Fed Resumes Rate Cuts While BOE Holds
US mortgage rates fell last week to the lowest level in nearly a year, spurring a surge of refinancing.
(Bloomberg) — The Federal Reserve cut interest rates for the first time this year and penciled in two more for next year, pointing to growing signs of weakness in the labor market.
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Meantime, the Bank of England chose to hold rates steady and left the prospect of more cuts later this year in doubt after policymakers voiced growing concerns over a resurgence in inflation.
Over in Asia, the Bank of Japan took another step toward policy normalization, announcing it would start to offload its massive exchange-traded fund holdings while keeping the door open to further hikes this year including in October.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:
US & Canada
Fed officials lowered their benchmark interest rate by a quarter percentage point and penciled in two more reductions this year following months of intense pressure from the White House to slash borrowing costs.
US mortgage rates fell last week to the lowest level in nearly a year, spurring a surge of refinancing. A sustained decline in mortgage rates could help rekindle buyer demand and encourage more Americans to list their homes for sale.
Canada is seeing a sharp increase in asylum-seekers entering through a border crossing between New York and the province of Quebec, as President Donald Trump’s policies drive away migrants and even some US citizens. Officials have received more than 5,500 asylum claims since the beginning of July at the Saint-Bernard-de-Lacolle border crossing, south of Montreal. That’s a 263% increase from the same period last year.
Europe
UK inflation held at the highest level in more than 1 1/2 years in August, another uncomfortable reading that kept Bank of England officials wary of cutting interest rates further. At their meeting a day after the inflation report, policymakers said upside risks to “medium-term inflationary pressures remained prominent in the Committee’s assessment.”
French unions led widespread anti-austerity protests Thursday, raising the pressure on newly appointed Prime Minister Sebastien Lecornu as he struggles to find allies to piece together a budget. The fiscal plans were proposed by the previous prime minister, Francois Bayrou, who was forced to resign after losing a confidence vote earlier this month. But Lecornu, who was a member of Bayrou’s government, has so far given little indication of concessions he is willing to make.