U.S. Economic News

August 12, 2019

U.S. News

According to the Wall Street Journal, Federal Reserve officials are debating whether now is the time to implement a countercyclical capital buffer, a policy tool that allows the Fed to require banks to increase holdings of loss-absorbing capital. Fed officials in favor of the move argue that raising bank capital requirements now will provide a much-needed layer of additional resilience, while others argue that banks’ capital reserves are already sufficiently high. WSJ

Bloomberg News reports that Chinese policymakers are maintaining a cautious approach to monetary policy as they attempt to manage China’s growth slowdown, leaving options open for larger stimulus efforts in case the trade conflict with the U.S. morphs into an all-out currency war. Even with domestic monetary policy unchanged, allowing the yuan to remain weak against the dollar could absorb most of the impact of the latest U.S. tariff increase. Bloomberg