Podcasts about kansas city fed

In this May 2025 edition of Trends in 10, Andy Campbell breaks down what equipment dealers and ag professionals need to know right now. From tightening lending conditions and rising operating loan volumes to volatile corn market projections and policy developments affecting ethanol, this episode covers it all. Andy digs into updated data from the Kansas City Fed and Purdue, reviews shifts in used equipment values (especially in the HHP tractor and combine categories), and explores why 2025 might signal a return to a “new normal” in farm capital investment.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news risk premiums keep on rising.But first, the OECD is reporting that the global expansion is leaking away, and quite quickly now. Economic activity rose by just +0.1% in the first quarter of 2025, significantly down from an +0.5% rise in the previous quarter. The US and Japan were the main drags in their data. And they say this is a departure from the higher and relatively stable growth rates recorded in the OECD area over the past two years.US initial jobless claims eased lower marginally, all accounted for by seasonal factors. There are now 1.79 mln people on these benefits, +103,000 more than at the same time last year.Existing home sales in the US fell -0.5% in April 2025, to their lowest in seven months and notably below what was expected. High mortgage rates are getting the blame.The first of the US PMI survey is out for May, the S&P/Markit one, and that reported output growth improved in the month, but prices spiked higher from the tariff impacts. And this was true for both the factory category, and their services category. It is better than a decline but in a broader historical perspective this isn't very impressive.Supporting that was the Chicago Fed's National Activity Index which not only recorded a decline in April, but March was revised lower too.Meanwhile, the Kansas City Fed factory survey for May slipped more negative again, even if hopes for the future remain positive.We don't usually report results of the US Treasury Inflation Protected Securities (TIPS), but today's 10 year event reveals the rising risk premiums investors are demanding, even as background inflation rises. Today's event delivered a median yield of 2.14% plus inflation, compared to the prior equivalent event a month ago of 1.86% plus inflation. These premiums are on the move wider, and are likely to widen substantially if Trumps 2025 Budget gets through Congress.North of the border, and in a bit of a surprise, Canadian producer prices slipped in April to be just +2.0% higher than a year ago. It turns out that many components for Canadian factories are sourced from the US and the falling US dollar has made them cheaper. That is certainly true for energy products, but true for many other components as well. Cheaper input costs will help Canadian factories push back against the tariff taxes their US customers have to pay.In Japan, they booked record high machinery orders in March, up +8.4% from a year ago, and far above what was anticipated. The outlook for the next three months looks good too. But we should note these gains are built on fast-rising domestic orders. Export order contributions were weak.Meanwhile, the Japanese May PMIs both slipped lower to be essentially flat (a marginal contraction for factories, a marginal expansion for services).In China, and in a sign of how broken their real estate development sector has become, local authorities are using bond funds to buy back unused land from struggling developers as a way to stop them completely collapsing.Singapore reported its change in economic activity for March and that came in at +3.9%, lower than the 5.0% growth in the December quarter but better than the expected +3.6%. But officials there downgraded their full 2025 expectations saying they will be lucky to get +2.0% growth this full calendar year - for all the obvious reasons.The Indian PMI for May stayed little-changed with a robust expansion. But they too are now noting rising price pressures.The flash Australia PMIs for May report a growth stall, for both their factory sector and their services sector. That was because they had their slowest growth in new orders in 2025 so far.Global container freight rates stayed low last week, up +2% from the prior week to be -28% lower than year-ago levels. And bulk freight rates rose +5.0% from a week ago but remain in the general low range they have been since early April.The UST 10yr yield is now at 4.55%, and down -5 bps from this time yesterday.The price of gold will start today at US$3,294/oz, and down -US$18 from yesterday.Oil prices are -50 USc softer today at just under US$61/bbl in the US and the international Brent price is just under US$64.50/bbl.The Kiwi dollar is now at 59 USc, and down -½c from yesterday at this time. Against the Aussie we are down -30 bps at 92 AUc. Against the euro we are down -10 bps at 52.4 euro cents. That all means our TWI-5 starts today still just under 67.4 and down a net -20 bps from yesterday.The bitcoin price starts today at US$111,542 and up +5.0% from yesterday. Volatility over the past 24 hours has been moderate at just on +/-2.5%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news this week we may start to see some hard data from the US and how the Trump insurgency is affecting the world's largest economy. Already sentiment surveys seem pretty negative.For us, the week ahead will be dominated by the March quarter financial system data releases from the RBNZ on Wednesday.Internationally, we will remain trapped watching the chaotic policy changes from Washington and trying to assess how they may impact us. Wall Street's earning season releases will also be a big influence, especially results from Big Tech. And the Americans will release their Q1-2025 GDP results, PCE inflation data, and their ISM PMI survey results. And at the end of the week we will get the April non-farm payroll results for the US labour market.The Bank of Japan is scheduled to review its monetary policy, but they are unlikely to make any changes in the fog of uncertainty around trade policies. Australia will release its Q1-2025 CPI data (expect a dip to 2.2%). China will release its official PMI survey results.Over the weekend, China said its March industrial profits were better than expected, but private sector profits slipped again. However, overall profits rose +0.8% from a year ago. Also better were foreign company profits which were up +2.8% on the same basis.China said they are adding another ¥500 bln in medium-term lending facility funding. This is the second month they have pushed out substantial additional liquidity in this way.And China says more than 120 million people have benefited from their old-for-new consumer goods trade-in subsidy program, driving sales of more than ¥720 bln.And the BS meter is on high after Trump said that “we're meeting with China” on tariffs, comments aimed at soothing jittery financial markets. But Chinese officials say no talks have taken place.In fact, China cancelled some large pork and soybean orders to US suppliers. American farmers not only have to bear the brunt of trade policy gone rogue, they are also battling rouge weather.Singapore said its industrial production rose in March, a bounce-back from a weak February result. But the recovery wasn't as strong as analysts had expected.Across the Pacific, US initial jobless claims fell last week to +209,700 and to the level expected. But seasonal effects suggested this reduction should have been larger. There are now 1.89 mln people on these benefits, still higher than year ago levels. This is despite Federal pressure on States to deny long term undocumented workers access to benefits.New durable goods orders jumped in March by +10.9%, the largest rise in seven months. Capital goods orders rose +24.1%. But non-defense, non-aircraft capital goods orders were only up +1.8%. This is probably why the March or April PMIs didn't note a general rise in factory orders.US existing-home sales fell -5.9% in March from February to be -2.4% lower than one year ago.Meanwhile the Kansas City Fed factory survey reported lower activity, higher costs, and unchanged order levels.Nationally, the Chicago Fed's National Activity Index reported a small slip in March. This is consistent with the overall Fed Beige Book monitoring.And finally for the US, the UofM sentiment survey for April was -8.4% lower than for March, -32% weaker than a year ago. These are big drops. Year-ahead inflation expectations surged from 5.0% in March, an unusually high level, to 6.5% this month, the highest reading since 1981.North of the border, Canada reported February retail sales and they slipped from January to be +2.1% ahead of year ago levels. This data is volume data, so a real increase.And its election day in Canada (tonight NZ time). There has been a notable surge in early voting. Official data for this was released a week ago, and that showed 7.3 million electors had voted in advance at that stage. This is a +25% increase from the 5.8 million electors who voted in advance in the last federal general election in 2021. They have 27.6 mln eligible voters this time.The UST 10yr yield is now at 4.25%, up +1 bp from this time Saturday.The price of gold will start today at US$3318/oz, and up +US$88 from Saturday.Oil prices have held from Saturday be still just over US$63/bbl in the US and the international Brent price is now just under US$67/bbl.The Kiwi dollar is now at 59.6 USc, down -10 bps from Saturday at this time. Against the Aussie we are down -10 bps at 93.2 AUc. Against the euro we unchanged at 52.5 euro cents. That all means our TWI-5 starts today still just on 68 and unchanged from Thursday, but up +40 bps from a week ago.The bitcoin price starts today at US$94,238 and down -0.8% from this time Saturday. Volatility over the past 24 hours has again been low at +/- 0.7%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news behind the tariff headlines that shows impacts of recent policy changes are starting to show up in some places, but not everywhere yet.US jobless claims fell slightly last week and about at the level seasonal factors would have expected. There are now 2.08 mln people on these benefits, about the same level as a year ago.That was the first of some marginally better data out overnight. The US merchandise trade balance pulled back in February from its record January deficit but it still came in far higher than what was expected. US exports stagnated but imports were +19% higher than year-ago levels.US wholesale and retail inventories rose with wholesale inventories up +1.2% from a year ago, and retail inventories up +4.6% on the same basis. Supply chain inefficiencies from the new tariff policies are starting to show up nowUS pending home sales came in -3.6% lower in February than year-ago levels, although the industry emphasised the +2% rise from January.The Kansas City Fed factory survey was a touch more positive than expected and better than in some other regions. But they too had lower new order levels, so this positivity probably won't last.In the Washington swamp, overshadowed perhaps by obvious lying by their unqualified Defence Secretary, the Administration has hit carmakers with new 25% tariffs. This will likely have a significant global impact on manufacturing as well as destabilising local supply chains. It is a move that may not play out as they want and will almost certainly mean US-produced cars will cost a lot more. GM's share price is down -7% today which accounts for most of the YTD drop. Ford is down -3.2%. Stellantis is down -4.3% today. The big local producers are expected by investors to do well out of this change.And they are not the only ones being hit. The recoiling of international tourists going to the US has seen substantial drops in the values of major US airlines. Delta is down -21% so far this year, United is down -22%. And American Airlines is down -35%. The whole industry is down -16% since the start of the year with those with extensive international routes worst hit. And this is despite global air travel being up about +10%.The final review of the Q4-2024 economic growth rate came in at +2.4%, which means that for all of 2024 they recorded an economic expansion of +2.5%. Both outcomes were marginally better than expected. 2025 has gotten off to a rocky start for them.In China, after the January -3.3% retreat, industrial profits were expected to be reported up +4.0% in February. But in fact they came in -0.3% lower again, so a market surprise. The SOE group saw profits rise +2.1%, public listed companies saw their profits down -2.0%, Hong Kong/Macao companies reported a +4.9% rise, and other private enterprises suffered a -9.0% drop.In Europe, the Norwegian central bank kept its key policy rate unchanged at 4.5% for the tenth consecutive meeting in its overnight March review, as widely expected.In Australia, household wealth was up +0.9% or +AU$144 bln in the December quarter, the lowest growth since September quarter of 2022. Year-on-year this was up +6.6% at a time inflation accounted for +2.4%. On that annual before-inflation basis their dwelling values only rose +4.4%. Their Super was up +9.3% however, and the value of their bank accounts were up +8.5%.Post their 2025/26 Budget, the Australian Treasury (AOFM) said it has raised its target bond fundraising from AU$100 bln in the coming year to AU$150 bln. Swap spreads then dived, indicating that demand for this debt paper could be hard to find. Expect Aussie Govt bond yields to rise sharply. It is widely expected that there will be an election date announcement later this morning, and most are expecting May 3 to be when the Aussies next go to the polls. Their recent Budget seems to have gone down well with the electorate so they want to capitalise on that.Globally, container freight rates fell -4% last week and are now -31% lower than year ago levels but +53% above pre-pandemic levels. Freight rates for bulk cargoes were essentially unchanged last week from the prior one, to be -19% lower than year-ago levels.The UST 10yr yield is now at 4.36%, up +2 bps from yesterday at this time.The price of gold will start today at just on US$3049/oz and up a net +US$32 from yesterday.Oil prices are down -50 USc from yesterday at just over US$69.50/bbl in the US and the international Brent price is now just over US$73.50/bbl.The Kiwi dollar is now at 57.3 USc and down -10 bps from this time yesterday. Against the Aussie we are also down -10 bps at 91.1 AUc. Against the euro we are up +10 bps at just on 53.3 euro cents. That all means our TWI-5 starts today just on 66.9, and down -10 bps.The bitcoin price starts today at US$86,905 very little-changed (+US$39) from this time yesterday. Volatility over the past 24 hours has again been modest at +/- 1.0%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news trade and tariffs are in the headlines, but their impact of higher inflation and slower economic activity are just starting to be seen.US initial jobless claims rose sharply last week in seasonally adjusted terms, the largest rise in five month. In actual terms they were basically unchanged when seasonal factors would have normally brought a good reduction in claims. These initial claim levels are +10% high that year ago levels and there are now 2.17 mln people on these jobless benefits, also much higher than a year ago.US durable goods orders rose +3.1% in January from December, but there was a sharpish revision lower in the December data. The January level is +4.3% higher than year-ago levels. Non-defense capital goods were up +2.2% from a year ago.The second estimate of Q4-2024 GDP came in unchanged from the first at +2.3% growth. It would have been more but they noticed higher inflation in the period which trimmed the rising nominal expansion in the period.Pending home sales in the United States fell -5.2% in January from a year ago, following a -5% drop in December.And today's downbeat American economic data releases extended to the Kansas City Fed factory survey which fell in February, contracting by its most in five months.The US Administration said China will be hit with a new 10% tariff, the latest salvo in the US president's steadily escalating trade fights. That is on top of the earlier 10% already in place. The President also said he intended to move forward with a threatened 25% tax on imports from Canada and Mexico, which is set to come into effect on 4 March.So it is little wonder that inflation expectations are rising among Americans. Tariffs are a tax on yourself, and higher prices either result from more expensive imported goods, or they allow local producers to face much less price competition so those prices rise too. It will be impossible for the US Fed to ignore, and bond markets aren't either.But north of the border, Canada said weekly earnings are rising faster there. They rose +5.8% in December from a year ago in data released overnight, the fastest pace since March 2021.And staying in Canada, the reaction to the endless Trump insults are generating a "Buy Canada, Bye America" surge, and now apps are sprouting up enabling such choices right in shop and supermarket aisles. Apparently there are export markets for such services, especially in Europe.The tracking of consumer and business sentiment in the EU shows it is either holding or moving up in January. Now almost as may are positive as negative, which is the best they have had in almost three years, and slightly better than expected.With all the US tariff news, it will be no surprise to learn that container freight rates fell another -6% last week, taking them -30% lower than year-ago levels, and now only +85% higher than pre-pandemic levels. Usage of the Suez Canal is normalising now too. But bulk cargo rates shot up +32% last week from the week before to be -40% lower than year-ago levels.The UST 10yr yield is at 4.29%, up +2 bps from yesterday at this time.The price of gold will start today at just under US$2875/oz and down -US$35 from yesterday.Oil prices are up +US$1 at on US$70/bbl in the US and the international Brent price is now under US$74/bbl.The Kiwi dollar is now at 56.5 USc and down -60 bps from yesterday. Against the Aussie we are unchanged at 90.3 AUc. Against the euro we are down -10 bps at 54.2 euro cents. That all means our TWI-5 starts today just over 66.5, and down a net -40 bps from yesterday.The bitcoin price starts today at US$84,968 and -2.3% from this time yesterday. It is currently very much in a bear phase with prices only rising when there is minor volume, but falling sharply when there is high volume. Sellers are choosing their timing, and there are a lot of them. Volatility over the past 24 hours has been moderate at +/- 2.8%. You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Well, we have a new US Presidential Administration with a very different economic strategy than its predecessor. The president has already started vocally demanding the Federal Reserve be more aggressive in lowering interest rates. And he's appointed a new head, Scott Bessent, at the US Treasury, replacing Janet Yellen. What should we expect from the policies this Administration intends to pursue? Will Jerome Powell march to the President's demands? Or will he flex to assert the Fed's independence? And where does inflation figure into all of this? For a true expert's informed perspective on these very important questions, we have the great privilege today of speaking with Dr Thomas Hoenig, former CEO of the Kansas City Fed, former voting member of the Federal Open Market Committee, a former director of the FDIC, and now a Distinguished Senior Fellow at the Mercatus Center. BUY YOUR TICKET ATTHE EARLY BIRD PRICE FOR OUR MARCH 15 CONFERENCE at https://thoughtfulmoney.com/conference

