rates
At the Senate confirmation hearing, Fed Chairman-designate Kevin Wash reiterated his willingness to carry out independent monetary policy, but avoided giving details on the future path of interest rates. “The president has never asked for a commitment to a particular interest rate decision,” he stressed. Wash argues that changes are needed in the way the Fed makes policy decisions, and proposes new policy frameworks to cope with persistent inflation and improvements in communication with the public. He did not give a clear stance when asked about the short-term interest rate outlook

2) Goldman CEO Says ‘Risk Of Recession, Runs On Tweets At Once’
Goldman Sachs CEO David Solomon warned that the risk of a recession could rise sharply following the U.S. administration’s comments on the war in Iran. He noted that while the current recession is relatively unlikely, the risk of a downturn may depend on “one tweet.” Goldman Sachs sees a U.S. recession probability of around 30% this year, higher than the underlying scenario of 15% in a “mild environment.”

3) Warnings of falling demand for crude oil in aftermath of war
Major energy traders warned that the decline in global oil demand triggered by the war in Iran will intensify and that the economic shock has yet to begin in earnest. Gunbor Group warned that a three-month closure of the Strait of Hormuz could trigger a recession. Trafigura Group expects the drop in demand to date to spread globally in response to international oil prices, although the drop in demand is concentrated in Asia

4) U.S. retail sales rise to highest in a year
Retail sales in the U.S. rose by the biggest margin in a year in March. Consumers continued to spend on a variety of products amid soaring gasoline prices. Overall retail sales rose 1.7 percent in March compared to the previous month. Despite the biggest increase in gas spending, sales increased evenly in almost everything including furniture, electronics, and general merchandise. This is because larger-than-year tax refunds supported consumption

5) Bank of Japan likely to freeze interest rates
The Bank of Japan (BOJ) is reportedly leaning toward freezing the key interest rate next week in consideration of the uncertainty caused by the war in Iran. However, since the government is expected to maintain a stance of raising interest rates, expectations for a hike in June could increase if the economy is strong. The BOJ is also considering raising its inflation forecast by a large margin. As the situation in Iran intensified, the swap market, which reflected the probability of a rate hike in April at 73 percent until the end of March, lowered its expectations to around 8 percent
(자료: Bloomberg News)