A trader reacts as a screen displays the Fed rate announcement on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 13, 2023.
Brendan Mcdermid | Reuters
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
China blames U.S. for tense ties
China’s top diplomat blamed the U.S. for bilateral tensions and reinforced Beijing’s backing for a peaceful end to the Israel-Hamas conflict. China’s Foreign Minister Wang Yi said America has been devising “new ways to suppress China,” arguing that U.S. accusations had reached an “unbelievable degree.”
India’s embattled startups
India’s once valuable startups Byju and Paytm are entangled in a financial and regulatory crisis, which has dealt a severe blow to the country’s booming tech sector. Funding for Indian startups dropped 83% to $7 billion in 2023, from a record $41.6 billion in 2021, data showed amid a larger global venture funding pullback.
Powell reiterates stance
Powell repeated that the central bank isn’t ready to start lowering interest rates, in prepared remarks for his first day of testimony on Capitol Hill. His remarks broke no new ground on monetary policy, but highlighted officials were still concerned about not losing the progress made against inflation.
[PRO] India’s promising ETFs
Tapping India’s promising market isn’t as straightforward for foreign investors as buying shares listed on the Indian stock exchanges. Portfolio managers highlight one of the simplest routes is through ETFs that specifically track indexes comprised of Indian stocks.
The bottom line
No news is, perhaps, good news as far as Wall Street is concerned.
Fed Chair Jerome Powell stuck closely to script in the first of two Capitol Hill appearances this week.
“Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy,” Powell said. “At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.”
Investors are keeping a close watch on the Fed chief’s comments to get more clarity on the central bank’s timing for rate cuts.
“The waiting game continues. Everything else in the written testimony is boilerplate about progress on inflation over the past year and the strength of the labor market,” wrote Ian Shepherdson chairman and chief economist at Pantheon Macroeconomics. “In short, no surprises, no news.”
Mohamed El-Erian, Allianz chief economic advisor posted on X, that Powell “is facing some quite aggressive Congressional questioning on the impact of high rates … His response is, understandably, to repeatedly refer back to the inflation mandate.”
“The situation would have been less uncomfortable for the Fed had it not mischaracterized the inflation problem for so long in 2021, been so late in its policy response,” he added.
“Therefore, had to hike rates aggressively and to a higher level than would have been otherwise necessary.”