US Briefing - Wednesday 16.09
Headlines
  • Fed Meeting To Focus On Laying Out Interest-Rate Strategy
  • OECD Projects Global Growth Will Collapse By 4.5% This Year
  • President Trump Claims Vaccine Be Ready Within Four Weeks
  • WH’s Meadows: Moderates' Aid Plan Could Lead Further Talks
  • US Daily Covid-19 Tally Hits Highest In More Than One Month
  • US Spending Pace Likely Slowed In August, Pausing Recovery
  • EU Pitches Massive Economic Overhaul In New Climate Plan
  • BoE Readies For Action As UK Faces Turbulent End To 2020
  • Discount Dining Drives UK Inflation To Lowest In Five Years
  • Bundesbank Chief To Meet Lawmakers Wake Of Court Case
  • Hurricane Sally Regains Strength As It Threatens Gulf Coast
  • Congressional Report Faults Boeing, FAA For 737 Max Failures
Commentary
Fed In No Hurry To Raise Rates Or Change Narrative

Fed Chair Jerome Powell’s speech for the Jackson Hole Symposium has set the Federal Reserve's position for what it expects to be a long fight against the adverse economic effects of Covid-19. Investors will want more of an explanation as to what this entails but may come away disappointed with the lack of any detail.

 

The Federal Open Market Committee (FOMC) is expected to leave rates and quantitative easing (QE) programmes untouched at the conclusion of its two-day meeting on Wednesday. However, there is potential for the board to further tweak forward guidance.

 

Fed governors will also present an updated Summary of Economic Projections (SEP) in what will be the last scheduled meeting ahead of the 3 November Presidential election. (LiveSquawk - Continue Reading)

World Economic Slump Not As Sharp As OECD Previously Feared

The global economic slump won’t be as sharp as previously feared this year, though the recovery is losing pace and will need support from governments and central banks for some time yet, according to the OECD.

 

The world economy will shrink 4.5% this year, less than the 6% forecast in June, the Paris-based institution said on Wednesday, upgrading its outlook in response to rebounds in activity since lockdowns ended. There were big revisions for the US and the euro area, as well as China, which is now forecast to grow modestly, the only Group of 20 country with such a prospect.

 

The better view reflects the strong economic pickup in recent months. The US unemployment rate fell more than forecast in August, while China this week reported positive retail and industrial production data. (BBG - Continue Reading)

US Retail Spending Pace Likely Slowed In August, Despite Rebound

Consumers likely boosted US retail spending in August for the fourth month in a row, but at a slower pace than earlier in the summer as the country continued to struggle with the coronavirus pandemic.

 

Economists surveyed by The Wall Street Journal forecast that retail sales increased a seasonally adjusted 1.1% in August from a month earlier. That would mark a slight cooling from the 1.2% increase recorded in July.

 

Retail spending has continued to recover from the economic shock created by the pandemic, surpassing prepandemic levels in July. “It’s going to be tough to make further gains because levels are already pretty robust,” Stephen Stanley, chief economist at Amherst Pierpont Securities said, referring to retail sales. (WSJ - Continue Reading)

Discount Dining Drives UK Inflation To Lowest Level In Five Years

The government’s discount dining scheme and VAT cut drove inflation down to lowest level in almost five years last month. The consumer prices index of inflation dropped to 0.2 percent in August from 1 percent in July, the Office for National Statistics said.

 

There were also downward contributions from clothes, fuel and travel. Economists said that inflation was now likely to have bottomed out. VAT was also cut in July from 20 per cent to 5 per cent for the tourism and hospitality sectors. The temporary cut will be in place until January.

 

Both pushed inflation down at one of the fastest rates on record. However, the fall was less than expected as restaurants used the government measures to claw back some of their higher costs. (Times - Continue Reading)

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