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Recent Editions
Risk Channel
North America
Federal Reserve officials agreed at their June meeting that interest rates may need to rise if inflation remains elevated, while maintaining that policy could stay unchanged if price pressures ease. The Federal Open Market Committee unanimously kept its benchmark interest rate at 3.5% to 3.75%, but projections showed nine of 18 policymakers now expect at least one rate hike by the end of the year, compared with none in March. Meeting minutes highlighted growing concern that inflation could prove more persistent, with officials identifying the rapid expansion of artificial intelligence investment, alongside tariffs and geopolitical tensions, as potential drivers of sustained price pressures. Policymakers said the outlook will depend on upcoming inflation and labor market data as they weigh the risks of tightening policy too quickly against allowing inflation to become entrenched.
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Risk Channel
UK/Europe
The European Systemic Risk Board (ESRB), the EU's financial stability watchdog, is examining the risks private credit poses to the region's banks and economy, according to Richard Portes, a member of the board's advisory committee and co-chair of a recently launched credit taskforce. He said this would involve assessing the potential of private credit to spread or amplify financial shocks and its interconnectedness with Europe's financial system. "It is those linkages that we as the ESRB and any macro-prudential authority will worry about. We want to know where the interconnections are. And honestly, not much is yet known about that," he said.
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