Yields near six-week lows, Fed hawkishness in question

NEW YORK, May 27 (Reuters) – US Treasury yields ended near six-week lows on Friday as concerns about growth and signs that inflation may have peaked led investors to speculate that the Federal Reserve may not raise rates as much as previously expected.

Benchmark 10-year yields have dropped from 3-1/2 year highs reached earlier this month on concerns that the US central bank’s aggressive rate hikes could tip the economy into recession.

Now, those fears have also increased speculation that the Fed could pivot to a more dovish stance if the economy cools.

“That’s been this week’s story … people questioning how high the terminal rate will ultimately be, but I think it’s still going to be too soon to say with any high conviction just given the fact that we’re going to need to see more inflation data,” said Benjamin Jeffery, interest rate strategist at BMO Capital Markets in New York.

Fed funds futures traders are pricing in 50 basis point hikes at each of the Fed’s June and July meetings, and a chance of a similar move in September.

They have pared their expectations on how high the Fed will ultimately raise its benchmark rate, with the federal funds rate now expected to be at 2.89% in March, compared with expectations on Monday of 3.03%. It is currently at 0.83%.

Benchmark 10-year note yields fell two basis points to 2.743%. They are holding just above a six-week low of 2.706% reached on Thursday and are down from 3.203% on May 9.

The yield curve between two-year and 10-year notes flattened one basis point to 26 basis points.

Yields briefly bounced after data showed that inflation eased in April, boosting hopes that the economy will suffer less damage if the worst of soaring price pressures have passed.

The personal consumption expenditures (PCE) price index gained 0.2% last month after shooting up 0.9% in March. In the 12 months through April, the PCE price index advanced 6.3% after jumping 6.6% in March.

US consumer spending also rose more than expected in April as households boosted purchases of goods and services, which could underpin economic growth in the second quarter.

Jobs data for May released next Friday is the next major US economic focus. It is expected to show that employers added 320,000 jobs during the month, according to the median estimate of economists polled by Reuters.

	Price	Current Yield %	Net Change (bps)
Three-month bills	1.065	1.0825	0.028
Six-month bills	1.4975	1.5296	0.034
Two-year note	100-8/256	2.4839	-0.004
Three-year note	100-78/256	2.6419	0.011
Five-year note	99-138/256	2.7242	0.007
Seven-year note	99-224/256	2.7698	0.005
10-year note	101-36/256	2.7432	-0.015
20-year bond	101-72/256	3.1629	-0.020
30-year bond	98-24/256	2.9715	-0.021

DOLLAR SWAP SPREADS
	Last (bps)	Net Change (bps)
US 2-year dollar swap spread	280.25	249.50
US 3-year dollar swap spread	280.75	264.25
US 5-year dollar swap spread	4.50	-0.50
US 10-year dollar swap spread	7.25	-0.25
US 30-year dollar swap spread	-23.00	-0.75

(Reporting by Karen Brettell; Editing by Nick Zieminski)

Incoming Philippine finance secretary does not favor tax hikes to tackle debt

MANILA, May 27 (Reuters) – Philippine central bank governor Benjamin Diokno, who takes on a new role as finance secretary next month, said on Friday he does not favor raising taxes even as the incoming government is set to inherit a huge pile of debt..

Diokno, who is President-elect Ferdinand Marcos’s choice to lead the finance ministry, would rather see an improvement in tax administration and collection, including reducing corruption through digitalization, he said.

“To me, grow the economy, focus on tax administration first, improve the collection,” Diokno told ANC news channel.

Diokno’s comments should help ease concerns among labour groups, which have opposed proposals by the outgoing government to impose more excise taxes on oil, defer scheduled tax cuts, and remove some value-added tax exemptions.

Marcos on Thursday said he preferred to reduce the tax burden for those suffering from the economic impact of the pandemic.

Diokno, who before being appointed central bank governor in 2019 served as budget minister, said he was “satisfied with the current tax structure”.

The tax system has already undergone reform in the past six years after incumbent President Rodrigo Duterte’s government lowered corporate and personal income taxes while raising levies on tobacco and alcohol products.

The new Marcos administration is inheriting 11.7 trillion pesos (USD 224 billion) in government debt, equivalent to 60.5% of gross domestic product as of the end of 2021, the highest ratio in 16 years, fueled by borrowing to address the COVID-19 pandemic.

