Lagarde calls for 'significant' Greek debt relief; Fed leaves rates unchanged - as it happened

Graeme Wearden

from on 2015-07-29 19:27 (#FS1N)

The US Federal Reserve has resisted raising interest rates until it sees more signs of labor market improvement

8.27pm BST

And that, I think, is all for another day. G'night all! GW

8.20pm BST

You can read the Fed's statement here, by the way.

8.15pm BST

A September interest rate hike is still on the cards, says Steve Murphy of Capital Economics.

Here's his take on the Federal Reserve's statement:

In its latest FOMC policy statement, the Fed did not provide any clear hints that a September rate hike is coming. Nevertheless, this doesn't mean that it won't happen, especially since the statement sounded a bit more upbeat on the economy.

The policy statement was largely unchanged, with only some minor tweaks to acknowledge the improvement in the economic data. The housing sector is described as showing "additional" rather than "some" improvement, jobs gains are now thought to be "solid" and the unemployment rate is "declining" rather than "remained steady" as before.

8.04pm BST

Tom Porcelli, chief U.S. economist at RBC Capital Markets, says the Fed will want to ensure that the two employment reports between the July and September meetings aren't "duds" before signalling that they're ready to raise borrowing costs.

Janet Yellen and colleagues will also be watching for any global risks flaring up, which could knock a rate rise off course. That's via Marketwatch:

The Fed didn't shed any light on the timing of an interest-rate hike: http://t.co/cDARs3ldt6 pic.twitter.com/V5EKX5axaX

7.47pm BST

Analysts at BNP Paribas, the French bank, say the Fed has left its options open with today's little-changed statement on monetary policy:

Here's a flavour of BNP's new note to clients:

7.43pm BST

7.23pm BST

Here's all you really need to know about the Federal Reserve's announcement:

Fed says the labor market and housing have improved, moving closer to rate hike - without providing a clear signal on the timing of liftoff.

Fed committee kept its description of risks to the outlook for the economy and labor market as "nearly balanced." Decision was unanimous.

7.20pm BST

The US stock market had a brief fluctuation at Fed o'clock, but it didn't last long.

Dow Jones pares most of the gains after the FOMC statement as investors have no clue what to do w/ the statement. pic.twitter.com/SM8TReNQFS

7.17pm BST

The immediate reaction is that today's Fed statement makes a September rate hike a little less likely.

But there's not much in it, given there's no radical change between the new statement and the last one.

USD weaker as #Fed headlines not dovish, just less hawkish in the immediate term. Swing-o-meter from Sept to Dec hike just moved a tad right

At the margin, Fed statement is dovish, because June dot plot points to 2 hikes, but this does not lay clear groundwork for Sept move.

7.13pm BST

The markets aren't quite sure what to make of the Fed statement.

The dollar plunged when the first newsflashes came up, but has now bounced back.

that was a heckuva knee-jerk move in the dollar/euro exchange rate pic.twitter.com/6DwWsOVASb

7.11pm BST

There are two significant changes in today's statement from the Federal Reserve.

1) It has added a reference to the labor market 'continuing to improve', and slightly hardened its language about the underutilisation of resources diminishing (ie, fewer people working less than they want)

Here's what changed in the new Fed statement: http://t.co/PI5ytJe3BE pic.twitter.com/pP1QU1Nz0j

7.06pm BST

Today's decision was unanimous, the Fed adds.

7.04pm BST

BREAKING: FED LEAVES IN THE WORD "NEARLY" http://t.co/7FzmnLlJCO

7.04pm BST

Here we go!

The Federal Reserve has resisted raising interest rates from their current record low, of 0% to 0.25%.

6.59pm BST

OK, nearly time for the Federal Reserve's interest rate decision....

Nervous

Come on Janet, I have gin to drink

3.47pm BST

Time for a recap:

The issue of Greece's unsustainable debt burden has moved back up the agenda, as top officials from the country's creditors prepare to begin talks on a third bailout.