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news we are living in a new world of imposed distortions. Ethical politics or business dealing is out the window. Trust is being replaced by force. It is hard to see how this will end well. After all, business relies on trust, honesty and integrity. Without it, why would you make a deal? The result can only be higher risk premiums.First, the annual Davos meetings are underway, and today they were dominated by US Presidential bluster where we claimed he would force interest rates down, force the oil price down, and force other countries to "put America First". He also threatened any country who challenged the American FANGs with taxes on their activities in their own countries. Billionaires don't see the need to pay taxes - their fair share, or any share - to anyone.US jobless claims fell back sharply from last week's big seasonal increase. But the fall was not as much as seasonal factors would have anticipated. On a seasonally-adjusted basis they rose. There are now 2.24 mln people on these benefits, which is actually the highest since the last Trump Administration. (Interestingly, the new US-DOL leadership 'hid' this data, shifting it to a 'new' location.)In the regions, the December factory survey from the Kansas City Fed revealed a further contraction. New order levels were low, and despite improved manager sentiment, they actually don't expect new order levels to rise much.In Canada, retail sales rose much more than expected in December, their best December rise since 2019, and the biggest any-month gain since May.Japan said its exports rose +2.8% in December from a year ago, meaning that eleven of the past twelve months recorded export growth. Only nine of the past twelve recorded import growth.And all eyes turn to the Bank of Japan and their expected +25 bps rate hike, later today.A rise in South Korean business sentiment in January comes after authorities there reported a quite soft Q4-2024 GDP growth outcome.Singapore's CPI inflation was up +1.6% in December, the same as November and slightly more than the +1.5% expected.Taiwanese retail sales rose +2.9% in December with a modest performance. But Taiwanese industrial production surged +20% in December from the same month a year ago which itself wasn't especially soft.In China, they are directing insurers to buy equities, a move designed to put a floor under the pressure on those markets.After 'peaking' in October at their long-run average, the EU consumer sentiment survey has slipped to be more net-negative since. But the latest January 2025 survey essentially held the December level to be almost 2 percentage points better than year-ago levels.In Turkey, their central bank claimed overnight that inflation there is under control at 44% and heading in the right direction. So it cut 2.5% from its policy interest rate taking that benchmark down to 45%.Driven by rates out of China, container shipping freight rates fell a sharpish -11% last week, although they are still 140% higher than pre-pandemic levels. The Baltic Dry index for bulk cargoes fell a sharp -16% in the past week, now at the very lower end of its long-run average level since 1969.The UST 10yr yield is up at 4.65% with a +4 bps rise from this time yesterday.The price of gold will start today at US$2757/oz and down -US$1 from yesterday.Oil prices are down down -US$1 at just over US$75.50/bbl in the US and the international Brent price is now under US$78.50.The Kiwi dollar is now on 56.8 USc and up +20 bps from this time yesterday and more than a one month high. Against the Aussie we basically unchanged at 90.3 AUc. Against the euro we are up +10 bps at 54.5 euro cents. That all means our TWI-5 starts today just on 67.2 and also essentially unchanged from yesterday. A fall against the Yen offset the USD rise.The bitcoin price starts today at US$106,275 and up +2.6% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.8%.Monday is the Auckland Anniversary holiday, and Australia Day, so the newsflow will be light. But we will have continuing regular service on Monday.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Tuesday – Monday is a public holiday in much of New Zealand.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news of deliberate chaos being constructed in Washington DC with a much higher prospect of a US Federal Government shutdown likely. Authorised funding expires later today / Friday, US time. Financial risks are sharply elevated today, and markets are pricing these in.Elsewhere, US jobless claims fell sharply last week and by more than can be accounted for by seasonal factors. There are now a bit less than 1.9 mln people on these benefits.The PhillyFed survey of factories in America's traditional rust belt turned very negative, the worst result since April 2023. Soft demand was behind this shift. Optimism about the future took a hit too.The Kansas City Fed's equivalent survey in its region wasn't so negative, but it wasn't positive either. Optimism was a bit better there however.American existing home sales in November rose, but to be fair it is still stuck in the very low range it has had post-pandemic which is even lower than the post-GFC range, and back to levels first seen in 1995. So the November rise in that perspective is kind of irrelevant, no matter what the industry peak body says.The US Conference Board leading index tracking rose in November. Higher building permits, high equity prices, rising average hours worked in manufacturing, and fewer initial jobless claims boosted the November result. But the December result will no doubt take a hit from the current Washington shenanigans.The final estimate for US Q3-2024 GDP raised the expansion to +3.1% and extending the good run they have had since mid-2022. The US economy delivered US$29.4 tln of economic activity in the past year, with the expansion of +US$1.4 tln and the most ever. And that describes what is at risk from bad policy.Elsewhere there were many central bank rate reviews.In Japan, the Bank of Japan held its key short-term interest rate unchanged at 0.25%, keeping it at the highest level since 2008. That was what financial markets expected. But the vote was split 8-1, with one board member wanting a +25 bps increase. Essentially they are waiting to see how destabilising the incoming American Administration will be. But the bank boss seems to have turned dovish in the circumstances, and that turn moved markets.In Taiwan, they kept their policy rate unchanged at 2%In the Philippines, they cut their rate by -25 bps to 5.75%.In Sweden, they cut by -25 bps to 2.5%.In Norway, they held at 4.5%.In England, they held unchanged at 4.75% with a split 6:3 vote with the dissenters wanting a cut. This is a pause as inflation starts to rise there again.In something of a surprise, Australian inflation expectations rose to 4.2% in December, ending their encouraging falls that started in September. It is not a result either the RBA or the Australian Treasury would have wanted.Container freight rates rose +8% last week but to be fair that was only because of a +26% rise in teh China-to-USWC route and a +17% rise in Chin-to-New York as traders raced to get ahead of the impending tariff threat. Other routes saw small declines. Bulk cargo rates fell another -7% last week to be less than half what they were a year ago and back to levels last seen in July 2023.Many mineral commodities are retreating in price in expectation 2025 will be tough, with copper down -2%.The UST 10yr yield is now at just on 4.59%, up a very sharp +19 bps from this time yesterday as markets digested the Fed's move and the deliberate mess being created by the incoming President.The price of gold will start today at US$2592/oz and down -US$42 from yesterday.Oil prices are down -US$2.50 to be just on US$69.50/bbl in the US while the international Brent price is now just under US$73.The Kiwi dollar starts today just on 56.5 USc and down -60 bps from yesterday. Against the Aussie we are down -40 bps to 90.3 AUc. Against the euro we are also down -10 bps to 54.5 euro cents. That all means our TWI-5 starts today at just on 67.1 to be down another -25 bps from yesterday at this time.The bitcoin price starts today at US$100,994 and down -3.1% from this time yesterday. Volatility over the past 24 hours has been high at +/- 3.1%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news about separate corruption cases involving Gautam Adani, and Matt Gaetz.But first today, the US labour market is maintaining its strength, despite strikes and tropical hurricanes. Last week only +213,000 people filed for initial jobless claims, well below the prior week, below what seasonal factors would have brought, and below the same week last year. This was a seven month low. Continuing claims inched up the prior week to 1.67 mln but that was about the same level as last year.Those job gains are helping their housing market. Existing home sales rose in October by +3.5% from the previous month to an annualised rate of just under 4 mln. While this level is pretty tame for them, it is off the September low which had the distinction of being a q14 year low. Industry insiders are hoping October's rise signals a trend turnaround. But it is hard to see with mass layoffs in the US Federal workforce imminent, it might be a vain hope.In contrast to the big jump in the New York region, the Philly Fed's factory survey dipped in November, but new order levels remained positive, and sentiment ahead did too. It was similar in the same report by the Kansas City Fed, where firms expect increases in production, new orders, and employment in the next six months.In Canada, producer prices turned up in October after easing in the prior month, to continue a trend that started in April. But the rises are not inflationary.In India, the depth and pervasiveness of corruption is on display in a case that is gripping the country. The BSE fell -0.5% on the news. And PM Modi is annoyed by the revelations as Adani has been important in his rise. In New York, Indian billionaire Gautam Adani was indicted on bribery charges in a US federal court yesterday, with prosecutors alleging the 62-year-old tycoon and other Indian executives promised more than US$250 mln to Indian government officials to win contracts. Bribery is also at the heart of a Swiss case against the same people. And Indian steel makers have faced similar allegations. But given the pervasiveness of corruption in India at the top level, there is probably little that will change there, especially as the BJP controls their government. The Americans are prosecuting because Adani did not disclose the bribes in documentation for fundraising in US markets, and it was considered to be a material factor for the investments.Ending a long series of improvement, the EU consumer sentiment survey reported a fall to a more negative result in November. Despite this, data out for EU car sales was quite positive, putting the August and September say behind it and returning to levels that have been 'normal' since mid-2022.In Turkey, they reviewed their policy rate and held it at 50%. Turkey has inflation running at 48%.In South Africa, they also reviewed theirs and cut it by -25 bps to 7.75%. South Africa has inflation running at 2.8% and falling quickly now. It is back within its target range.Container shipping freight rates were little-changed last week. Bulk cargo rates spiked during the week, but ended up basically unchanged from last week.The UST 10yr yield is now at just on 4.42% and up +1 bp from yesterday at this time. Wall Street started its Thursday little-changed, but then rose +0.7% on the S&P500 and rising when Matt Gaetz said he won't be the US Attorney General.The price of gold will start today at US$2649/oz and up another +US$26 from this time yesterday.China has found new gold reserves in central Hunan province, state outlet Xinhua News reported yesterday. China is the world's largest gold producer, accounting for around 10% of global outputOil prices are again little-changed, up just +50 USc to just over US$69.50/bbl in the US while the international Brent price is now just over US$73.50/bbl.The Kiwi dollar starts today at 58.6 USc and down -10 bps from this time yesterday. Against the Aussie we are -40 bps lower at 90 AUc. Against the euro we unchanged at 55.8 euro cents. That all means our TWI-5 starts today at just over 68.3, and down -20 bps from yesterday.The bitcoin price starts today at US$97,247 and up +3.7% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.7%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Former Kansas City Fed President Esther George discusses how the US Presidential Election outcome will affect Fed policy going forward. She speaks with Bloomberg's Jonathan Ferro and Lisa Abramowicz. See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news we need to get ready for a +3o future and start adapting for it.But first, initial jobless claims in the US came in at just 203,000 last week, much lower than expected. There are now 1.635 mln on these benefits. We are about a week away from getting the US non-farm payrolls report and current estimates are that it expanded just +140,000 in October. That may be conservative.But the Chicago Fed's monitoring of their National Activity Index reveals a slip in September.But in October that may have picked up, and substantially. The S&P/Markit US factory PMI contracted its least in three months, and their services PMI is still expanding at a good pace and has been for six months now. This helps explain why employment has been stronger than expected for some time.The other encouraging feature of these PMI reports is that inflation pressures seem absent now.The Kansas City Fed's regional factory survey showed these trends; factory activity barely contracting now which was a sharp improvement from September. And their services sector was expanding still.Although firms in both regional and national surveys are increasingly optimistic about the future, they seem to be ignoring - or looking past - the damage the extended Boeing strike will cause. More here.Also encouraging for them is that American new home sales were on the rise in September, rising to a 738,000 annual rate, its highest since the outlier May 2023 spike. The September level is +6.3% higher than a year ago. This time, new home sales seems to be on a rising trend.In Japan their flash October PMI report shows a contraction too in their factory sector, but also only a minor one. But output and new order levels slipped at a slightly faster rate. Their services sector isn't expanding either according to this same report, a slip from the prior month. Apparently Japanese businesses are struggling to adapt to their modest inflation pressures.Korea reported its Q3-2024 GDP yesterday, revealing a +1.5% growth rate, lower than the +2% expected at the +2.3% in Q2-2024.India's October PMIs stayed strongly expansionary. New order levels were high. But there are signs of serious overheating, and inflation in India is a building concernThere is no overheating in the EU with everything ticking lower in October. But at least their service sector is still expanding.In Australia, their October PMI survey reveals that their factory sector is at a 53 month low with a moderate contraction. Their services sector however is holding its own - just.An updated UN report shows that we have essentially run out of time to cut greenhouse gas emissions. We are on track for a +3% rise in global temperatures and that will radically change how the planet operates, most of it not good. The difference between rhetoric and action is stark. China (+5.2% rise in emissions) and India (+6.1%) are overwhelming the US (-1.4%) and EU (-7.5%) restraint. Together China and India released 20,140 MtCO2e of greenhouse gas, 38% of the global total. Together the US and the EU released 9,200 MtCO2e or 17%. Neither China nor India are likely to heed the evidence, and if Trump is elected, the US will likely switch sides - so it will now be all up to how we adapt. Fortunately, New Zealand is in a relatively good position (or less-bad position).Container freight rates fell another -4% last week but are still +118% higher than the 2019 pre-pandemic average. Again it was outbound China routes that fell but there was also a slip in rates from the US to China. Bulk cargo rates fell a sharper -12.5% last week, to be -28% lower than a year ago and back to pre-pandemic levels.The UST 10yr yield is now at just on 4.19% and down -6 bps from this time yesterday.The price of gold will start today at US$2732/oz and up +US$12 from yesterday.Oil prices are -50 USc softer at just on US$70/bbl in the US while the international Brent price is now just over US$74/bbl.The Kiwi dollar starts today at 60.1 USc and up +10 bps from this time yesterday. Against the Aussie we are also up +10 bps at 90.6 AUc. Against the euro we are down -10 bps at 55.6 euro cents. That all means our TWI-5 starts today at just on 68.9, and down -10 bps from yesterday at this time.The bitcoin price starts today at US$67,558 and up +2.5% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.1%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Former Kansas City Fed President Esther George weighed in on the labor market and Fed rate strategy. George spoke to Bloomberg Television's Sonali Basak, Matt Miller, and Katie Greifeld at the Citadel Securities Global Macro Conference in New York Wednesday.See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead China is trying to get back on track to keep up with the US economically.First in the US, the number of initial claims for unemployment benefits fell again last week and by more than expected to 181,000. In fact there has been a consistent reduction each week since the end of July. There are now only 1.63 mln people on these benefits.American durable goods orders came in better than expected too in August. After an unexpected jump in July, they were expected to fall back sharpish. They did but not by anything like what was expected. In actual terms they rose +7.5% from July to be level-pegging with a year ago. The embedded year-on-year negative has now been extinguished. Capital good orders rose in August to be +2.5% higher than a year ago. This too is a bright recovery.There were no surprises in the US Q2 final GDP result, with their economic activity growing +3.0% 'real' and almost double the +1.6% expansion in Q1. For the full year to June, there was US$29 tln in economic activity recorded, a fast pace of expansion for the world's largest economy. By some estimates, that +3% pace has continued into Q3.It is not all good, or even even. The Kansas City Fed's factory survey retreated in its September review, even if expectations for future activity stayed positive.Again, there was good support for today's US Treasury 7 year bond auction. It went for a median yield of 3.61%, down from 3.71% at the equivalent event a month ago. And that is despite secondary benchmark yields rising slightly today.And as expected, the Swiss National Bank cut its key policy rate by -25 bps to 1% at their overnight meeting, a third consecutive reduction and pushing borrowing costs to the lowest since early 2023.Aussie job vacancies continue to fall. There were 330,000 job vacancies in August, down by 18,000 from May, and well down from the peak of 473,000 in May 2022. Their labour market stats shows there were 623,200 unemployed people in the same month, of which 418,500 were supposedly looking for full-time work.The OECD said the global economy is turning the corner as growth remained resilient through the first half of 2024, with declining inflation, though significant risks remain, according to the OECD's latest Interim Economic Outlook. With robust growth in trade, improvements in real incomes and a more accommodative monetary policy in many economies, the Outlook projects global growth persevering at 3.2% in 2024 and 2025, after 3.1% in 2023. Global inflation is projected to be back to central bank targets in most G20 economies by the end of 2025. Headline inflation in the G20 economies is projected to ease to 5.4% in 2024 and 3.3% in 2025, down from 6.1% in 2023, with core inflation in the G20 advanced economies easing to 2.7% in 2024 and 2.1% in 2025.Container freight rates fell -7% last week from the prior week, to be +160% higher than the pre-pandemic levels and back to levels we last saw at the start of 2024. All the latest reductions were on routes outbound from China. Bulk cargo rates were up +6.6% last week to be +25% higher than a year ago.In China, Beijing has asked its four top state-owned banks to cover for it with lending that may not make a lot of commercial sense. Now Bloomberg is reporting that they are moving to bolster the capital in these key institutions. The amount of added capital required is enormous.And we are starting to see some movement in some commodity prices, responding to the Chinese stimulus program. For example the copper price is back above US$10,000/tonne which is approaching the upper limits of where it has been since its first rise in 2011. Iron ore or rebar steel aren't moving, but zinc is.The UST 10yr yield is now at just on 3.79% and unchanged from yesterday. The price of gold will start today at US$2670/oz and up +US$9 from yesterday to yet another new all-time high.Oil prices have fallen another -US$2 to US$67.50/bbl in the US while the international Brent price is now just on US$71.50/bbl. The Saudis seem to have surrendered the idea that production cutbacks will juice the price in their favour. They are shifting to pump more and regain market share.The Kiwi dollar starts today in a yoyo pattern at 63.3 USc and back up +60 bps from this time yesterday. Against the Aussie we are unchanged at 91.8 AUc. Against the euro we are up +30 bps at 56.6 euro cents. That all means our TWI-5 starts today at 70.6, and back up +30 bps from yesterday.The bitcoin price starts today at US$65,167 and up +3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.9%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Last week in his much-anticipated speech at Jackson Hole, Federal Reserve Chairman Jerome Powell announced the "time has come for policy to adjust". World markets now have a 100% probability expectation that the Federal Funds Rate will be cut at the upcoming September meeting. In the words of Nick Timiraos, chief economist for the Wall Street Journal and suspected media mouthpiece for the Federal Reserve, "The Powell pivot is complete". Is that indeed the case? And if so, what should we expect from here from the speed and depth of rate cuts? What will the expected impacts be on the economy? And which ones will be felt soon, and which perhaps not for quarters from now? And lastly, is this the correct policy move the Fed should be pursuing? For a true expert's informed perspective on these very important questions, we have the great privilege today of speaking with Dr Thomas Hoenig, former CEO of the Kansas City Fed, former voting member of the Federal Open Market Committee, a former director of the FDIC, and now a Distinguished Senior Fellow at the Mercatus Center. Follow Dr Hoenig at https://www.discoursemagazine.com/ or https://www.finregrag.com/ WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com --- Support this podcast: https://podcasters.spotify.com/pod/show/thoughtful-money/support

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news financial markets in the US have the jitters ahead of a key speech by Fed boss Powell tomorrow at the Jackson Hole central bank shindig. Equities fell, bond yields rose, and the USD firmed and expectations grew Powell will make the case for only a gradual pace of rate cuts.Meanwhile, US jobless claims actually fell last week and by about what was expected. But the seasonally-adjusted level rose and that wasn't expected and that grabbed the headlines in the absence of any other major economic news. There are now 1.86 mln people on these benefits, also a fall.The 'flash' US PMIs from S&P/Markit shows their factory sector contracting slightly but their services sector expanding faster. New order levels are problem for their manufacturing sector. But service sector activity grew at a solid and increased rate in August, and because that sector is far larger than the factory sector, that points to robust GDP growth in excess of 2% annualised in the third quarter, which should help allay near-term recession fears.The Chicago Fed's National Activity Index for July basically confirmed the manufacturing slowdown.But the Kansas City Fed factory survey held on with an improvement in August, showing there are some regions still improving in their manufacturing sector.Also improving were the July existing home sales which rose modestly at about the expected level and that ended a four month retreat. But despite that, the sales volume levels essentially remained at the low levels they have had since early 2023. And on a broader perspective, sales volumes at this level were first achieved in the mid-1970s, and were the levels in the GFC. So July's rise is a very low bar.In Canada (and the US), all eyes are on a stoppage in their key rail network due to industrial action. It is a lockout, and it will have many spillover impacts in both countries.In India, the expansion rolls on for both their factory and services sectors in an impressive way, with them shrugging off capacity issues in their factory sector with a notable rise in job creation. 'Growth' is creating many more employment opportunities.In Japan, although it rose, its August factory PMI is still contracting, slightly. On the other had Japan's service sector is expanding at a good rate. That is the seventh consecutive expansion in their services sector.In China, Reuters is reporting that regulators there will likely impose a six-month business suspension on a big part of PwC's auditing unit in the mainland as a penalty for its work on troubled property developer Evergrande.In Europe, business activity rose at faster pace in August, but the rate of new order intake continued to ease. The uptick in business activity is largely due to the Paris Olympics however, so that probably won't last.In Australia, their August PMI's sort of mirrors Japan but at a slightly lower level. The factory PMI is up but still contracting. Their services PMI is expanding although only at a modest rate.Global container freight rates slipped another -2% is a continuation of the minor moves down from the extreme July heights, with the basic pressures unresolved. These rates are still almost three times higher than pre-pandemic and pre-canal-pressure levels. There is no real sign of a proper normalising. Bulk freight rates rose slightly last week.The UST 10yr yield is now at just on 3.86% and up +8 bps from this time yesterday.The price of gold will start today down -US$27 from yesterday at US$2482/oz.Oil prices are recovered yesterday's US$1.50 drop, now back at US$73/bbl in the US while the international Brent price is now just under US$77/bbl.The Kiwi dollar starts today down -30 bps from yesterday at 61.3 USc. Against the Aussie we are up +10 bps too at 91.5 AUc. Against the euro we are still at 55.3 euro cents. That all means our TWI-5 starts today at 69.4 and little-changed.The bitcoin price starts today at US$60,305 and up +0.7% from this time yesterday in its recent yoyo pattern. Volatility over the past 24 hours has been modest at just under +/- 1.6%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

