{"text":[[{"start":11.05,"text":"New US Federal Reserve chair Kevin Warsh will oversee his first meeting of the interest rate-setting committee next week, when investors will scrutinise his comments for guidance on borrowing costs and his political independence. "}],[{"start":24.450000000000003,"text":"The central bank is widely expected to hold rates in the current range of 3.5 to 3.75 per cent. The next move is not fully priced in by the futures market until March 2027, when the Fed is expected to raise by a quarter of a percentage point."}],[{"start":42.050000000000004,"text":"The Fed committee, however, may choose to remove the “easing bias” expressed in its last statement, as inflation risks mount. Three regional Fed presidents dissented from the use of that language at the April meeting. "}],[{"start":54.400000000000006,"text":"Oil prices fell at the end of this week on hopes of peace in the Iran war but are still well above where they were before the conflict started. A hot jobs report last month suggested the Fed need not worry about the employment side of its mandate. Any comments from Warsh that dismiss inflation risks or perpetuate the easing bias could be seen as an appeal to President Donald Trump, who nominated him to the role and has repeatedly called on the Fed to lower interest rates. "}],[{"start":83.05000000000001,"text":"“The market is going to test Warsh,” said Priya Misra, a portfolio manager at JPMorgan Asset Management. “What will he do with interest rates? I believe he will leave them be and remove the easing bias.” "}],[{"start":96.20000000000002,"text":"She added: “People will be looking for signs for him to be political. But it would be so unproductive for him to signal that as it would unanchor inflation expectations.” Kate Duguid"}],[{"start":105.15000000000002,"text":"Will the BoJ tell FX markets what they want to hear?"}],[{"start":109.05000000000003,"text":"The headline outcome of next week’s meeting of the Bank of Japan’s Monetary Policy Committee is not in much doubt: the central bank has thoroughly signalled to the market that it will raise its policy interest rate by 0.25 percentage points to 1 per cent, its highest in more than 30 years."}],[{"start":126.10000000000002,"text":"But many questions swirl. The BoJ is already facing criticism that it has fallen behind the curve, while the persistent weakness of the yen suggests markets are uncertain whether its tightening momentum will be maintained. Consumer price pressures are intensifying, producer price inflation is accelerating, and unlike Japan’s long period of deflation, companies are much better able than in the past to pass rising costs on to customers. "}],[{"start":152.40000000000003,"text":"The big question is over the messaging, and particularly as to whether the BoJ sees a 1 per cent rate as a good point to stop and take a breather — and perhaps give a nod to the dovish preferences of Prime Minister Sanae Takaichi — or use it as a stepping stone to further increases, with the next possibly as soon as December."}],[{"start":173.80000000000004,"text":"Adding to the uncertainty is the sudden admission to hospital this week of Kazuo Ueda, the BoJ’s 74-year-old governor."}],[{"start":181.50000000000003,"text":"Ueda will miss the meeting and will not vote. The critical task of taking the post-meeting press conference will fall to deputy governor Shinichi Uchida. Some regard him as a seasoned communicator whose nuance will be easy enough to parse; others worry that introducing a new voice will muddy the waters."}],[{"start":200.70000000000002,"text":"The yen traded this week below levels where the government has previously intervened in currency markets. For it to strengthen organically, analysts say, Uchida must reassure traders that the normalisation process has further to run, and that the neutral interest rate is significantly higher than 1 per cent. Leo Lewis"}],[{"start":218.50000000000003,"text":"How will BoE rate-setters respond to softening oil prices?"}],[{"start":222.75000000000003,"text":"The Bank of England is expected to hold its benchmark interest rate unchanged at 3.75 per cent on Thursday, not following the lead of the European Central Bank, which moved this week to tighten policy in response to the Iran war inflation shock."}],[{"start":237.30000000000004,"text":"Traders are only pricing in around a 10 per cent chance of a BoE quarter-point rate rise, according to levels implied by swaps markets. After a string of data showing a weaker UK economy, and given that the interest rate is still viewed by economists as high enough to be a restraint on growth, investors have been cautious about pricing in too many increases from here."}],[{"start":257.70000000000005,"text":"That caution is being encouraged by a fall in oil prices on hopes of a US-Iran peace deal, with the price of Brent crude touching a three-month low on Friday below $86 a barrel. "}],[{"start":269.15000000000003,"text":"The first quarter-point rate increase by the BoE had been priced in for September before Trump’s announcement on Thursday that a deal was close, but is now not fully priced in until November. "}],[{"start":280.25000000000006,"text":"Lower oil prices, softer recent inflation data and a weak labour market “buy the BoE some time”, said JPMorgan’s Allan Monks in his preview of what he expects to be a seven-to-two vote to hold."}],[{"start":292.65000000000003,"text":"But with inflation by his estimate reaching at least 3.5 per cent by the end of the year, Monks is expecting signs of an “incremental hawkish shift” in the section of the statement accompanying the rate decision where the Monetary Policy Committee members give their own views. Ian Smith"}],[{"start":314.75000000000006,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781445586_3183.mp3"}