Aurelia Butler

A record 84% of consumers now view it as a bad time to buy a house, up from previous levels, according to Fannie Mae’s Senior Vice President and Chief Economist Doug Duncan. This sentiment has been primarily driven by mortgage rates exceeding 7%, replacing high home prices as the main deterrent for potential buyers. Only 16% of consumers believe it is currently a good time to buy a house.On the other hand, the number of people who consider it an ideal time to sell their homes also dropped to 63%. This dip is attributed to homeowners’ reluctance to give up their ‘locked-in’ lower mortgage rates, further exacerbating the negative sentiment in the housing market.Despite this downturn in sentiment, the overall HPSI index is up 3.7 points year over year. However, future expectations are not optimistic, with a 42% prediction of rising home prices and an increase in job loss concern to 23%. The Mortgage Rate Expectations component of the index suggests pessimism, with only 17% expecting a decrease in the next year.Household incomes are under strain as well, with respondents reporting lower year-on-year incomes. This deterioration in personal economic situations, coupled with reduced job security, is expected to contribute to sluggish home sales into the next year. The lack of affordability relief continues to pose a significant problem for home purchases, emphasizing the challenges faced by potential buyers in the current economic landscape.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Despite the slowdown, PMI indicators suggest that France is not on the brink of an imminent recession. Business leaders are optimistic about an upturn in both industrial and service sectors starting this October. Moreover, they expect the construction sector to maintain its stability.The French economy has demonstrated resilience amid global economic challenges. It has managed to withstand weaker Chinese demand and the energy crisis that occurred last winter. One key factor contributing to this resilience is the stabilization of supply difficulties and a drop in raw material costs.Interestingly, France’s economic performance has outpaced Germany’s, one of its leading European counterparts. The nation’s ability to adapt to these challenges and maintain steady growth amidst a slowing global economy underscores the robustness of its economic structure and policies.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The IMF faces arguably the greatest test of its legitimacy since it was forged almost 80 years ago. It has weathered multiple crises, from cold war politics to currency crashes. But today it needs to confront a confluence of challenges: global co-operation is fragmenting just as the strains of indebtedness and climate change on the international economy grow larger. The annual meetings of the IMF and World Bank, which started on Monday in Marrakech, are an opportunity to catalyse reform of the flagging global economic guardian. Without concerted effort among its members for change, the IMF could see its influence as the world’s emergency lender wane. That would be detrimental to an interconnected global economic system that needs an overarching arbiter to guarantee its stability.Challenges to the IMF’s legitimacy come partly from recent failings. First, despite its $1tn lending capacity, it has recently struggled to deploy its financial resources effectively at scale, according to the ODI, a think-tank. Second, while the fund estimates about 60 per cent of low-income countries are at high risk of, or in, debt distress, the process of debt restructuring — which it plays a critical role in — has been painstakingly slow. Though the IMF has been impeded by intransigent creditors, its own procedures have been criticised for lacking speed and transparency. A broader threat to its relevance comes from shifts in the global economy. The economic rise of China and India has not been accompanied by a commensurate increase to their share of IMF quotas, which determine contributions and voting rights. The institution over-represents the voice of Europe in particular. The fund is now competing against crisis lending from Beijing and Gulf countries, which often provide finance to developing countries on opaque terms. China has blocked numerous IMF attempts to restructure sovereign debt. Charting a path forward requires buy-in from its members — which will be difficult amid rising economic nationalism. The US is leading a push for an equi-proportional increase in the IMF’s quota resources, which will raise contributions from its 190 member countries while maintaining current voting power allocations. That would be a welcome start towards raising its lending capacity. To leverage more funds from rising powers it would need to raise their quotas and voting shares — and dilute that of other members. Any efforts to raise the influence of Beijing, in particular, at the IMF should be linked to support for debt restructuring. China cannot expect a greater say without adhering to IMF principles. There are other levers the fund could pull. First it needs to be tougher on creditors unwilling to be involved in a restructuring. This could mean using an existing backstop that ensures borrowers suspend debt repayments to difficult creditors. It also needs to be more transparent with it own debt sustainability analysis to speed up the restructuring process.While the IMF needs to bolster its core function as an emergency lender, it has a broader role too. Since climate change and terms of trade shocks hit poorer nations’ fiscal stability, its preventive resilience financing support remains important. Indeed, channelling resources such as its special drawing rights — the IMF’s own international reserve assets — to more nimble multilateral development banks makes sense. Acting as the world’s lender of last resort and leading the restructuring of sovereign debt is a messy but essential job. Critics often focus on the IMF’s errors, while its successes — including suspending debt servicing payments for poor nations and raising $650bn in SDRs during the Covid pandemic — are forgotten. Nonetheless, it needs to be reformed to stay relevant for the sake of the global economy. For that, the IMF ultimately remains dependent on the good sense and willingness of its members to co-operate. More

The delegation will engage in investor and bilateral meetings with representatives from Indonesia, Morocco, Brazil, Switzerland, Germany, and France. The fourth G20 FMCBG meeting is expected to host 65 delegations from G20 countries and international organizations. Topics of discussion will include the crypto assets agenda, strengthening Multilateral Development Banks (MDBs), and the global economy. A Global Sovereign Debt Roundtable (GSDR) is also scheduled to discuss progress on debt restructuring and ways to support the work of G20 countries.In a parallel development today, Rueben Lifuka, vice chair of Transparency International, called on the IMF and World Bank to intensify their fight against corruption during their meetings in Morocco. Lifuka underscored the need to curb illicit financial flows costing Africa US$98 billion annually. These flows are facilitated by professional enablers in major finance centers in advanced economies.Lifuka advocates for global financial system reforms, technical assistance programs, country evaluations, beneficial ownership transparency measures, and strengthened financial intelligence units in African nations. The Civil Society Policy Forum, Tax Justice Network Africa, Stop the Bleeding campaign, and Tunisian Observatory of Economy are all hosting discussions on international financial reforms during these meetings. Transparency International is also urging further analysis of money laundering threats based on IMF’s recent assessment in Northern Europe.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