 Former Kansas City Fed Governor Esther George  See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the rise of the US economy and the slowdown in China that Beijing can't seem to arrest is twisting a vast cast of supporting economies and their currencies. The NZD and AUD are devaluing faster now.First up today, the giant American economy grew much more than expected as reported by their 'advance' Q2-2024 release. It was up +2.8% when +2.0% rise was expected after the Q1-2024 +1.4% expansion. This was driven by strong consumer spending which broadly confirms the weekly retail impetus that we track. Consumers are acting 'positively'. Growth of +2.8% is 'moderate' in the grand scheme of things - until you realise that it is a +US$360 bln (nominal) expansion from Q1, almost +US1.6 tln from the same period a year ago. Nowhere else has expanded like that (and more than double China's +US$784 bln equivalent expansion). The American economy had economic activity of US$28.6 tln in the past year.Prices (PCE) were up +2.6% in Q2, a lesser rise than the +3.4% rise in Q1. Getting there, but not there yet.Meanwhile, US initial jobless claims fell more than expected last week at 225,000 from the 281,000 of the prior week. These levels are nearly back to where they were a year ago. There are now 1.9 mln workers on these benefits, a tiny slice of their 364 mln workforce.But new orders for durable goods slumped -6.6% in June from May, after four consecutive monthly increases and missing market expectations of a +0.3% rise. Transportation equipment drove the decrease. From a year ago, these durable goods orders were down a startling -11%. Orders for capital goods were worse, down -27% on the year-ago basis. (However, excluding aircraft, there was little change.)The next July regional factory survey is from the Kansas City Fed, and they reported little-change from June. Basically it mirrors the national durable goods order data.Earlier today there was a well-supported UST 7yr bond auction and that brought a 4.11% median yield. That is slightly lower than the 4.22% yield at the prior equivalent event a month ago.China's central bank unexpectedly cut the rate at which it lends to financial institutions, the first such cut in nearly a year. It lowered the one-year medium-term lending facility (MLF) rate to 2.3%, from 2.5%. The bank issued ¥200 bln in loans to banks at this rate.This rate cut is part of Beijing's attempts to spur a sluggish economic growth. This was just a part of actions taken yesterday. It is also expanding a subsidy program to get more people buying cars and consumer electronics. This will cost them ¥300 bln, paid for out of their issue of ultralong special treasury bonds. The subsidies for those trading in their passenger cars for new energy vehicles will double to ¥20,000, compared to the ¥10,000 subsidy announced in April. Trade-ins for petrol vehicles will rise to ¥15,000 from ¥7,000 per vehicle.Global container shipping rates stayed very high last week, but they did slip a small -2% from the week before and are just off their peak. That makes them +268% higher than a year ago. There seems no relief in sight yet. Bulk cargo rates were little-changed last week to be +24% higher than year-ago levels.The UST 10yr yield is now at just on 4.27% and down -2 bps from this time yesterday. The price of gold will start today down a very sharp -US$60 from yesterday at US$2352/oz. That is down -2.5% on the day.Oil prices are +50 USc firmer at just over US$78/bbl in the US while the international Brent price is just on US$81.50/bbl.The Kiwi dollar starts today weaker, down another -40 bps at just under 59 USc. That is a -3.4% devaluation since the start of the month. Against the Aussie we are down -10 bps at 90 AUc. Against the euro we are down a full -½ at 54.3 euro cents. That all means our TWI-5 starts today at 68 and down -40 bps from yesterday and that is near a two year low.The bitcoin price starts today at US$64,827 and down -2.6% from this time yesterday. Volatility over the past 24 hours has been moderate, also at +/- 2.6%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news China seems to be making a play to avoided as an investment destination.But first, initial US jobless claims fell to just +192,000 last week when a small increase was anticipated. Still no labour market stress signals here. The total number of people on these benefits fell below 1.7 mln, the lowest level of the year. The insured unemployment rate remains at a very low 1.1%.The globally benchmarked S&P Global/Markit factory PMI for the US rose (to 50.9) in May from its steady state in April although it did not get its boost from new orders this time. But new order growth was a feature of their May services PMI (54.8) with an impressive display and a two year high.This May strength is yet to show up in the Chicago Fed's National activity Index which slipped slightly in April. But it is showing up in the Kansas City Fed's factory survey which recorded a good recovery.It definitely did not show up in the April new home sales data, which in the month ran at almost -8% lower than the year-ago level. The retreat has been gradual each month in that period, but relentless.Perhaps we should note that there was another case reported where bird flu in US dairy cows has jumped to a human. Officials still say the risk is low.The internationally-benchmarked May S&P Global (Markit) PMI for Japan delivered its fastest expansion in nine months. Their previously shrinking factory sector rose to a minor expansion (50.5) while their service sector expansion slipped slightly (53.6).India's PMI data continued its strong run in May, for both the factory and services sector. A feature is the growing rise in exports, presumably benefiting from the China de-risking trend.Taiwanese industrial production was up more than +14% from a year ago in April. That is partly a reflection of weakness a year ago but for the past three months the month-on-month rises have been impressive and March was notably revised higher. Their retail sales growth was more modest however although its base was more solid. All this comes before the full-court pressure the PLA is currently applying to the island nation, a crude show of force in the Russian style.Beijing's claim that they are 'prioritising business reforms' rings hollow in light of the Taiwan pressure.In Europe, their economic recovery gained momentum in May, according to provisional PMI survey data. Faster increases in business activity, new orders and employment were all recorded in the month, while business confidence hit a 27-month high. This recovery is being led by Germany. Meanwhile, rates of inflation of both input costs and output prices softened from April, but remained above pre-pandemic averages in each case.Australian inflation expectations, as monitored in a respected Melbourne Institute survey, eased to 4.1% for the year ahead, down from 4.6% last month. The last time they measured actual inflation, it came in at 3.5% in March.The internationally-benchmarked May S&P Global (Markit) PMI for Australia delivered another small contraction in the factory sector (49.6) but a good expansion in the service sector (53.1). But both levels were lower than March and April. New orders retreated in both sectors, but to be fair the reductions were slight and the least in the past three months.The tighter global security situation has seen the container freight rates leap again, up +16% in the week to their highest in at least a year. The jump is all about outbound cargoes from China which emphasises the risks of trade from there. The Taiwan situation will make it even worse next week. So far, bulk cargo rates haven't moved much in the past week.The UST 10yr yield is now at 4.48% and up +5 bps from this time yesterday. The price of gold will start today still in a sharp down-trend, down another -US$51 at US$2336/oz. That is now down -US$119 from its all-time high on May 20, 2024, a -4.8% retreat.Oil prices are down another -US$1 at US$76.50/bbl in the US while the international Brent price is down a bit less to under US$81/bbl.The Kiwi dollar starts today unchanged from yesterday at just on 61 USc. Against the Aussie we are firmer, up +¼c at 92.3 AUc and a two-month high. Against the euro we are firmish at 56.4 euro cents. That all means our TWI-5 starts today just on 70.4, and up +10 bps from yesterday.The bitcoin price starts today at US$67,776 and down -3.0% from this time yesterday. Volatility over the past 24 hours has been modest however at just on +/- 1.8%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

The St. Louis Fed's Matuschka Lindo Briggs, senior vice president and regional executive of the Little Rock Branch, and Chad Wilkerson, senior vice president and Oklahoma City Branch executive for the Kansas City Fed, discuss their insights on the Arkansas and Oklahoma regional economies.

The Federal Reserve is one of, if not the most, significant institutions in the world given the global impact of its policy decisions. It influences the price of nearly everything, as well as the availability of jobs, the stability of our banking system, and the purchasing power of our money. When the Fed Chair speaks, the entire world stops to listen. But the average person has a poor understanding of how this colossally important entity operates or even why it exists. And after a series of asset price bubbles -- which some argue we're in another one now -- a chorus skeptical of the Fed's actions has emerged. So today we're doing our best to shine as bright a light as possible on the Fed: how & why it operates, the good & as well as the shortcomings of its actions to date, what direction its policies are likely to take from here, and how all of this impacts the households of regular people like you and me We have the great privilege of speaking today with Thomas Hoenig, former CEO of the Kansas City Fed, former voting member of the Federal Open Market Committee, a former director of the FDIC, and now a Distinguished Senior Fellow at the Mercatus Center. Follow Dr. Hoenig at https://substack.com/profile/131926993-thomas-hoenig WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com #federalreserve #inflation #money

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news India is the world's bright economic star at the moment.But first in the US, the actual number of people claiming jobless benefits fell last week, but by less than expected to 194,000. Continuing jobless claims were unchanged at 2.1 mln, still the highest since November. It was a mixed picture. Seasonally these levels are higher than was expected.American PCE inflation for January came in at the expected 2.4% which was a dip from the December 2.6%. Core PCE dipped slightly too. Personal income jumped an outsized +1.0% in January from December which puts it +2.1% higher than a year ago (real), while personal spending rose +0.3% on the same basis, also +2.1% higher than a year ago (also real).The Chicago PMI fell again, its third straight fall. But there was a sharp recovery in the Kansas City Fed factory survey although new order growth was flat.American pending home sales in January dropped -4.9% as the residential sector stays in the doldrums. The Northeast and West posted monthly gains in transactions while the Midwest and South recorded losses. All four U.S. regions registered year-over-year decreases.Canada data for Q4-2023 GDP shows them returning to growth.Japanese industrial production disappointed in January, coming in -1.5% lower than a year ago. Meanwhile, retail sales in Japan rose +2.3% year-on-year in January, slowing slightly from an upwardly revised +2.4% gain in December.Meanwhile, Taiwanese retail sales grew just +0.3% year-on-year in January, the lowest expansion since February 2022. But Taiwanese industrial production surged in January, up +16% from a year ago.India released its Q4 GDP results beating both forecasts and the strong Q3 expansion, to be +8.4% larger than the same quarter a year ago. The Indian economic performance is a strong global highlight. It is impressive given how large it is, a famously difficult place to generate change. (But we probably should be a bit sceptical on this data. The Modi Government has a tight control over their stats, and an election is looming. Just saying ...)But there are never any contested elections in China. China's per capita gross national income declined in US dollar terms for the first time in 29 years in 2023, data released yesterday shows, pulling it further from the World Bank's threshold for a high-income country. The comparison with India will be causing some concern in Beijing now. China's solution to their woes? More state planning and directed SOE activity. They seem a bit lost at the moment.The -1.4% decline in real German retail sales continued in January. But that seems to be the price they are prepared to pay to get inflation back to where they need it. In February it fell to +2.5%, its lowest since mid 2021. In between it peaked at almost +9%.In Australia, the January retail sales brought a modest bounce, but not to a level that satisfied anyone.Container freight rates eased again last week, but remain very high for the usual climate (Panama) and security (Suez) restriction reasons. They are still almost +90% higher than year ago levels. Bulk cargo rates are rising now too, up a sharp +24% in the past week alone.The UST 10yr yield starts today at 4.25% and down -4 bps from this time yesterday. The price of gold will start today up +US$13/oz from yesterday at US$2045/oz.Oil prices are up +US$1 at just under US$79/bbl in the US while the international Brent price is now just over US$82.50/bbl.The Kiwi dollar starts today at just on 60.9 USc and little-changed from this time yesterday. Against the Aussie we are down marginally at 93.7 AUc. Against the euro we have firmed slightly to 56.4 euro cents. That all means our TWI-5 starts today at just over 70.3 and little-changedThe bitcoin price starts today at US$62,275 and up +0.82% from this time yesterday. Volatility over the past 24 hours has been high at +/- 3.9%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

The former Kansas City Fed president talks about the persistence of inflation, when the central bank is likely to lower interest rates, how worried she is about office CRE, the lessons from the failures of three regional banks last year, whether she supports a central bank digital currency, and the future of community banks.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news the giant US economy grew by +US$1.4 tln in 2023, shrugging off all recession predictions.US initial jobless claims rose last week, and by more than expected, but were still at near the bottom of their ranges. There are now 2.06 mln people on these benefits, lower than last week but there were 1.86 mln on these same benefits a year ago. The seasonal retreat isn't as strong as last year, so the overall level is creeping up.US durable goods orders came in in December less than expected and continuing their recent yoyo pattern. They were virtually unchanged in December 2023, after a +5.5% rise in November and missing market expectations of a +1.1% rise. Excluding aircraft, new orders increased +0.6%. Capital goods orders however were up a very strong +9.8% in December from a year ago, and holding November' very good level.The big news however is that the US economy expanded at a +3.3% rate in Q4-2023, much better than forecasts of a +2% rise, and following a stellar +4.9% rate in Q3. Consumer spending on goods slowed while consumption of services rose faster. Also helping were a rise in exports. For all of 2023, the giant American economy rose +2.5% in real terms and generated US$27.9 tln in economic activity in the year, up an additional +US$1.4 tln or +5.8% more nominally, +2.5% in real terms. That is a larger expansion in volume terms than China's in the same period and is like adding two thirds of Australia over the past twelve months.The current manufacturing sector isn't delivering its share of this expansion however. The Chicago Fed's National Activity Index fell slightly in December, after being downwardly revised slightly in November, indicating activity contracted during the last month of the year. All four broad categories of indicators decreased from November, and three of them made actually contracted.And the Kansas City Fed manufacturing survey retreated rather sharply in January too.US new home sales came in +4.4% higher in December than a year ago, and residential building consents were up +1.8% in the same monthChina is going through a crisis of confidence, one triggered by tightening State control and lackluster economic performance. Their 'security' push to suppress news that isn't positive for the Party is corroding confidence inside and outside the country. It is particularly obvious in a transformed and chilled Hong Kong.South Korea reported a GDP expansion of +2.2% in Q4-2023 over the same quarter a year ago. This was better than expected and the +1.4% rate in Q3-2023.As expected, the ECB kept its hawkish hold position in the face of continuing inflation pressures, and it kept its quantitative tightening program. It claims credit for reducing inflation however due to its set of 2023 rate hikes.Today is a public holiday in Australia, "Australian Day". (Monday is a public holiday in Auckland.)Globally, container freight rates rose by another +5% last week as the latest supply chain pressures in the Red Sea (and the Panama drought) continue to bite. A feature of the latest changes is that trans-Pacific shipping rates are making a sharp catchup even though they are not directly involved. But still, there is no equivalent rise in rates for bulk cargoes.The UST 10yr yield starts today at 4.14% and down -2 bps from this time yesterday. The price of gold will start today up +US$2/oz from yesterday at just on US$2014/oz.Oil prices are up another +US$1 at just over US$76.50/bbl in the US while the international Brent price is now just over US$81/bbl.The Kiwi dollar starts today at 61.1 USc and unchanged from this time yesterday. Against the Aussie we are little-changed at 92.9 AUc. Against the euro we are marginally firmer at 56.4 euro cents. That all means our TWI-5 starts today just on 70.1 and essentially unchanged in a day.The bitcoin price starts today a little lower. It is now at US$39,703 and down -1.1% from this time yesterday. Volatility over the past 24 hours has been low to modest at just on +/- 1.0%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Agricultural credit conditions in the Kansas City Fed's Tenth District softened during the third quarter of 2023.See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news of some weaker American data overnight that has brought a risk-off tone to financial markets and a pull-away from commodity currencies like the NZD.US jobless claims rose marginally last week but the weekly series of small rises are now adding up and they are now at their highest in almost 3 months. The level is still very low, even on a post-pandemic basis, but the trend is becoming noticeable. There are now however less than 1.6 mln people on these benefits so those falling off coverage is actually higher than new claimants.Overall industrial production in the US fell -0.6% in October from September, the most in 4 months and more than market expectations. It is now -0.7% lower than a year ago.Both the Kansas City Fed and Philly Fed's factory surveys came in with marginal overall improvements for November however. One reported lower new order levels, the other positive levels.Canadian housing starts were impressive in October, rising from September when a fall from that already high level was expected. These starts were especially strong in Vancouver. Year-on-year they were up +3.9%.Japanese machinery orders rose in the September data released overnight and by more than expected. But they remain -2.2% lower than year ago levels even if this is the least annual decline in 2023. Their look ahead however isn't especially positive.Official data for Chinese house prices was glum again, and given the low volumes and sensitivity of this data, maybe not really telling the full story. Anyway that official data reveals further small declines in new house prices, larger declines for used houses. Only 11 of their 70 largest cities posted rises in new prices. And in only 2 of them did used house prices rise. It seems unlikely the official price data really reflects the state of their housing markets.In Australia, their jobless rate rose to 3.72% in October and it's highest since May 2022. Employment rose by +54,900 but +37,900 of those were part-time roles. Part time workers now make up 30.7% of their employed workforce, the highest proportion since March 2022.The recent rising trend in container shipping freight rates came to an end last week with prices falling -2% from the week before. Bulk cargo freight rates are still rising however.The UST 10yr yield is back down -11 bps from yesterday, now at 4.44% in a return to levels of two days ago. The price of gold will start today at US$1982/oz and up +US$21/oz from yesterday.But oil prices have crashed -US$4.50 overnight, to be just over US$73/bbl in the US. The international Brent price is now down to US$77.50/bbl. Driving this were unexpected high American oil inventories.The Kiwi dollar starts today at 59.8 USc and back down -½c from yesterday. Against the Aussie we are little-changed at 92.4 AUc. Against the euro we are also down -½c from yesterday at 55.1 euro cents. That all means our TWI-5 starts today at just on at 69.2, and a net -40 bps lower.The bitcoin price starts today at US$36,570 and up a net +0.6% from this time yesterday. Volatility over the past 24 hours however has also been moderate at just on +/- 2.3%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news, so far the sky is not falling despite the higher benchmark interest ratesFirst in the US, the actual number of new initial claims for jobless benefits fell to just under 175,000 last week, emphasising the continuing strength of the American labour market. True, the seasonally-adjusted version rose marginally, but even so, this data has been falling since July and is almost back to the very low levels they had a year ago. It might not be 'news' but it is an impressive run, one that makes it much harder for the Fed to meet its inflation-fighting mandate even if it is acing its full employment one.They also released their third and 'final' Q2-2023 GDP result today, confirming it rose at an annual rate of +2.1%, a minor slip from the Q1 rate of +2.3%. (That took their GDP on a nominal basis to US$27.1 tln, up +5.9% from a year ago or a gain of +US$1.5 tln. Inflation accounted for US$0.9 tln of that however.) It is likely that the real, inflation adjusted expansion for Q3 will be very much faster than Q2, perhaps twice as fast with a +4.9% growth.But one American sector remains firmly in the doldrums, their residential real estate sector. Pending home sales for August fell a whopping -18.7% from a year ago with a very sharp fall in August from July. No asset class has immunity from asset price revaluation in a rising interest rate market, and certainly housing doesn't.The Kansas City Fed's September factory survey reported slippage across the board, including for new orders. But interestingly, not for employment.In Canada, weekly earnings are rising faster, up +4.3% from a year ago. Their CPI was +4.0% over the same period. The earnings rise was their fastest since March 2022.EU business sentiment was stable in September, in contrast to the reversing consumer sentiment levels.Meanwhile, Germany released is September CPI data overnight and while still high at 4.5%, this was lower than expected (4.6%) and sharply lower than in August (6.1%), and their lowest since February 2022.Container shipping freight rates fell sharply again last week, down -5.1% from the prior week to be 65% lower than year-ago levels. Trans-Atlantic rates seem to have bottomed out, but again it is the outbound rates from China that still show the main weakness. Bulk cargo rates are still rising however, and are back near year-ago levels, and pretty much near their long term averages.The UST 10yr yield starts today down -2 bps from yesterday at 4.62% but essentially holding its recent high. The inverted curves are flattening more. The price of gold will start today at just on US$1863/oz and down another -US$12 from yesterday. This is a new low since February 2023, all driven by the sharply rising yields. China's gold price has risen faster than in most other global markets, but overnight it plunged lower, wiping out most of the premium that had built up.After getting as high as US$95/bbl overnight, oil prices are moving back down today, -US$1.50 lower than this time yesterday at just under US$91.50/bbl in the US. The international Brent price is just under US$93.50/bbl. The surge to US$100 being talked about isn't happening today although the long-term trend is still firm.The Kiwi dollar starts today at 59.7 USc, up +½c from this time yesterday. But against the Aussie we are down almost -¼c to 92.9 AUc. Against the euro we little-changed at 56.5 euro cents. That all means our TWI-5 starts today at 69.6 and up +20 bps.The bitcoin price has moved sharply higher today from yesterday, and it is now at US$27,191 up a strong +3.7% from then. Volatility over the past 24 hours has been moderate at just under +/-2.3%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

At Jackson Hole, the Kansas City Fed's annual gathering for economists and central bankers, there's a lot of focus on the short-term path of monetary policy. But, of course, the Economic Symposium is supposed to be about long-term policy frameworks. And central bankers aren't just responsible for changing benchmark interest rates — they are also financial regulators. On this episode, we speak with Hyun Song Shin, economic advisor and head of research at the Bank for International Settlements, about where he sees risks lurking in the financial system now. We discuss the shift from bank lending to bond-based borrowing, and what it means for inflation now. We talk about how even safe assets like US Treasuries can become sources of stress, such as in March 2020, the gilt crisis of last year, and most recently, the collapse of Silicon Valley Bank. We also talk about how higher interest rates are supposed to bring down inflation, but might not be doing that much currently, as well as the limits of central banking.See omnystudio.com/listener for privacy information.