Lagarde at online press conference in Washington today pic.twitter.com/eH2L6RPmEU

"I'm the last person who would want elections....If I don't have a parliamentary majority, though, we will be forced to head to a snap vote."

Tsipras Challenges Party Rebels With Threat of Snap Greek Ballot http://t.co/JZIPpaAKO9 pic.twitter.com/mPN90Yciwc

3.12pm BST

Asked about the prospect of a US rate rise, Christine Lagarde predicts "a variation of monetary policy in the not-too-distant future".

And she ends her first online press conference by telling reporters that she hopes they're comfy, with their feet on the desk and a cup of coffee (or watching the Ashes, perhaps....)

Takeaways from Lagarde's online presser: She's not sweating China's stock rout too much. More prodding of Europe to give Greece debt relief

2.48pm BST

Four legs good.....

Fiscal policies, structural reforms, financing & debt restructuring are four key legs for a Greek solution - Lagarde pic.twitter.com/eVYeShcwLn

2.48pm BST

Christine Lagarde has warned that Greece needs "significant" debt relief - laying down the conditions for the IMF to take part in the third bailout.

She told today's virtual press conference that any rescue plan for Greece will be unworkable without some form of debt relief.

"For any programme to fly, a significant debt restructuring should take place."

IMF's @Lagarde on Greece: "for any programme to fly, a significant debt restructuring should take place".

Lagarde on Greece: what matters are actions. "It's deeds, not creeds."

2.37pm BST

IMF Lagarde notes trepidations in Greece but notes Eurozone recovery finally taking shape Admits questions on cohesion will shape its future

2.35pm BST

IMF chief Christine Lagarde is holding her first ever virtual press conference with reporters.

Top spokesman Gerry Rice is putting the questions (don't go easy on the boss, Gerry!)

Online Press Conference with IMF Managing Director Christine @Lagarde pic.twitter.com/hvBM4diQnY

IMF's @Lagarde in online chat: "We believe that the Chinese economy is resilient"; can withstand "significant variations" in stock markets.

2.26pm BST

The ECB has maintained its current support for the Greek banking sector today, at almost a91bn.

Why no increase? Apparently the Bank of Greece didn't ask for one - suggesting that the outflow of deposits has stabilised (and with capital controls in force, that's understandable).

1.19pm BST

In a drama fast unraveling in Athens the scene has been set for possible criminal charges to be brought against former finance minister Yanis Varoufakis following revelations of his secret plan to establish an alternative currency in the event of Greece's euro ejection.

"I think that it is highly likely he will end up in a courtroom."

"With his loquaciousness, with his naivety, with his zeal to prove his ideas more than anything else, it seems that he hurt the Greek issue."

Something is rotten with the eurozone's hideous restrictions on sovereignty (Plus the Plan against liquidity crunch) http://t.co/uERxy9qOIp

"I think he called it wrong, but God knows it was an awesome responsibility - and we may never know who was right."

Have you not heard Paul? Drawing up contingency plans vs the troika unapproved by the troika = High Treason https://t.co/6tPWL8ojja

12.16pm BST

12.02pm BST

Tsipras has also warned that Greece could face fresh snap elections, if he cannot maintain the support of his party:

Tsipras: I am the last to want elections, if we have parliamentary majority. If not, forced to go to elections

11.48am BST

Tsipras appears to be challenging the 30-or so rebellious government MPs to either shuffle back into line, or shuffle off:

#Tsipras on Syriza defectors:You can't say you disagree with govt decisions but back the government. That's taking surrealism to a new level

11.42am BST

Let's get back to Alexis Tsipras's radio interview, where the Greek PM has warned rebels in his Syriza party to support him or clear off:

Tsipras: collective decisions must be followed by all MPs or hand back their seat

#Greece PM Tsipras says there cannot be i la carte support to the government.