The debt level was almost double the 6.4 trillion pesos of liabilities when Duterte took office in June 2016, government data showed.

“I am not worried about the level of the debt,” said Diokno, who sees it as “easily manageable” as long as the economy is able to return to a pre-pandemic annual growth rate of 6% to 7%.

(Reporting by Neil Jerome Morales; Editing by Ed Davies)

‘Protect the truth’: A Marcos return in Philippines triggers fear for history

MANILA, May 27 (Reuters) – Books about the late Philippine dictator Ferdinand Marcos and his brutal era of martial law are flying off the shelves, spurred by “panic buying” after his son and namesake won a May 9 presidential election.

Ferdinand “Bongbong” Marcos Jr.’s presidency, set to begin on June 30, has many people worried about losing access to books and other accounts of his father’s rule, given his family’s decades-long effort to rehabilitate its name through what critics describe as a campaign of historical revisionism.

“They are panic buying,” Alexine Parreno said of her customers, many them parents buying books about martial law aimed at children.

“They are really worried and scared that the books will be pulled out and that everything will be revised.”

One shopper was Faith Alcazaren, a mother of two, who picked up extra bundles of books to send to friends overseas.

“I felt like the smallest thing I can do and have control over is to protect the truth,” she said.

Thousands of opponents of the senior Marcos were jailed, killed or disappeared during martial law, from 1972 to 1981, when the family name became synonymous with cronyism and extravagance as billions of dollars of state wealth disappeared.

The younger Marcos has called for a revision of textbooks that cover his father’s rule, saying they are teaching children lies.

His choice of education minister, vice president-elect Sara Duterte-Carpio, daughter of outgoing strongman leader Rodrigo Duterte, has raised fears the Marcos family will finally succeed at entrenching its sanitised version of history.

“We already thought that textbooks and the teaching of history in basic education was woefully inadequate in terms of explaining to our youth and children what the martial law period meant,” said Ramon Guillermo, a professor at the University of the Philippines.

“If the Marcoses come back to power and Dutertes are supporting them, we could even have a more difficult situation in teaching what really happened,” said Guillermo.

YEARS OF INVESTIGATION

Guillermo, with a group of fellow scholars, launched a manifesto last week pledging to combat attempts to falsify history to suit the Marcos narrative, and to oppose all censorship and book-banning.

The manifesto, signed by 1,700 people, came after a government task force labelled as communist a children’s book publishing firm selling five titles on martial law and dictatorship it called “#NeverAgain Book Bundle”.

“Never Again!” was the battlecry of millions of protesters who joined the historic “people power” revolution that toppled the 20-year dictatorship in 1986, when the senior Marcos and his notoriously extravagant wife, Imelda, fled with their children into exile in Hawaii.

“History cannot be bought, but books about history can be purchased,” one book buyer said on Instagram.

“We will continue to fight historical revisionism.”

Marcos and Duterte-Carpio did not respond to requests for comment. In a 2020 media forum, Marcos dismissed accusations his family was attempting to rewrite history.

“Who is doing revisionism? They put it in the books, the children’s textbooks that the Marcoses stole this, we did this … what they have been saying about what we stole, what we did, not all of them are true.”

Years of investigation and legal proceedings followed the rule of the senior Marcos. The Presidential Commission on Good Government set up in 1986 has retrieved about USD 5 billion of the Marcos fortune, its chairman, John A. Agbayani said. Another USD 2.4 billion is still caught up in litigation, he said.

‘TSUNAMI OF DISINFORMATION’

The younger Marcos fought the election with the slogan “Together, we shall rise again”, invoking nostalgia for his father’s rule, which his family and supporters have portrayed as a golden age.

His campaign rode what academics called a “tsunami of disinformation” with social media flooded with narratives playing down rights abuses and corruption under his father.

On the day it became clear that Marcos had won, a book published in 1976 that details corruption and abuses during the Marcos regime sold 300 copies, its publisher said.

More than a week later, 500 copies of the book, “The Conjugal Dictatorship of Ferdinand and Imelda Marcos”, were sold within an hour of being posted online.

“I wanted to make sure that inside our home, I can keep a version of the martial law era that has not been tampered with by their hands,” said college student Jose Anonat, who got the book.

