Though US central bankers admitted to being befuddled by the absence of inflation last year despite the economic recovery and strong job market, they now see signs of rising price pressures.

So far, the Fed has been moving gradually to tighten monetary policy to prevent the world’s largest economy from overheating.

But a host of factors — including the massive tax cuts enacted by Congress, a weaker dollar and robust job creation — have markets on the lookout for signs the Fed could become more aggressive, and boost rates four times this year instead of three.

Following the Fed’s decision, newly-installed Chairman Jerome Powell will address the news media for the first time in a quarterly press conference. His words will be closely scrutinized for hints about the central bank’s thinking and the likely pace of interest rate increases.

Ian Shepherdson of Pantheon Macroeconomics said markets already accepted the coming Fed rate hike, so the comments and the updated quarterly forecasts will be of more interest.

“After a widely-anticipated central bank policy move, what really matters is what policymakers say about their actions and intentions,” he said in a client note.

But Powell is likely to avoid sending ripples through markets by criticizing the $1.5 trillion tax cuts, even though they are expected to balloon the government deficit and stimulate an economy already at full employment, Shepherdson said.

– Carefully chosen words –

“No matter how hard the press push him, he’s not going to say that the fiscal easing is a mistake,” he said.

First-quarter economic forecasts have dimmed in recent weeks on a batch of mixed economic data, including a widening trade gap, weak sales of housing, autos and durable goods, as well as soft retail and construction spending.

But with very strong jobs markets, record business and consumer sentiment, low unemployment and signs of rising inflation, even dovish Fed officials have indicated their support for tighter monetary policy.

Meanwhile, industry groups and markets have been badly rattled this month by President Donald Trump’s sudden decision to impose punishing duties on steel and aluminum imports.

Tariffs could raise prices for key inputs and consumer products, and spark tit-for-tat retaliatory measures by trading partners, factors that move the inflation needle higher.

But all of this is too far down the road for the Fed to comment on this week, said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics.

“If I were them, I would say very little about it now,” Gagnon told AFP.

“I think they’ll probably ask their staffs about it but won’t want to talk about it publicly.”

Somboon Chitphentom, BOT assistant governor for the Financial Institutions Policy Group, said on Tuesday that the commercial banks’ current contribution to the FIDF, at 0.47 per cent of each bank’s deposit base, was appropriate for the fund’s remaining debts of about Bt890 billion.

All banks are required to pay at this rate in the government-initiated move to reduce the public burden in regard to the FIDF’s Bt1.14-trillion debt.

While 0.46 per cent is used to repay the FIDF debt, the remaining 0.01 per cent goes to the Deposit Protection Agency.

“The contribution rate can remain unchanged as the rate is proper although, legally, a rate of no more than 1 per cent can be collected. The [maximum] rate remains at 1 per cent in the draft amendment of the BOT bill, which is being considered by the National Legislative Assembly,” Somboon said.

Amending the Bank of Thailand Act aims to establish a mechanism to solve problems involving the financial-institutions system in replacement of the old mechanism, which has expired under law, as a preparation for problem-solving in advance.

The main principles will consist of conditions to solve several types of problem, including a severe liquidity shortage and large amounts of bad debt, the assistant governor said.

The solutions will be limited especially to crisis-hit financial institutions which affect overall economic and financial stability, Somboon added, insisting that the mechanism would not help a particular financial institution.

Decision-making will be faster and clearer with a balance of power, requiring approvals by the BOT’s Financial Institutions Policy Committee, the finance minister and the Cabinet.

The FIDF will solve the problem, given its experience and readiness, he said.

In regard to the source of funding for solutions, the FIDF can make borrowings from the Bank for Agriculture and Agricultural Cooperatives or other sources with the government’s financial guarantee, while contributions to paying off the debt burden will be made by financial institutions in the system afterwards, he explained.

Meanwhile, “We insist the country’s financial institutions remain strong without any problems. At the end of last year, the capital base combined was at 18 per cent, higher than the legal requirement of 8.5 per cent [of total risk assets].

“Besides, the BOT monitors the overall picture to ensure financial institutions’ stability and proper risk management. The [draft] law will not have any [negative] impacts on financial institutions,” Somboon stressed.

The government has received Bt894.012 billion in revenue, while budget disbursement was at Bt1.378 trillion.

To finance the deficit, the government has borrowed Bt214.9 billion.

Therefore, the treasury reserve at the end of February 2018 was Bt189.327 billion.

​She addd that fiscal balance in the first five months of fiscal year 2018 remained sufficiently strong for disbursement, due to higher government revenue collection and higher capital expenditure disbursement.

Major US indices shed more than one percent following reports that Cambridge Analytica, the data analysis firm hired by Donald Trump’s 2016 presidential campaign, stole information from 50 million Facebook user profiles to help design software to predict and influence voters’ choices.

Facebook shares slumped 6.8 percent, but other tech giants such as Apple, Google-parent Alphabet and Netflix also stumbled on worries that additional scrutiny could result in regulations that crimp growth at many of the stock market’s leading lights.

“What this has done has sparked a conversation that will probably affect quite a few of these tech names,” said Shawn Cruz, manager for trader strategy at TD Ameritrade.

“If there’s any sort of changes or regulation that comes out of this, it’ll be applied across the board to all these companies that are using data.”

The revelations will also lead to “a general increase in distrust among (Facebook’s) massive amount of users,” said Gorilla Trades strategist Ken Berman.

