Central Bank Intervention

SINTRA, Portugal—European Central Bank President Christine Lagardesaid the bank would raise interest rates gradually over the coming months, veering from a global push toward faster rate increases as inflation broadens and intensifies around the world.Speaking at the ECB’s annual economic policy conference in Portugal on Tuesday, Ms. Lagarde said Europe’s inflation problem was deepening, but warned that the region also faced weaker growth prospects related to the war in Ukraine. SINTRA, Portugal—European Central Bank…

Federal Reserve Chairman Jerome Powell is facing pressure from both Senate Democrats and Republicans over how chiefs of the 12 regional Fed banks and their board members are selected. On Tuesday, Senate Democrats including Ohio Sen. Sherrod Brown, chairman of the Senate Committee on Banking, Housing, and Urban Affairs, and New Jersey Sen. Robert Menendez, a senior member of that panel, wrote to Mr. Powell and said the Fed needs more diversity in the leadership ranks of its regional banks.…

Federal Reserve Chairman Jerome Powell said the central bank’s battle against inflation could lead it to raise interest rates high enough to cause an economic downturn.“It’s certainly a possibility,” Mr. Powell said Wednesday during the first of two days of congressional hearings. “We are not trying to provoke and do not think we will need to provoke a recession, but we do think it’s absolutely essential” to bring down inflation, which is running at a 40-year high. His remarks underscore the…

Policy makers in Australia and South Korea warned that inflation was rising faster than expected, and the head of Australia’s central bank said it would take years for it to return to normal levels. Reserve Bank of Australia Gov. Philip Lowe on Tuesday said inflation in Australia is on track to rise to 7% by the end of the year, higher than the bank’s last forecast in May when it expected inflation to peak at around 6%. Mr. Lowe added that it would take…

The Federal Reserve appears to be moving toward a more precise understanding of just how potent the bond buying part of its monetary policy regime is. And based on a new Fed paper and comments by some officials, the effect of the purchases is pretty modest relative to what the central bank can accomplish by changing its federal-funds interest rate target. The Federal Reserve appears to be moving toward a more precise understanding of just how potent the bond buying part of its monetary…

OTTAWA—The rapid acceleration in prices has increased the likelihood the Bank of Canada may need to double its policy interest rate, from its current 1.5% level to 3% or higher, to drive inflation toward its 2% target, a senior central bank official said Thursday. “The bottom line is that the risk is now greater that inflation expectations could de-anchor and high inflation could become entrenched,” Bank of Canada deputy governor Paul Beaudry said in a speech to a business audience in Gatineau, Quebec. “This…

A Federal Reserve official said Monday he would support raising interest rates in half-percentage-point increments for several more meetings, adding to a growing debate over how far and fast the central bank should push up borrowing costs to combat high inflation.The U.S. central bank raised interest rates by a half percentage point, or 50 basis points, on May 4, the first half-point increase since 2000. Officials have signaled similar moves are very likely at their next two meetings, in June and July. “I support…

WASHINGTON—A U.S. central bank digital currency could one day provide consumers with a level of safety amid a proliferation of privately-issued digital assets such as stablecoins, Federal Reserve Vice Chairwoman Lael Brainard told House lawmakers Thursday.Ms. Brainard told the House Financial Services Committee that in the future a central bank digital currency could coexist with and be complementary to stablecoins by providing a widely available, government-backed means of payment. “It…

The prospect of losses on the Federal Reserve’s holdings of securities is a real issue for U.S. taxpayers, a former top central bank staffer wrote in a research note Wednesday. Bill Nelson, who now works as chief economist for the Bank Policy Institute industry group, was responding to a report released by the New York Fed on Tuesday. In that report, the bank said the Fed likely suffered paper losses on bonds it owned this year and that those paper losses could be substantial over time depending on how…

Christine Lagarde, president of the European Central Bank, said the bank could increase its key interest rate in July for the first time in 11 years. Photo: Georg Wendt/Zuma Press…