International News 27 November 2025
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RBNZ Cuts Interest Rate to 2.25% Amid Weakening Economy
The Reserve Bank of New Zealand (RBNZ) lowered its Official Cash Rate (OCR) by 25 basis points to 2.25% on Wednesday, marking its lowest level since mid-2022. The move aims to support a sluggish economic recovery and cushion New Zealand against persistent global uncertainty. The rate cut aligned with a Reuters poll, where 32 of 36 economists expected a quarter-point reduction. This follows an unexpected 50-basis-point cut in October, bringing the total easing since August 2024 to 325 basis points. The aggressive policy stance reflects the central bank’s efforts to counter an economy that has contracted in three of the past five quarters, signaling persistent weakness that policymakers are determined to address.
https://internasional.kontan.co.id/news/bank-sentral-selandia-baru-pangkas-suku-bunga-jadi-225
U.S. Consumer Confidence Falls Sharply in November
U.S. consumer confidence slipped in November as households grew more worried about job prospects and their financial situation, a decline likely influenced in part by the recently concluded government shutdown. According to The Conference Board, the consumer confidence index fell to 88.7 from a revised 95.5 in October, undershooting economists’ expectations for a mild drop to 93.4. Chief economist Dana Peterson noted that consumers’ written responses continued to center on concerns around prices and inflation, tariffs and trade, and political developments, with a rise in mentions of the federal government shutdown. Although references to labor market conditions eased slightly, they remained among the most frequently cited issues. Overall, the tone of November’s responses was more negative than in October.
https://internasional.kontan.co.id/news/kepercayaan-konsumen-as-memburuk-pada-november
US Treasury Chief Warns Fed’s Rate-Control Framework Is Becoming “Fragile”
U.S. Treasury Secretary Scott Bessent criticized the Federal Reserve’s increasingly complex interest-rate control system, warning it is showing signs of “fragility.” In an interview with CNBC on Tuesday (Nov 25, 2025), Bessent said the Fed must simplify its policy framework, arguing that the current ample-reserves regime—supported by a US$6.56 trillion balance sheet—has strained money-market dynamics. His remarks follow recent liquidity tensions that pushed the Fed to halt its balance-sheet runoff starting in December, after tightening conditions made it difficult to keep the federal funds rate within target. Banks heavily tapped the Fed’s Standing Repo Facility, while large cash flows into the reverse repo facility highlighted ongoing distortions in short-term rates. Bessent has long criticized the Fed’s oversized balance sheet, saying it distorts bond prices and the yield curve—a concern echoed by Kansas City Fed President Jeffrey Schmid, who argued that a jumbo balance sheet blurs the line between monetary and fiscal policy. The current system also requires the Fed to pay substantial interest to financial institutions, contributing to cumulative losses of around US$240 billion, though these do not impact the central bank’s operations. Despite the drawbacks, many Fed officials prefer the automated nature of the current framework, noting that returning to the pre-2008 system would be painful and require massive bond sales that could sharply raise real borrowing costs.