Stanley Fischer News
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Israel’s shekel weakened to a two- month low and government bonds rose on investor bets the central bank will cut interest rates next week.
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Bank of Israel Governor Stanley Fischer used his tie-breaking vote for the first time to restrict last week’s rate cut to 0.25 percentage point, as half the panel pressed for a bigger reduction.
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Bank of Israel Governor Stanley Fischer, who last week unexpectedly cut the benchmark interest rate to a three-year low, may not be done yet, according to Jonathan Katz, an economist at HSBC Holdings Plc.
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Israel’s government bonds rose, pushing the yield down to a record, as inflation slowed and a surprise interest reduction spurred bets the central bank could follow with another rate cut.
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Israel’s economy expanded an annualized 2.8 percent in the first quarter, with growth in exports and private consumption partly offset by declining investment.
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Federal Reserve Vice Chairman Janet Yellen is seen by a third of international investors as the most likely to take the helm of the central bank when Ben S. Bernanke’s term ends in January.
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The shekel slid to a two-month low after Israel’s central bank pledged this week to buy foreign currency to arrest appreciation and as optimism the U.S. economy is improving fueled gains in the dollar.
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Israel’s central bank needs to follow yesterday’s surprise interest rate cut and dollar purchase plan with more measures to succeed in stemming the shekel’s gains, the currency’s most accurate forecasters say.
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Israel’s inflation rate dropped to a six-year low in April, adding to the economic evidence that spurred policy makers to cut borrowing costs yesterday.
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Israel’s central bank unexpectedly cut its benchmark interest rate to a three-year low and announced a program to purchase foreign currency to limit gains in the shekel. Israeli stocks and bonds rose.
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