Market News

China's Central Bank Suspends Bond Buying as Yields, Yuan Fall By Vicky Ge Huang

The People's Bank of China has suspends government bond purchases,as long-term yields hit fresh lows and the yuan falls.

Also, St. Louis Fed President Alberto Musalem suggests greater caution is warranted on reducing interest rates.

Elsewhere, Deputy Governor Sarah Breeden said Thursday the Bank of England is keeping a close eye on price moves in the market for U.K. government bonds, but they have so far been "orderly."

Additionally, the United Nations raised its growth forecast for the global economy this year.

Top News China's Central Bank Suspends Bond Buying as Yields, Yuan Fall

China's central bank has hit pause on Chinese government bond purchases, a move that comes as long-term yields hit fresh lows amid expectations of more monetary policy easing.

The People's Bank of China cited excess demand for government bonds as the reason for its decision, saying the suspension was made effective this month. Buying will resume at an appropriate time, it said in a statement Friday.

Fed Official Says Further Rate Cuts Can Wait

A Federal Reserve official said he viewed last month's decision to lower interest rates as a "close call" because the economic outlook appears to be different now than it was when the central bank started cutting rates four months ago.

St. Louis Fed President Alberto Musalem said by the time of last month's meeting the risk that inflation might get stuck between 2.5% and 3% had increased. As a result, he thought greater caution would be appropriate in making further reductions.

Bank of England Monitoring Gilt Market, But Sees Moves as Orderly, Says Breeden

The Bank of England is keeping a close eye on price moves in the market for U.K. government bonds, but they have so far been "orderly," Deputy Governor Sarah Breeden said Thursday.

Yields on long-term U.K. government debt have risen to their highest levels since 1998 over recent days.

Philadelphia Fed President Patrick Harker Sees More Rate Cuts Ahead

Philadelphia Fed President Patrick Harker says that on inflation, "it's just taking a little longer to get back to target than initially anticipated." Still, the Fed official sees more rate cuts ahead, albeit with uncertain timing, he says in a speech in Princeton, N.J.

"To be sure, I still see us on a downward policy rate path," Harker says in a published text of his remarks. "But the exact speed I continue to go along this path will be fully dependent upon the incoming data." Harker acknowledges policy uncertainty as control of the White House and Congress shifts: "Here at home, we await potential policy changes which may have an economic impact," he says, but adds he "won't deal in hypotheticals." (Dow Jones Newswires)

Why Two Fed Officials Doubt The Need For Many More Rate Cuts

Two top Federal Reserve officials on Thursday questioned the need for many more interest rate cuts.

Fed Governor Michelle Bowman and Kansas City Fed President Jeff Schmid both said the 100 basis points in rate cuts since September has brought the Fed's benchmark rate down to "neutral," where it neither dampens or boosts demand.

That neutral level has been the goal of rate cuts. Fed officials would only go below neutral if the economy were slowing markedly. (MarketWatch)

Fernandez's Take Pro Take: Crypto Could Get a Boost as Barr Departs as Fed's Supervisory Head

Michael Barr's departure as vice chair for supervision at the Federal Reserve could help pave the way for bitcoin and other crypto assets to have a broader role in the U.S. financial system . But it isn't the only avenue opening to President-elect Donald Trump that could allow him to ease crypto rules.

Federal banking regulators during the Biden years, including Barr, have cracked down on crypto, viewing them as destabilizing-especially after the collapse of the fraud-riddled FTX crypto empire.

U.S. Economy U.S. Mortgage Rates Climb to Highest Since July

U.S. mortgage rates are back at their highest level since last summer , frustrating homebuyers waiting for a break from some of the steepest borrowing costs in more than a decade.

Home sales have shown signs of a rebound in recent months, but those gains have come despite costlier financing, a weight economists say is continuing to drag on a full-fledged housing recovery.

Financial Regulation UBS Close to Large Settlement Over Credit Suisse Tax Case

UBS is set to pay at least hundreds of millions of dollars to settle violations by Credit Suisse of an earlier agreement with the U.S. Justice Department over American clients who evaded tax, people familiar with the matter said.

A settlement could come as soon as this week, one of the people said. Prosecutors have weighed how best to punish Credit Suisse since it came under new ownership via a rescue by UBS in 2023. It could be one of the last big actions for the Justice Department under the departing Biden administration, which promised to crack down on repeat corporate offenders.

Bayview Asset Management Enters Into $20 Million Settlement Over Cybersecurity Weaknesses

Mortgage company Bayview Asset Management will face a $20 million penalty over a data breach and its alleged failure to cooperate with regulators in the aftermath.

Bayview, a Coral Gables, Fla.-based investment manager that owns mortgage-servicing firms, had deficient information technology practices and suffered a 2021 data breach that affected 5.8 million customers, the Conference of State Bank Supervisors said Wednesday. Bayview then failed to cooperate with regulators as they sought information, said CSBS, an organization that represents financial regulators in U.S. states and territories.