11.26am BST

Breaking away from Greece, and the Bank of England's deputy governor for financial stability has revealed his worries about the consequences of a US interest rate rise.

Speaking to the Guardian, Sir Jon Cunliffe warned that markets are still 'quite fragile'. So we can't assume that a Fed rate hike won't cause problems.

"If and when US interest rates go up ... there are concerns about how the market will adjust. This must be the most advertised, well signalled change in monetary policy in the history of man.

Nonetheless you don't know. These are different sorts of markets to the ones we had before."

11.13am BST

Alexis Tsipras has warned radio listeners that Greece could still be forced out of the eurozone.

The risk of Grexit won't be removed until a third bailout deal, and debt relief, is secured, he says.

Tsipras: capital controls damage reversible. Grexit still on the table until a debt forgiveness comes

On top of that there would be utter chaos. If Greece were not prepared to reform, a path like that would have to be accepted but one shouldn't strive for it oneself or organise it."

10.56am BST

What defeat?!

Tsipras: I have no regrets over the past few months. Greece is front page news with positive light.totally worth it

10.54am BST

In defeat, unbeatable?

Tsipras: deal on greece was Pyrrhic victory for EU partners

#Tsipras: it was a Pyrrhic victory for lenders, a big moral victory for #Greece

#Tsipras on July 12 e/z summit:If I had done what my heart told me, + left talks, wd have been chaos w Greek banks, global markets, savings.

10.51am BST

Tsipras has returned to defending the deal he signed up to at the all-night negotiations in Brussels:

Tsipras: if I left the 17hs negotiations, chaos with Greek banks and world markets, peoples' savings lost

10.44am BST

But what about your referendum, Alexis?

A. Tsipras: referendum was not for a Grexit but for strengthening negotiating position

10.43am BST

Another nugget from Alexis Tsipras's interview with Sto Konnino 105,5 - he says Greece's creditors will tackle its debt sustainability in November:

RT @ThePressProject: #Tsipras on radio: We will have debt relief in November #Greece #GreekCrisis

*TSIPRAS: GREECE CAN'T RETURN TO MARKETS WITH CURRENT DEBT LEVEL

10.36am BST

Alexis Tsipras is denying that Greece could have breezed out of its bailouts if Syriza hadn't won January's election:

A. Tsipras. Samaras, Venizelos on exit from memoranda were fairy tales

10.33am BST

Chris Loukas of radio station Sto Kokkino 105,5 is tweeting the key points from their interview with the PM:

Tsipras. Our mandate was to stop the people's bleeding. I never said memoranda can be torn with just one law

Tsipras: we have been implementing our policies for the past 6 months whilst negotiating in asphyxiation conditions

A. Tsipras: (on referendum) I had no choice but to decide on a referendum. U have to see what kind of deal we were offered.

A. Tsipras: France, Italy other, different views than Germany

10.27am BST

Kathimerini are also translating Alexis Tsipras's radio interview (thanks guys!).

The Greek PM is (once again) defending the bailout deal he agreed to this month:

PM #Tsipras interview with Sto Kokkino FM: For the first time, there was a tough negotiation. Conflicting strategies on the table #Greece

#Tsipras: we never said negotiations would be a walk in the park #Greece

#Tsipras: We did not say, before the elections, that bailout agreements would be annulled with a single piece of legislation #Greece

10.22am BST

Here are some early highlights from Alexis Tsipras's radio interview, via Enikos.

The institutions were not independent or neutral.

We should be proud of the battle we have given.

10.20am BST

Greek PM Alexis Tsipras is giving a radio interview now. It's live here (in Greek, obviously)

My interview on @stokokkino1055 has begun. Listen to it live here: http://t.co/5uX09Q7D53 #Greece pic.twitter.com/MTolC63vz5

10.17am BST

Britain's City watchdog has fired a warning shot at the banking sector, warning that some firms haven't done enough to prevent financial benchmarks being manipulated.

