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The main contract for low-sulfur fuel oil (LU) fell 4.00% intraday, currently trading at 4034.00 yuan/ton.On June 16th, Wang Guanhua, spokesperson for the National Bureau of Statistics and Deputy Director of the Department of Comprehensive Statistics of the National Economy, stated at a press conference held by the State Council Information Office that although the PPI (Producer Price Index) has increased, it remains relatively stable, with prices of consumer goods remaining stable. This is primarily due to the different meanings of PPI and CPI (Consumer Price Index). PPI increases exhibit a clear structural characteristic, reflecting prices in the industrial production sector, while CPI reflects prices in the consumer sector, covering all categories of consumer goods. CPI transmission is mainly concentrated in the industrial consumer goods sector, with food and service prices accounting for a larger share, and is less affected by fluctuations in industrial product prices. Secondly, from the perspective of price transmission patterns, upstream industrial product prices are directly affected by international commodity prices. However, the transmission of upstream product prices to downstream sectors along the industrial chain is influenced by factors such as market competition and technological progress, often showing a decreasing trend.Goldman Sachs: We expect Persian Gulf oil exports to recover to pre-war levels by the end of July, up from the previous forecast of the end of August.On June 16, Fu Linghui, spokesperson, chief economist, and director of the Department of National Economic Comprehensive Statistics of the National Bureau of Statistics, stated at a press conference held by the State Council Information Office that the widening decline in investment growth from January to May was due to the impact of high temperatures and heavy rainfall in some regions, and also reflects the shift in investment from quantitative expansion to quality improvement in the transformation of old and new growth drivers. Despite the decline in investment growth, the investment structure continued to optimize, driven by sustained policy efforts, innovation-led development, and enhanced livelihood security, playing an irreplaceable role in strengthening infrastructure, promoting transformation, and benefiting peoples livelihoods. Infrastructure investment grew steadily, investment in emerging industries grew rapidly, and investment in livelihood sectors continued to strengthen. Fu Linghui stated that in the next stage, my country still has ample room for investment. New urbanization, rural revitalization, the development of new productive forces, and the improvement of public services all require investment support. It is necessary to leverage the guiding role of government investment, stimulate the vitality of private investment, adhere to the close integration of investment in things and investment in people, pay more attention to optimizing and improving the investment structure and efficiency, and better leverage the important role of effective investment in promoting high-quality development.Interest Rate Hike Expectations: 1. Goldman Sachs: Expects the Bank of Japan to raise interest rates at this meeting, which is in line with consensus and market pricing. The central bank will then maintain a pace of approximately one rate hike every six months. 2. Mitsubishi UFJ: Expects the Bank of Japan to raise interest rates this week, with another rate hike later this year. Given that the 25 basis point rate hike has been fully priced in by the market, this move alone is unlikely to reverse the yens depreciation trend. 3. State Street: Expects the Bank of Japan to raise interest rates at this meeting, raising them to the psychologically key level of 1.0%. The central bank may hint at a second rate hike this year. 4. Oxford Economics: The Bank of Japan is likely to raise interest rates in June rather than July. A delay in the rate hike would disappoint financial markets and could lead to further yen depreciation. 5. Mizuho Bank: The probability of a rate hike at this meeting is high. The baseline scenario is that the central bank will subsequently raise rates approximately every six months. 6. Reuters Survey: 94% of economists expect the Bank of Japan to raise its key interest rate to 1.00% in June and to raise it to 1.25% in the fourth quarter. 7. Former Chief Economist of the Bank of Japan, Seisaku Kameda: The Bank of Japan is expected to raise interest rates at this meeting, and the US-Iran peace agreement is not expected to change the expectation of two rate hikes this year. Deputy Governor Shinichi Uchida is expected to reiterate the central banks determination to continue raising rates, but will avoid giving a clear hint about the timing of the next rate hike. QT Expectations: 1. Mizuho Bank: The Bank of Japan is expected to conduct a mid-term assessment of its bond-buying program at this meeting, and may maintain the current reduction plan until January to March next year; from April to June and beyond, it may suspend or slow down the reduction of monthly bond purchases. 2. Deutsche Securities: If the Bank of Japan decides to stop reducing the monthly bond purchase program, it must provide a full explanation. If the Bank of Japan decides to raise interest rates and stop reducing bond purchases at the same time, regardless of its true intentions, the market and the public may interpret it as a "political deal" reached with the government. Other Expectations: 1. Bank of America: The Bank of Japan is expected to raise interest rates by 25 basis points in October this year, followed by further rate hikes in March and July 2027, raising the terminal interest rate to 1.75% by the end of 2027.

NY Fed’s Williams Says Digital Currency Might Impact Monetary Policy

Jimmy Khan

Jun 02, 2022 18:06

Only a few top Federal Reserve officials have spoken out about cryptocurrencies and their potential to destabilize monetary policy. A central bank digital currency (CBDC) may coexist with stablecoins and give a level of safety, according to Vice-Chair Lael Brainard.


Governor Miki Bowman of the Federal Reserve Board of Governors also emphasized the need of innovation in community banking, citing the Fed's recent discussion paper on cryptocurrency.

When it comes to crypto legislation or a CBDC, the United States is still in the early stages of investigation.


The President of the New York Fed called digital transformation "essential."


The president of the Federal Reserve Bank of New York, John Williams, views digital revolution in payments as a method to influence the Fed's monetary policy and balance sheet.


Williams noted that although technology is fast evolving, the mission of the central bank remains the same in his remarks at a Columbia University research conference on Wednesday. "The job of central banks will always be to provide money and liquidity to promote economic and financial system stability," he said.


CBDCs and stablecoins backed by secure and liquid assets, he told an audience of financial sector professionals, central bank officials, and academics, offer opportunity for innovation.


His comments come amid broader crypto sell-offs, with cryptos such as bitcoin (BTC) battling to break over the $30k barrier. After plunging from an all-time high of approximately $67,000 in November 2021, the world's first cryptocurrency is currently trading below $30,000.


Terra's network failure, which sent terra (LUNA) and TerraUSD (UST) values to new lows, has prompted Fed officials like Williams to investigate secure currency digitalization.


According to a Reuters story, Williams said that digital transformation might have "implications for markets" and "how we carry out monetary policy," as well as the Fed's dealings with peers. "It's vital that we understand how these shifts might influence the economy and financial system, as well as the execution of monetary policy," he said.

Senators Contribute to the Fight for a Digital Currency

A digital dollar or CBDC might have a host of advantages, but it's still a long way off.


The recent volatility in cryptocurrency prices has prompted US politicians to draft legislation that would empower the US Treasury to form a CBDC. According to the plan, the digital dollar would essentially eliminate payments transfer waiting times while also lowering expenses.


The Biden administration issued an executive order in March asking for additional study into the development of a digital currency and highlighting the need for stronger governmental monitoring of cryptos like ether (ETH), Litecoin (LTC), and others.


Crypto advocates also argue that financial inclusion is critical for the United States to accept its digital currency.


Several senators, though, are in favor of introducing a digital currency into the payments system. "As digital payment and currency technologies continue to expand rapidly, and with Russia, China, and over 90 countries worldwide already researching and launching some form of Central Bank Digital Currency," Rep. Stephen Lynch (D-Massachusetts) said, "it is absolutely critical for the United States to remain a world leader in the development and regulation of digital currency and other digital assets."

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