In this Real Estate News Brief for the week ending August 26th, 2023… tough talk on inflation from the Fed Chief, when and why we might see a surge in home prices, and what Texas is doing to manage a booming economy north of Dallas.   We begin with economic news from this past week and comments from Fed Chief Jerome Powell. He delivered the keynote address at the Kansas City Fed's annual retreat in Jackson Hole, Wyoming. He reiterated previous sentiments about making progress on inflation, but says it's still too high and the central bank plans to “keep at it until the job is done.” He said: “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective” – which is 2%...    ...The North Texas area is becoming a global technology hub as semiconductor companies move into the area. That's creating tens of thousands of jobs, and with all those jobs, a surge in housing demand. We are capitalizing on this opportunity at RealWealth with a North Dallas Rental Fund for accredited investors. You can find out more about this fund at growdevelopments.com.   That's it for today. You can listen to past episodes and check for links to our news sources at newsforinvestors.com. You can also sign up for a free RealWealth membership while you are there to learn more about how and where to invest in real estate. And please remember to subscribe to this podcast, and leave a review!   Thanks for listening! Kathy Fettke   Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy's audiobook on Audible at: https://tinyurl.com/retirerichaudible   Links:   1 - https://www.marketwatch.com/story/powell-unsure-of-the-need-to-tighten-further-b43a9d18?mod=federal-reserve   2 - https://www.marketwatch.com/story/jobless-claims-drop-to-3-week-low-of-230-000-still-no-sign-of-rising-u-s-layoffs-1f1411f6?mod=economic-report   3 - https://www.marketwatch.com/story/u-s-home-sales-fall-in-july-as-rates-rise-and-listings-fall-33b79a54?mod=economic-report   4 - https://www.marketwatch.com/story/u-s-new-homes-sales-rise-4-4-in-july-533ab184?mod=economic-report   5 - https://www.freddiemac.com/pmms   6 - https://markets.businessinsider.com/news/commodities/housing-market-outlook-recession-home-prices-mortgage-rates-fannie-mae-2023-8   7 - https://finance.yahoo.com/news/house-prices-wont-fall-ndash-195516944.html   8 - https://www.rentcafe.com/blog/rental-market/market-snapshots/new-apartment-construction/ 9 - https://www.bizjournals.com/dallas/news/2023/08/18/txdot-greg-abbott-115-billion.html

This is a narration of our weekly Rent and Operating Trends Report.Fed Chair Jerome Powell gave a very middle of the road speech last week at the Kansas City Fed's Jackson Hole symposium. The leader of the central bank acknowledged that tightening monetary policy has had its desired impact on inflation, but also warned that inflation may come back, thus warranting further interest rate increases. He neither suggested nor refuted that another interest rate hike would be needed, and the Fed will continue to monitor pertinent economic data before making their next policy decision in a few weeks. Two key data points they will be monitoring will be the Personal Consumption Expenditures Index (PCE) and second quarter Gross Domestic Product, both of which will be released this week. The PCE index is the Fed's preferred inflation indicator and as of June measured 3.0% growth on an annual basis, just at the top end of the Fed's ideal range.Apartment performance continues to decline modestly at the national level. Rents are falling on a week-over-week basis, and leading indicators including traffic and leasing are either flat or negative from week to week. Interestingly occupancy has increased by the smallest of margins in each of the past two weeks, however the slight growth is not enough to indicate a longer-term trend in my opinion. With roughly four months remaining in 2023, key operating metrics will likely continue to soften, but the overall housing shortage and the increasing cost of home ownership will protect our industry from any major declines. Market-by-market weakness will be apparent as new supply is delivered and absorbed.Explore our Research webpage for more insights and resources: https://bit.ly/RadixResearch.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news that all the 'rich men north of Richmond' have now decamped to Jackson Hole WO, and are awaiting Fed boss Powell's speech.So today we are left with the granular details of the American economy - which is actually doing remarkably well for the non-rich men south of Richmond (even if they can't actually acknowledge it).New jobless claims last week fell to under +200,000 which is a low benchmark and confirming their labour market is in pink health still. There are now still 'only' 1.8 mln people on these benefits, an unusually low level even if has become normalised over the past two years.American durable goods orders in July recorded a rather sharp -5.2% decrease following a +4.4% rise in June. But the July drop is all about the timing of large aircraft orders. Excluding those, durable goods orders rose in July. And overall they are +3.3% higher than year-ago levels. Orders for capital goods are +4.2% higher than a year ago. None of this suggests rust-belt activity is under any special pressure.And the Chicago Fed's more broad national activity index pointed to a pickup in economic activity in July, again belying the doomsters.And this in turn is confirmed by the Kansas City Fed factory survey which reported a sharp recovery in their key measures. And firms surveyed indicated that they expected a further pickup in the months ahead, so hiring remained positive.The rich men north of Richmond seem to be organising an expansion that is keeping those south of Richmond in a positive economic state. New research shows that American males won't leave their jobs unless the new offer is US$78,645 pa on average (NZ$133,000), +8% higher than a year ago when CPI inflation is only 3.0%. That is the highest on record. (And for men - who seem attracted to the viral anthem - they won't switch jobs unless the offer is US$91,000 (NZ$154,000).) They may 'feel' left behind but clearly it is their sense of entitlement that is the thing that is unmoored.In Turkey, the shift back from the disastrous Erdogan experiments with their monetary policy positions is requiring some rather sharp changes. Today they raised their benchmark policy interest rates by +750 bps to 25% following a +250 bps hike in the previous meeting. This rate has risen from 9% in June. All this is in the face of a currency that devalued by -77% from the pre-pandemic period and an inflation rate that is still at 48%. However, this latest indication that they are serious about tackling inflation saw the Turkish currency gain more than 5% against the USD in a day.In China, the stories about foreign investors pulling out their exposures just keep on coming.The recent rise in container freight rates hasn't been maintained in the latest weekly assessment. They fell -3.5% last week from the prior week, with the falls occurring on all major routes. Bulk cargo rates reversed to be lower too.The UST 10yr yield will start today at 4.23%, recovering +3 bps from this time yesterday in a small bounce.The price of gold will start today at US$1917/oz and unchanged from this time yesterday.And oil prices are down yet another -50 USc at just over US$78.50/bbl in the US. The international Brent price is now just over US$82.50/bbl.The Kiwi dollar starts today another -½c weaker at just on 59.2 USc. Against the Aussie we are softer at 92.2 AUc. Against the euro we are -¼c softer at 54.8 euro cents and a two week high. That all means the TWI-5 is now at 68.4 and down -40 bps from yesterday.The bitcoin price is lower today and now at US$26,033 and down by -1.8% from yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.8%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

This is a narration of our weekly Rent and Operating Trends Report.Economists will be focused more on the qualitative information coming out this week than the quantitative data being released. The Kansas City Fed hosts its annual symposium in Jackson Hole, and Chair Jerome Powell will be delivering the keynote address on Friday. Ahead of the meeting, three other Fed governors are expected to give speeches on Tuesday. While it is unlikely the leaders of the Fed will share explicit information regarding upcoming monetary policy changes, their tone and language should provide insight into additional rate hikes or the end of monetary tightening. The 10-year treasury rate, which typically follows the market's view of intermediate to long-term inflation, has been rising rapidly in the past few weeks. It currently sits at its highest yield since 2007. The multifamily market continued its moderation last week. Net effective rent fell 10 basis points last week, the second consecutive week of rent declines at the national level. This marks the first back-to-back NER drop since last December. Occupancy increased ever so slightly, rising one basis point last week. Nationwide occupancy remains almost a full percentage point below its level from this time last year. Traffic and leasing remain stable as the third quarter progresses.  Explore our Research webpage for more insights and resources: https://bit.ly/RadixResearch.

For the first time, credit card debt in the U.S. has hit $1 trillion. The record was hit thanks to a combination of inflation, high interest rates and Gen Z confidence. Plus, the Biden administration is expected to restrict U.S. firms from investing in certain kinds of China-based tech. We’ll also discuss diversity at a major upcoming economic conference. Update (8/9/23): The story about diversifying the Kansas City Fed's Economic Policy Symposium has been updated to accurately reflect Boston Fed President Susan Collins’ involvement. For more information, check out the story on marketplace.org.

For the first time, credit card debt in the U.S. has hit $1 trillion. The record was hit thanks to a combination of inflation, high interest rates and Gen Z confidence. Plus, the Biden administration is expected to restrict U.S. firms from investing in certain kinds of China-based tech. We’ll also discuss diversity at a major upcoming economic conference. Update (8/9/23): The story about diversifying the Kansas City Fed's Economic Policy Symposium has been updated to accurately reflect Boston Fed President Susan Collins’ involvement. For more information, check out the story on marketplace.org.

Farm lending activity at commercial banks in the Kansas City Fed's district slowed through the first half of 2023 as interest rates continued pushing higher.See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news bond markets are coming around to believing the US Fed signals, reversing their view that their call for high rates was 'just talk'.But first, US jobless claims stayed up at 250,000 last week at about the level expected. There are 1.67 mln people still on these benefits unchanged as well and also staying up. Although both are now higher than year-ago levels, they remain historically low and don't alter the underlying tightness of their labour market. But you do get a sense the next movement will be an unwinding of their benign labour market conditions.The Chicago Fed's National Activity Index turned marginally negative in May after a positive showing in April.The Kansas City Fed's regional factory survey turned more negative in June as well, as did the Conference Board's index of leading indicators. Both were as expected.Meanwhile American existing home sales edged marginally higher and by more than expected in May, an improvement on the April retreat.China is on vacation for its Dragon Boat Festival, a three day break. They are expecting more than 100 mln tourist trips this year which is actually higher than pre-pandemic levels.Although still deeply negative and below its long term average, EU consumer sentiment rose in June to keep the improvement that started in November going. And it is worth noting that this is now one of the steepest continuous rise in sentiment since this survey began in 2007 and the pace of improvement shows no sign of slowing down.Overnight both Norway and England raised rates by more than expected. In Norway's case they rose +50 bps to 3.75%. In the UK case they also rose +50 bps to 5.0%. In both cases markets had expected a +25 bps rise. Norway has inflation running at 6.7% and the UK has it running at +8.7%, so both central bank policy makers clearly realised they aren't leaning against these price pressures hard enough. And the more important regional benchmark is the ECB policy rate which is 4.0% which was raised by +25 bps last week with inflation at 6.1%. With the ECB positions as backdrop the English and Norwegian rate increases make regional sense.Separately, the central bank of Turkey raised its policy rate from 8.5% to 15% in the expected reversal of the prior unorthodox approach that brought raging inflation. You will recall that post-election the President changed out both his Finance minister and the head of their central bank in a clear signal things would change. Actually the +650 bps hike was less than markets had expected. Markets were expecting a bigger increase to 21%. The Turkish lira sank on a decision seen as timid.In the widely-watched rankings of 'liveable cities', Vienna, Copenhagen, Sydney and Melbourne took out the top four spots in 2023. Auckland rose sharply to #10 and Wellington to #23. In conjunction with open borders, this is driving Sydney house prices higher.And staying in Australia, regulator ASIC said 5.6 mln policy holders are on track to receive AU$815 mln in compensation after they uncovered pricing failures by 11 general insurers that led to clients being overcharged for their insurance. 6.5 mln policies were involved between January 2018 and October 2021.The cost of shipping containers continues to fall, down -3.5% again last week. It is saying something about the state of global trade and it is not positive. The bulk cargo shipping costs are however rising again and are at about at a long-run average levelThe UST 10yr yield will start today rising at 3.79% and up +7 bps. The price of gold will start today down another -US$19 at US$1916/oz and it hasn't been this low since early March.And oil prices are down a sharp -US$3.50 from yesterday to now be just over US$69/bbl in the US. The international Brent price is now just on US$74/bbl.The Kiwi dollar starts today at 61.8 USc and down -¼c from yesterday. Against the Aussie we are marginally firmer at 91.5 AUc. Against the euro we are little-changed at 56.4 euro cents. That means the TWI-5 is now just on 69.8 and also little-changed.The bitcoin price has firmed slightly from this time yesterday and now at US$30,132 with minor rise of +0.3%. Volatility over the past 24 hours has been modest at just over +/- 1.6% in sharp contrast to the past few days.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news that despite the expectations of bears, the US labour market hasn't wobbled yet.US jobless claims rose +213,000 and a small dip from the previous week. This was about what markets expected and still no indication a any special American labour market stress. There are now less than 1.9 mln people on these programs. This overall little-changed result is actually quite impressive given all the news of growing tech and start-up layoffs recently.Sales of new single family houses rose +1.1% in February from January to an annualised rate of 640,000, the highest level since August last year. Given the upturn in the existing home market, analysts had expected an even stronger result however. And the industry will be disappointed because they have more than 8 months of unsold inventory at present.The Chicago Fed's national activity index for February revealed little material change even if the index softened marginally.The Kansas City Fed factory survey also had little-material change but at least it was positive in March.Canada's population is now approaching 40 mln in a fast 2022 spurt. They added a record +1 mln new people over in 2022, largely boosted by immigrants and the substantial intake of Ukrainian refugees. The expansion is a stunning +2.7% in one year, their fastest ever post WWII.Taiwan's industrial production fell a sharp -8.7% in February from the same month a year ago. But as bad as that sounds, it is far less than the -20% retreat in January. Still it is the fifth month-on-month fall in the past six months, and global tech demand, especially from China, remains very weak.Taiwanese retail sales slumped in February from January, but were still up +4.2% above year-ago levels. This is quite good in fact given their inflation ran at 2.4% over the same period.Taiwan's central bank raised their policy rates by +12.5 bps with their key rate now 1.875% with a hike that wasn't expected.The EU's consumer sentiment survey for March was out overnight and while it remained quite negative, it remained near its best level in over a year.Overnight three European central banks reviewed their policy rates and two mimicked the US Fed with a +25 bps rise. Norway raised theirs to 3.0% and England raised theirs to 4.25%. Norway has inflation running at 6.3% and in England it is running at 10.4%. The Swiss raised their by +50 bps to 1.5%. They also reminded investors in Tier 1 bonds that they agreed to have them treated as capital in the event of a bank failure and those who invested in Credit Cuisse AT1 bonds can have no complaints because that is what they agreed to.In Australia, the State of NSW votes this Saturday, and the latest poll suggest that the ALP is widening its lead over the Liberal incumbents. Freight rates for global containerised shipping fell again last week, extending the long decline. They fell another -2% in a week to be almost -80% below year ago levels and are now -35% lower than ten year averages. Bulk freight rates, which have been rising recently, topped out this week and are also falling now too.And the lithium price retreat is getting even steeper.The UST 10yr yield starts today at 3.44% and down a large -11 bps from this time yesterday, and back to early February levels. The price of gold will open today at US$1995/oz and up a strong +US$47 from this time yesterday. And that is a new one-year high for the yellow metal.And oil prices start today a little softer from yesterday at just over US$70/bbl in the US. The international Brent price is still just under US$76/bbl.The Kiwi dollar is up almost +½c against the USD and now at 62.9 USc. Against the Aussie we are also almost +½c firmer at 93.5 AUc. Against the euro we are also a little firmer at 57.7 euro cents. That puts the TWI-5 up at 70.6 with a +20 bps gain.The bitcoin price is marginally lower today, now at US$28,544 and down -0.5% from this time yesterday. And volatility over the past 24 hours has been very high however at +/-4.1%.You can find links to the articles mentioned today in our show notes.Good journalism and independent financial news coverage is an expensive business and we need your support to keep doing what we do.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Thomas Hoenig was the President of the Kansas City Fed for 10 years.  He tells Fox Business that the deep part of the recession is still in front of us.  What's your action plan heading into the new year? Hear how Steve can help protect and grow your income and create a market protection plan! Call Steve today for your complimentary Market Protection Plan! 

