Jackson Hole Symposium Moved Online Due to Covid Risk; Dallas Fed’s Kaplan may be cooling off before a gradual start
Good day. Remarks by Federal Reserve Chairman Jerome Powell at the Jackson Hole Economic Symposium on Friday will close a full week of economic data, including August surveys of purchasing managers in the United States and some of the other largest economies in the world. The surveys will offer the most recent insights into how the rapid spread of the Delta variant of Covid-19 is affecting economic activity. Citing concerns about health conditions, the Kansas City Fed said the Jackson Hole rally will be held virtually rather than in person. Dallas Fed Chairman Robert Kaplan said on Friday he might reconsider urging the Fed to start scaling back its bond buying campaign if it looks like the Delta variant is cooling the economy.
Now on to today’s news and analysis.
Fed’s Kaplan may rethink its call for a gradual start in October
Federal Reserve Bank of Dallas Chairman Robert Kaplan said on Friday he may rethink his call for the Fed to quickly start cutting its $ 120 billion in monthly bond purchases if it The spread of the coronavirus variant appears to be slowing economic growth, MarketWatch reports. Earlier this month, Kaplan said the Fed is expected to announce plans to cut buying in September and begin the slowdown in October. In an interview with Fox Business Network on Friday, he said the Delta variant had caused him to have an open mind on the monetary policy path, noting that the variant was “the great imponderable” in the outlook.
Analysis: What we don’t know about the Fed’s bond buying spree
Three vital questions for investors remain unclear as the Federal Reserve prepares to reduce its bond purchases, writes James Mackintosh. Will this quantitative tightening cause Treasury yields to rise or fall? Will stocks do better with rising or falling bond yields? And, related question, is the equity-bond relationship that has existed for the past three decades being reversed?
Fed Withdrawal From In-Person Collection Signals Wider Pullback
The Federal Reserve’s decision to cancel its own in-person event is representative of a wider decline in economic activity as concerns about the virus increase, according to Barron’s. New data from the Transportation Security Administration shows a slowdown in travel, as the number of people passing through TSA checkpoints fell 10% on Friday from a recent high in mid-July. Meanwhile, data from restaurant-booker OpenTable reflects a further decline in bookings. Economists at Oxford Economics say their recovery tracker, a mix of about two dozen indicators, has stalled as consumers become more cautious and overall mobility declines.
Pelosi deadlocked centrist Democrats with key vote ahead
The centrist House Democrats were stuck in a stalemate with House Speaker Nancy Pelosi over when to vote on a roughly $ 1 trillion infrastructure bill, jeopardizing the capacity of the chamber to advance an important segment of President Biden’s agenda.
New appetite for mortgage bonds bypassing Fannie and Freddie
Wall Street is plunging back into turning home loans into bonds, injecting new competition into a market long dominated by government-backed mortgage giants Fannie Mae and Freddie Mac.
Key developments around the world
Japan’s love for debt offers a vision for the future of the United States
Japan often serves as a testing ground for policies that later debut on the biggest stage of the world economy, the central bank of Japan in the United States was a pioneer in introducing zero interest rates. and by buying large amounts of government bonds to stimulate a sluggish economy, tools subsequently used by the Nourris. In debt, Japan is leading the pack. Its public debt first exceeded the size of the economy about 20 years ago. Now the United States is crossing that threshold and Congress is debating more about the proposed spending.
Iron ore prices fall as China’s steel production slows
The price of iron ore has fallen about 40% since mid-July amid concerns over demand from China, which produces more than half of the world’s steel. The recession struck a blow to producing countries, Australia and Brazil.
Overview of financial regulation
Cryptocurrency Firms Leave China In ‘Great Mining Migration’
When China pledged to crack down on cryptocurrency mining in early summer, Nasdaq-listed Bit Digital Inc. stepped up efforts to get its more than 20,000 computers out of the country, which had used the two-thirds of the world’s energy dedicated to bitcoin harvesting.
US banks advance cautiously in Taliban-controlled Afghanistan
U.S. banks are monitoring transactions with their Afghan counterparts more closely, pending whether U.S. sanctions against the Taliban apply across the country now that the Islamist group is in the driver’s seat.
China delays Hong Kong anti-sanctions law
Beijing has delayed plans for a new law that could bar Hong Kong banks and businesses from complying with sanctions imposed on the Chinese people, reflecting the caution over a move that has sparked concern in the banking community. city affairs.
Monday (every hour ET)
9:00 am: Bank of Israel issues policy statement
10 a.m .: National Association of Realtors publishes sales of existing homes in the United States in July
National Bank of Hungary issues policy statement
8:30 a.m .: Schnabel from the European Central Bank speaks during a panel on non-bank financial intermediation at the EEA-ESEM virtual conference
10 a.m .: US Department of Commerce releases July new home sales
Australia risks being divided over cutback as Covid-19 rages
Reserve Bank of Australia suspending plans to cut government bond buying program in September is now a 50/50 proposal, with central bank already preparing to write upbeat economic forecast it has published just a few weeks ago, writes James Glynn.
Huarong’s survival doesn’t mean Chinese companies can’t fail
China’s biggest bad debt manager will live to fight another day, as will its dollar bondholders, but that doesn’t mean investors can afford to ignore President Xi Jinping’s war on debt and shadow banking, writes Nathaniel Taplin.
A major container terminal at the Chinese port of Ningbo-Zhoushan remained closed a week after operations were suspended due to a single case of Covid-19, with dozens of ships lining up to load goods for Western markets before the end of the year shopping season.
Canadian retail sales rose 4.2% in June to seasonally adjusted C $ 56.16 billion, or the equivalent of $ 43.78 billion, after two consecutive months of decline due to economic restrictions to make in the face of a destabilizing third wave of Covid-19 infections, Statistics Canada said. . (Dow Jones Newswires)
New home prices in Canada rose 0.4% in June from May and 11.9% from the previous year, the biggest increase in over 14 years, according to Statistics Canada. (DJN)
(END) Dow Jones Newswires
August 23, 2021 09:06 ET (13:06 GMT)
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