Following a series of scandals, the FCA is pushing banks to ensure that they are properly overseeing their staff. However:

....the application of the lessons learned from the LIBOR, Forex and Gold cases to other benchmarks had been uneven across the industry and often lacked the urgency required given the severity of recent failings.

9.40am BST

After getting off to a bumpy start yesterday, negotiations with mission chiefs representing Greece's creditor institutions will begin today minus one, we have just been told.

"There's no particular reason for the delay.

But I can confirm she won't be coming in today, she'll be arriving tomorrow."

@deliavelculescu new @IMFNews delegation chief to #Greece in #Greecrisis - a cool "Draculescu" http://t.co/2qzrapJlAZ pic.twitter.com/Xk5xuOJysc

"As far as reports of prior actions are concerned it should be noted that neither in the agreement of the European summit on the 12 of July nor in the two letters that the Finance Minister Euclid Tsakalotos sent to the ESM was there the slightest hint of a third package of prior actions."

9.18am BST

Here's a few gems from the deluge of corporate news this morning:

Strong spring selling boosts Taylor Wimpey sales http://t.co/N2PVqyRoWX

Antofagasta lowers full year copper guidance http://t.co/a9yzZ72aFy

9.08am BST

Greek stock market investors need to stay patient.

The Athens exchange won't open today, because the government hasn't issued a ministerial decree to allow trading to resume.

9.04am BST

You need nerves of steel to play the Chinese stock market right now.

Believe it or not: #China regulators manages to get stocks into the green. Shanghai Composite ends up 3.5%. pic.twitter.com/UBDScuPKKl

8.47am BST

For all the talk of clean-ups and fresh starts, Britain's banks are still paying for the mistakes of the past.

The figure was revealed as John McFarlane, the chairman who is standing in as chief executive following the ousting of Antony Jenkins earlier this month, pledged to accelerate the disposal of risky businesses, cut costs at the scandal-hit bank and change the dividend policy.

Included in the provision is a further 600m for the payment protection insurance mis-selling scandal and 250m to compensate customers with packaged bank accounts that had other products, such as insurance, attached to them.

8.40am BST

There's not much sign of Greek angst in the European stock markets this morning.

Shares are higher across the board, helped by the news that China's stock market surged by over 3% in late trading:

What everyone wants to know from tonight's FOMC announcement is clear guidance on the likely time frame to expect an US interest rate increase.

We have repeatedly been told that US interest rates will rise at some point later this year, but the timing on when this will occur still remains largely unclear.

8.24am BST

The prime minister of Bavaria, one of Angela Merkel's allies, has warned that there would be 'utter chaos' if Greece were to leave the eurozone.

"No one can predict the consequences of a Grexit other than that a lot of Greece's debts would have to be written off and at the same time monetary help would be necessary."

"On top of that there would be utter chaos. If Greece were not prepared to reform, a path like that would have to be accepted but one shouldn't strive for it oneself or organise it."

8.19am BST

Negotiations over the third Greek bailout deal are going well, European commissioner Pierre Moscovici told French radio listeners this morning.

Interviewed on Europe 1 radio, Moscovici said talks were taking place in "good conditions", declaring that:

"Grexit is behind us."

Le #Grexit est derriire nous. Nous avons besoin d'une #zoneeuro plus inti(C)gri(C)e. Il faut aller de l'avant @EU_Commission #Grice

Poursuivre les efforts pour ri(C)duire le chimage, ni(C)cessiti(C) de ri(C)formes pour la #croissance et l'#emploi en #Europe @EU_Commission #E1Matin

8.12am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Coming up.....

#Greece and the Institutions agree 2015 GDP forecast at -3.3%. ~@in_gr

In October 2014 there was consensus that #Greece 2015 GDP would land at minimum +2%. Now forecast lies at -3.3%. Syriza mission accomplished

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