MNI China Daily Summary: Monday, July 1

MNI BRIEF: PBOC To Borrow CGBs In Response To Market Situation

MNI BRIEF: Caixin June Manufacturing PMI Hits Three-year High

MNI: PBOC Net Drains CNY48 Bln Via OMO Mon; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

MNI: US MAY CONSTRUCT SPENDING -0.1%

MNI: US ISM JUN MANUF PURCHASING MANAGERS INDEX 48.5

US JUNE MANUFACTURING PMI 51.6 (51.7 FLASH, 51.3 MAY)

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Powell Says ​Real Fed Funds Rate Now In Meaningfully Positive Territory

FED
  • Q: Some of your colleagues have said they feel very little transmission of tightening has taken place and those who say it's happened very fast this time. Where are you on that continuum?
  • A: That's a long running debate - we know financial conditions move in anticipation of our decisions, but doesn't necessarily change the process from that point on. We know that financial conditions affect econ activity and inflation with a lag that can be long and variable, or lags, plural that can be long and variable, with a lot of uncertainty.
  • The real federal funds rate is now in meaningfully positive territory. Take the funds rate and subtract the near-term inflation expectations and you get a real rate above most estimates of the longer-run neutral rate. So I would say monetary policy is restrictive, and more so after today's decision, meaning it is putting downward pressure on economic activity and inflation. We'll keep monetary policy restrictive until we think it's not appropriate to do so.
  • The SLOOS will come out next week, it's broadly consistent with what you would expect - pretty tight credit conditions in the economy, lending conditions tight and getting tighter, and weak demand.
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