Market watchers said other events this week are also encouraging investor caution, including a Federal Reserve monetary policy decision on Wednesday and a G20 meeting of finance ministers in Argentina that could bring to the surface rising tensions on international trade.

Unease over trade dragged bourses in Paris and Frankfurt down more than one percent, analysts said.

“Concerns over the potential for a Trump trade war still seem to be weighing on the minds of investors, with a lack of risk appetite still leading to caution in global stock markets,” FXTM research analyst Lukman Otunuga said.

Trump’s tariffs on steel and aluminum imports worldwide are to come into effect on March 23, with the exceptions so far of Canada and Mexico, which have won temporary exemptions from the US.

The British pound rallied after Britain and the EU reached a landmark deal on a two-year transition after Brexit that will buy businesses and citizens time to adjust to life after the divorce. However, the parties still have not resolved the thorny issue of the future of the Irish border.

The strong pound weighed on London’s benchmark FTSE 100, which shed 1.7 percent.

Key figures around 2100 GMT

New York – Dow: DOWN 1.4 percent at 24,610.91 (close)

New York – S&P 500: DOWN 1.4 percent at 2,712.92 (close)

New York – Nasdaq: DOWN 1.8 percent at 7,344.24 (close)

London – FTSE 100: DOWN 1.7 percent at 7,042.93 (close)

Frankfurt – DAX 30: DOWN 1.4 percent at 12,217.02 (close)

Paris – CAC 40: DOWN 1.1 percent at 5,222.84 (close)

EURO STOXX 50: DOWN 1.2 percent at 3,394.79 (close)

Tokyo – Nikkei 225: DOWN 0.9 percent at 21,480.90 (close)

Hong Kong – Hang Seng: FLAT at 31,513.76 (close)

Euro/dollar: UP at $1.2339 from $1.2290 at 2200 GMT Friday

Pound/dollar: UP at $1.4026 from $1.3942

Dollar/yen: UP at 106.10 yen from 106.01 yen

Oil – Brent North Sea: DOWN 16 cents at $66.05 per barrel

Oil – West Texas Intermediate: DOWN 28 cents at $62.06 per barrel

The Thailand Blockchain Community Initiative is aimed at reducing costs and increasing productivity for banks’ clients and the broader economy.

Aside from the 14 lenders, the initiative has the backing of three state enterprises and four large corporations.

They aim to upgrade businesses efficiency and competitiveness by adopting blockchain technology, which is best known for its role in underpinning the most widely used digital currency, bitcoin.

The Thailand Blockchain Community Initiative will initially focus on blockchain-based letters of guarantee. The participants in the scheme say this will lead to the full integration of the LG system – worth Bt1.35 trillion – into the era of the electronic documentation. Operating costs will be cut by half, they say.

The system is being tested in the Bank of Thailand’s regulatory sandbox. It is expected to have an interoperability launch in the third quarter of this year, according to the joint statement of the participants.

Bank of Thailand governor Veerathai Santiprabhob told a press conference announcing the initiative that the central bank is delighted to witness the setting up of Thailand Blockchain Community Initiative, which will be beneficial to the banking and broader business sectors as well as the Thai economy as a whole.

In particular, the adoption of technology with h potential technology such as blockchain “can change how we conduct businesses”, Veerathai said.

“Participating banks will be able to share this infrastructure and technology without having to fully invest in such development individually.

“This will as well help achieve higher efficiency and lower costs. For the business sector, the Thailand Blockchain Community Initiative will reduce the complexity of connecting to the same financial services provided by different banks, facilitate data verification on the same blockchain network, mitigate risks of counterfeiting, and increase timeliness as well as security.”

After implementing a pilot project for LGs, the central bank is working with banks to introduce blockchain-based bond issuance. Investors would receive the bonds within days, instead of the 15 days currently.

The next blockchain project, Veerathai said, would be for interbank settlement between the central bank and banks or a so-called wholesale central bank digital currency.

Predee Daochai, the chairman of the Thai Bankers’ Association, said the estimated value of LGs issued via the banking system in Thailand in 2017 may have topped Bt1.35 trillion, or more than 500,000 in volume, up 8 per cent over 2016.

Of this, LGs via the electronic system, or e-LGs, represent around 15-20 per cent of this issuance. Therefore, paper-based LGs still hold the lion’s share of issuance in the Thai economy. This presents as a burden for both issuing banks and businesses using LGs, in terms of costs and document management, Predee.

“Thailand is the first country in the world to implement blockchain-based LGs,” said Predee.

Large corporations participating in the Blockchain Community Initiative include PTT Global Chemical, PTT Polymer Marketing, IRPC, Siam Cement Group, the Electricity Generating Authority of Thailand, Metropolitan Electricity Authority and the Provincial Electricity Authority.

The new LG system is going to be popular, much like the PromptPay system for electronic payments that was launched last year, Predee said.

In collaboration with three state enterprises and four large business corporations, the 14 banks announced the establishment of the initiative on Monday.

They aim to upgrade businesses efficiency and competitiveness by adopting blockchain technology, with the initiative initially implemented via the LG project.

This will lead to fully integrating the LG system worth Bt1.35 trillion into the era of electronic documentation, whereby their operating costs will be cut by half, the banks announced in a statement.

The system is currently being tested in the Bank of Thailand’s regulatory sandbox.

It is expected to have an interoperability launch in the third quarter of this year, according to the press statement.