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news underlying resilience is holding the global economy from any meaningful pullback.There are no real signs yet of weakness in the American labour market. Their jobless claims were expected to rise last week, but they fell and were below their low year-ago levels. There are now 1.9 mln people on these benefits, 1.3% of their workforce.The American Q4-2022 GDP growth data was updated today. Recall the advance estimate was a surprise +3.1% rate and this latest update was expected to trim that to +2.9%. But in the event, it has come in even lower at +2.7%. Actually, this second estimate recorded a higher nominal expansion, but also a higher price adjustment, so the 'real' expansion is lower. There will be a third estimate released on March 31 (NZT). The Q4-2022 New Zealand GDP result will not be released until March 16.The next regional Fed factory survey is out, this one from the Kansas City Fed district. It shows a slight easing of conditions there, but they did record gains for new orders and jobs, which is more positive than many other districts.In fact, the Chicago Fed's National Activity Index suggests economic growth picked up in January, and probably its best expansion in six months.Taiwanese industrial production slumped more than -20% in January from a year ago in a worrying dive. But their retail sales rose on the same basis, although at a fast-easing rate.Singapore's inflation rate was little-changed in January at 6.6% (December 6.5%). But this was less than the expected 7.1% so they will count this as a win.In South Korea, they had a monetary policy review yesterday and they held their benchmark interest rate at 3.5%, as expected. This is regarded as a hawkish pause as more voting members seem to be open to future hikes. They are still battling inflation above 5%, but their expansion is slowing.We should note that the case of mad-cow disease in Brazil has been confirmed. Already, exports to China have been suspended. This may rock beef prices in the short-term and the share price of all the major Brazilian exporters have been hit hard.In Australia, a migration boom is underway. More than 400,000 permanent workers arrived in the country in 2022, and while this pace is expected to ease off, they still expect +350,000 this year and another +275,000 next year. That is +1 mln in just three years, and alone will raise Australia's population by +4% and decrease its average working age. They seem to be up for the inevitable stresses that may bring in the short term. If demographics is destiny, then Australia's looks bright.The OECD is noting that international trade contracted in value terms in Q4-2022, although some of that is related to the sharp falls in the price of crude oil.Reflecting that pullback, global container shipping rates fell another -3% last week and are now -30% below ten year averages. Bulk cargo rates actually stopped falling this week and turned a little high, but are still near their pre-pandemic lows.The UST 10yr yield starts today at 3.91% and up +1 bp from yesterday but still off its recent highs. The price of gold will open today at US$1820/oz and down -US$12 from this time yesterday.And oil prices start today up +50 USc at US$75/bbl in the US. The international Brent price is now at US$81.50/bbl.The Kiwi dollar is at 62.1 USc, softer than this time yesterday. Against the Aussie we are a little firmer at 91.8 AUc. Against the euro we are unchanged at 58.7 euro cents. That all takes the TWI-5 to 70.3 and a -10 bps easing.Bitcoin has risen +1.1% since this time yesterday and is now at US$23,865. However, volatility over the past 24 yours has again been moderate at +/-2.1%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Amerikaanse bedrijven hebben in 2021 prijzen meer verhoogd dan de kosten zijn gestegen. Dat heeft de Kansas City Fed berekend. 'Daar komt meer dan de helft van de inflatie in dat jaar ook uit voort', zo weet econoom Edin Mujagic.  Volgens de regionale centrale bank hebben de bedrijven dat gedaan met de verwachting dat de kosten de aankomende jaren structureel zullen stijgen. En dat verklaart waarom de winstcijfers de afgelopen twee jaar zo goed bleven, denkt Mujagic. 'Ondanks de hoge inflatie, ondanks de lage economische groei, ze bleven winst maken.' Hij stelt zich dan ook hardop de vraag wanneer het bedrijven lukt om prijzen te hoog te maken. 'Ik denk dat het magische woord 'concurrentie' is', vervolgt hij. 'Als je weinig concurrentie hebt, kun je heel gemakkelijk de prijzen verhogen. En als we met die bril naar de Amerikaanse economie gaan kijken, dan wijst heel veel erop dat er in driekwart van de sectoren in de Amerikaanse economie sprake is van twee of drie bedrijven die het leeuwendeel van de markt in handen hebben. En dan begrijp je dat het ook in de Verenigde Staten redelijk gemakkelijk is om de prijzen wat verder te verhogen dan de stijging van de kosten. Die macht hebben ze nou eenmaal.'See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news economic weaknesses except in some key labour markets.We follow American jobless claims, looking for early signs of labour market stress. But despite other weakish economic signals, this key sector isn't showing that yet. There were just 199,600 new claims last week, a very low level. There are now 1.237 mln people on these benefits, also historically low.But there were weak signs continuing from their housing markets. New housing starts slipped again last month to be -8.8% lower than year-ago levels. Building consent levels -10% lower on that basis. But it is worth noting that both are still above pre-pandemic levels. And overall these October falls were less than was expected.Also weak were the survey results from factories in the Philadelphia Fed region, primarily in Pennsylvania where a grim partisan election took place recently. It swung strongly to the Democrats, and that was despite their factories giving this survey a downbeat assessment, one taken right as votes were counted or immediately after.But not quite so downbeat were factories in the Kansas City Fed survey. Here earlier declines in metrics slowed noticeably.Meanwhile, the St. Louis Fed boss has called for more front-loading of the Fed's rate hikes, wanting it above 5% to get meaningfully on top of their inflation threat. The upper-bound of the Fed's current policy rate is currently 4%. Fed policy makers next meet on December 15, 2022 NZTIn China, Bloomberg is reporting that regulators there have told banks to report on their ability to meet short-term obligations after a rapid selloff triggered a flood of investor withdrawals from fixed-income products. The unscheduled regulatory queries coincided with the biggest decline in China's short-term government bonds since mid-2020. The slump, spurred by a shift toward riskier assets including stocks, prompted retail investors to pull money from wealth-management products, fueling a spiral of price declines and accelerating withdrawals. Losses also spread to top-rated corporate bonds, stoking a record surge in yields this week.In the UK, their "Autumn Statement" is a tough one, recognising that they are already in a deep recession essentially from own-goals, and that their jobless numbers will likely rise by another +500,000 soon. They unveiled £55 bln of tax rises and spending cuts, which they hope will lead to a "shallower downturn" with "fewer jobs lost" that the track they are currently on. Living standards are about to be rest sharply lower there.Australia added +32,000 jobs in October and their jobless rate dipped to 3.4% from 3.5% in September. Better yet, there were +47,000 new full time jobs, and a fall of -15,000 part-time jobs here. These better-than-expected and solid labour market results will likely mean the RBA will add another +25 bps to their official rate in early December, taking it to 3.10%. Markets have priced in slightly less than that prior to this jobs data release.And locally, Fonterra has announced it has finally sold its Chilean Soprole business, for about NZ$1 bln.Container shipping rates continued their fast fall last week, down another sharp -7% from the prior week to be more than -70% lower than year-ago levels and are now -30% lower than five-year averages. It is still rates out of China, and now especially to Europe, that are driving this collapse. It is now almost just a third of the price to ship from Shanghai to Rotterdam, than it is to ship from Rotterdam to New York. That is highly unusual. Bulk freight rates are back to their pre-pandemic levels.The UST 10yr yield starts today at 3.78% and up +6 bps from yesterday. The price of gold will open today down -US$17 at US$1759/oz.And oil prices start today down -US$2/bbl from this time yesterday at just under US$82/bbl in the US while the international Brent price is just under US$89.50/bbl.The Kiwi dollar will open today at 60.9 USc and down -½c. Against the Australian dollar we are firmer at 91.5 AUc. Against the euro we have slipped back slightly more to 58.9 euro cents. That all means our TWI-5 starts today at 69.9 and down another -20 bps.The bitcoin price is now at US$16,672 and up +1.4% since this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.0%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news that generally isn't positive, but the data and sentiment seems to be remarkably resilient.US durable goods orders rose more in September than August, but not be as much as was expected. But the rise from a year ago was an impressive +11.5%. Orders for capital goods rose +13.6% on the same basis which is actually quite impressive in itself and indicates a broad commitment by firms there to new capital spending.The US economy grew an annualised +2.6% in Q3-2022, beating forecasts of a +2.4% rise and rebounding from a contraction in the first half of the year. Helping was strong business investment and a smaller current account deficit. Hurting was a fall in residential construction and marginally slower consumer spending. But this actually was the bit that held better than expected. This result is the first of three estimates, so is subject to revisions.There were +183,000 new claims for jobless benefits last week, another low level and taking the total to 1.225 mln and a small increase but really, still bumping along near record lows. Next week's October non-farm payrolls are likely to to remain very solid.Not so positive is the next regional factory survey, this one from the Kansas City Fed district. This one points to a sharpish softening in production, shipments, and new orders. Still, employment rose mainly because those surveyed expect a pickup because "the economy is still decent". That is borne out by remarks by one very large business in the region, Caterpillar.In China they reported that industrial profits slipped in October. Apparently foreign firms made losses in the month, as did local privately owned businesses. But State-owned businesses reported improved or holding profits.In Taiwan, the trifecta of an invasion fear, rising inflation and interest rate hikes, saw consumer confidence there drop to a 13-year low in October.As expected the ECB raised its policy rates by +75 bps earlier today, taking the key one to 2.0%. They tweaked a few of their support programs, but didn't change them significantly. In just three months, they have raised rates by +200 bps, the fastest pace of tightening in the bank's two-decade history. They are presiding over a set of economies on the brink of recession while trying to tame raging inflation, a very tough ask. They want to shrink their bloated balance sheet, but haven't started that yet.German consumer sentiment improved in October according to the widely-watched GfK survey. It was a very minor improvement, but going into winter and with a war on their doorstep, this is perhaps a somewhat surprising outcome. It still is however at a quite depressed level.Global freight rates for shipping containers fell faster last week than in the prior one, down another -7% in this latest survey. It is rates out of China, especially to Europe, that drove this latest fall. Rates from China to the US also continued to fall. Trans-Atlantic rates are actually now rising. Rates for bulk cargoes slipped again too.The UST 10yr yield starts today down another -6 bps at 3.96% and back to where it was two weeks ago. The price of gold will open today at US$1659/oz. This is down -US$8 from this time yesterday.And oil prices start today +US$1 firmer than this time yesterday at just under US$89/bbl in the US while the international Brent price is just over US$95/bbl.The Kiwi dollar will open today at 58.4 USc and little-changed from this time yesterday. Against the Australian dollar we are up +½c at 90.3 AUc. Against the euro we are up a bit more than +½c at 58.5 euro cents. That all means our TWI-5 starts today at 68.5, and another +30 bps firmer than yesterday.The bitcoin price is now at US$20,567 and -1.0% lower than this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.1%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

The S&P 500 was on its way to a fifth consecutive “decision day” gain this afternoon – until a unanimous Federal Open Market Committee confirmed the market's 100%-priced-in expectation of a 75-basis-point increase to the federal funds rate target range but firmly underscored its hawkish tone. Stocks turned red and yields surged at 2:00 p.m. ET, as the FOMC's “dot plot” suggested another 125 basis points of rate hikes over its last two meetings in 2022 and further tightening well into 2023. Reiterating that it's “highly attentive to inflation risks” and that it “anticipates that ongoing increases in the target range will be appropriate,” the Fed also lowered its growth forecast for the year. Real Vision's Andreas Steno Larsen welcomes Joseph “The Fed Guy” Wang for today's Daily Briefing to talk about Fed policy – looking back and going forward – and what it means for risk assets. We also hear from Thomas Hoenig, who led the Kansas City Fed for 20 years, about the risks “quantitative tightening” presents to the global financial system. Watch the full conversation featuring Thomas Hoenig and Harry Melandri here: https://f.io/fd0SmXxX. Learn more about your ad choices. Visit megaphone.fm/adchoices

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news central banks around the world are racing to raise rates in a concerted effort to squash inflation. The cost may be growth and jobs, but there seems universal agreement rampant inflation is a bigger long term risk.But first, US jobless claims rose last week to +178,000 but this level is still very low by historic standards. It is no indication their tight labour market is easing. There are now still less than 1.3 mln people on these benefits and the insured jobless rate is a tiny 0.9%.The US current account for Q2-2022 came in pretty much as expected, with a -US$251 bln deficit. It isn't good, and these huge quarterly deficits started in 2020 and haven't let up. Disastrous policy making is behind the ugly trend and although Q2-2022 was an improvement on Q1, it still came in at -4% of GDP. Recovery from mad policy isn't easy as they are finding out. (New Zealand's current account deficit is -2.7% and that isn't good either.)The latest regional factory survey, this one from the Kansas City Fed, reported a sluggish expansion, but firms continued to add workers and were moderately optimistic about growth in future months.But with mortgage rates hitting 6.29%, the American housing market is wavering and ready to a substantial drop, it seems. The chance to reset to improve affordability is ahead of them. Rents may have peaked too.The Bank of Japan met yesterday and held its ultra loose monetary policies. But the Japanese government had to intervene to support the yen for the first time since 1998 after the currency extended losses to fresh 24-year lows. The divergence between monetary policy in Japan and the United States has widened further adding to policy stress. The Bank of Japan maintained its key short-term interest rate at -0.1% with governor Kuroda saying the central bank won't be raising interest rates any time soon.The Taiwanese central bank also met and raised its policy rate to 1.625% from 1.5%. It was a modest rise in the face of a slowing economic expansion.Hong Kong had no inflation in August from July and very weak local economic activity, and the annual rate remained at 1.9% - almost all of which happened in October 2021 so is about to leave the index.Indonesia raised its policy rate by +0.5% yesterday as they are starting to experience inflation at too-high levels for them and now running at +6%. That took their policy rate up to 4.25%.Norway also raised its policy rate by +50 bps to 2.25%. They have an inflation rate running at 6.5%. Switzerland raised theirs by +75 bps to 0.50% and taking them out of a negative policy rate for the first time since 2015 and their highest rate since 2009. Swiss inflation is now running at 3.5%.The Bank of England joined the queue unanimously raising their rate by +50 bps too, to 2.25%. Their inflation rate is currently 9.9%. They also said the UK may already be in recession.EU consumer confidence confidence dropped further in August to a new all-time low since this series began in 2007. Container shipping costs dived -10% in the past week alone as demand in the sector deflates very quickly now. But the same is not true for oil tankers; the cost for them has doubled in the past month. And dry bulk cargo rates are inching higher again.The UST 10yr yield starts today at 3.70% and up a huge +19 bps from this time yesterday. This now its highest since 2010. The price of gold will open today at US$1672/oz. This is down -US$12 from this time yesterday.And oil prices start today up +50 USc from yesterday at just under US$83.50/bbl in the US while the international Brent price is now just over US$89.50/bbl.The Kiwi dollar will open today at just on 58.5 USc and more than -½ lower than this time yesterday, as the Fed signals settle in. Against the Australian dollar we are slightly softer at just 88 AUc and its lowest in seven years. Against the euro we are little-changed at 59.4 euro cents. That all means our TWI-5 starts today at 68.4, and down -40 bps.The bitcoin price is now at US$19,071 and down -1.8% than this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.5%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

The Kansas City Fed says agricultural credit conditions remained strong in the second quarter, but slower improvement is expected during the months ahead. Those bankers who responded to the Federal Reserve Survey of Agricultural Credit Conditions say farm income continued to increase.See omnystudio.com/listener for privacy information.

Philadelphia Fed President Patrick Harker talks exclusively to MNI about inflation pressures, the direction of interest rates and financial conditions on the sidelines of the Kansas City Fed's Annual Jackson Hole Symposium. 

USDA is funding critical infrastructure to combat climate change in rural America, and the Kansas City Fed says ag credit conditions remain strong.

Patrick Harker, Philadelphia Fed President, says the Fed should consider pausing rate hikes after hitting at least 3.4% by year end to see how the economy reacts. James Bullard, St. Louis Fed President, says the Fed's rate hikes are working at shorter lags than in the past. Raphael Bostic, Atlanta Fed President, says the Fed should keep interest rates higher “for a long time.” TD Securities Global Head of Rates Strategy Priya Misra and Citi Chief US Economist Andrew Hollenhorst react to Fed Chair Jerome Powell's speech at the Kansas City Fed's annual economic policy symposium in Jackson Hole, Wyoming. See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news global full employment just goes on and on, and is calling into question some of the ways we measure economic activityFirst in the US, Americans are in the last week of their summer holidays and heading toward the crucial final third of 2022 with rising economic uncertainty. Much of that is because their housing markets are slowing quickly, and mortgage interest rates are rising. In fact rates for this past week turned up again after a few weeks relief. But like most consumers, negative news weighs heavier than positive news, but there are positives, and even in the global circumstances, a lot of them. The mood should be upbeat, even if it isn't.New American jobless claims fell yet again to only 184,400 and well below what was expected. There are now 1.4 bln people on these benefits, a new modern low. Just one year ago, there were 12 mln people on these benefits, so the improvement has been epic. It is not a metric reported much these days, but we shouldn't lose sight of the achievement.Meanwhile, the second estimate of the US GDP result for the second quarter was released and that brought a small improvement (actually a lower decline of -0.6% from Q1) than in the first estimate revealed. Interestingly they also released data for "Gross Domestic Income", which is the same data as GDP, just from a mirror perspective: one person's spending is another's income. And that shows GDI rose +1.4% in Q2, even if it was down from +1.8% in Q1. Obviously one of GDP or GDI is wrong and increasing numbers of economists now think that history will show that GDI is closer to the actual situation.Away from this geeky data, all eyes are on the Powell speech at Jackson Hole, WY, in a central bank gathering organised by the Kansas City Fed. Actually the same regional Fed branch released their factory survey for its District and that showed a weakening expansion in August.We will have details of the Powell comments, and the market reaction, in tomorrow's briefing.In Canada it is probably worth noting that weekly earnings there are rose faster than expected June and a notably faster pace than for May. The overall gains are not keeping up with inflation though. But some are however, with factory wages up +6.9% year-on-year, and wages for people in professional and technical jobs were up almost +11%.China has rushed out more economic stimulus with a further ¥1 tln set of policy measures to try and rebuild some growth, guard against the effects of their pandemic policies and try to fix the corrosion of their property market crisis. A 19-point policy package announced yesterday included another ¥300 bln that SOE banks can invest in infrastructure projects, on top of ¥300 bln already announced in June. Local governments will be allocated ¥500 bln of special bonds although this is not all strictly 'new'.Overnight rains swept across parts of Sichuan, which has been suffering from a prolonged drought as a result of the worst heatwave in 60 years. But no-one is saying the impact of drought is behind them yet. They will need rain for a month to catch up.The Bank of Korea raised its base rate by +25 bps to 2.5% during its August meeting, as widely expected, citing persistent inflationary pressures and high inflation expectations. This move came after they delivered an unprecedented +50 bps rate increase in July and as they try to prevent capital outflows amid more rate hikes in the US. The latest decision was also the 7th increase in borrowing costs since they lifted their base rate for the first time in August 2021. South Korea's inflation rate to hit 5.2% this year, the highest level since 1998.Germany also reported its Q2 economic activity and in contrast to the US, it expanded, and expanded a bit more than expected. Having said that the growth was a low +1.7% year on year, just better than the +1.4% expected. Germany might be struggling with energy pain, and angst levels high. But in fact history will show they are handling the challenge well in the circumstances.Freight rates for container shipping fell at a faster pace last week. But although it is -40% lower than the September 2021 peak, these rates are still +60% above the five-year average. Freight rates for bulk cargoes fell even faster last week.The UST 10yr yield starts today at 3.03% and down -8 bps from this time yesterday and awaiting Powell's speech. The price of gold will open today at US$1758/oz which is up +US$9/oz from this time yesterday.And oil prices start today at just over US$93/bbl in the US which is a -US$1.50 USc fall, while the international Brent price is still just over US$99/bbl.The Kiwi dollar will open today at 62.3 USc and +½c higher than this time yesterday. Against the Australian dollar we are lower at 89.3 AUc and while it is only a small slip since yesterday, it is in fact our weakest against the Aussie since October 2017, a 5 year low. Against the euro we have risen slightly to just on 62.4 euro cents. That all means our TWI-5 starts today at 71.3 and a +30 bps firming.The bitcoin price is now at US$21,572 and a tiny -0.3% slip from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.1%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Thomas Hoenig, former president of the Kansas City Fed, previews the upcoming Annual Jackson Hole Symposium, which he hosted for 20 years. 

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news both China and the US seem to be facing economic questions at the same time.There are mounting concerns about the giant American economy's resilience. Inflation is at 40-year highs, home sales are weakening but their red hot labour market has yet to show any sign of weakness.New American jobless claims fell marginally last week, and there are now 1.44 mln people on these benefits which is still close to an all-time low.But the initial 'flash' reading for real economic activity fell in the June-2022 quarter by -0.9%, on top of the -1.6% recorded fall for Q1-2022. If that is confirmed over the subsequent revisions, it will show the US economy has been in a shallow recession. In nominal terms it grew at an annual rate of +1.9% in Q2 but that was less than inflation. Over the past year it grew to US$24.85 tln and up +9.3% in nominal terms, up 7.8% at an annual rate in the second quarter alone. But that was less than price increases which for the household sector was a 9.1% inflation rate. The second estimate of this data will come in about four weeks.The puzzle in all of this is their labour market - growing fast with widespread labour shortages. If a recession is in fact declared for this 2022 period it will be the strangest one in memory, one with a record low jobless rate. Today, the bond markets 'believes' the recession story, but equity investors don't. History shows though it is unwise to ignore bond market signals.To confuse matters, the official arbiter of whether the US is in recession, the NBER, has always rejected the "two quarters down" rule. So the 'recession' designation is still up for grabs.Meanwhile, the Kansas City Fed's factory survey came in more positive for July than for June, back expanding at a strong pace and a much better level than was expected.And Mastercard reported stunning revenue growth, up more than +20% and far more than can be account for by inflation. This is not the sort of data that suggests recession.But the latest US Treasury bond tender reflects the risk-off mood sweeping bond markets. Their 7-year tender was well supported but the median yield fell to 2.65% from 3.20% at the prior event a month ago.In China, their top leadership has been meeting to address, the "complex and severe international environment and the arduous domestic reform" situation, a clear indication that their economy is not performing as it would like. The problems run deep, as they seem to acknowledge. But their "persistence is victory" mantra seems to indicate they will keep doing the same things that got them into this current trouble.In Europe, German inflation is staying very high, up 7.5% year-on-year with the month-on-month rises running at an even faster pace. This July data was higher than analysts were expecting.In Australia, retail sales activity disappointed in June. They rose a mere +0.2% from May after the May change was revised lower. This latest data was the softest rise in retail trade since a retreat in December 2021, and signals that retail volumes are shrinking as inflation bites harder. June's retail trade may be up +12% from year-ago levels, but the tepid May-to-June rise is the one catching the eye of analysts (up at an annualised rate of only +2.5%).The decline in global container shipping rates continued last week. Bulk cargo rates fell too.The UST 10yr yield starts today at 2.68% and down -5 bps from this time yesterday. The price of gold will open today at US$1753/oz in New York which is up +US$32 from this time yesterday.And oil prices are little-changed today at just on US$96/bbl in the US, while the international Brent price is still at US$101.50/bbl.The Kiwi dollar opened today up from this time yesterday to 62.8 USc. Against the Australian dollar we are up +½c to 90.1 AUc. Against the euro we are also +½c higher at 61.8 euro cents. That all means our TWI-5 starts today at 71.2.The bitcoin price has risen sharply from this time yesterday, up almost +11% to US$24,010 and most of the gain coming after the US GDP announcement. Volatility over the past 24 hours has been extreme at just over +/-5.7%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Rick Roberts, former NY Fed executive and ex-Kansas City Fed adviser, tells MNI the Fed's latest rate hike makes 75 bp moves the 'new baseline' for now.

