European and US interest rates are unlikely to rise before next year so as not to hurt a global economic recovery that is being weakened by Europe’s debt crisis, the world’s top central bank body said on Sunday.
“In the United States, federal funds futures and options suggested that the first rate hike was not expected to occur until late in the first quarter of 2011,” the Bank for International Settlements said.
The probability of a rate increase in September and December this year is “declining,” it said in its quarterly report on banking and financial market developments.
“Forward rates in Europe signaled a similar postponing of the expected first rate hike by the European Central Bank [ECB] beyond 2011,” the bank for central bankers said.
The BIS said this reflected indications put out by central banks that they were not expecting to raise rates, but also “investors’ concerns that volatile market conditions could derail the nascent economic recovery.”
It said that the market was expecting fiscal belt-tightening in several countries, which in turn could lead to contraction in the economy. Central banks had slashed lending rates to record lows during the financial and economic crises to get lending flowing and to boost the economy.
As the world exited from the recession, some central banks had begun raising rates.
However, the debt crisis in Europe led to a halt in these moves, with Australia’s central bank citing turmoil in the markets over the debt crisis for holding its rates early this month.
Both the Bank of England and the ECB held their lending rates at record lows this month.
Seeing continued fragility in the US recovery, the US Federal Reserve kept ultra-low borrowing costs at its April meeting, despite improvements in the labor and housing markets.
The 10-member panel had vowed to keep rates of zero to 0.25 percent for an “extended period,” in an effort to boost growth.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from