Aurelia Butler

Investing.com – Federal Reserve chairman Jerome Powell is set for Capitol Hill on Tuesday, but the Fed chief isn’t likely to endorse the market’s hawkish rate-hike forecast as the outlook on whether the economic reacceleration seen since the turn of the year has staying power or is transitory remains murky at best, experts say.Market participants are currently pricing in around a further 86 basis points of hikes, but MUFG said it doesn’t “expect Fed Chair Jerome Powell to endorse that scale of further tightening” when the Fed chief takes to Capitol Hill to deliver his semi-annual testimony before Congress.Powell is set for two days of testimony before Congress, on Tuesday and Wednesday.The Fed chairman is more likely to “wait to assess further data in the coming months to see if the strength in activity and inflation is sustained before strongly committing to more rate hikes,” it added.In an interview in February, Powell admitted that the Fed members didn’t expect the January jobs report to be as “strong” as it was, but said it showed why the process [to bring down inflation would take “a significant period of time.”The spigot of strong economic data including the blowout January jobs report and several signs of sticky inflation has forced market participants to abandon their recent penchant to “fight the Fed.”Investors are now forecasting the peak level of Fed funds rates sits ahead of the 5.1% level the Fed had projected in December, with whispers of rates reaching nearly 6% recently seeping into the investment narrative.While the swashbuckling start to the year for the economy has taken many by surprise, others suggest more data is needed to suss out whether the economic reacceleration is real or transitory.“For any additional tightening beyond the May meeting, we would need to see evidence that the reacceleration is real,” Morgan Stanley said.Fortunately, investors won’t have long to wait for a clearer outlook on the economy. The monthly jobs report for February due Friday isn’t expected to replicate the 500,000+ job gains seen in February.“Another blowout NFP report is highly unlikely in the week ahead,” MUFG says, though it remains on alert for an update surprise in wages that perhaps “provides the biggest risk of another hawkish surprise that could lift U.S. yields and the U.S. dollar further.”For the moment, however, the strong data seen thus far has done enough to sway the pivoteers, who were confident a Fed cut was on the table, to relent.“We have moved our call for the first rate cut from December 2023 out to March 2024, and thereafter expect an even more gradual easing cycle with 25bp cuts per quarter, instead of one per meeting previously,” Morgan Stanley added. More

