NEW DELHI: The finance ministry has asked state-run banks to raise money through additional Tier I (AT1) bonds at lower cost and only when market conditions are favourable, an advice aimed at reducing interest rates in the economy. The government hopes this will help reduce the cost of funds for the lenders, which they often blame for not passing on interest rate cuts announced by the central bank.
Everyone knows that interest rates are going to rise in the future. So the real question is not whether they will rise, but when and by how much. Janet Yellen didn't change the consensus opinion regarding these questions much in her testimony today. The market thinks the Fed is almost certainly going to end the tapering of QE3 in October, and about six months later, give or take a few months, the Fed is expected to start raising short-term rates.
The latest snapshot of economic growth this week will heat up the debate about when the Bank of England will raise UK interest rates for the first time since the depths of financial crisis.
Economists predict official figures on Tuesday will show GDP growth bounced back in the second quarter after a new-year slowdown. Alongside fading worries about the Greek debt crisis and signs of rising living standards, any such recovery in headline growth could fan expectations that the Bank’s policymakers are readying to raise interest rates, perhaps even before the end of the year.
HONG KONG (AP) — World stock markets were mostly higher Monday as the yuan steadied and Greece inched closer to receiving its latest bailout.KEEPING SCORE: European stocks opened higher, with France's CAC 40 up 0.5 percent to 4,982.93, while Germany's DAX gained 0.4 percent to 11,032.42. Britain's FTSE 100 was flat at 6,549.97. U.S. stocks were poised to open slightly lower, with Dow futures down less than 0.1 percent to 17,432.00. Broader S&P 500 futures dipped 0.1 percent to 2,088.00.
MarketPulse FX submits:
By Scott Boyd
The European Central Bank is facing a true dilemma with its upcoming interest rate vote. On the one hand, the Bank is cognizant of the rising rate of inflation in certain economies comprising the 17-member Eurozone of countries, while on the other, it is aware of the pressures the so-called “periphery” nations face as they deal with the ongoing credit crisis.