Business News

CCTV Script 11/04/17


This is the script of CNBC's news report for China's CCTV on April 11, Tuesday.

Welcome to CNBC Business Daily, I'm Qian Chen.

The speech of U.S. Fed Chair Janet Yellen on Monday largely echoed what she had said before, and did not offer any new color on the timing of the rate hikes, or of the Fed's eventual reduction of its $4.5 trillion balance sheet.

She repeated that the Fed's plans to raise U.S. interest rates gradually are aimed at sustaining full employment and near-2-percent inflation without letting the economy overheat.

Yellen said that she thinks we have a healthy economy now and inflation is reasonably close to the Fed's 2-percent goal.

Now, with the economy expected to continue to grow at a moderate pace, the Fed is now shifting its focus.

[Richard Yetsenga, Chief Economist, ANZ] "Even in the US, the pickup in wage growth remains very slow, we know headlines say if we are able to start to calm down through the rest of this year because the base effect from commodities start to come out of the data, and tips markets already start to reflect that and of course if you look outside the US, virtually no sign of underlying inflation at all, and thats the part of global economy which makes me worry, the problem looks a bit chronic actually."

The Fed raised rates in March for only the third time since the Great Recession, and most Fed officials expect the central bank to raise rates at least two more times this year.

The Fed funds rate indicates that has a probability of 63 percent of a rate hike of 25 basis points, and another hike sometime by the end of this year.

In the U.S. Treasury bond market, yields were little changed after Yellen's remarks.

[US Fed Chair Janet Yellen] "If the economy ends up overheating and inflation threatens to rise well above our target, we don't want to be in position where we have to raise rates rapidly which could conceivably cause another recession. So we want to be ahead of the curve and not behind it."

Now, markets are eyeing on any hint from the Fed about starting to wind down the massive $4.5 trillion balance sheet that the central bank has built up.

The news came last Wednesday when minutes from the FOMC's March meeting were released.

Another thing Yellen addressed was the Fed's ability to conduct monetary policy free of short-term political pressures. She said the Fed has been under "some threat" from two bills making their way through the U.S. Congress.

Of the legislation under consideration, the one that goes the furthest to curtail the Fed's independence would require the central bank to follow a simple rule for setting interest rates and to justify any deviation from that rule.

CNBC's Qian Chen, reporting from Singapore.