“We have finalized the design of the fiscal framework internally and now I will discuss it with the economic team before presenting it to President Luiz Inacio Lula da Silva, because it cannot be a Finance Ministry proposal,” Haddad told journalists at the ministry. “It will be a proposal from the society, because it will involve a complementary bill to be approved by Congress,” he added.Haddad also stated that Lula has commissioned the development of a system behind the so-called Desenrola program, aimed at refinancing consumer debt with government guarantees. The program will be launched when there is an estimate of when the system will be ready.According to Haddad, the program’s guarantee fund will have about 10 billion reais ($1.9 billion), an amount that will be sufficient to renegotiate 50 billion reais in debt from 37 million individuals.The program will not have an income limit, but only those who earn up to two minimum wages will have their renegotiation guaranteed by government funds, allowing them to receive greater discounts, said the minister.He also stated that he has been sending suggestions to Lula for two director positions in the central bank. The president will dedicate March to analyzing the resumes, said Haddad.Both the terms of Bruno Serra, director of Monetary Policy, and Paulo Souza, director of Supervision, expired in February. However, they can remain in office until replaced.($1 = 5.1538 reais) More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.The show goes on. Just.World and Asian stocks crept higher on Monday despite an increase in U.S. and global bond yields, and ahead of an expected interest rate hike in Australia and hawkish remarks from Federal Reserve Chair Jerome Powell on Tuesday.On top of the Reserve Bank of Australia (RBA) rate decision on Tuesday, investors in Asia have a slew of potentially market-moving indicators on the docket, including Chinese trade and FX reserves, South Korean GDP and inflation from the Philippines, Thailand and Taiwan. Investors are going into these events in a fairly upbeat mood. MSCI’s World equity index rose for a third straight session on Monday, its best run in a month, and the Dow Jones rose for a fourth day, its best run in two months.The gains were minimal, but they came despite a rise in global bond yields on Monday and significant event risk on Tuesday. Arguably the main event in Asia will be the expected quarter point rate hike from the RBA, which would take the cash rate up to 3.60%. Graphic: Australia inflation and interest rate https://fingfx.thomsonreuters.com/gfx/mkt/movakqoqlva/RBA.jpg Analysts expect one more 25 basis point increase in the second quarter of the year, leaving the cash rate at 3.85%, its highest since 2012. If policymakers are to err on one side or the other, it will likely be on the hawkish side.That would be in line with the RBA’s signaling last month and with rate-setters at other major central banks – Austrian central bank chief Robert Holzmann, a hawkish member of the European Central Bank’s (ECB) governing council, told German business daily Handelsblatt that the ECB should hike rates by 50 basis points at its March, May, June and July meetings.Tuesday’s focus rests squarely on the first of two Congressional appearances this week from Powell. Rates and bond market pricing suggests traders expect him to deliver hawkish testimony to lawmakers – the implied terminal rate is holding around 5.50% and traders are a putting near one-in-three chance of a half-point rate hike this month.Again, the question is: how long can equity markets hold up and volatility stay depressed, if yields and Fed expectations continue to grind higher?On the Asian data front, China’s FX reserves for February could cast a light on whether Beijing is starting to reduce its huge holdings of dollar-denominated assets amid the sharp rise in U.S.-Chinese tensions.Analysts expect a decline in reserves to $3.16 trillion from $3.184 trillion in January, which would be the first monthly fall since September. The latest valuation-adjusted figures show that China sold Treasuries last year, but bought a similar amount of U.S. agency debt, thereby keeping its exposure to dollar assets broadly steady. Here are three key developments that could provide more direction to markets on Tuesday:- Australia rate decision (consensus: +25 bps to 3.60%) – China trade, FX reserves data (February)- U.S. Fed Chair Jerome Powell’s semi-annual monetary policy testimony to the Senate (By Jamie McGeever; Editing by Josie Kao) More

The share of independent contractors in the labor force may be about 15% of all workers, according to the study. That’s roughly twice the typical 7% estimate from the Bureau of Labor Statistics.Comprehensive data on informal work and other side hustles have been hard to come by, especially with the rise of the gig economy. The authors of the paper fielded a large-scale survey to find self-employed who might have been miscoded in conventional government estimates and those who may be freelancing on the side of a primary job. They found that less-educated workers and people who have several jobs were the most likely to be under-reported. “Taking these workers into account substantively changes the demographic profile of the independent contractor workforce,” wrote the authors, from the University of Maryland and the W.E. Upjohn Institute for Employment Research.The findings have important implications for the economy. They suggest a greater share of the workforce lacks many of the protections — such as benefits, labor regulations and insurance — afforded to employees. Separately, if many more have extra sources of income, that could help explain the resilience of consumer spending in the face of high inflation, which has been baffling economists.Independent contractors are a subset of the self-employed whose skills and pay varies widely, the paper’s authors wrote. They include freelance consultants, Uber (NYSE:UBER) drivers, and some child-care workers and house cleaners.In their survey, the researchers found that many who thought of themselves as employees were in fact independent contractors upon further questioning, including some cases of multiple levels of subcontracting.The notion of “gig work,” which has been rising in popularity to describe on-demand jobs often handled through apps, fell flat with many groups, especially — but not only — Black workers, the economists wrote. Some associated it with a hobby rather than a job.The survey adds to evidence that informal work has been increasingly prevalent in the US economy, a trend further exacerbated by the pandemic, social media and remote work. The estimated number of Americans who freelanced in 2022 surged to a record 60 million, based on a survey by freelancing platform Upwork (NASDAQ:UPWK).©2023 Bloomberg L.P. More