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ECB Could Change Policy Stance If Iran War Drags On, ECB’s De Guindos Says
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- ECB Vice President Luis de Guindos said an extended Middle East war could raise inflation expectations and alter the bank’s policy.
- U.S. and Israeli strikes on Iran and the ensuing war caused oil and gas prices to jump, threatening renewed eurozone inflation.
- Morgan Stanley no longer expects the ECB to cut rates this year, having previously forecast two rate cuts.
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Fed’s Beige Book Sees a Stable Economy Still Facing Challenges
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- The Federal Reserve’s latest Beige Book report indicates a steady economy with persistent inflation, a stable labor market, and policy uncertainty.
- Many businesses report stable staffing levels, but some are shrinking payrolls, and intensive immigration enforcement impacted Minneapolis’s economy.
- All 12 regional Fed branches reported price increases, with businesses passing on the higher costs.
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Malaysia Holds Interest Rate Steady as Global Risks Rise
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- Bank Negara Malaysia kept its overnight policy rate unchanged at 2.75% for a fourth consecutive meeting.
- The central bank cited stable economic conditions amid external uncertainty, including the conflict in the Middle East.
- The decision matched expectations of all eight economists polled by The Wall Street Journal, with the last rate adjustment in July 2025.
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Regulators Need to Play Catch-Up on Private-Credit Risk, Canada Central Banker Says
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- Bank of Canada Gov. Tiff Macklem urged global authorities to increase surveillance of nonbank lenders like hedge funds and institutional investors.
- Macklem cited hedge funds as notable buyers of government debt, often financed with short-term repo agreements, posing risks to sovereign debt markets.
- Macklem also highlighted the growth of opaque private credit, which falls outside global banking regulators’ purview and could cause cross-border spillovers.
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OECD Sees Rising Refinancing Risk as Bond Sales Surge
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- Rich countries, led by the U.S., are set to sell a record $18.3 trillion in bonds this year, increasing refinancing risks.
- The U.S. faces the largest refinancing requirement, accounting for 70% of needs in 2025, partly due to shorter bond maturities.
- Corporate bond sales are projected to reach a record $6.9 trillion, driven by “enormous” AI capacity building costs.
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Private-Sector Hiring Solid Last Month, ADP Data Show
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- ADP’s monthly report showed the private sector added 63,000 jobs in February, exceeding analysts’ expectations.
- The ADP data precedes the federal government’s official February jobs report, which covers the full economy.
- In January, ADP’s private-sector job figures were a poor guide to the Labor Department’s stronger official numbers.
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U.S. Services-Sector Activity Continued to Rise in February
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- U.S. services-sector activity increased in February, with the ISM purchasing managers index rising to 56.1 from 53.8 in January.
- All four services subindexes expanded for the third consecutive month, with new orders and business activity at 2024 highs.
- The employment index expanded for a third month, while the prices index, at 63, was its lowest since March 2025.
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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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