Federal Reserve Chair Janet Yellen said it could be "quite dangerous to allow inflation to drift down" and leave the economy trapped below the central bank's 2% target rate. There is evidence that inflation expectations are about to fall, she said.
European Central Bank President Mario Draghi says digital currencies such as bitcoin have had limited effect on the broader economy, and pose no immediate threat to central banks' control of money supply. However, he added that authorities are watching developments and sharing information, with cybersecurity being a primary concern.
The European Central Bank is unlikely to make any major changes to its forward guidance as it unwinds its quantitative easing, officials say. However Benoit Coeure, director of market operations, said Tuesday that the central bank will likely be prepared to drop its bond-buying pledge by September.
JPMorgan Chase CEO Jamie Dimon has called bitcoin "fraud," but a source says the bank is considering giving clients access to CME Group's bitcoin futures contracts, which might launch this year. The bank reportedly is weighing demand and whether the risk is worth facilitating bitcoin trading.
UK and EU negotiators over the next three weeks are working on a plan to resolve the most difficult aspects of Britain's departure from the EU. However, a variety of contentious issues remain, including how much the UK will pay the EU when it leaves.
Analysts say Europe's narrowing yield curve can lead to economic pessimism and tighter lending conditions, which may prompt the European Central Bank to review its stance on rate rises.
Winning the right to host the European Banking Authority was a major victory for Paris in its competition with Frankfurt, Germany, to become the dominant financial hub for Europe and attract many financial-sector jobs leaving London because of Brexit. Frankfurt's leaders thought they were certain to get the EBA, but the city did not reach the final round of voting.
Bank executives told the European Banking Authority that its proposals to tighten rules on risk transfers through securitisations could entail a quadrupling of relevant capital requirements. Market participants have criticised several aspects of the proposals, and the EBA has said it will accept feedback until next month and will revise the plans, if necessary, before submitting them to the European Commission.
Bank of England officials are pushing back against calls to improve how they communicate interest-rate and monetary policy changes, saying being too definite would be risky. "It's tempting to think the bank could promise where rates will be in future, but this would create more uncertainty," Monetary Policy Committee member Michael Saunders told Parliament.
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