The latest purchasing manager surveys (services, manufacturing, composite) and manufacturing index (Kansas City Fed) suggest the United States is heading towards a recession, soon (maybe already?).----EP. 254 REFERENCES----Alhambra Investments Blog: https://bit.ly/3wh01G2RealClear Markets Essays: https://bit.ly/38tL5a7Epoch Times Columns: https://bit.ly/39ESkRf-------THE EPISODES-------YouTube: https://bit.ly/310yisLVurbl: https://bit.ly/3rq4dPnApple: https://apple.co/3czMcWNDeezer: https://bit.ly/3ndoVPEiHeart: https://ihr.fm/31jq7cITuneIn: http://tun.in/pjT2ZCastro: https://bit.ly/30DMYzaGoogle: https://bit.ly/3e2Z48MReason: https://bit.ly/3lt5NiHSpotify: https://spoti.fi/3arP8mYPandora: https://pdora.co/2GQL3QgCastbox: https://bit.ly/3fJR5xQPodbean: https://bit.ly/2QpaDghStitcher: https://bit.ly/2C1M1GBPlayerFM: https://bit.ly/3piLtjVPodchaser: https://bit.ly/3oFCrwNPocketCast: https://pca.st/encarkdtSoundCloud: https://bit.ly/3l0yFfKListenNotes: https://bit.ly/38xY7pbAmazonMusic: https://amzn.to/2UpEk2PPodcastAddict: https://bit.ly/2V39XjrPodcastRepublic: https://bit.ly/3LH8JlV---------THE TEAM---------Jeff Snider, Head of Global Investment Research for Alhambra Investments. Master of ceremonies, Emil Kalinowski. Illustrations by David Parkins. Audio and video editor, Terence. Episode intro/outro music is "Pretender" by Lazer Boomerang.------FIND THE TEAM-------Jeff: https://twitter.com/JeffSnider_AIPJeff: https://alhambrapartners.com/author/jsnider/Emil: https://twitter.com/EmilKalinowskiEmil: https://www.EuroDollarEnterprises.comDavid: https://DavidParkins.com/Terence: https://www.VisualFocusMedia.comLazer Boomerang: https://www.youtube.com/channel/UCPnl9BuBDKx8_uQ2xNy-djg"Pretender": https://youtu.be/YBb3y6FHxgM

The 2022 Ag Symposium was held by the Kansas City Fed May 23rd and 24th, and the theme of the bank's annual event is help wanted in agriculture. Today, DTN Farm Business Editor Katie Dehlinger joins us to talk more about what she heard from President of the Kansas City Fed, Esther George, and from various Fed economists who have their attention trained on the ag sector as inflation climbs, global factors disrupt supply chains, and the resources farmers need to run their businesses get harder to find. From the bank's perspective– ag labor is at the top of the list, whether it's the need for hired hands on grain operations, cowboys or dairy workers, or picking and pruning teams, workers are becoming fewer and farther between. We'll discuss how the Fed understands this growing issue, what they can and can't do about it, and where they expect relief to come from.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news Wall Street is rising again, partly because some large retailers like Macy's, Dollar General and Dollar Tree all reported good results reflecting their ability to handle margin pressures from inflation's surge.Meanwhile, initial jobless claims fell again last week in the US, but the number of people on these benefits rose marginally, but they are still below 1.3 mln and still hovering near 50 year lows.Pending home sales also fell in April, and both by more than expected and by more than in March. This is an embedded trend now, taking the string of falls to six consecutive months. Higher mortgage servicing costs are hampering sales. That average prices are still rising just means those that are selling are at the higher-priced end of the market. More recently we should note that US mortgage interest rates dropped last week, for a second straight week.Although it did fall slightly, the Kansas City Fed manufacturing survey stayed historically strong in May.Also falling slightly was the second estimate of Q1 economic activity in the giant American economy. As we have reported with the first estimate, it shrank slightly from the very strong Q4-2021, but is up +3.5% from the same quarter a year ago on an inflation-adjusted basis. On a nominal basis it is up +10.6% year-on-year, boosted of course by heady inflation.Also showing signs of wear were Canadian retail sales which were unchanged in March from February when a rise was anticipated. Sales volumes fell.The news out of China is still mostly negative and compounding that more property developers have said it can't make loan repayments in full.South Korea raised its OCR by +25 bps to 1.75% in a move that was no surprise in response to rising inflation.Singapore's industrial production bounced back less in April than anticipated, but the year-on-year gain is still a good +6.2%.Russia cut its policy rate sharply again, slicing it by -300 bps today on top of the prior -600 bps retreat. They say inflation is retreating fast in the middle of "challenging" economic trends. Their policy rate is now 11%. Their inflation target is 4%, but it is running at over +17% currently they say, but falling faster than that anticipated - hence the rate cut.In Australia, investment in new private capital fell unexpectedly in Q1-2022, when a solid +1.5% rise was anticipated. This was because investment in buildings and structures fell -1.7% while investment in plant and machinery rose by +1.2%.Staying in Australia, power prices are regulated. Now just days after the election their regulator has announced new higher "default" power prices, up by between +1.7% and +8.2% above inflation in NSW, south-east Queensland and South Australia from July 1. Soaring coal and gas prices are inflating wholesale prices, mostly war-driven.The cost of containerised shipping freight barely budged last week. The cost of shipping bulk cargoes fell from its recent highs. The UST 10yr yield will start today at 2.76% and little-changed. The price of gold is lower today, down -US$2 since this time yesterday at US$1849/oz.And oil prices are up +US$4 from this time yesterday and now just on US$113.50/bbl in the US, while the international Brent price is now just at US$114.50/bbl.The Kiwi dollar will open today little-changed against the US dollar, now at 64.7 USc. Against the Australian dollar we are softer at 91.2 AUc. Against the euro we are also softer at 60.4 euro cents. That all means our TWI-5 starts today at unchanged 71.5.The bitcoin price has slipped a minor -0.6% from this time yesterday and is now at US$29,615. Volatility over the past 24 hours has been high however at +/- 3.5%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Could you soon be feeling the squeeze in your pocketbook even more than you do now? Many economists, including former Federal Reserve chairman Ben Bernanke, say the US could face stagflation. Dr. Thomas Hoenig from the Mercatus Institute, and former head of the Kansas City Fed, talks with Boyd about the likelihood of that and the real challenges our economy faces in the months ahead. See omnystudio.com/listener for privacy information.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news markets are roaring with positivity today.First, US jobless claims came in as expected last week at +203,000 and the total number of people on these benefits remained steady at 1.45 mln, and still an historic low.But the Q1 GDP number did not come in as expected, recording a surprising fall from the prior quarter when a rise was expected. But this was mostly due to a record trade deficit, softer inventory growth, and a drop in government spending. Meanwhile, personal consumption and non-residential and residential fixed investment remained strong. This same data showed that the inflation pressure might have eased in the period too, which was also a surprise. But we must note that these are 'advance' results, and there are two more revisions due over coming weeks, so they could change. And in nominal terms, American GDP rose at a +6.9% annual rate in the first quarter to be running at a rate of US$24.383 tln of economic activity and +10.6% higher than a year ago.Markets picked up on the strong consumption data, seeing the other Q1 factors weighing on the overall result as temporary, and have turned bullish. The US dollar is surging.Meanwhile, the Kansas City Fed's factory survey reported a continuing strong expansion, even if it was down from the March boom result.The US Treasury has another bond auction overnight, this one for their 7-year bond and it too was well supported. The median yield was 2.84% vs 2.43% at the month-ago prior event.In China, employment is being ‘hit quite hard' by the pandemic. Tough enforcement of pandemic restrictions has forced factories and businesses to close over the last two months. The country's unemployment rate had already risen to 5.8% in March, and now a record 10.8 million college graduates are set to enter their jobs market this year, compounding the strain. There will be a growing cadre of disappointed workers there.Meanwhile, China has cut its tariff on imported coal to zero, reinforcing the perception it is facing energy stress. It's a very rare move from Beijing.Japanese housing start data for March surprised. It rose strongly in February and was expected to revert in March, but in fact that +6% expansion continued into March.Taiwanese Q1 GDP was also released overnight and that came in marginally better than expected at a +3.1% annual rate. Although this was well down on year-ago rates the expansion in Q1-2022 over Q4-2021 surprised on the high side.German inflation for April was reported overnight and it came in higher than expected at 7.4%. Some major costs like energy prices actually fell, which was a surprise. But that was more than covered by sharp rising food prices.And Germany, which had been one of the main opponents of sanctioning the EU's oil and gas trade with Russia, is now ready to stop buying Russian oil, clearing the way for an EU-wide ban on crude imports from Russia, government officials said. That comes just as energy utility Uniper said it would start paying in rubles for the gas it buys for Germany.Sweden raised their official rates from 0% to 0.25% overnight and signaled that more hikes are on their way. This is something of a u-turn in policy, unexpected, and the Swedes are now joining in the global fight against inflation.The slowdown in the Chinese economy is resulting in lower container shipping rates with yet another small retreat last week. But we are not really seeing the same trend for bulk cargoes.The UST 10yr yield starts today up +4 bps at 2.86% as markets lock in their Fed bets for next Thursday's announcement. On Wall Street, the S&P500 is roaring today, up +2.7% in late afternoon Thursday trade. Overnight, European markets all rose another +1% overnight led by Frankfurt. Yesterday Tokyo ended its Thursday session up +1.8% and more than making up the prior day's retreat. Hong Kong was also up +1.7% on the day. And Shanghai gained a further +0.7% on the stimulus announcements. The ASX200 ended yesterday up +1.3%. The NZX50 ended also ended up +1.3%.The price of gold starts today down -US$1 since this time yesterday at US$1890/oz.And oil prices are up +US$2 at just on US$104/bbl in the US while the international Brent price is now just under US$107/bbl.The Kiwi dollar will open today softer again at 65 USc and nearing a two-year low. Against the Australian dollar we are soft too at 91.5 AUc. And against the euro we are marginally softer at 61.9 euro cents. That all means our TWI-5 starts today at 72.5 and that is only a two-month low.The bitcoin price is up +2.6% from this time yesterday at US$40,108. Volatility over the past 24 hours has been moderate at just over +/- 2.0%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.This podcast is taking a break for a week.Kia ora. I'm David Chaston and we'll do this again on Monday, May 11.

My guest is Tim Todd, author, A GREAT MORAL AND SOCIAL FORCE: A History of Black Banks.  Tim is an executive writer and historian with the Federal Reserve Bank of Kansas City. He is the author of eight books on the history of banking and financial services, including  A Great Moral and Social Force. Prior to joining the Federal Reserve, Tim was a journalist for 10 years and spent another five years as a writer focused on fixed income markets.A Great Moral and Social Force: A History of Black BanksA Great Moral and Social Force: A History of Black Banks is written as a historical reference on Black community banks, and serves as a guide to help all Americans think differently about our relationships with banks. The goal of the latest volume of the Kansas City Fed's historical book series is to move across eras and examine some of the communities where banks played a dual role in establishing both economic opportunity and social equality.  For more information and a free copy of the book go to https://www.kansascityfed.org/about-us/a-great-moral-and-social-force/.DIVERSE VOICES BOOK REVIEWSocial media:Facebook - @diversevoicesbookreviewInstagram - @diverse_voices_book_reviewTwitter - @diversebookshayEmail: hbh@diversevoicesbookreview.comWeb site: https://diversevoicesbookreview.wordpress.com/ 

