Aurelia Butler

Federal Reserve officials warned they would need to see “substantially more evidence” of easing inflation before they are convinced that price pressures are under control as they backed fresh rate rises this year, according to an account of their most recent meeting.Minutes from the December gathering, when the US central bank raised its benchmark rate by half a percentage point, showed the Fed intends to continue squeezing the economy to try to tackle price pressures, which they warned could “prove to be more persistent than anticipated”.The half-point rise ended a months-long string of 0.75 percentage point increases and lifted the target range of the federal funds rate to between 4.25 per cent and 4.5 per cent.The decision in December followed fresh evidence that inflation appeared to have peaked as energy prices and those tied to the goods sector have retreated, developments which participants described as “welcome”.“Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 per cent, which was likely to take some time,” the minutes, released on Wednesday, said, referring to the Fed’s inflation target.The minutes also indicated that officials are attuned to how their policy communications are being digested by investors and others across Wall Street. In the weeks leading up to the December meeting, financial conditions had loosened as traders in fed funds futures wagered the Fed would back off its tightening campaign sooner than officials have signalled.

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A slower pace of rate rises “was not an indication of any weakening of the committee’s resolve to achieve its price-stability goal or a judgment that inflation was already on a persistent downward path”, a number of participants said was important to make clear, according to the minutes.Officials also warned an “unwarranted easing in financial conditions, especially if driven by a misperception by the public of the committee’s reaction function, would complicate the committee’s effort to restore price stability”.According to the “dot plot” of policymakers’ interest rate projections published after the meeting, most officials now see the federal funds rate peaking between 5 per cent and 5.25 per cent, with a large cohort of the view that it may need to go even higher. That suggests a total of at least 0.75 percentage points’ worth of rate rises to come. At the press conference that followed last month’s rate decision, Jay Powell, Fed chair, warned that he could not “confidently” say the central bank would not raise its estimates again as he sought to push back against speculation that it would soon abandon its tightening plans.“We’ve covered a lot of ground and the full effects of our rapid tightening so far are yet to be felt. We have more work to do,” he told reporters. Michael Gapen, chief US economist at Bank of America, said the Fed could respond to the easing of financial conditions by raising interest rates more than expected and delivering a hawkish surprise to financial markets. The central bank next meets later this month, with its rate decision announced in early February.The minutes did not indicate whether officials are likely to support another half-point rate rise or shift down to a quarter-point increase, though the odds of the smaller jump stand at 70 per cent, according to CME Group.However Gapen said he believes the Fed will press ahead with another half-point rate rise and warned there is a chance the central bank will eventually need to lift its policy rate to between 5.5 per cent and 6 per cent.The dot plot showed that rate cuts are not expected until 2024, when the benchmark rate is projected to fall to 4.1 per cent, before dropping to 3.1 per cent in 2025. Growth is set to slow considerably as borrowing costs are kept high for an extended period, with most officials projecting an expansion of just 0.5 per cent this year before a 1.6 per cent rebound in 2024.The unemployment rate is likely to increase by nearly a full percentage point from its current level to 4.6 per cent, the estimates show.The minutes also indicated that officials are still chiefly concerned about “upside risks to the inflation outlook” and doing too little in terms of tightening. But there are also fears that the Fed will have raised rates excessively and to a degree that will lead to an “unnecessary reduction in economic activity”.

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While the weakening economy is set to put downward pressure on prices, it is expected to take some time for inflation to fall to the Fed’s longstanding 2 per cent target. The central bank’s preferred inflation gauge — the core personal consumption expenditures price index — is projected to decline to 3.5 per cent by the end of 2023 and 2.5 per cent in 2024. As of November, it hovered at 4.7 per cent.So far, the Fed’s tightening has been felt most in interest-rate sensitive sectors such as housing, where prices have declined dramatically from their coronavirus pandemic peaks. However, labour demand remains high as consumers continue to spend, helping to further entrench inflationary pressures that have taken hold across the services sector. Economists warn that rooting those out will require a recession and job losses.Powell and his colleagues, as well as White House officials, maintain a recession can be avoided even as the unemployment rate ticks up. More

