MNI BRIEF: Text of Bank Of Canada Interest-Rate Decision

MNI BRIEF: Text Of BOC Press Conference Opening Statement

BOC CUTS RATE TO 4.5% FROM 4.75%, MORE MAY BE JUSTIFIED

MNI China Daily Summary: Wednesday, July 24

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MNI: US JUL FLASH MANUFACTURING PMI 49.5 (FCST 51.6); JUN 51.6

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More Colour on BofA's Fed Call Change

FED
  • Following's BofA's Fed policy call change (now seeing 50bp rate hikes in June and July 2022 and 25bps hikes at all other meetings until the policy rate reaches 3.00-3.25% in May 2023), they add that their call reflects the Fed's acceptance that they are behind the curve.
  • In response, they have lower their GDP growth forecast in 2023 by 0.1% to 1.8% owing to below trend growth in 2H 2023. On inflation, they revise up core PCE forecasts from 3.5% to 4.0% 4q/4q 2022 and from 2.5% to 2.6% 4q/4q 2023.
  • They conclude that the Fed may have to "risk a recession" to reverse some of the drop in unemployment. We warned that "the unemployment rate has never risen more than 0.5% without a recession." With these risks starting to become reality, the Fed is facing increasingly difficult choices."
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