‘Tightening’ Signal in Fed Minutes

Federal Reserve Board (Fed) released Federal Open Market Committee meeting minutes for April.

In the minutes of the US Federal Reserve meeting held on April 27-28, members emphasized that the economy is far from the Federal Open Market Committee (FOMC) targets.

In the minutes of the meeting, which reiterated that loose monetary policies would continue even if inflation exceeds the target for a period of time, it was signaled that monetary tightening might start at some point.

Some of the Fed officials, who were cautiously optimistic about the US economy, stated at the upcoming meetings that the debate of the bank’s $120 billion monthly asset purchase program might start to be discussed.

“Several participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the meeting summary said.

After the meeting, Chairman Jerome Powell said that the recovery is still “uneven and far from complete” and that the economy has yet to reach the “substantial further improvement” standard that the committee has set before changing policy.

Additionally, the dollar index, which was below the 90 levels before the minutes, rose by 0.40% to 90.13 after publication.

The euro/dollar parity, which saw the level of 1.2240 before the minutes, declined to the level of 1.2175 after the minutes.

China and Russia Started Constructing Nuclear Power Plants

During a virtual ceremony on Wednesday, China and Russia agreed to expand their nuclear cooperation and vowed to play a larger role in combating climate change.

Chinese President Xi Jinping and his Russian counterpart Vladimir Putin met via video link to start constructing four new reactors at two Chinese nuclear power plants.

The reactors use Russian technology, and the two plants – Tianwan in Jiangsu and Xudapu in Liaoning – are part of a US$2.9 billion nuclear energy deal signed in 2018.

Chinese President Xi Jinping and his Russian counterpart, Vladimir Putin, saw the beginning of the construction through a video link and highlighted its relevance for the strategic cooperation between both countries.

The construction of the Russian-made third-generation “VVER-1200” type reactors is expected to be completed in 2026 and 2028.

They are expected to help China fulfill its plan of gradually reducing carbon dioxide emissions until it neutralizes this chemical by 2060.

Xi said during the ceremony that Beijing and Moscow had agreed to strengthen bilateral ties. “In the face of the epidemic and changes unseen in a century, China and Russia have firmly supported each other and cooperated closely and effectively,” Xi said.

The Russian leader also hailed relations between the two countries. “It can be said that Russia-China relations have reached their highest level in history,” Putin said.

UK Home Prices Recorded the Fastest Rise in 14 Years

While UK home prices recorded the fastest rise in 14 years, detached house prices also increased with the start of remote work.

House prices in the UK had achieved the fastest annual rise in the last 14 years when finance minister Rishi Sunak announced the extension of the pandemic emergency tax cut and other support for home-buyers, official data showed on Wednesday.

According to the data released by the National Statistics Office, house prices in the UK increased by 10.2% in March, up from 9.2% in February 2021. Other surveys also point to rising prices, along with tax cuts and mortgage guarantees.

The Office for National Statistics (ONS) said the pandemic might have caused buyers to “reassess” their housing preferences, with the average price of detached properties in the UK rising faster than flats.

Sam Beckett, head of economic statistics at the ONS, said the surge in March was also the 11th consecutive monthly rise for the property sector.

“The average price of a house in the UK now stands at a record £256,000, which is £24,000 higher than this time last year,” she said.

Many Britons chose to move to houses with gardens that were not in the city, with the start of work from home. According to ONS, the price of single-family homes increased by 11.7% in March compared to the previous year.

London again saw the weakest gain in house prices among all of the United Kingdom’s regions, with a 3.7% increase in the year to March. By contrast, prices in Yorkshire and the Humber region jumped by 14%.

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