A Fed official stresses the importance of curbing inflation despite the risks of recession.

In a statement last Friday,
Richmond Federal Reserve Bank President Thomas Barkin said,
“The central bank is determined to rein in severe inflation,
even if that means risking a recession in the United States.”
He stressed their commitment to return inflation to the target at 2%
and we will try to do everything to achieve this,
and that this can be achieved “without a massive decrease in activity”,
while acknowledging the risks that still exist,
which is the recession that may occur during that.

the details from evest

topic

Prospective data

Turkey stimulates the economy with a sudden interest rate cut.

Tencent sales declined for the first time as the economy deteriorates in China.

Prospective data

After raising interest rates by 75 basis points in July,
to become the second consecutive hike in two months,
as monetary policy officials in the United States seek to confront inflation
that is approaching historical levels in 40 years,
and they also stressed their need for more interest rate hikes,
but it will be Deciding on the amount of the hike at the next monetary policy meeting
The report of the Ministry of Labor in July showed a recovery in the American economy,
as it managed to add 528,000 jobs, a rate more than expectations,
with a decrease in the unemployment rate to reach 3.5%
at the same level before the epidemic.

When does inflation reach its peak?

A report published on the tenth of August showed an increase
in consumer prices by 8.5% in the 12 months to July,
and thus declined during the year to June of this year from 9.1%,
and thus recorded its highest inflation rate since 1981,
it will work Officials will review the latest reports on jobs
and consumer inflation at the meeting scheduled for next month

A monetary policy official said that he was “supportive of raising interest rates at an early stage,
and added uncertainty regarding the level of interest rates,
which are considered neutral,
which means that they do not have the effect of slowing down
or even stimulating the American economy.”

“Controlling inflation will be necessary to establish
what we have the ability to do in the economy,
and I have convinced myself that not controlling inflation
is incompatible with a thriving economy,” he added.

artical name A Fed official stresses the importance of curbing inflation

Turkey stimulates the economy with a sudden interest rate cut.

On Saturday, the Turkish Central Bank issued a decision to push commercial banks
to reduce interest rates on loans granted to companies,
after the Turkish Central Bank had moved to stimulate the Turkish economy
through a sudden reduction in interest rates,
as officials in Turkey would resort to imposing rules
that would force banks to It approximated the interest rate on the commercial loan
from the benchmark interest rate in Turkey,
in attempts to counteract the slowdown in the economy,
where signs that show that the economy,
which has reached 800 billion in size, recorded worrying results.

Despite the high inflation in Turkey at 80%, which is the highest level in 24 years,
the Turkish Central Bank decided to reduce interest rates at 13%,
and is currently seeking to issue regulations aimed at maintaining
a relatively cheaper cash flow for companies,
while providing job opportunities while preparing When Turkey has elections next year 2023
Banks are seeking to buy more government bonds denominated in lira for adjustment,
and this demand may lead to a rise in the Turkish bond markets.

Regulations set by the Turkish Central

The regulations set by the Central Bank of Turkey
are to strengthen what it calls the transfer mechanism,
or its ability also to the cost ratio of the money that is loaned to customers by banks
The most important part remains the goal of reducing the cost of loans to corporate clients,
and therefore the banks that deal with loans to their clients will have to deposit
more assets in lira in the Central Bank of Turkey.

Thus, banks will have to buy bonds in local currency equivalent to 20%
of the credit with the Monetary Authority.
These regulations will be applied that differentiate the loans
that will be extended to the end of the year.

current situation

The official interest rate in Turkey shows the sharp contrast with the cost of loans
during the past months in the banking sector,
where the interest rate of the Turkish Central Bank is less than half in banks,
and has witnessed great stability at 14% since September 2021 until it was reduced last week.

Interest rates on commercial loans in the Turkish currency rose to 30% in June,
the highest rate in the last four years,
and the process of strengthening the economy by providing credit remained
the policy that the administration of Turkish President “Recep Tayyip Erdogan”
had long preferred after the failed coup attempt in 2016.

Turkish lira

It is clear that the lira currency is under threat due
to the sudden resumption of monetary easing,
and the currency has recorded the worst performance among the currencies
in the world since the beginning of this year 2022,
as it fell by about 1% against the US dollar,
and officials in Turkey, headed by “Erdogan”,
are seeking to reduce costs Borrowing before the next presidential election
But at the same time, the problem of high prices remains
a major threat to the current president, “Erdogan.”

artical name A Fed official stresses the importance of curbing inflation

Tencent sales declined for the first time as the economy deteriorates in China.

Tencent Holdings announced a decline in its revenues for the first time
after the record decline in online advertising sales, which reached 18%,
but it exceeded estimates, and this is evidence of the extent of the impact of the deteriorating
Chinese economic situation on the country’s largest companies,
where the company is considered the highest in terms of value

And the company has cut thousands of jobs by about 5% of its workforce,
which is the first quarterly drop in employment since 2014,
after decisions to lay off workers in the global technology sector.

Reports stated

that the company’s revenues fell by about 3% to reach 134 billion yuan,
with a decrease in net income of 56 percent in the quarter ending last June.

Tencent is suffering from a downturn in the Chinese economy,
which is the second largest in the world.
This economic decline comes due to real estate stagnation
and closures in connection with the Coronavirus.

The prevailing uncertainty continues to lead to chaos in business,
extending from the advertising sector,
including cloud computing and games,
and the “Ali Baba Holding” group announced
that it recorded the first quarterly decline in revenue this month.

Investors welcomed the efforts of Tencent to reduce costs despite the pressures,
and thus the company was able to cope and withstand better than expectations.

The results indicated that the adjusted net income of 28.1 billion
yuan is about 15% higher than expectations,
and “Tencent” intends to give up its shares in one of its partners, “JD.com”,
and “Tencent” shares rose by about 4% in Hong Kong, but Ali from this rise,
but it is affected by the significant decline this year by about 25%.

In the past, the company relied on expanding its investment network to hundreds of companies
in order to provide opportunities and new markets, but in the past,
the company indicated to change this policy and
will try to reduce the shares in investing in major Internet companies, including JD.

This has a positive effect on satisfying the Beijing administration,
which was seeking to reduce the influence imposed by “Tencent”
and “Alibaba” on the Internet sector in China
by supporting hundreds of startup companies.

artical name A Fed official stresses the importance of curbing inflation

A Fed official stresses the importance of curbing inflation

Related Topics