“In my view … it will be appropriate to continue to raise rates at least at the next few meetings until we are confident inflation has peaked,” Kashkari said in an essay posted on the regional Fed bank’s website, even as he noted increasing evidence price pressures appear past their worst.The U.S. central bank, which rapidly raised interest rates in 2022 to combat high inflation, is eyeing a stopping point in its current tightening cycle in the spring of this year. Its main policy rate currently sits in a target range of 4.25% to 4.50%.Minutes of the Fed’s last policy meeting in December showed rate-setters still focused on controlling the pace of price increases amid worries of any “misperception” in financial markets that their resolve to fight inflation was in any way flagging.Kashkari’s forecast of 5.4% as a point at which to pause is at the more aggressive end of Fed policymakers, although 15 of 19 of them expect the target rate to rise by either three-quarters of a percentage point or a full percentage point in coming months.Kashkari, whose projections last year of where interest rates would need to go in 2023 were the most hawkish of all Fed policymakers, also said rates would have to be held at their initial peak for a “reasonable” period to allow time for the central bank’s actions to work their way through the economy and continue to bring inflation to heel.He also cautioned that the road would likely be bumpy and indicated a bias to overshooting rather than undershooting on bringing inflation down.”To be clear, in this phase any sign of slow progress that keeps inflation elevated for longer will warrant, in my view, taking the policy rate potentially much higher,” Kashkari said.Fed Chair Jerome Powell has also made plain that the central bank expects to hold rates at a high level for an unspecified period of time and has pushed back against expectations for rate cuts this year.Of course, much depends on how incoming data, in particular on inflation and labor market strength, reinforce that view. Despite a waning of price pressures late last year, the Fed’s preferred inflation gauge is still rising at a 5.5% annual rate, more than twice the U.S. central bank’s 2% target.Data released on Wednesday also showed job openings, a closely watched indicator as a proxy for labor market shortages and pressure on employers to give higher-than-normal wage increases, fell only moderately in November.For his part, Kashkari reiterated the Fed must avoid cutting rates prematurely. “That would be a costly error, so the move to cut rates should only be taken once we are convinced that we have truly defeated inflation,” he said.Drawing on the unexpected surge in inflation caused by supply and demand imbalances over the past two years, Kashkari also chided the inability of traditional economic frameworks at the Fed and elsewhere to forecast inflation outside of labor market and inflation expectation channels and called for new models to predict high inflation.”From what I can tell, our models seem ill-equipped to handle a fundamentally different source of inflation, specifically, in this case, surge pricing inflation,” he said. More

WASHINGTON (Reuters) – U.S. job openings fell less than expected in November as the labor market remains tight, which could see the Federal Reserve boosting interest rates to a higher level than currently anticipated to tame inflation.There was, however, encouraging news in the inflation fight, with a survey from the Institute for Supply Management (ISM) on Wednesday showing its measure of prices paid by manufacturers for inputs diving in December to the lowest level since February 2016, discounting the plunge early in the COVID-19 pandemic.The Fed is engaged in its fastest interest rate-hiking cycle since the 1980s as it tries to dampen demand, including for labor, to quell inflation. Last month, the U.S. central bank projected interest rates could rise to a peak of 5.1%. But persistent labor market tightness has led economists to expect that borrowing costs will increase to a much higher level and remain there for a while.”The labor markets are still too darn hot for policymakers,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “Fed officials won’t be confident their monetary tightening is working until hiring demand begins to slow.” Job openings, a measure of labor demand, slipped 54,000 to 10.458 million on the last day of November, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report. Data for October was revised higher to show 10.512 million openings instead of the previously reported 10.334 million. Economists polled by Reuters had forecast 10 million job openings. There were 1.74 jobs for every unemployed person in November. Professional and business services reported an additional 212,000 job openings, while vacancies increased 39,000 in nondurable goods manufacturing. But job openings dropped 75,000 in finance and insurance, one of the industries hardest hit by higher borrowing costs, and fell 44,000 in federal government. The job openings rate was unchanged at 6.4%, though it was 0.9 percentage point below its peak in March 2022. Hiring fell to 6.055 million from 6.111 million in October. But hiring increased 74,000 in the healthcare and social assistance sector. The hiring rate dipped to 3.9% from 4.0% in October. The Fed last year hiked its policy rate by 425 basis points from near zero to a 4.25%-4.50% range, the highest since late 2007. Last month, it projected at least an additional 75 basis points of increases in borrowing costs by the end of 2023. Minutes of the Fed’s Dec. 13-14 policy meeting published on Wednesday showed officials acknowledged “significant progress” over the past year to bring inflation down and thought the central bank now needed to balance its fight against price pressures with the risks of slowing the economy too much and “potentially placing the largest burdens on the most vulnerable groups” through higher-than-necessary unemployment.Stocks on Wall Street were mostly higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.MORE RESIGNATIONSThe still-tight labor market conditions were reinforced by a 125,000 increase in the number of people resigning from their jobs to 4.173 million in November. That lifted the quits rate, viewed by policymakers and economists as a measure of job market confidence, to 2.7% from 2.6% in the prior month. Higher resignations could keep wage growth elevated and ultimately inflation. Layoffs fell 95,000 to 1.350 million. “Workers overwhelmingly quit their old jobs to take new ones, which is a critical fuel for wage growth,” said Nick Bunker, head of research at Indeed Hiring Lab. “The flipside of workers leaving their old jobs readily is that employers aren’t letting go of the workers that remain.”In a separate report, the ISM said its measure of prices paid by manufacturers dropped to 39.4 from 43.0 in November. The ninth straight monthly decrease reflected fading demand for goods, which are typically bought on credit.Supply chains are improving and Americans are shifting spending away from goods to services as the nation moves to a post-pandemic era. The ISM survey’s forward-looking new orders sub-index tumbled to 45.2, the lowest since May 2020, from 47.2 in November. It was the fourth straight month this measure has been in contraction territory.Its measure of supplier deliveries fell to 45.1 from 47.2 in November, remaining below the 50 threshold, which indicates faster deliveries to factories, for a third consecutive month. The month-over-month performance of supplier deliveries was the best since March 2009, according to ISM. Goods prices are falling on a monthly basis, while the annual increase has slowed considerably. Economists expect goods deflation this year. Services will, however, continue to exert upward pressure on inflation.With demand slumping, manufacturing contracted for a second straight month in December with ISM’s manufacturing PMI dropping to 48.4 from 49.0.That was the weakest since May 2020 and pushed the index just below 48.7, which the ISM says is consistent with a recession.But with the labor market still pumping out jobs and sustaining consumer spending, it is unlikely the economy is in recession.A PMI below 50 indicates contraction in manufacturing, which accounts for 11.3% of the U.S. economy. The survey’s measure of factory employment rebounded to 51.4 from 48.4 in November. Comments from manufacturers ranged from “huge” skilled labor shortages in the computer and electronic products industry to orders “really” slowing in the transportation equipment sector, and “customers delaying their commitments for capital purchases” in the machinery production industry. More