In an indication of the sort of history re-writing that Marcos supporters want, Juan Ponce Enrile, the late dictator’s defence minister, said in a conversation with the younger Marcos that appeared on YouTube in 2018, that not one person was arrested for political and religious views, or for criticizing the elder Marcos.

The clip has been viewed more than 1.5 million times.

There were also attempts to remove the terms “dictator” and “kleptocrat” describing the elder Marcos on Wikipedia, said Carlos Nazareno, of the Wiki Society of the Philippines, part of a movement against disinformation.

Carmelo Crisanto, who heads an agency memorializing martial law victims, is digitizing documents relating to 11,103 survivors who were awarded reparations from seized Marcos family wealth. He hopes the database will be online by September, in time for the 50th anniversary of the declaration of martial law.

“These archives will be alive,” said Crisanto. “They will never be suppressed.”

(Reporting by Karen Lema; Editing by Robert Birsel)

Wall Street jumps on retailer outlook hikes, ebbing Fed fears

May 26 (Reuters) – Wall Street closed sharply higher on Thursday after optimistic retail earnings outlooks and waning concerns about overly aggressive interest rate hikes by the Federal Reserve put investors in a buying mood.

All three major US stock indexes posted solid gains, with economically sensitive consumer discretionary and microchip stocks beating the broader market.

The tech-laden Nasdaq surged the most – its 2.7% advance was powered by gains in Apple Inc. (AAPL), Tesla Inc. (TSLA) and Amazon.com Inc. (AMZN).

On a weekly basis, the S&P 500, Nasdaq and Dow are on track to snap their longest losing streaks in decades, during which the benchmark S&P plummeted 14.1% and brought it within striking distance of being confirmed as a bear market.

At current levels, all three indexes are poised to notch their biggest weekly gains since mid-March.

“With first quarter earnings essentially over and coming in better than expected, combined with the Fed indicating that they are going to be front-end loading its rate-tightening policy and implying it may pause later in the fall, all of that has given investors reason to feel optimistic,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

Upbeat guidance from retailers appeared to offset dour warnings from their peers in recent weeks.

Department store operator Macy’s Inc M.N jumped 19.3% after raising its annual profit forecast.

Discount chains Dollar General Corp DG.N and Dollar Tree DLTR.O advanced by 13.7% and 21.9%, respectively, following their annual sales forecast hikes, suggesting consumers are shopping for less costly goods amid decades-high inflation.

The minutes from the Federal Open Market Committee’s (FOMC) most recent monetary policy meeting calmed fears that the US central bank could turn more hawkish, a concern which has fed into market volatility in recent weeks.

“We have had 65% more daily price moves of 1% or more than the average since WW2,” Stovall said.

“If the Fed is too aggressive, they’ll choke off inflation but also choke off economic growth,” he added. “It’s like in the winter you want to tap your brakes, not slam on them, to maintain control and avoid spinning out.”

Economic data released on Thursday, including jobless claims, pending home sales and GDP, brought good news wrapped in bad, suggesting the economy is showing just enough softness to prompt a dovish pivot from the Fed by autumn.

The Dow Jones Industrial Average rose 516.91 points, or 1.61%, to 32,637.19; the S&P 500 gained 79.11 points, or 1.99%, to 4,057.84; and the Nasdaq Composite added 305.91 points, or 2.68%, to 11,740.65.

Of the 11 major indexes in the S&P 500, all but real estate ended the session up. Consumer discretionary led the gainers, rising 4.8%, with tech and financials placing and showing at 2.5% and 2.3%, respectively.

Shares of Twitter Inc. (TWTR) jumped 6.4% on news that the social media company is suing billionaire Elon Musk for delayed disclosure of his stake in the company.

US-listed shares of Alibaba Group (BABA) rose 14.8% after the Chinese e-commerce company beat estimates, even as it declined to provide forward guidance in view of COVID-19 restrictions in China.

Advancing issues outnumbered declining ones on the NYSE by a 5.16-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored advancers.

The S&P 500 posted three new 52-week highs and 29 new lows; the Nasdaq Composite recorded 28 new highs and 116 new lows.

Volume on US exchanges was 11.43 billion shares, compared with the 13.22 billion average over the last 20 trading days.

