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In seven months, the Fed may end stimulus. And Reaffirms That Inflation Is Temporary – Monetary Policy

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In seven months, the Fed may end stimulus.  And Reaffirms That Inflation Is Temporary - Monetary Policy

Members of the Federal Open Market Committee (FOMC) of the Fed at the US central bank monetary policy meeting, held September 21 and 22, indicated the possibility of a gradual removal of stimulus for the economy. called “tapering”, which involves buying out the debt – starting in mid-November or mid-December. The program is scheduled to be completed by the middle of next year.

The current incentive program involves the purchase of assets equivalent to $ 120 billion per month. These amounts are split each month into $ 80 billion in Treasury bonds and $ 40 billion in mortgage-backed securities.

According to the minutes of the last meeting, FOMC members generally agreed with the idea that they should begin to cut emergency support for the pandemic to the economy, with this “phase-out” starting in mid-November or mid-December, “even if the delta covid -19 continues to create obstacles. “

Fed members stressed that if at the next meeting on monetary policy, which will be held on November 2 and 3, a decision is made to start lifting the stimulus, the process could begin in mid-November or mid-December.

In addition, “participants [na reunião] they felt that, given that the economic recovery is still in the pipeline, it would be prudent to complete the ‘gradual transition’ process by the middle of next year, ” disclose the protocol released this Wednesday.

US central bank officials also discussed a possible quantitative “taper” trajectory, pointing to a $ 10 billion monthly decline in Treasury purchases and $ 5 billion in the case of mortgage-backed securities.

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Inflation: continues to rise but is temporary

As for inflation, which is growing at a fast pace – in September it was at its highest level in 13 years, at 5.4% – some Fed officials noted that disruptions in supply chains and production could put pressure on prices. longer than expected. However, they confirmed its temporary nature.

Last month, Fed officials calculated that inflationary pressures will ease next year and inflation will fall to levels close to the central bank’s 2% target.

As for the federal funds rate, 9 out of 18 FOMC members predicted at the September meeting that key interest rates could rise at least once in 2022 (compared to the family who saw such an opportunity at the June meeting).

In September, the FOMC maintained interest rates between 0% and 0.25%, indicating that they will remain at this level until the labor market reaches full employment and inflation becomes more controllable (maybe “for some time.” , be above 2%.).

At this last Fed meeting, a “dot plot” – a map that shows how each central banker assesses changes in key interest rates – thus showed that half of the members of the Federal Reserve now expect interest rates to rise next year.

In addition, all but one participant expect at least one key rate hike by the end of 2023, with 13 of them expecting two hikes during 2022.

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Economy

Bitcoin Down 87% On Binance US Platform – Executive Digest

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Bitcoin Down 87% On Binance US Platform - Executive Digest

An algorithm flaw on the Binance platform caused users in the US to see a false 87% drop in Bitcoin this Thursday morning to $ 8,200.

The transaction volume for that minute was 592.8 bitcoins, which is only $ 40 million at current price.

The Exchange immediately fixed the bug.

“One of our institutional partners explained to us that there is a bug in the algorithm. We are investigating what happened. The situation has been resolved, “says an email sent by Binance USA.

This is not the first time a crypto-asset platform has encountered this kind of error.

Earlier this month, DeFi’s platform, Synthetify, was forced to shut down for a while shortly after its debut due to a “bug” in the Pyth Network, a pricing channel maintained by some of the world’s most famous trading companies.

Pyth already made the same mistake in September, showing a 90% drop in bitcoin share.

Also a month ago, decentralized financial platform DeversiFi saw $ 24 million “slipped out of his hands” after that amount was paid in the form of a $ 100,000 transaction fee in Ethereum.

Later, the exchange managed to recover 7,626 Ethereum units using a miner.

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Economy

Powell’s scandalous operation prompts Fed to ban high-level officials from buying and selling shares – markets

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Powell's scandalous operation prompts Fed to ban high-level officials from buying and selling shares - markets

“A robbed house, locks on the door.” THE The US Federal Reserve System (FRS) has decided to tighten rules for trading in capital markets by senior officials after it became known that the president of the institution, Jerome Powell reportedly sold the $ 5 million shares he held on a personal level last October, ahead of a Wall Street sell-off.

The new rules, announced this Thursday, will ban the purchase of certain securities, restrict active trading and require more frequent reporting and public disclosures, the Fed said.senior officials can only purchase diversified investment vehicles such as mutual funds, barring them from investing in stocks, individual and agency bonds, or derivatives.

“These tough new rules raise the bar to convince the public that our employees are focused only on the public mission of the Federal Reserve,” Jerome Powell said in a statement on the agency’s website.

Starting in the next few months, the Fed’s top management will have to give advance notice 45 days to buy and sell bonds, obtain prior approval and hold the investment for at least one year. In addition, movement during periods of heightened stress in the financial market is not permitted.

Jerome Powell reportedly sold between $ 1 million and $ 5 million in Vanguard Total Stock Market Index Fund on October 1, 2020. pandemic. In addition to this deal, there were other sales with no specific deadlines.

The Wall Street Journal reported that a Fed source indicated that the financial transaction was compliant with central bank regulations and was approved by the Office of Public Ethics.

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Economy

Diploma for limiting the fuel surcharge valid tomorrow

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Diploma for limiting the fuel surcharge valid tomorrow

NO documentstay decisive “The ability to set maximum marketing margins for simple fuels”, an initiative of the government, currently adopted by the Assembly of the Republic.

Thus, the diploma states: “regardless of the declaration of the energy crisis provided for in the previous numbers, for reasons of public interest and to ensure the normal functioning of the market and consumer protection, a margin may be established, in exceptional cases, in any commercial components that make up the retail the price of regular fuel or bottled LPG ”.

According to the law, which amends several decrees establishing general principles regarding the organization and operation of the National Petroleum System, the “maximum margin” can be “determined for any activity in the value chain of ordinary fuel or bottled LPG. set by the order of the members of the government responsible for the economy and energy, at the suggestion of the energy services regulator and after consultation with the anti-monopoly body. “

The diploma also specifies that “the maximum fields indicated in the previous numbers should be limited in time.”

In July, the government approved in the Council of Ministers (CM) a proposed law that would limit fuel sales margins by decree if it deems it too high “without justification,” according to the Minister of the Environment.

At a press conference, João Pedro Matos Fernández said that this diploma, which also applies to gas cylinders, will later be sent to the Assembly of the Republic, stressing that this measure will be “limited in time.”

The purpose of the law is to “give the government a tool to allow, when it is proven that the margin on the sale of fuel and gas cylinders is unusually high and unreasonable, this right, by decree, to limit the same margin,” the government official said. …

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“After approval [a proposta de lei]and the government, always listening to ERSE [Entidade Reguladora dos Serviços Energéticos] and the Competition Authority, by its decree, always for a limited period of time, which, I believe, is a month, two months, administratively sets the maximum margin for the sale of fuel, ”said João Matos Fernández.

The government official recalled that this markup “is also the sum of the markups associated with transportation, storage, wholesale and retail,” and these reference values ​​”continue to be calculated by ENSE on a daily basis.”

“As soon as this bill is approved, we will have this tool at our disposal,” he said, assuring that today “the state has no opportunity” to interfere in limiting prices for fuel and gas cylinders.

The initiative has been criticized by industry associations, which accuse the government of wanting to deflect attention from the weight of taxes on fuel prices.

Read also: Fuel and energy. Concerned parties are asking the government to take additional action.

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