New projections saw a majority of 11 Fed officials pencil in at least two quarter-point interest rate increases for 2023. Fed Chair Jerome Powell said there had also been initial discussions about when to pull back on the Fed's $120 billion in monthly bond purchases, a conversation that would be completed in coming months as the economy continues to heal. This week's meeting will be noted as a distinct turn away from the crisis policies the Fed has pursued since the onset of the pandemic, at times crossing into uncharted territory with its broad and open provision of credit to an economy reeling towards a potential depression. The Fed now expects the economy to grow 7% this year.
Bipartisan U.S. Senate group backs infrastructure framework
A bipartisan group of 20 U.S. senators - 10 from each caucus - said on Wednesday it supported a framework for infrastructure investment. The statement followed an announcement last week that a smaller bipartisan group of senators had reached an agreement on an infrastructure framework, which a source said would cost $974 billion over five years and $1.2 trillion over eight years, and includes $579 billion in new spending. That proposal falls short of President Joe Biden's current $1.7 trillion offer. Infrastructure investment is one of the Democratic president's top legislative priorities. The White House told lawmakers this week it would take stock of where things stand by the end of next week, said spokesman Andrew Bates.
China's new home prices grow slightly in May
New home prices in China rose in May at the same pace as in April, official data showed on Thursday, as a raft of government measures to cool the market began to bite. Average new home prices in 70 major cities grew 0.6% in May, unchanged from April, according to Reuters calculations based on data released by the National Bureau of Statistics. On a year-on-year basis, new home prices rose 4.9%, slightly faster than a 4.8% rise in April. Chinese property prices have risen quickly this year, even as the government took a series of measures to cool the market, including stricter rules for home buyers, curbing loans to developers and guiding banks to increase mortgage rates. A relentless rise in home prices, particularly in big cities, has raised concerns about overheating.
Bonds stung, dollar cheered by sudden hawkish turn at Fed
The 10-year government bond yield (interpolated) on the previous trading day was 1.83, +0.00 bps. The benchmark government bond yield (LB31DA, 10.5 years) was 1.81, -2.00 bps. LB31DA could be between 1.80-1.86. Meantime, the latest closed US 10-year bond yields was 1.57%, +6.00bps. USDTHB on the previous trading day closed around 31.16 Moving in a range from 31.26-31.33 this morning. USDTHB could be closed between 31.25-31.33 today. Meantime, Asian equities fell to a three-week low on Thursday
after the Fed stunned investors by signalling it might raise interest rates at a much faster pace than assumed, sending bond yields and the dollar sharply higher.
Sources : Bloomberg, CNBC, Investing, CEIC