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news the bond market is over yesterday's retreat and yields are rising again today.But first, new claims for jobless benefits hit a new and impressive low last week, falling again so that they are now their lowest level since September, 1969. There are now 1.73 mln people on these benefits. Their insured jobless rate is now just 1.3% of their workforce, and that is a record all-time low. (The highest ever was during the Trump pandemic at just under 16%.) It also backs up the overall very low general jobless rate of 3.8% in February and strongly suggests it will be reported lower than this when the March data is released in about two weeks.But it is not all good news in the world's largest economy. Core durable goods orders for February were expected to rise from January, but in fact they fell. It wasn't much, but is was a slip all the same. If you include aircraft and defense orders, the fall was more. But on a year-on-year basis they were up +12.5%, and capital goods orders were up +13.3% on that basis.Orders might have slowed marginally, but activity is increasing. The latest March PMI data from the Markit surveys points to rising levels in factory activity and a six month high. Their services sector is expanding just as fast and now at an eight month high.The regional Kansas City Fed factory survey is also reporting a growing expansion, in fact growing at a record pace.In Japan, the Markit survey records a small contraction.It is clearer now that container shipping rates from China are falling, and noticeably. Bulk cargo rates seemed to have topped out at a moderate level. Transpacific cargoes are still at high levels, although ship wait times in Los Angeles have eased further. One reason may be because Vancouver is picking up much more traffic.Across the Atlantic, EU PMIs are suffering. These Markit PMIs for March report that growth is slowing, exports are falling, business sentiment is slumping and prices are rising at a record rate, all of course because of the Russian invasion of Ukraine. But they are still expanding despite this crisis. Output price inflation it a new record high in Germany.In Russia, they re-opened the Moscow stock exchange and prices rose, up +4.4%. But it may not be all it seems. Foreigners were barred from selling. Short selling was banned. And their sovereign wealth fund flooded the market with 'buy' orders. And then when these effects were waning, the market was unexpectedly closed after only 4 hours of trading. The net effect was that oligarch wealth was preserved, on the surface at least.In the South Pacific, leaked documents show that China is close to securing a naval base in the Solomon Islands. The proposal includes allowing Chinese police, armed police and the military to assist the Solomon Islands on "social order".In Australia, their PMIs are expanding in both their manufacturing and services sectors and at a healthy clip. But this survey also notes record price pressures.The UST 10yr yield opens today at 2.35% and a +4 bps rise from this time yesterday. The price of gold starts today at US$1963/oz and up another +US$29/oz from this time yesterday.And oil prices are down by -US$1 to US$112.50/bbl. And the international Brent price is now just on US$117/bbl.The Kiwi dollar will open today marginally softer, now at just on 69.5 USc. Against the Australian dollar we are down at 92.7 AUc. Against the euro we are soft at 63.2 euro cents. Only against the tumbling Japanese yen are we gaining. That all means our TWI-5 starts today at just at 74.8 and now off our four month high.The bitcoin price is up +3.3% from this time yesterday at US$43,954. Volatility over the past 24 hours has been moderate at +/- 2.5%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news benchmark interest rates are rising despite the political tensions.Somewhat surprisingly, American inflation expectations eased a bit in January, falling from 6.0% to 5.8% as the expected inflation over the next year in the large New York Fed national survey. This is the first decline in short-term inflation expectations since October 2020. Similarly, median three-year ahead inflation expectations decreased by 0.5 percentage point to 3.5%. The decline in medium-term inflation expectations was broad-based across age, education, and income groups and is the largest one month decline in the measure since the inception of the survey in 2013. The yield on the benchmark US 10-year Treasury note rose again to above 2% on Monday and the 2-year/10-year yield curve fell to the flattest since July 2020, as bets for a +50 bps rate hike from the Fed increased again. St. Louis Federal Reserve President Bullard has reiterated his call for +100 bps of hikes by the end of June during the interview on CNBC.Meanwhile, another Fed official, Esther George from the Kansas City Fed, said the central bank should consider selling bonds from its US$9 tln asset portfolio to address high inflation and guard against harmful effects that can result from raising short-term rates above long-term rates.Cross-border traffic between Detroit and the Canadian city of Windsor is returning to normal after a bridge crossing the Detroit River reopened following a week of demonstrations.In India, their inflation rate rose to 6.0% in January, and up from 5.7% in December. Its a seven month high, and food inflation is rising within it.In the UK, a regulator there has told a set of 'buy now pay later' firms to issue refunds of excessive late-payment fees and rewrite their contracts so the terms are clearer. This ruling affects Afterpay, Openpay, Laybuy and Klarna - three Aussie firms and a Swedish one (in which Aussie bank major CBA has a minor stake).The UST 10yr yield opens today at 2.00% and +8 bps higher than this time yesterday. The price of gold starts today at US$1862/oz and up another +US$3 from this time yesterday. Given the political tensions you might have thought the gold price would be rising faster.And oil prices are holding high at just over US$92/bbl in the US, while the international Brent price is marginally softer at US$93.50/bbl. The Kiwi dollar will open today at 66.1 USc as the greenback firms. Against the Australian dollar however we have slipped to 92.8 AUc. Against the euro we are holding at 58.5 euro cents. That means our TWI-5 starts today lower at just on 70.8 but that is where it was a week ago.The bitcoin price is up a minor +0.9% since this time yesterday and now at US$42,679. Volatility over the past 24 hours has stayed modest at +/- 1.5%. Interestingly, a huge surge in crypto ads during the American Superbowl seems to have had virtually no influence in demand or prices - unless it stopped them falling.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news financial market reactions to yesterday's Fed announcements are still echoing around the world.But first up today, and confirming the strong data we have been reporting for months, the first estimate of economic activity in the December quarter in the US has come in unusually strong, in fact the best result in nearly 40 years. GDP rose +1.7% in December from September which is an annualised rate of +6.9%. For the full 2021 it was up +5.7%. These are 'real' increases, discounting inflation. But the nominal rise takes the US economy to a US$24 tln behemoth - and supercharged by a strong exchange rate. By any measure, today's Q4 result is impressive, although it is not final - two more revisions will come over the next month or so.This GDP data also gave us our first look at December PCE data, the inflation measure the Fed is said to prefer. They have an inflation problem with that up +6.5% and core PCE up +4.9%.Financial markets are seeing a Fed that seems determined now to fight inflation, a jot that is harder because they are late to the effort. And that may bring a bumpy road.It could be especially bumpy for tech stocks. The latest to slip out of favour is Tesla, which is down an eye-watering -28% since the start of the year, including today's -8% dumping.Meanwhile, initial jobless claims for last week were +268,000 and more than anticipated. There are now just on 2 mln people on these benefits, marginally higher than pre-Christmas, but basically back to pre-pandemic levels.It isn't all good news. December durable goods orders fell -0.9% from November when a -0.5% fall was expected. This follows a stellar November, so a pullback from that isn't a major concern. But at least they are up +21% higher than the same month a year ago. New orders for capital goods are up +33% from a year ago, confirming business is investing freely now.US pending home sales fell -3.8% in December from a year ago as a lack of inventory, and higher mortgage rates, keep a lid on their residential real estate market. It is a broad-based fade, nationwide. At least it confirms an economy that isn't 'just houses'.In fact, the Kansas City Fed factory survey is evidence of a healthy manufacturing sector, even if it does have unusually tough cost and supply chain pressures. Activity expanded at a faster pace, and it was already running fast. Orders, including new export orders were up, but there was no sign that cost pressures were fading.Across the Pacific, Chinese New Year is starting. This year, authorities there are trying hard to prevent people from travelling because of the Covid risks. But the people are apparently more determined than ever to get back to their home villages after being locked away for two years. Could get ugly. The legal holiday is seven days starting February 1, but the migration - one of the world's largest, is now underway even if 'silent' this year.And industrial profits from large Chinese companies remained positive in December, up +4.2% above the same month in 2020 which is actually their slowest pace in 18 months. They are talking up the 2021 gains over 2020 which of course are large given the weak base.At the World Trade Organisation, China had something of a 'win' in its trade dispute with the US. And arbitrator there ruled China can levy US goods up to US$645 mln in penalty duties because the US had broken WTO rules. But the amount is much less than the US$2.4 bln that China had initially requested legal authority to target.Meanwhile the EU is taking China to the WTO over Beijing's attempts to apply trade pressure on Lithuania for dealing with Taiwan in a friendly way. Beijing's trade bullying there is reminiscent of their pressure on Australia. The EU's response is also reminiscent of Australia's pushback reaction.The UST 10yr yield opened today at 1.78%, unchanged from this time yesterday but in between it was up as high as 1.88%. The price of gold starts today at US$1795/oz and another -US$37 lower than this time yesterday. A week ago it was US$1841/oz.And oil prices start today marginally softer than yesterday's recent high at just under US$87/bbl in the US, while the international Brent price is now just under US$89/bbl.The Kiwi dollar will open today a full -1c lower at 65.9 US as the greenback surges. Against the Australian dollar we are firmer at 93.6 AUc. Against the euro we are a little softer at 59.1 euro cents. That means our TWI-5 starts today at 71 and we haven't been this low since November 2020.The bitcoin price has jerked back down today, now at US$36,513 and a sharpish fall of -4.6%. Volatility over the past 24 hours has been moderate at +/- 2.8%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news of the US is ending 2021 on strong economic notes, while China seems to be on the skids.New US jobless claims fell slightly last week to +267,500 and the number of people on these benefits fell to 1.713 mln, and back below pre pandemic levels.US housing starts rose strongly to their highest since March and their second highest level ever.However, the American industrial production gains slipped back in November after a very strong October and to an expansion rate we had been used to seeing. Still they are +5.3% higher than year ago levels.The regional Philly Fed factory survey came in much weaker for December than expected, while a similar survey conducted in the Kansas City Fed region was unchanged at a modestly healthy level.All this makes the slowing results in the Markit December factory PMI for the US understandable - expanding strongly from an historical perspective, but actually its slowest expansion in the past 12 months. It was always going to be hard to keep the pace up.The US services PMI is expanding at a similarly high pace, but slowing too, at a three month low in December.In China, there has been another twist in the property development sector woes. One company, China Fortune Land Development, that has now had to default, says it has 'lost' NZ$460 mln in a get-rich-quick scheme it had with a murky investment fund.And Beijing is promising a reprise of its stimulus programs and many firms, especially SMEs start to struggle with the slowdown. Reinvigorating their property sector seems to be an aim.Japan's latest December PMIs show both their factory and services sectors expanding still but at slower rates.Yesterday, there were central bank rate reviews in Indonesia (3.5%), the Philippines (2%) and Taiwan (1.125%). Taiwan did raise its GDP forecast for 2022 and said rates may rise next year. All three report a strengthening recovery.The PMI expansion is slowing in the EU, although they too are still at good levels. In Germany, it is all about a fast-slowing of their services sector. Their factory sector is on the up again in December.The ECB left its interest rates unchanged butsaid it is reducing the pace of bond buying, closing down purchases under its pandemic emergency scheme and shutting that down by March. But it said it would offset some of that wind-down with increased buying in its more restricted Asset Purchase Program stimulus program.The Bank of England raised its policy interest rate from +0.1% to 0.25%, their first rise in three years.In Turkey, their central bank bowed to political pressure to cut interest rates, defying soaring inflation and deepening a currency crisis that has dogged their economy. Of course, their currency fell sharply as a result which will be even more inflationary. At the same time they raised their minimum wage by +50%.The December PMI reports for Australia also report small slip-backs in December from the strong expansions reported for November. No issues are flagged in this report.The Australian workforce rebounded by +366,000 jobs in November, much more than the +205,000 expected and dropping their jobless rate to 4.6% from 5.2%. However, +208,000 of those new jobs were part-time. So, the full-time rise of +128,000 was only half of the overall increase expected.The UST 10yr yield opens today at 1.43% and a -1 bps slip from this time yesterday after the US Fed signals. The price of gold will start today at US$1798 up +US$31 from this time yesterday, a +1.8% gain.And oil prices start today +US$2.50 higher at just under US$72.50/bbl in the US, while the international Brent price is now just under US$75.50/bbl.The Kiwi dollar opens today firmer at 68.1 USc and up +¾c from this time yesterday. Against the Australian dollar we are firm at 94.7 AUc. Against the euro we are up at 60.2 euro cents. That means our TWI-5 starts the today up +60 bps at 72.6 and off its recent lows.The bitcoin price is firmer at US$48,483 and up +3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news both Turkey and bitcoin have taken a sharp re-rating lower today.But first in the US, new jobless claims fell to 239,000 and the number of people on these claims is now 1,754,000 and back to pre-pandemic levels. These new levels are about what was expected.The Philly Fed manufacturing survey reported buoyant conditions and continuing fast-rising cost and price rises. New order levels were strong.The Kansas City Fed factory survey wasn't so upbeat, still growing but at a slower pace. However they too reported strong new orders, high cost and price increases and a very tight labour market.All this American data is consistent with the Conference Board's leading index which rose sharply in October suggesting the current economic expansion will continue into 2022 and may even gain some momentum in the final months of this year.The Canadian ADP payrolls report for October was stronger, and an improvement from September. But not every sector shared in the bounce-back.In Vancouver, panic buying has emptied stores in a city now cut off by debris on major highways and rail lines. The province's death toll of one is expected to climb. The military is due in the area soon to assist rescue efforts.In China, infrastructure investment is very weak now, growing just +1% year on year in the first ten months of 2021. And it could slip further. And separate data confirms their birth rate is very low, and falling.In Turkey, their central bank slashed its one-week repo auction rate by -100 bps to 15% during its November meeting, following a -200 bps cut in October and a -100 bps cut in September. The move was expected after Turkish President Erdogan, who backs an unconventional theory that high rates cause inflation, vowed to fight for lower rates as his country grapples with inflation at near 20%, well above the mid-point target of 5%. The Turkish currency is down almost -11% in November and may well fall further, adding to their inflation – and educating their President.Shipping freight rates out of China are staying very high, according to this week's assessments. Some thought it might be reverting lower by now, but that hasn't happened yet. But the Baltic Dry index is one cost that is reverting lower.The price of lithium just keeps on rising however.The UST 10yr yield opens today at 1.58% and -2 bps softer than this time yesterday. The price of gold will start today down -US$6 to US$1861/oz.And oil prices are also a little softer at just under US$78/bbl in the US, while the international Brent price is now just on US$80/bbl.But the Kiwi dollar opens today firmer at just on 70.3 USc. Against the Australian dollar we are another +½c firmer at 96.7 AUc, so up +1c in two days. Against the euro we are little-changed at 61.9 euro cents. That means our TWI-5 starts today at 74.8 and up +40 bps since this time yesterday.The bitcoin price has fallen again since this time yesterday, down -4.8% to US$57,466. In NZ dollars that is a drop of more than -NZ$10,000 in a week. Volatility over the past 24 hours has been high at just over +/-3.2%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news inflation from the global supply chain woes are taking the wind out of the global economic expansion.The American economy grew at an annualised +2.0% in Q3-2021 according to initial estimates, well below market forecasts of +2.7% and slowing sharply from +6.7% in Q2. It is the weakest growth of the pandemic recovery. The levels of government stimulus continues to fade and a surge in COVID-19 cases, plus global supply constraints have weighted on both consumption and production. Still, economic activity was +4.9% larger than in Q3-2020 and +1.9% larger than Q3, 2019.US jobless claims came in at 245,000 last week, lower than the prior week and lower than expected. There are now just under 2 mln people on these programs, and now almost back to pre-pandemic levels.US pending home sales were down -2.3% in September, partially reversing from an +8.1% surge in August and much worse than market forecasts of a flat reading. It is being called a 'dip' by the industry, but that overlooks that this activity has 'dipped' in seven of the past twelve months and is now lower than a year ago. A retreating trend in sales activity is well set in this market.Meanwhile the Kansas City Fed manufacturing survey is quite upbeat. All the key indicators were more positive in October than September and while cost and supply chain pressures are still hurting, two thirds of survey responders said they expected them to ease in the next 6-12 months.There was another well supported US Treasury bond issue earlier today, for their 7 year maturity, and the same story as for previous recent auctions applies: yields are rising.In China, central bank officials are admitting that they have underestimated the strength of the cost inflationary push in their economy. They have apparently lowered their sights on 2021 growth goals. And to ease the pressures on private firms, they are deferring some tax payment dates.In Japan there are signs of improvement in their retail sector with sales up +2.7% in September from August which was an unexpected improvement.Overnight there were two major central banks reviewing their monetary policy positions - the Bank of Japan, and the ECB. Neither announced any material changes.EU business and consumer sentiment in October were at good levels (for them).EU inflation expectations rose sharply in October and to a new ten year high. This is hardly surprising in the current environment when Germany's inflation rate has risen to 4.5% in October, and you have to go back to 1992 to find a higher rate.But at least containerised shipping costs continue to ease, even rates out of ChinaIn Australia, Westpac's respected Bill Evans is now saying the RBA will start raising their official policy rate in February 2023, a year earlier than the previously expected 2024 restart indicated by the RBA. Following Westpac, ANZ's analysts have joined him too. This has motivated a general shift higher in Aussie wholesale rates which were already on the firm side. And there are questions about how wholesale markets are functioning.The UST 10yr yield opens today up +4 bps to 1.57%. The price of gold is having another rise today, up +US$7 to US$1802/oz.And oil prices are down by -US$1 to just on US$81.50/bbl in the US, while the international Brent price is now just over US$82.50/bbl.The Kiwi dollar opens today +30 bps firmer at 72.1 US. Against the Australian dollar we are little-changed at 95.4 AUc. Against the euro we are a fraction softer at 61.7 euro cents. That means our TWI-5 starts today unchanged at just on 75.3, still well over the top of the 72-74 range of the past eleven months, and possibly now resetting this range.The bitcoin price has recovered by +3.9% since this time yesterday, and now at US$61,197. Volatility over the past 24 hours has been high at just over +/-3.1%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news markets are brushing off signs of rising financial risk, preferring to accent the positives. They are aided by some generally hawkish central bank comments.But first in the US, their debt ceiling negotiations have come down to the wire with the traditional bipartisan resolution now very unlikely. The Democrats will have to do it on their own.Meanwhile, new US initial jobless claims rose last week to +306,000 in a surprise bounce. And the total number of people on these claims rose also, up to 2,535,000 which as also an unexpected rise. It doesn't really help however that the four week moving average is now at its lowest since the start of the pandemic.The August report by the Chicago Fed of the national activity index notes a slowing economic expansion even if it is still expanding well above average.The Kansas City Fed factory survey backs that up, reporting a good but slowing expansion. But cost and price rises remained very high, they said.These reports reinforce the latest PMI reports for the US factory sector - fast expansion but just not as fast in September as in August. Except for costs and prices which were reported as rising faster. In the services sector, the overall picture is very similar. Costs are a problem there too, but optimism is rising faster.New June data out from the US Fed shows that American household net worth hit a record high of US$ 142 tln, up +20% in a year, driven by surging home values. (Sound familiar?) This is the second consecutive quarter their net worth gains have exceeded +US$20 tln in a quarter. Thursday's bond payment was made, but there are other larger tests in coming weeks.There were flash PMIs reported in the EU as well where there was slower growth as bottlenecks curb activity and their input price gauge hit a 21-year high.In China, it looks like the Evergrande crisis hasn't passed after all. There are reports that Beijing has decided to let the company fail, and it is racing to prepare all its national and local agencies to brace themselves "for the possible storm" and wait to handle the aftermath after a failure, not prevent it from happening.China is also facing sharp but regional output cutbacks amid a shortage of electricity supply as authorities respond to Beijing directions to achieve targets for lower overall energy use. They need to act now so that they aren't embarrassed in the coming winter surge.Taiwan's central bank reviewed its monetary policy position and left all its settings unchanged. The country is in a period of strong export-led growth.Turkey's central bank stunned markets overnight by cutting its key interest rate a full -1.0% to 18%, which immediately caused their currency to plunge to record low levels. And that will sharply raise inflation. It was a cut demanded by their President, who has fired the past three central bank governors for keeping interest rates higher than he wants.In England, their central bank left all its settings unchanged as expected as well, but two officials there called for an end to its QE program. This is despite the regulator downgrading its economic growth expectations.There was a September PMI report out for Australia too, and that reported a continuing contraction in both their manufacturing and services sectors, even if it was slightly less in September than August.The UST 10yr yield opens today up sharply at just under 1.40% and +9 bps higher from this time yesterday. The price of gold will start today sharply lower again, down -US$24 at US$1752/oz.But oil prices have moved higher again overnight and compared to yesterday's levels are up +$1 to just over US$73/bbl in the US, while the international Brent price is even higher at just under US$76.50/bbl.The Kiwi dollar opens today at just on 70.8 USc and more than +½c firmer since this time yesterday. Against the Australian dollar we are little-changed at just over 96.9 AUc. Against the euro we are +40 bps firmer at 60.3 euro cents. That means our TWI-5 starts today at 74.1 and back at the top of the 72-74 range of the past eleven months.The bitcoin price has risen again today, and is up at US$44,860 and a +3.7% gain from this time yesterday. Volatility in the past 24 hours has been moderate at just under +/- 2.3%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

The Kansas City Fed's annual Jackson Hole Economic Symposium is sort of like TED for Central Bankers. In the lead-up to this year's event, the conversation has been totally focused on whether or not Fed Chair Jerome Powell would signal a beginning of tapering of dovish support. NLW breaks down the expectations and Powell's words to glean a picture of the monetary policy likely to come.  Enjoying this content?   SUBSCRIBE to the Podcast Apple:  https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M=   Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW “The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Michael Nagle/Bloomberg/Getty Images, modified by CoinDesk.

The Fed couldn't be clearer about continued long term dovish monetary policy. This episode is sponsored by NYDIG.The Kansas City Fed's annual Jackson Hole Economic Symposium is sort of like TED for Central Bankers. In the lead-up to this year's event, the conversation has been totally focused on whether or not Fed Chair Jerome Powell would signal a beginning of tapering of dovish support. NLW breaks down the expectations and Powell's words to glean a picture of the monetary policy likely to come. -NYDIG, the institutional-grade platform for Bitcoin, is making it possible for thousands of banks who have trusted relationships with hundreds of millions of customers, to offer Bitcoin. Learn more at NYDIG.com/NLW.-“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: Michael Nagle/Bloomberg/Getty Images, modified by CoinDesk.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Apple is set to let app developers alert users to alternate payment methods. Southwest Airlines makes cuts to its fall flight schedule. Federal Reserve Chairman Jerome Powell is expected to make a speech at the Kansas City Fed's annual meeting. Marc Stewart hosts. Learn more about your ad choices. Visit megaphone.fm/adchoices

Kia ora, Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news the chaos at the Kabul airport has cast a pall over markets today.But elsewhere, positive economic news is generally being reported however. And Powell's Jackson Hole speech is close now.Actual US jobless claims fell again last week to under +300,000, the first time it has been below that level since the start of the pandemic. (Seasonally-adjusted it is being reported as +353,000, an unchanged level.) That takes the actual number of people on these claims to just under 2.8 mln, also the lowest since the start of the pandemic.The US also reported its second estimate of Q2 GDP and this has been revised higher to a +6.6% pa rate, and a slight rise above the initial estimate of +6.5%. The final Q1 rise was +6.3% pa. Estimates vary for what Q3 will bring, but most see a +7% pa rise.The latest regional Fed factory survey, this one from the Kansas City Fed, shows a solid expansion continuing in that district. Just like the other surveys, price movements remain very elevated with this one reporting that "prices received" rose to a survey high in August. However, at the same time, 20% of these firms noted that activity was falling away due to the impact of delta Covid.The South Korean central bank raised its policy rate yesterday by +0.25%, the first Asian central bank to do so, and in fact the first central bank of any developed economy to do so since the start of the pandemic. Their new rate is 0.75%. A "sound recovery" and rising inflation were the prompts there. They are also concerned about fast-rising consumer debt levels there.Hong Kong reported strong export growth for July. While the rise above July 2020 was always going to show a good result, in fact the rise above July 2019 was equally impressive. Buyer wariness about getting goods during the global shipping woes is drawing activity forward so these high levels may not be all they seem.But while there may be a sense that the Baltic Dry Index is topping out, as a measure of the cost of ships for the bulk trade, there is certainly no relief on the cost of container freight. The cost of container freight out of China rose another +4% just last week. The only softness is being seen in trans-Atlantic rates. Unless you are now prepared to spend more than NZ$14,000 per container trip, you are unlikely to find a shipping line willing to take your order. For popular routes like Shanghai to Los Angeles, it is more like NZ$16,500/one-way trip. Bidding wars are underway in this frenzy.And now there are reports that the Chinese authorities are concerned about these huge distortions and seeing what they can do at their end to alleviate the problem, one that could well squash their export trade.German consumer sentiment is no longer improving, according to a widely-watched survey. German spending impulses fell and their saving impulses rose as concerns over the impact of the delta strain widens.In Australia, the economic news is mainly around NSW's surrender to delta COVID. But its citizens seem wary of the opening up plans despite record infection rates, so the economic boost they are seeking may end up being quite limp.The UST 10yr yield is little-changed at 1.34% and holding its recent rise. The price of gold is little-changed today, up +US$3/oz from this time yesterday, and now at US$1792/oz.Oil prices have slipped slightly by about -50 USc, so in the US they are now just under US$68/bbl, while the international Brent price is just over US$70.50/bbl.The Kiwi dollar opens today slightly softer at 69.5 USc. Against the Australian dollar we are marginally firmer at 95.9 AUc. Against the euro we are little-changed at 59.1 euro cents. That means our TWI-5 starts today fractionally softer at 72.8 and in the middle of the 72-74 range of the past ten months.The bitcoin price has fallen -3.9% from this time yesterday to US$47,041 and it is actually now at its lowest point in more than a week. Volatility in the past 24 hours has been highish at just over +/- 3.2%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

After reviewing macro and markets for the week, Jeff Mayberry and Samuel Lau take a close look at the Conference Board's Leading Economic Index (LEI), a composite of 10 indicators used to anticipate turns in the economic cycle (13:07). The podcast co-hosts assess the LEI's predictive track record since its inaugural print in January 1996, and they analyze its components. Those constituents have changed over time. The most recent such change was the substitution of the M2 money supply with the Leading Credit Index (20:47). The week of Aug. 16-20 was a relatively quiet one for U.S. stocks (slightly lower) and bonds (slightly higher). Jeff Mayberry, however, notes energy equities, a persistent frontrunner YTD, were the worst performer on the week (6:23), ceding leadership to real estate and financial stocks. Commodities ended the week mostly in the red (4:22). The week's $5 decline in West Texas Intermediate crude to $62 a barrel, Samuel Lau observes, reflected reduced travel and mobility, particularly in China, due to the spread of the Delta variant of the COVID-19 virus (4:45). The Aug. 18 release of the FOMC minutes (9:49), Jeff and Sam noted, raised the possibility, if the broad economic recovery continues, of a commencement of tapering by the Fed of asset purchases later in this year. That compares to market expectations of reduced QE starting in 2022. If the Fed does decide to taper this year, Mayberry notes, Fed Chair Jerome Powell doesn't have a lot of “runway” to prepare the markets. So perhaps, the cohosts speculate (30:17), Powell will signal how he's leaning in his next scheduled public appearance: 4 pm Eastern/1 pm Pacific Friday Aug. 27 on the Kansas City Fed's YouTube channel.