(Reporting by Stephen Culp; additional reporting by Devik Jain and Anisha Sircar in Bengaluru; editing by Jonathan Oatis)

Dollar eases as traders scale back bets on Fed tightening

NEW YORK, May 26 (Reuters) – The U.S. dollar edged lower on Thursday as markets considered whether the Federal Reserve might slow or even pause its tightening cycle in the second half of the year, which would weaken the allure of the safehaven currency.

The dollar index, which measures the greenback against a basket of six major peers, was down 0.206% at 101.84 at 3 p.m. ET (1900 GMT).

The currency began to weaken after minutes from the Fed’s May meeting, released Wednesday, showed that most participants judged that 50 basis-point hikes would likely be appropriate at the June and July policy meetings to combat inflation that they agreed had become a key threat to the economy’s performance.

Many of the participants believed that getting rate hikes in the books quickly would leave the central bank well positioned later this year to assess the effects of policy firming, the minutes showed.

“The market is becoming a little bit more optimistic that the Fed won’t be too aggressive with tightening and that some of the sell-off that we’ve seen with risky assets, specifically equities, might have been overdone, said Ed Moya, senior market analyst at Oanda.

“That’s prompting a little bit of a rally here for risky assets, which is really nice for the risk trade, which in essence, is bad for the dollar,” he said.

The dollar index reached a nearly two-decade peak above 105 earlier this month but signs that aggressive Fed action may already be slowing economic growth have prompted traders to scale back tightening bets, with Treasury yields also dropping from multi-year highs.

“While it is not the base case view of our Economics team … we think the Fed might make the case that reaching 1.75%-2% provides a normalization of policy which then offers an opportunity to pause and assess the impact on jobs and inflation,” strategists at JP Morgan said in a client note.

The implied yield on the eurodollar futures June 2023 contract — essentially where markets see interest rates to be at that point — is down some 80 basis points this month.

“The dollar at this point is range-bound,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management.

Data on Thursday confirmed the U.S. economy contracted in the first quarter under the weight of a record trade deficit and a slightly slower pace of inventory accumulation compared to the fourth quarter.

A separate report showed number of Americans filing new claims for unemployment benefits fell last week, signaling continued tightness in the labor market.

Elsewhere, the euro rose 0.37% to USD 1.0719, while the dollar edged down 0.011% against the Japanese yen to 127.155 yen.

Risk-correlated currencies were mixed, with the Australian dollar up 0.08% at USD 0.7093 and New Zealand dollar down 0.08% at USD 0.6473.

Sterling briefly rose to a three-week high of USD 1.26165 ahead of an expected announcement from British Chancellor Rishi Sunak on a package of measures to help consumers cope with rising energy bills.

The pound was last up 0.1% at USD 1.2596.

In cryptocurrencies, bitcoin was last trading 0.17% lower at USD 29,459, while smaller rival ether was down 4.68% at USD 1850.

(Reporting by John McCrank; additional reporting by Samuel Indyk; Editing by Emelia Sithole-Matarise/Kirsten Donovan/Ken Ferris)

Wall Street climbs 1% on upbeat results, Fed relief

May 26 (Reuters) – US stock indexes climbed on Thursday after upbeat annual forecasts from several retailers, while data confirmed the US economy contracted in the first quarter, easing concerns about aggressive interest rate hikes.

All of the 11 major S&P sectors advanced in early trading, with consumer discretionary up 3%, followed by a 1.7% rise in the financials sector.

Macy’s Inc. (M) jumped 12.1% after the department store raised its annual profit forecast, as party-wear demand rebounds.

Dollar General Corp. (DG) and Dollar Tree (DLTR) gained 13.2% and 17.8% respectively, after raising their annual sales forecasts, as more Americans turn to discount store shopping with inflation at a four-decade high.

Meanwhile, the Commerce Department’s report showed US gross domestic product fell at a 1.5% annualized rate last quarter, revised down from the 1.4% decline reported in April under the weight of a record-trade deficit. The economy grew at a robust 6.9% pace in the fourth quarter.

Separately, weekly jobless claims fell to 210,000 last week, consistent with a tight labor market despite rising interest rates and tightening financial conditions.

“These numbers are indicative that growth is slowing, demand is slowing and maybe prices are even starting to slow. And if all those three things are in place, then the case for a dovish pivot will build over the summer months,” said Thomas Hayes, chairman of Great Hill Capital.

The report came a day after the minutes of the Federal Reserve’s May meeting showed most policymakers backed rate hikes of 50 basis points in June and July to tame inflation, but appeared flexible to possibly change course in September.