“I expect that continued restrictive financial conditions will be necessary to restore price stability in a sustainable and timely way,” Logan, one of the Fed’s more hawkish policymakers, said in prepared remarks to the National Association for Business Economics. “I remain attentive to risks on both sides of our mandate. In my view, high inflation remains the most important risk. We cannot allow it to become entrenched or reignite.”Since the U.S. central bank last raised its policy rate to the 5.25%-5.50% range in July, long-term Treasury yields have risen sharply, making borrowing more expensive and acting as a brake on what has been surprisingly strong economic growth and job gains. How much more the central bank’s policy-setting Federal Open Market Committee (FOMC) will need to do, Logan said, will depend crucially on how much of the recent tightening in financial conditions is due to expectations about the economy versus the compensation investors demand for holding longer-term U.S. debt, the so-called “term premium.” “If long-term interest rates remain elevated because of higher term premiums, there may be less need to raise the fed funds rate,” Logan said. “However, to the extent that strength in the economy is behind the increase in long-term interest rates, the FOMC may need to do more.”Higher term premiums play a “clear role” in the rise in long-term yields, Logan said, citing the results of surveys, models, and her own assessment of investor expectations that the Fed will continue to allow its balance sheet to shrink even after it begins reducing interest rates to account for falling inflation. “The expectation of lower Federal Reserve asset holdings over time implies that other investors will need to hold more long-duration securities, which appears to be one factor among the many contributing to higher term premiums,” Logan said. But figuring out how much of the higher long-term rates is due to higher term premiums is complex, Logan said.”I will be carefully evaluating both economic and financial developments to assess the extent of additional policy firming that may be appropriate to deliver on the FOMC’s mandate,” Logan said. More

STOCKHOLM (Reuters) -Harvard economic historian Claudia Goldin won the 2023 Nobel economics prize for her work exposing gender gap issues including deeply rooted wage inequality between men and women, the Royal Swedish Academy of Sciences said on Monday.The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the last of this year’s crop of Nobel prizes and is worth 11 million Swedish crowns, or nearly $1 million. “This year’s Laureate in the Economic Sciences, Claudia Goldin, provided the first comprehensive account of women’s earnings and labour market participation through the centuries,” the prize-giving body said in a statement.”Her research reveals the causes of change, as well as the main sources of the remaining gender gap.”The award for economics is the final instalment of this year’s crop of Nobels that have seen prizes go to COVID-19 vaccine discoveries, atomic snapshots and “quantum dots” as well as to a Norwegian dramatist and an Iranian activist.Goldin, who in 1990 became the first woman to be tenured at Harvard’s economics department, is only the third woman to win the Nobel economics prize – and the first to win it by herself rather than sharing it.She hailed the decision as “an award for big ideas and for long term change”. “There are still large differences between women and men in terms of what they do, how they’re remunerated and so on,” Goldin told Reuters at her home in Cambridge, Massachusetts.”And the question is, why is this the case? And that’s what the work is about.” Goldin’s 1990 book “Understanding the Gender Gap: An Economic History of American Women” was a hugely influential examination of the roots of wage inequality.She has followed up with studies on the impact of the contraceptive pill on women’s career and marriage decisions, women’s surnames after marriage as a social indicator and the reasons why women are now the majority of undergraduates.”Claudia Goldin’s discoveries have vast societal implications,” said Randi Hjalmarsson, member of the Economic Prize committee. “She has shown us that the nature of this problem or the source of this underlying gender gap changes throughout history and with the course of development.”Hjalmarsson quoted Goldin’s own words: “By finally understanding the problem and calling it by the right name, we will be able to pave a better route forward.””BOTH LOSE”While it is illegal across much of the world for employers to discriminate based on gender, women still face significant shortfalls in pay compared to men.In the United States, women last year earned on average 82% of what men earned, according to a Pew Research Center analysis. In Europe, meanwhile, women earned 13% on average less per hour than men in 2021, according to European Commission data.Goldin’s work revealed that while there has been progress in narrowing the gap over past decades, there is little evidence of it fully closing any time soon.She has attributed the gap to factors ranging from outright discrimination to phenomena such as “greedy work”, a term she coined for jobs that pay disproportionately more per hour when someone works longer or has less control over those hours – effectively penalising women who need to seek flexible labour.The economics award is not one of the original prizes for science, literature and peace created in the will of dynamite inventor and businessman Alfred Nobel, but a later addition established and funded by Sweden’s central bank in 1968.The first economics prize was awarded the following year and past winners include a host of influential thinkers and academics such Friedrich August von Hayek, Milton Friedman and, more recently, U.S. economist Paul Krugman.Last year, a trio of U.S. economists including former Federal Reserve Chair Ben Bernanke won for their research on how regulating banks and propping up failing lenders with public cash can stave off an even deeper economic crisis, like the Great Depression of the 1930s.As with the other Nobel prizes, the vast majority of the economics awards have gone to men. Only two women have previously landed one – Elinor Ostrom in 2009 and Esther Duflo a decade later. Speaking on a recording posted on the Nobel website, Goldin said the first thing she did on hearing she had won was to tell her husband, who asked her what he could do.”I told him to take the dog out and make some tea and that I had to prepare for a press conference,” Goldin said.($1 = 11.0095 Swedish crowns) More