Ende August findet das alljährliche Symposium der Kansas City Fed in Jackson Hole statt, das in der Vergangenheit die Märkte schon ordentlich durchgeschüttelt hat, weshalb der Devisenmarkt mit Argusaugen auf dies Ereignis schaut. Birgt das Treffen in Jackson Hole auch in diesem Jahr eine Überraschung für den US Dollar? Antje Präfcke im Gespräch mit Esther Reichelt, Devisenanalystinnen bei der Commerzbank. Kontaktadresse: CommerzbankFXStrategy@commerzbank.com Dauer: 15:36

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news the economic threats to recovery are just not fading as fast as we need.American unemployment claims jumped last week to 406,000, an unexpected turn higher. That took the total number of people on these benefits to 3.25 mln and a net rise of +100,000, also unexpected. Until this level gets down to 2 mln, the pandemic impact on their labour market won't be behind them.Housing market sales in the US rose to about the expected level in June but it was a modest gain. A slowly improving rise in supply allowed the gains. But things are more spectacular on the pricing front with the median now US$363,300 (NZ$521,200) which is a startling +23% higher than a year ago - although some of this is because single family homes are in higher demand than condos and apartments, so the mix has shifted.The Chicago Fed's national activity index suggests that economic activity moderated somewhat in June.Meanwhile, the Kansas City Fed factory survey for July is positively glowing. Almost 90% of firms reported supply chain issues and a similar proportion reported labour shortages. Many have increased overtime for current workers and are raising starting wages to attract workers.In Canada, the cost of housing will have a larger influence in how Canada's main gauge of inflation is constructed. The shelter component of their CPI, which includes both owned and rented housing, along with other expenses, will comprise 29.8%t of the basket, up from 26.9%. Most of that increase is due to a sharp uptick in spending on real estate commissions and legal fees, owing to record transactions across the country. (In New Zealand, the equivalent portion is 28.0%.)Housing won't be the largest influence on consumer prices soon. It is becoming clearer that northern hemisphere droughts are going to have very large impacts on food prices over the next year or so. China is scrambling to buy as much as it can, and yields are expected to drop sharply in the traditional food producing regions of North America.In China, the Yellow River flooding emergencies are not fading. And now a typhoon is approaching the Yangtze River delta area and Shanghai which has authorities on high alert.The Indonesian central bank reviewed its policy rates yesterday and left everything unchanged. But oddly, it raised its growth forecast slightly for 2021/22 because it expects their government to ease pandemic restrictions early despite the country having one of the world's worst coronavirus outbreaks.The ECB also reviewed its policy positions overnight, and they too left them unchanged. They are sticking with negative rates in their push to re-ignite inflation.The UK has asked Brussels to renegotiate its Brexit deal because it is finding it too hard to live with, especially in Northern Ireland. It is getting no interest from EU members however.In Australian their June 2021 exports topped AU$41.3 bln with iron ore and other dug-up minerals making up almost half of that. These surging minerals exports allowed them to post a AU$13.3 bln merchandise trade surplus in the month.The UST 10yr yield starts today at just on 1.26% and a -3 bps turn down. The price of gold is now just on US$1806/oz which is up +US$4/oz from this time yesterday.Oil prices have risen by another +US$1.50 so in the US they are now just over US$71.50/bbl, while the international Brent price is now just over US$73/bbl.The Kiwi dollar opens today just under 69.7 USc and unchanged since this time yesterday. Against the Australian dollar we are softish at 94.5 AUc. Against the euro we are firmish at 59.3 euro cents. That means our TWI-5 starts today unchanged at 72.8.The bitcoin price is now at US$32,281 and up a minor +0.7% since this time on yesterday. Volatility in the past 24 hours has been moderate at just over +/- 2.0%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news China sues Australia at the WTO.But first, US durable goods order levels for May were slightly disappointing, rising +2.3% from April when a +2.8% bounce back was expected. Still this was the largest month-on-month increase since July 2020. But it is only +0.9% higher than the May 2019 level. Non-defence capital goods orders were actually down -2.3% month-on-month and only up +0.8% from May 2019American new jobless claims came in at a relatively high +393,000 last week and more than expected. There are now 3.2 mln people on these benefits and while this is now far below the pandemic peak it is also far above the 2 mln level it needs to reach before they can say they are back to pre-pandemic levels.The US merchandise trade deficit rose to -US$86 bln in May with imports up and exports slipping. This result means the annual total has now hit -$1 bln in the prior twelve months or -4.5% of GDP.The Kansas City Fed factory survey is still reporting a strong expansion in that region and expectations for future activity increased to a survey record high. They also report that firms are successfully passing on the much higher input costs they are facing.We should also note that the results of the Fed's annual stress tests for US banks is released at about 8:30am this morning (NZT).And we should note that a bipartisan but slimmed-down US$1 tln infrastructure plan has been agreed and the White House will now attempt to shepherd through a closely divided Congress.In Mexico, there was something of a surprise rate hike their overnight. They unexpectedly raised their benchmark rate for the first time in three years by +0.25% to 4.25%. It was a split decision. Concerns are mounting that persistently high inflation may threaten the economy's rebound - and they took action despite previously describing current inflation as transitory.The English central bank also reviewed its rates overnight, but it was a non-event.German business sentiment rose markedly in June for both manufacturing firms and service providers.The tit-for-tat between Australia and China continues. China said it filed a claim at the WTO over Australian anti-dumping and anti-subsidy measures on Chinese exports of railway wheels, wind towers and stainless steel sinks. This would be the third recent WTO case between the two countries, after Australia sued over Chinese tariffs on wine and barley.Meanwhile, China is making top-level efforts to extend its influence into the South Pacific, with President Xi making a personal phone call to Fiji's prime minister Bainimarama. The Fijian leader apparently thanked China for its help in their current Pandemic situation.In Australia, the latest data shows that their full-year budget deficit is on track to be almost half the -AU$$214 bln originally forecast. Surging income tax receipts from companies and individuals is driving the improvement.The Aussie stats bureau released household wealth data as at Q1-2021 and that had their "Wealth per capita" up at a record high of AU$492,055 and up a remarkable +15.3% in a year, its fastest growth in more than a decade. Rising house prices drove the gains with property prices contributing +8.5 percentage points to the growth and superannuation balances +4.1 percentage points. Household wealth grew more in the last year than it did during the preceding three years combined. The UST 10yr yield starts today unchanged at 1.49%. The price of gold starts at US$1775/oz which is down -US$8/oz from this time yesterday.Oil prices are little-changed from this time yesterday. In the US they are now at just over US$73/bbl, while the international Brent price is just on US$74.50/bbl.The Kiwi dollar opens today firm at 70.6 USc. Against the Australian dollar we are also firm at 93.2 AUc. Against the euro we are a little firmer too at 59.2 euro cents. That means our TWI-5 starts today at 73.1.The bitcoin price is now at US$34,832 and up +3.6% from this time yesterday. Volatility in the past 24 hours has been very high again at +/- 4.1%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news of a sudden change in the value of fossil fuel investments.But first, the April durable goods orders data in the US came in surprisingly weak. They are -1.3% lower than the March level which is far away from the +0.7% gain expected. Of course they are hugely higher on a year-on-year basis but that is just the pandemic base effect. Compared to April 2019 orders are +0.4% higher so the recovery in the factory sector is still lackluster by this metric. 2021 orders for non-defence capital goods however recorded a good +3.5% gain.US initial jobless claims fell again, down to +420,000 last week and the lowest since before the pandemic started. There are low 3.5 mln people on these claims, well down from the 22 mln at its peak, but still well above the pre-pandemic level of under 2 mln.Pending home sales for April fell when a rise was expected. Record low inventory levels are the declared reason.The Kansas City Fed's factory survey also reported softer conditions in May than for April. But they are still reporting a strong expansion and also reporting very sharp pricing pressures, just like every other similar survey nationwide.And we should note that the coming weekend includes the Memorial Day holiday in the US on Monday. Memorial Day weekend serves as the unofficial beginning of the US summer driving season and more than 37 million people will be on the road this weekend and petrol prices are expected to spike as a consequence. They are paying more than US$3/gallon for petrol and complaining about it, or NZ$1.09/liter.And in courtrooms, a Dutch court found in favour of environment groups and ordered Royal Dutch Shell to set deeper and faster emissions cuts targeting a 45% reduction by 2030. The case, which industry experts say may serve as a precedent for other European oil majors, came the same day as ExxonMobil was dealt a blow with an small hedge fund unseating two board members in a bid to force the US company to diversify beyond fossil fuels, and to fight climate change. Current investors in oil and gas are going to find it very hard to quit their holdings without taking huge haircuts. These two rulings have caused an earthquake in the fossil fuel industry.One likely strategy for these investors is to now maximise their returns in the short run, as they stop investing. With little competition, prices for fuel may well rise sharply even as demand falls.Meanwhile, profits at large China’s industrial companies grew at a continuing fast pace in April, despite high commodity prices and weaker performance in the consumer goods sector. While the year-on-year comparisons distort the usual benchmarks, compared with April 2019 those profits were 49% higher and operating revenues were +33% higher.In Australia, Victoria is now in a 7 day lockdown, causing a suspension of flights to and from New Zealand. And other states are closing their border with Victoria too.The UST 10yr yield starts today +2 bps higher at 1.61%. The price of gold starts today up at US$1897/oz, a gain of +US$4 since this time yesterday.Oil prices start today marginally firmer at just under US$66.50/bbl in the US, while the international Brent price is just under US$69/bbl.The Kiwi dollar opens today marginally firmer at 72.9 USc and holding its RBNZ induced slightly higher level. Against the Australian dollar we are up at 94.3 AUc. Against the euro we are still at 59.8 euro cents. That means our TWI-5 starts today at 74.5 and that is an appreciation over the past week of +124 bps.The bitcoin price is now at US$39,175 and a mere +0.7% higher than this time yesterday. It might seem like it is trading sideways but volatility in the past 24 hours has still been very high at +/- 4.3%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we’ll do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news climate controls are very much back on the international agenda, even if some say they are not enough yet.They will be tougher to win given the economic recovery underway.Last week there were 566,000 new jobless claims in the US, lower than expected and lower than the prior week. Now there are 3,863,000 people on these benefits, and the good thing is that this decline is being driven primarily by rising employment and no longer just the expiry of benefit qualification.Supporting that, the Chicago Fed is reporting its National Activity Index rose, and by more than was anticipated. There was a good economic rebound underway in March, making back the unexpected February weakness, and more. April factory activity in the Kansas City Fed region is very strong.But some steam seems to have gone out of the residential real estate market in the US in March. Still, volumes sold were still +12% higher than a year ago, and prices rose, perhaps indicating the sales volume pullback from February is more related to a lack of supply than demand.The US Treasury auctioned US$21 bln of 5 year inflation protected bonds earlier today and got US$48 bln in bids. The average yield was -1.69% lower than the CPI.And the premium cost for non-investment grade corporate debt over US Treasurys has fallen below +3% for the first time since 2007. Debt risk is rising.In Europe, consumer sentiment 'improved' more than expected in April, although it is still a net negative - just less negative. But it is still not back to its pre-pandemic levels.This negativity mean't that the ECB held all its policy positions in its latest monetary policy review, including its €20 bln per month of money printing. There is no taper talk in Europe. Its balance sheet is now up to €7.5 tln (US$9.0 tln) and that compares to the US Fed's level of just under US$7.8 tlnIn Washington, the new Administration said it will boost public climate finance to help poor countries reduce greenhouse gas emissions and adapt to a changing climate, doubling funding by 2024 from average levels hit during the Obama administration. It was part of a wide range of new commitments by global leaders to restrain emissions, although China and India notably are still prioritising "development" over emissions reductions. China won't even start the process of phasing out coal consumption until 2026. And Australia has refused to set an emissions reduction goal for 2050.But Aussie regulator APRA says bankers may need to cap their exposure to customers at most risk from climate change or even consider ditching some of these clients.On Wall Street, the S&P500 has thrown its toys out of the cot after lunch. It is down -0.8% in early afternoon trade as the new Administration prepares to push ahead with its tax hikes for the wealthy, including raising the capital gains tax to 43%. The UST 10yr yield starts today at 1.55% and a -2 bps dip. The price of gold starts today at US$1781 and that is down -US$13 since this time yesterday, with the yellow metal unable to hold on to yesterday's good rise.Oil prices are little-changed at just over US$61/bbl in the US, while the international price is just over US$64.50/bbl.The Kiwi dollar opens today at just under 71.6 USc and softer from this time yesterday. Against the Australian dollar we are marginally softer at 92.9 AUc. Against the euro we are also softer at 59.6 euro cents. That means our TWI-5 is down at 73.5 but that is only back to its Wednesday level.The bitcoin price will start today lower than this time yesterday, at US$53,730 and down -3.8% to its lowest level in four weeks. Volatility in the past 24 hours has been high at +/- 3.0%. You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and as it is a public holiday in New Zealand on Monday, we’ll do this again on Tuesday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news of new inflation risks from the dramatic Suez Canal blockage that will upset most global supply chains.But first in the US, there was a sharp drop in initial jobless claims last week, falling more than -100,000 to 657,000 and the lowest in a year. In addition there were 242,000 Pandemic Unemployment Assistance claims filed, also a very sharp reduction. (Interestingly, exactly a year ago, the first of the huge spikes in claims started with almost 3 mln people filing claims then in one week.) There are now 3,870,000 people still on these benefits. This is very much lower than analysts were expecting.The next regional factory survey, this one by the Kansas City Fed, shows the solid expansion well embedded with strong new order growth. But this latest survey continues the reporting that input costs are rising fast and most firms say they can pass most of them on.The Atlanta Fed's GDPNow forecast has the US economy growing at +5.4% pa in March.The US Treasury had a big bond tender for its benchmark 7yr Note and the yield rose to +1.3% pa and well above its prior 1.195%. US$150 bln was tendered for the US$73 bln that was accepted. Today's result takes the yield back to higher than a year ago after the suppressed pandemic falls.In the dramatic Suez Canal blockage and shutdown, it is now expected to "take weeks" to clear the problem. The blockage is creating long tailbacks in the waterway, with more than 150 vessels currently waiting in the area to pass. The alternative Cape Town route can add two weeks plus to the journey. There will be a global impact from this problem, sharply increasing shipping costs and container availability everywhere, all adding to an already stressed and expensive problem.In Canada their housing regulator is pointing out their vulnerability to a downward price correction there. Toronto is the key market at risk, but these risks of overheating are spreading to other cities they say, and the coming correction could be sharp.In Germany, there was a notable shrinkage in their negative consumer sentiment, a result of the easing of their lockdown conditions.In China, a different kind of supply chain problem is growing. The boycott of the use of forced or slave labour in making Chinese cotton is seeing Beijing force its ecommerce firms to remove the products of companies who adhere to that boycott. It is an issue that is further fracturing relations between the West and China, and China's sensitivity over the issue (in support of slave labour) is hard to understand except as a challenge to their wounded pride. The Australians have called China a 'vindictive' and 'unreliable' trading partner, an escalation that is sure to draw a response.The UST 10yr yield is unchanged at 1.62%. The price of gold starts today back down -US$7 in New York at US$1728/oz.Oil prices have given up all of yesterday's recovery and more, down -US$3/bbl and are now at just over US$58/bbl in the US, while the international price is now just under US$61.50/bbl.The Kiwi dollar opens today even lower at 69.6 USc with an extended devaluation that has now reached -4.0% in just over a week. Against the Australian dollar we are holding at 91.7 AUc. Against the euro we are also holding at 59.1 euro cents. Today's shifts are again all about a rising greenback. That means our TWI-5 opens today marginally lower at 72.2.The bitcoin price will start today at US$51,153 and down a sharp -8.5% from this time yesterday. Volatility in the past 24 hours has been very high at +/- 5.9%. You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. We will do this again on Monday.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news where the most interesting move globally has been the forced move by our Government to have the RBNZ target housing. Interest rate rises may become a self-fulfilling consequence.But first in the US, new orders for durable goods in January rose much more than in December and came in much higher than expected with a +4.5% rise year-on-year. Orders for non-defence capital goods were up an even better +6.8% suggesting boardrooms are investing again.The number of new regular jobless claims fell sharply last week to +710,000 (a 3 month low) and the new number of people on these claims is 4.8 mln, an equivalent drop. But there were +451,000 initial claims for Pandemic Unemployment Assistance. Both are still large levels but they do seem to be trending lower.However, pending home sales slipped in January from December and this was an unexpected result. And the prior month's data was revised lower. But they are still well above the levels of January 2020.The Kansas City Fed's factory survey is the latest regional survey out and that reports activity that is climbing and new order growth. But they are seeing lots of weather-related interruptions.In Texas, a string of financial defaults arising from their power crisis threatens to start a domino effect in the state, all a consequence of the rocketing up of the electricity price in that period.In Canada, weekly earnings data shows little change but is +6.4% higher than year-ago levels. This is largely the result of lower-paid jobs falling away however.In China that are celebrating "the elimination of poverty" and showering Chairman Xi with accolades for the accomplishment.China is having trouble containing its African Swine Fever pandemic. The outbreak is returning again after not really having been defeated in the first round and the emergence of a resistant strain.In Taiwan, industrial production is climbing fast, up almost +19% in January from a year ago. Retail sales growth is returning too after lagging for a while, up +3.6% on the same basis.In the UK, public transport frequency is being reduced as riders continue to shun that form of commuteWall Street has turned sharply lower today and restarting their losing streak, with the S&P500 down by -1.9% in early afternoon trade and now at its lowest point in a week. There is a tech rout underway and the rising bond yields are accentuating the downward trend. Yesterday the NZX50 Capital Index ended its session down another -1.2%. In fact, in four days, the NZ exchange has lost -3.3% and since the start of the month it is down -7.6% in pretty much a one-way slide.The UST 10yr yield is up dramatically today, up +8 bps at 1.46%. This sell-off now has global momentum, all based on rising expectations for inflation, expectations central bankers can't halt despite their attempted unison jawboning. The New Zealand Govt 10 year yield has raced up another +18 bps to be at 1.88%. Recall, it was at 1.16% at the start of the month and 1.02 at the start of the year, so the repricing has been sharp, with the largest rises in the past few days.The savage sell-off of New Zealand bonds yesterday was after the RBNZ was forced to add housing to its policy remit. Bond managers think the RBNZ will now have no option but to raise interest rates to preserve affordability. And that may have been made into a self-fulfilling consequence.The price of gold will start today down another -US$31 at US$1770/oz and falling.Oil prices are marginally firmer and are now at just over US$63.50/bbl in the US, while the international price is just over US$66/bbl.And the Kiwi dollar opens at 74.3 USc with another rise from this time yesterday. It is close to its high more than 4½ years and it has risen +33% in a year. Against the Australian dollar we are holding at 93.4 AUc. Against the euro we have slipped slightly, back at 60.8 euro cents. That means our TWI-5 is now up at 75.2 and also a 4½ year high.The bitcoin price is now at US$50,827 and +2.4% higher than this time yesterday. It did get up to US$52,076 in between but is drifting lower now. Volatility in the past 24 hours is still high at +/- 4.1%.You can find links to the articles mentioned today in our show notes.And get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. We will do this again on Monday.