Markets have sold off sharply this year on growing worries about an economic slowdown due to aggressive Fed policy moves aimed at reining in surging prices. The war in Ukraine, pandemic-related lockdowns in China and recent dismal earnings forecasts have also weighed down markets.

The blue-chip Dow and the benchmark S&P 500 have lost 10.5% and 15.4% year-to-date, while the tech-heavy Nasdaq has fallen 25.9% as high-multiple growth stocks took a hit from rising interest rates.

“The reality is a lot more complicated at this juncture and so we will have these counter trend rallies in any bear market environment,” said Hans Olsen, chief investment officer of Fiduciary Trust Company.

At 10:06 a.m. ET, the Dow Jones Industrial Average was up 442.60 points, or 1.38%, at 32,562.88, the S&P 500 was up 55.00 points, or 1.38%, at 4,033.73, and the Nasdaq Composite was up 162.14 points, or 1.42%, at 11,596.89.

US-listed shares of Alibaba Group (BABA) jumped 11.5% after the company posted upbeat fourth-quarter revenue on growing demand for some of its niche online shopping services in China.

Advancing issues outnumbered decliners by a 7.18-to-1 ratio on the NYSE and a 3.32-to-1 ratio on the Nasdaq.

The S&P index saw three new 52-week highs and 29 new lows, while the Nasdaq recorded 19 new highs and 66 new lows.

(Reporting by Devik Jain and Anisha Sircar in Bengaluru; Editing by Saumyadeb Chakrabarty and Vinay Dwivedi)

Five things to know about Philippines’ next central bank governor, Felipe Medalla

MANILA, May 26 (Reuters) – The Philippines’ central bank will be led by a new governor, Felipe Medalla, starting July 1 as current chief Benjamin Diokno takes on a new role as finance minister in Ferdinand Marcos Jr’s incoming administration.

Below are five things to know about the next Bangko Sentral ng Pilipinas (BSP) governor:

WHO IS FELIPE MEDALLA?

Medalla, 72, is an economist and educator who earned his Ph.D. in economics from Northwestern University in the United States.

Outside of government work, he has engaged in public advocacy for fiscal reforms and market-friendly government policies and has also served on the boards of several public Philippine companies.

WHAT ARE HIS CREDENTIALS?

Medalla has served under four Philippine presidents, starting with Fidel Ramos in the 1990s up to the current administration. He was the country’s economic planning minister from 1998 to 2001.

He has been a member of the central bank’s policymaking board since 2011.

WHAT CHALLENGES WILL MEDALLA FACE?

Like central bankers globally, he will have to strike a balance between taming inflation and avoiding overly aggressive rate hikes that could derail the recovery of the Philippines, among Asia’s fastest growing economies before the pandemic.

The BSP this month started unwinding its pandemic-driven accommodative monetary policy to battle inflationary pressures, with a hike of 25 basis points. During the pandemic, rates were cut 200 basis points.

WHAT DOES HIS TEAM LOOK LIKE?

Diokno, as finance minister, will continue to be a part of the central bank’s policymaking board and can still influence monetary policy. Other members of the panel are experienced bankers and technocrats.

HOW DOES THE MARKET VIEW MEDALLA?

Medalla is seen in the business community as a respectable and able hand.

His experience as an economic planner bodes well for the central bank, said Michael Ricafort, economist at Rizal Commercial Banking Corp in Manila, as Medalla is seen to prioritise measures that provide greater support for economic growth and development.

(Reporting by Neil Jerome Morales; Editing by Kanupriya Kapoor)

Incoming Philippines central bank governor sees no need to rush rate hikes

MANILA, May 26 (Reuters) – The Philippine central bank has room to tighten monetary policy but there is no reason to rush raising interest rates with inflation mainly driven by higher cost of imports, its incoming governor said on Thursday.

Felipe Medalla, a monetary board member of the Bangko Sentral ng Pilipinas (BSP) for the past decade, was named as its next governor on Thursday by President-elect Ferdinand Marcos, who is close to completing his economic team.

Medalla, 72, will start work from July 1 and takes over from Benjamin Diokno, who has been named finance secretary in the new Marcos administration. Medalla will serve out the rest of Diokno’s term, which ends in July 2023.

“I am joining a strong group,” Medalla told Reuters, referring to Marcos’s economic team.

