Fed Extends Wait-and-See Rate Stance

Federal Reserve Extends Wait-and-See Rate Stance By Hardika Singh

The Federal Reserve acknowledged a recent setback in its inflation fight but said it was more likely to keep interest rates at their current level for longer than to raise them again. However, some analysts are warning of limits to how long the central bank can keep rate increases off the table. Meanwhile, drivers rethink the optimum number of years to hold on to a car as the costs of ownership increase. And Canada's second-largest bank is setting aside hundreds of millions of dollars for possible U.S. anti-money laundering penalties. Read on for this news and more.

Top News Fed Says Inflation Progress Has Stalled

Federal Reserve Chair Jerome Powell tried to keep the central bank's options open Wednesday by sticking with his view that interest rates are restrictive and that inflation was likely to resume its decline.

But a string of disappointing readings on price and wage pressures have led investors to put less weight on the central bank's outlook and more attention on how the economic data unfold .

Fed Says Inflation Progress Has Stalled, Extends Wait-and-See Stance Transcript: Fed Chief Jerome Powell's Postmeeting Press Conference Parsing the Fed: How the May Statement Changed Stalled Inflation Vexes the Fed. Is It Noise or a New Trend? Bank of Canada Getting Closer to Rate Cuts, Tiff Macklem Says

Bank of Canada Gov. Tiff Macklem said officials are confident that inflation will continue to decelerate, and the central bank is getting closer to a point where it is able to cut interest rates .

U.S. Economy The New Math of Driving Your Car Till the Wheels Fall Off

There have always been people who relish driving cars into the ground, but the case for this frugal personal-finance move has grown stronger as the costs of car ownership have ballooned.

The average transaction price on a new vehicle was $46,660 in March, compared with $39,950 three years earlier, according to Edmunds, an online car-shopping guide. Repair and maintenance costs are up 8.2% year-over-year, and insurance costs are up 22.2%, Labor Department data show.

Financial Regulation TD Bank Sets Aside $450 Million for Possible U.S. Anti-Money Laundering Penalties

TD Bank said it would set aside $450 million for fines it is likely to face from U.S. regulators because of weaknesses with its anti-money laundering practices.

Canada's second-largest bank by market capitalization said Tuesday the provision is related to talks with one U.S. regulator. Bank officials are in talks with two other regulators, and TD said the initial provision doesn't reflect other financial or nonmonetary penalties that the lender could face.

Forward Guidance Thursday (all times ET)

4:00 a.m.: Eurozone manufacturing PMI for April

8:30 a.m.: U.S. weekly jobless claims

8:30 a.m.: U.S. trade report for March

8:30 a.m.: U.S. factory orders for March

Friday

4:30 a.m.: S&P Global U.K. Services PMI for April

8:30 a.m.: U.S. employment report for April

10 a.m.: ISM Report on Business Services PMI for April

7:45 p.m.: Chicago Fed's Goolsbee speaks at Hoover Institution's Getting Global Monetary Policy on Track

Research Swiss Franc Could Rise in Coming Weeks Due to Position Squeeze

The Swiss franc could appreciate in the coming weeks as extensive short positions - or bets on the currency falling - could result in a squeeze that pushes the currency higher, Sam Lynton-Brown, global head of macro strategy at BNP Paribas, told Dow Jones Newswires. "We think the Swiss franc is poised to appreciate in the very short term on the grounds that the market is positioned very short, the shortest in many years on our metrics," he said. The Swiss franc would also benefit from safe-haven demand in the event of any geopolitical escalation, he said. - Jessica Fleetham

Basis Points Forced laborers are being transferred from China's Xinjiang region to elsewhere in the country in growing numbers, a Biden administration official said, a problem that could test corporate efforts to comply with a U.S. supply-chain crackdown. - Richard Vanderford The global economy is likely to avoid an anticipated slowdown this year , but could yet suffer a significant setback if an escalation of conflict in the Middle East were to push oil prices sharply higher, the Organisation for Economic Co-operation and Development said Thursday. - Paul Hannon Japan likely carried out a second round of significant yen-buying intervention this week, according to a calculation based on data from the Bank of Japan and private money brokers. - Peter Landers The Reserve Bank of Australia has been far too timid in raising interest rates , some might argue, given that swaths of the economy are still going strong, according to a former senior manager at the central bank. - James Glynn A court in Vietnam sentenced a property tycoon named Truong My Lan to death in April in the biggest financial scandal the Southeast Asian nation has ever seen. Vietnam's famously secretive Communist government made an unusual show of punishing Lan. Her case became one of the most high profile in a relentless antigraft campaign dubbed the "Blazing Furnace," launched about a decade ago by Communist Party leader Nguyen Phu Trong, who is now 80 years old. Thousands of officials have gone to prison. Two presidents, accused of allowing corruption, have been toppled. - Feliz Solomon About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[e-mail]].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

05-02-24 0715ET