Decline in "federal" rates for the first time since 2008

After 10 years of steady growth, the US Federal Reserve has reduced its primary credit interest for the first time since 2008, following persistent criticism by Donald Trump and accusations that the US economy has not been sufficiently stimulated .
The Federal Reserve cut its interest rate yesterday at a rate of between 2% and 2.25%, citing uncertainties about the global economy and continued weakness in inflation.
The Monetary Committee left the door open for a new initiative, saying it would act appropriately to support growth.
The reserve raised interest rates four times (quarterly) last year, but we now see that weak global growth and low inflation require a more flexible monetary policy.
Despite this change in monetary direction, the description of economic activity made by the Monetary Committee has not changed much from its last meeting six weeks ago. Employment growth remains strong, business investment growth is weak and inflation remains below 2%.
The Fed also decided to stop two months ahead of schedule, reduce its balance sheet and abandon its Treasury bonds.
Reducing investments in government bonds implicitly implies a slight rise in interest rates, which would go well to the anger of Trump, who is complaining about the high cost of borrowing. The reserve budget should therefore rise to about $ 3.8 trillion instead of $ 4.5 trillion by the end of 2017, the highest level when it decided to go ahead. buy heavily financial bonds to stimulate economic recovery.
Many economists worry that a wrong rate cut could stimulate the economy, resulting in a financial bubble, especially in terms of corporate borrowing or inflation.
This is the first time since Jerome Powell badumed the presidency of this institution in early 2018 in which the Monetary Committee witnesses this split.

Kuwait
For its part, the Central Bank of Kuwait kept the discount rate unchanged at its current level of 3%.
"The decision is aimed at maintaining the competitiveness of the national currency and its attractiveness as a vector of domestic savings as a solid foundation for fundamental trends in monetary policy," said Central Bank Governor Mohammed. al-Hashil.
He pointed out that this decision was part of the ongoing monitoring of the changing economic, monetary and banking conditions and their expected trends, as well as the periodic review of the business. interest rate developments on international currencies and the Federal Council decision to reduce interest rates of the dollar.
As a result, the Central Bank's board of directors has decided to maintain its discount rate in relation to its current level of 3%, given its approach based on a close reading of economic, financial and financial developments. and banking and fluctuations in global interest rates.
Al-Hashil pointed out that the current discount rate corresponds to the price applied since March 2018, as the Central Bank did not match the "federal" rate hike three times after that date.
He emphasized that the decisions of the Central Bank in the area of ​​monetary policy, including decisions and procedures on local interest rates, were based on the study and badysis of the latest available economic and monetary data and information. , including general economic performance rates and indicators of domestic liquidity, Bank, interest rate on the Kuwaiti dinar and major currencies, mainly the dollar.
He added that these data are among the most important determinants of the need to stimulate local interest rates and trends in these prices, as well as appropriate tools and tools to achieve them, and indicated that the Central Bank would continue to monitor developments in the economic, monetary and banking conditions as well as the evolution of international interest rates, on the basis of the latest information available.
He stressed that the Central Bank would not hesitate to use the available monetary policy tools to strengthen the climate for economic growth and the continued competitiveness and attractiveness of the national currency. as a vector of domestic savings and in the framework of maintaining monetary stability and financial stability.

Golf's country
For its part, the Saudi Monetary Agency (SAMA) lowered the rate of reverse repurchase agreements used to lend money to banks at 275 basis points, compared with 300 basis points, as well as the rate of in which commercial banks deposit funds with the central bank, the same margin at 225 basis points.
In turn, the central bank of the United Arab Emirates announced that it had decided to reduce repo rates by 25 basis points as of August 1, according to the decision of the US Central Bank.
The central bank announced in a statement that it had also lowered the interest rate on certificates of deposit by 25 basis points, as of Thursday.
Qatar's central bank announced it had lowered its lending rates by 25 basis points to 4.75 percent, adding that the decision had been made taking into account the changing macroeconomic situation at the national and international levels. .
The Central Bank of Bahrain (CBB) has decided to reduce its key rate on deposits of the week
25 basis points, from 2.75% to 2.50%.
Bahrain's central bank also lowered the sight deposit rate from 2.50% to 2.25%, the lending rate from 4.50% to 4.25% and interest from deposits to one month of 3, 10% to 2.85%.

Trump … upset!

US President Donald Trump said Federal Reserve Chairman Jerome Powell "has not" managed to cut interest rates by a quarter of a percentage point, saying that the market wanted a signal for a prolonged and aggressive rate reduction.
"What the market wanted to hear (Jerome) Powell and the Federal Reserve, is that it 's about the beginning of a long and aggressive cycle of rate cuts. interest in China, in the European Union, in the European Union and in the European Union, "said Trump, And other countries of the world".
"As usual, Powell let us down, but at least, ends the quantitative focus that should not have started."

Recovery and decline of the dollar
Euro and Sterling

LONDON (Reuters) – The euro fell to its lowest level in 26 months yesterday, after rising gains against the dollar after the Federal Reserve's cautious tone regarding further interest rate cuts .
The Fed's less hawkish tone helped the dollar to recover, pushing its index, which measures the performance of the greenback versus a basket of currencies to a 26-month high, and the euro fell at its lowest level for 26 months against the $ 1.1034 dollar bill, In 30 months at $ 1.2087.
At the last exchange, the euro fell 0.3% to 1.1037 dollar, while the pound fell 0.2% against the single European currency, to 91.29 pence for a euro.
In turn, the yen fell to its lowest level in three months, at 109.32 yen to the dollar. In recent transactions, it fell 0.3% to 109.09 yen per dollar.
The Swiss franc rose 0.2% to 1.0983 francs against the euro, while the Australian dollar moved little further to 0.6847 USD.

Bank of England warns of recession
Economist after "Brest"

The British central bank has warned that Britain is facing a high probability of going into recession even if a final exit agreement is concluded by the end of October.
The Bank's monetary policy committee, after announcing an interest rate hurdle of 0.75%, said that if an agreement was reached without agreement, the local economy would suffer a significant drop in rates. of growth while inflation would rise to a high level, pushing the pound to its all-time lowest level.
In addition, the UK government has announced the allocation of an additional 2.55 billion dollars to accelerate exit procedures of the European Union (BRICT) scheduled for late October.

Gold … is down

– The price of gold fell to its lowest level in two weeks yesterday, a day after the US Federal Reserve cut its interest rates.
Spot gold fell 0.6% to $ 1404.81 an ounce, after reaching its lowest level since July 17 at $ 1402.15 an ounce.
Gold futures dropped 1.5% to 1404.90 dollars an ounce.
Gold rose for the third consecutive month in July, reaching its highest level in six years, at $ 1,452.60 an ounce on July 19.
Platinum slid 1% to $ 850.95 an ounce after falling to its lowest level since July 23 at $ 845, and palladium dropped about 2% to $ 1485.89 the ounce, its lowest level since June 21st.

Oil prices are falling

The price of a barrel of Kuwaiti oil rose 92 cents Wednesday to 65.91 dollars, against 64.99 dollars per barrel Tuesday. Oil prices tumbled on world markets to record their first decline in 6 days after the Federal Reserve thwarted hopes of a series of rate cuts At the end of trade talks between China and the United States without clear progress being made in the resolution of the bitter commercial conflict.
Brent futures fell 68 cents, or 1 percent, to $ 64.37 a barrel, after losing more than a dollar early in the session, while US crude prices fell 72 cents, or 1.2%, at $ 57.86 a barrel. Fell more than a dollar earlier in the session.