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Fed Should Be Ready to Act to Address Inflation Concerns, Kansas City Fed’s Schmid Says
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- Kansas City Fed President Jeff Schmid said the Fed should be ready to act to prevent inflation, nearly 3%, from staying above its 2% target due to the Iran war.
- Schmid said the inflation risks of the war are his primary concern, despite higher oil prices potentially hurting economic growth.
- Most Fed officials signal holding rates steady, with Fed Chair Jerome Powell not rushing to adjust policy amid war uncertainty.
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BOE Urges Readiness for More Periods of ‘Intense’ Volatility in Financial Markets
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- The Bank of England warned of more intense financial market volatility related to the Middle East conflict.
- The central bank cited concerns about government bonds, private credit markets, and U.S. AI technology companies.
- The BOE urged market participants to engage in timely risk management for potential sudden price adjustments.
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Europe’s Central Banks Undecided on Need for Rate Rises
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- European central bank officials cautioned against inevitable rate rises despite investor expectations and eurozone inflation rising to 2.5% in March.
- Policymakers are focused on “second round effects” like wage increases, recalling past mistakes in 2011 and 2022.
- The current job market is less tight than in 2022, with Lombard Odier’s chief economist predicting no rate hikes.
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Eurozone Unemployment Inched Up in February Ahead of Energy Price Surge
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- The eurozone’s jobless rate rose to 6.2% in February from 6.1% in January, according to Eurostat.
- The Middle East conflict and soaring energy prices could threaten firms’ hiring, with manufacturing employment reduced in March.
- The unemployment rate is a key factor for the European Central Bank as it calibrates policy amid rising inflation and wage demand concerns.
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Japan Firms Stay Upbeat Under Pressure, Keeping Rate Hike on Table
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- Japan’s large manufacturers’ sentiment improved for a fourth quarter, reaching its highest level since December 2021, raising the probability of an April rate hike by the Bank of Japan.
- Companies anticipate overall prices will climb 2.6% over the coming year, exceeding the central bank’s 2% target, amid rising input costs and geopolitical risks.
- Sentiment in the oil-related sector deteriorated sharply, and large manufacturers’ confidence for the next three months declined, prompting some economists to warn against a swift rate hike.
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Canada Economy Accelerates After GDP Grows in January
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- Canada’s gross domestic product rose 0.1% in January and an estimated 0.2% in February, marking three months of expansion.
- January’s economic growth was driven by goods producers, mining, oil and gas extraction, and construction, including residential building.
- Manufacturing contracted 1.4% in January, while the economy faces uncertainty from U.S. protectionist policies and trade pact renegotiation.
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U.S. Job Openings and Hiring Fell in February
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- U.S. job openings slipped in February, and hiring fell to its lowest level since April 2020, the Labor Department said.
- Available positions decreased to 6.9 million in February from 7.2 million in January, with 4.8 million workers hired.
- Layoffs remained unchanged at 1.7 million in February, while the quit rate decreased to 1.9% from 2% in January.
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China Manufacturing Gauge Shows Slower Expansion in Activity
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- A private gauge of China’s manufacturing activity, the RatingDog PMI, eased to 50.8 in March from a five-year high of 52.1 in February.
- China’s official factory activity gauge showed expansion at its fastest pace in a year, buoyed by robust demand and a production rebound.
- Both private and official surveys indicated a marked increase in price pressures, with economists noting China’s relative insulation from Middle East conflict.
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Consumers’ Mood Steady Amid Iran War, Conference Board Survey Suggests
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- The Conference Board’s economic sentiment index rose to 91.8 in March, defying analyst expectations of a decline amid the Iran war.
- The Conference Board’s result was at odds with a University of Michigan survey that showed an appreciable March decline.
- Cost-of-living issues and rising energy prices dominated household concerns, said Dana Peterson, chief economist.
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WSJ Pro Central Banking brings you news and analysis from a global team of reporters and editors at The Wall Street Journal and Dow Jones Newswires. Send your tips, suggestions and feedback to service@dowjones.com. An artificial-intelligence tool created these summaries, which are based on the text of the article and checked by an editor. Read more about how we use artificial intelligence in our journalism.
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