Vocabulary:

inflationary pressure - инфляционное давление

economic fundamentals – основные макроэкономические показатели

domestic-led growth – увеличение темпов роста экономики, вызваное внутренними факторами

Сравните: export-led industries – отрасли экономики, получившие развитие за счет экспорта.

39. Bank of Japan Pressed to Ease Monetary Policy

The Bank of Japan is under pressure from the Ministry of Finance and politicians to take action at a policy board meeting to help check the surge of the yen to a three-year high against the US dollar.

Some politicians and government officials indicated at the weekend that a deal with the bank may have been struck, and the bank would make a token concession to loosen monetary policy. However, it remains unclear whether a majority of the board members will endorse this deal at the meeting, fearing this would undermine the central bank’s independence.

The Ministry of Finance has been putting pressure on the bank to make a symbolic gesture of concession to have the way for concerted action with the US to weaken the yen. Japan’s drive to gain support for joint moves on the yen is to be an issue at next weekend’s meeting of Group of Seven finance ministers.

Officials are concerned that the strengthening of the yen against the dollar last week could hamper Japan’s recovery from its worst postwar recession.

The Bank of Japan maintains that loosening monetary policy in unlikely to have much economic impact as interest rates are close to zero, and there is little demand to borrow funds by Japanese corporations.

But politicians argue that even a symbolic change in monetary policy may have a beneficial impact on market psychology, particularly because the bank and ministry appear to have been at odds in recent days. This has also complicated efforts by Japanese politicians to convince the US of the merits of joint intervention.

The Nikkei newspaper, the business daily which is often used to express official policy views, said at the weekend that the bank was planning to ease monetary policy. Bank officials are said to be mulling three options: increasing the supply of funds to the interbank money market, buying more short-term government bonds from financial institutions, and engaging in “repo” operations where it borrows bonds from the market.

Vocabulary:

make a token concession; make a symbolic gesture of concession – лишь частично пойти на уступки; чисто символически пойти на компромисс

“repo” operations - repurchase agreement: договор (соглашение) об обратной покупке, репо - соглашение, по которому продавец обязуется в установленный срок выкупить у покупателя проданные ему ценные бумаги по установленной цене

40. Fed Report Shows Economy Remains Robust

The US economy continues to exhibit overall strength, with few signs of rising wage pressures but growing evidence of increases in wholesale prices, the Federal Reserve said yesterday.

In its six-weekly Beige Book report on economic conditions in the various regions of the US, the FED said growth rates were “moderate to brisk” across most of the country in August and the first half of this month.

The Beige Book is prepared by the FED’s 12 districts across the US and is a valuable guide for policymakers as they assess whether or not to raise interest rates to cool the economy.

The FED’s districts reported widespread evidence of increases in wholesale prices, as raw materials costs surged. These increases followed a pickup in global commodity prices and a decline in the value of the US dollar this year.

The FED said steelmakers in the Cleveland district, for example, reported price increase of 5-7 per cent, while construction costs in Dallas were up by 5-8 per cent in the first eight months of the year.

There was also evidence of sharp increase in the cost of companies’ health insurance benefits for employees.

These two emerging trends may cause some concern at the FED. For the last three weeks commodity prices, a strong dollar and falling healthcare costs have been critical elements in the benign performance of overall inflation in the US.

The FED also reported that consumer spending remained strong and industrial activity rose in many parts of the country, helped in part by resurgent Asian demand. But construction spending, which has been extremely brisk for most of the year, is starting to slow.

The banking sector remained in generally sound condition, with credit quality overall still good.