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[Quick Facts]

1. Timiraos: Fed minutes show officials are divided on the future rate rise.

2. Yellen says the U.S. economic outlook is optimistic but risks still exist.

3. Fed's Collins says the central bank may have to hike again if data calls for it.

4. Russia requires some exporters to sell FX proceeds to stabilize the ruble.

5. Fed minutes show one more rate hike may be appropriate.

[News Details]

Timiraos: Fed minutes show officials are divided on the future rate rise

Federal Reserve officials were split over whether they would need to raise interest rates again this year when they decided last month to hold their benchmark policy rate steady, the Wall Street Journal correspondent Nick Timiraos wrote. A majority of participants judged that one more rate increase at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted. The rise in long-term U.S. Treasury yields that began in August accelerated after last month's meeting. If long-term Treasury yields remain elevated, there may be less need for the Fed to raise interest rates again this year.

Yellen says the U.S. economic outlook is optimistic but risks still exist

U.S. Treasury Secretary Janet Yellen on Wednesday, October 11, continued to give an optimistic view of the U.S. economy. I still see as the base case for the United States to be a so-called soft landing, she said, that is, the inflation rate falls but the unemployment rate will not rise significantly. Unemployment remains low, but wage pressures that may contribute to the persistence of high inflation have eased, and inflation is falling, she added. However, the U.S. economy still faces risks, with global external shocks being one of them. The recent situation in Israel has caused additional concerns.

Fed's Collins says the central bank may have to hike again if data calls for it

Boston Fed President Susan Collins said on Wednesday that while the odds of the economy escaping a recession have grown, it's possible the central bank is not done with interest rate hikes aimed at bringing inflation back to its target. "I expect we'll need to hold rates at restrictive levels for some time – until we see evidence that inflation is on a sustained path back to 2%," Collins said.

"While we are likely near, and could be at, the peak for policy rates, further tightening could be warranted depending on incoming information," she said.

Russia requires some exporters to sell FX proceeds to stabilize the ruble

Russia has introduced a mandatory sale of foreign exchange earnings to 43 companies, including major oil exporters, in order to stabilize the ruble exchange rate, according to a decree signed by Russian President Vladimir Putin. For a period of 6 months, mandatory repatriation and sale of foreign exchange earnings on the Russian market is introduced for individual companies in the volumes and terms to be set by the government, the statement said. These include a number of companies related to the fuel and energy complex, metals industry, chemical and forestry industries, and grain. A government statement quoted Russian First Deputy Prime Minister Andrei Belousov as saying that the main purpose of these measures is to create long-term conditions for increasing the transparency and predictability of the foreign exchange market and to reduce the possibility of currency speculation.

Fed minutes show one more rate hike may be appropriate

The Fed minutes showed that monetary policy should remain restrictive for some time in order to continuously push inflation down; at the same time, the Fed found that risks have become more balanced. Participants generally judged that, with the stance of monetary policy in restrictive territory, risks to the achievement of the committee's goals had become more two-sided.

A majority of participants judged that one more rate increase at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted. All participants agreed that the Committee was in a position to proceed carefully that policy decisions would continue to be based on the economic outlook as well as the balance of risks. The minutes showed that the Fed officials face a two-way policy outlook between the recession as well as the risk of too tight policy and the risk of sustained inflation above 2%. At that meeting, the Fed kept its benchmark interest rate at 5.25%-5.5% and hinted that interest rates would remain high for longer than expected after one more rate hike this year.

[Focus of the Day]

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UTC+8 16:30 ECB Governing Councilor Villeroy delivers a speech

UTC+8 17:00 Peel, chief economist of the Bank of England, delivers a speech

UTC+8 17:00 European Central Bank Governor Holzmann speaks

UTC+8 18:00 ECB Governing Council member Nott speaks

UTC+8 18:50 ECB Governing Council members Vujcic and Vasle deliver speeches

UTC+8 19:30 The European Central Bank publishes the minutes of its September monetary policy meeting

UTC+8 20:30 U.S. CPI (Sept)