Economy

Fed vs inflation
Fed chief in speech: Interest rate hike may be in question

In his first major speech, the new US central bank chief Kevin Warsh says that inflation is too high and opens the way for an interest rate hike, writes TT.

– We must be convinced that underlying inflation is moving towards our target, clearly and at a sufficient pace, otherwise there is work to be done, he says.

It is a clearer message than the previously cautious Warsh has given. The speech at the annual meeting in Jackson Hole, Wyoming, is being closely watched by economists and investors.

Raising the key interest rate would scare investors and likely anger President Donald Trump, who nominated Warsh for the job. 

Oil market
Sources: Venezuela considering leaving the OPEC oil cartel

Venezuela is considering leaving OPEC – the oil cartel that the country helped create more than 60 years ago. This is according to sources for Bloomberg.

The country's consideration of leaving OPEC is a complete reversal, and shows the influence of the United States after the country's President Nicolás Maduro was taken out of the country by American authorities at the beginning of the year, the news agency writes.

Washington's influence is also visible in the talks with Venezuela about taking over a significant share of the country's oil fields. According to the sources, a 100-year lease agreement is being discussed on several of the oil fields. 

Swedish growth
Nordea believes that the Riksbank can raise the interest rate this year

Today's strong growth figure for the Swedish economy together with positive households increases the likelihood that the Riksbank will raise the key interest rate this year. This is what the major bank Nordea writes in a recent forecast, according to TT.

The banks' assessments of the interest rate differ.

- So far, the labor market is weak and the improvement in it is fragile. I don't think the Riksbank feels stressed about the inflation risk, says SEB's interest rate strategist Amanda Sundström to TT.

Today's stock market
Wall Street opens cautiously ahead of Warsh's speech

Wall Street begins Friday cautiously. The market awaits US Federal Reserve Governor Kevin Warsh's speech in Jackson Hole, where he is expected to give a picture of where interest rates are headed.

At the opening, the S&P 500 rose 0.1 percent. The Nasdaq Composite Index fell by the same amount while the Dow Jones Industrial Average rose 0.3 percent.

Payment service Paypal plunged 12 percent after Advent and Stripe backed off their attempts to buy the company.

Semiconductor company Marvell Technology fell 7 percent after yesterday's report in which margins for the current quarter were lower than expected.