“I am also in an institution that has sufficient independence and tools to achieve its objectives.”

Medalla will take the helm of the BSP just as it kicked off its monetary tightening cycle this month to confront rising prices.

He said the hike in interest rates can be good news because it signals that “growth is already on solid footing.”

But while Medalla believes the economy’s strong growth affords the central bank room to tighten policy, he said there was “no reason to rush because much of inflation is imported.”

The central bank raised its policy rate by 25 basis points for the first time in over three years on May 19 to keep inflation under control. It next meets on June 23.

Medalla has a doctorate from Northwestern University in Evanston, Illinois and served under four Philippines presidents, starting with Fidel Ramos in the 1990s.

He was economic planning minister from 1998 to 2001 and aside from government posts, he was dean of the University of the Philippines’ School of Economics and has served as a director on the boards of several companies.

(Additional reporting by Neil Jerome Morales; Editing by Martin Petty)

Oil stocks lift European shares but rate-hike worries limit gains

May 26 (Reuters) – European shares opened slightly higher on Thursday, helped by energy stocks on the back of gains in oil prices, even though sentiment remained subdued as major central banks signaled continued policy tightening to control rising inflation.

The pan-European STOXX 600 index rose 0.2% by 0718 GMT, with energy shares up 0.8% as crude prices climbed on tight supply.

Overnight, minutes of the US Federal Reserve’s early May policy meeting showed policymakers’ belief in the strength of the economy. However, Fed policy makers agreed to continue hiking rates by 50 basis points for the next two months to tame surging prices exacerbated by the war in Ukraine.

This came after the European Central Bank’s resolve to follow suit beginning July, and left investors worried about a hit to economic growth.

While Wall Street ended higher on Wednesday, futures signaled some choppiness for Thursday. Asian shares also stumbled.

In Europe, miners, banks, and technology stocks fell between 0.1% and 0.2%.

London’s FTSE 100, heavy with mining stocks, traded flat.

Some markets in Europe, including Swiss, Sweden and Finland, were closed for a local holiday.

(Reporting by Susan Mathew in Bengaluru; Editing by Subhranshu Sahu)

Fed’s Brainard sees case for central bank digital currency

May 25 (Reuters) – Creating an official digital version of the US dollar could help ensure financial system stability as crypo-assets and digital currencies developed by other countries become increasingly popular, Federal Reserve Vice Chair Lael Brainard said on Wednesday.

“As we assess the future digital financial system, it is prudent to consider how to preserve ready public access to safe central bank money, perhaps through the digital analogue of the Federal Reserve’s issuance of physical currency,” Brainard said in testimony released in advance of her appearance on the issue before the US House of Representatives Financial Services Committee on Thursday.

“We recognize there are risks of not acting, just as there are risks of acting,” she said.

Fed policymakers remain divided on the need for a central bank digital currency (CBDC) and have just finished a three-month public consultation period soliciting feedback on the idea. The Fed has also indicated it would not launch one without clear support from the White House and lawmakers.

That puts it behind its other major global central bank peers, including the ECB, Bank of Japan and Bank of England, on the process of possible adoption. China is currently piloting its own CBDC and in total nine countries have launched one and another 87 countries are exploring the option, according to the Atlantic Council.

The risks of loosely-regulated cryptocurrencies and stablecoins, which exploded in value during the COVID-19 pandemic, have come into sharp focus with the crypto market slumping sharply this month after the downfall of major “stablecoin” terraUSD. Leading cryptocurrency Bitcoin has dropped more than 50% since November.

“These events underscore the need for clear regulatory guardrails to provide consumer and investor protection, protect financial stability, and ensure a level playing field for competition and innovation across the financial system,” Brainard said.

Unlike cryptocurrencies, which are typically run by private actors, a CBDC would be issued and backed by the central bank. If the US goes ahead with creating one, Brainard said, it ought to be designed so that commercial banks, given their centrality to the financial system, are not disintermediated, by for instance limiting the amount an individual could hold or transfer.

Brainard also argued a US CBDC could safeguard the dollar’s global importance.

Other Fed policymakers, including Fed Governor Christopher Waller, are more skeptical and point out that many dollar transactions are already digital, and have also raised privacy concerns.

(Reporting by Lindsay Dunsmuir and Ann Saphir; Editing by Richard Pullin)

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