Investing.com – Federal Reserve policymakers agreed that a sustained period of restrictive policy would be needed to cool “unacceptably high” inflation, according to the minutes of the Fed’s December meeting released on Wednesday. Fed members favored a “restrictive policy stance for a sustained period,” the minutes showed, until inflation was on a sustained downward path to 2 percent, which was likely to take “some time.”  At the conclusion of its previous meeting on Dec. 14, the Federal Open Market Committee raised its benchmark rate by 0.5% to a range of 4.25% to 4.5%.The Fed’s policy decision in December marked a slowdown from the four consecutive 0.75% rate increases seen at the prior meetings. Despite a willingness to move at a slower pace of hikes, Fed members at the meeting backed the need to raise interest rates further, upgrading their forecast on the peak level of rates, or the terminal rate.Members viewed that a higher for longer rate regime would keep a lid on economic growth and curb inflation, which remains “unacceptably high,” according to the minutes. At the meeting, Fed members estimated a median rate of 5.1% in 2023, up from a prior forecast of 4.6%, suggesting a target range of 5%-5.25%, or about another 75 basis points of rate hikes ahead. The more aggressive rate-hike outlook from the central bank arrived as Fed members prepared for an even faster pace of inflation, raising their outlook on price pressures to 3.5% in 2023, up from a prior forecast of 3.1%.Debate among Fed members focused on two risks: the risk of pausing too early, which would threaten the central bank’s aim of bringing inflation down to its 2% target, and the risk of tightening too much, pushing the economy into recession. “Many participants highlighted that the Committee needed to continue to balance two risks. One risk was that an insufficiently restrictive monetary policy could cause inflation to remain above the Committee’s target for longer than anticipated, leading to unanchored inflation expectations…[T]he other risk was that the lagged cumulative effect of policy tightening could end up being more restrictive than is necessary to bring down inflation to 2 percent.”Ultimately, the committee members, however, continued to view the inflation outlook as a “key factor shaping the outlook for policy,” the minutes showed.    Earlier on Wednesday, Minneapolis Federal Reserve President Neel Kashkari said while there were signs of easing inflation, the Fed still has more work to do.”[I]t will be appropriate to continue to raise rates at least at the next few meetings until we are confident inflation has peaked,” Kashkari said, forecasting a Fed pause at about 5.4%.“I have us pausing at 5.4%, Kashkari said, though added that any risk to inflation remaining higher for longer will “warrant, in my view, taking the policy rate potentially much higher.”The latest data pointing to a still-tight labor market, which threatens to further fuel wage growth and inflation, outlined the need for the Fed to continue tightening monetary policy.U.S. job openings, a gauge of labor demand, fell less than expected in November to 10.458 million from 10.512 million in October, according to the Bureau of Labor Statistics.“The JOLTS report was very strong, showing no improvement in the labor imbalance,” Jefferies said in a note. “Without a substantial reduction in labor demand, the Fed will not be comfortable pausing, let alone cutting rates.”Fed members expect, however, that under an “appropriately restrictive path of monetary policy,” labor market supply and demand would “come into better balance over time, easing upward pressures on nominal wages and prices,” the minutes showed.About 84% of traders expect the Fed to lift rates by 0.25% at its next meeting on Feb. 1, according to Investing.com’s Fed Rate Monitor Tool. “We continue to expect three additional 25bp rate hikes in February, March, and May, for a peak funds rate of 5-5.25%,” Goldman Sachs said in a recent note ahead of the FOMC minutes. The Fed also flagged the recent easing financial conditions, if driven by market expectations for rate a cut, as a concern and said no rate cuts were expected this year. “No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023,” according to the Fed minutes.  More

“Brazil is back”. Luiz Inácio Lula da Silva’s words are an ambitious declaration of intent from one of the world’s best-known leaders after a remarkable political resurrection. Following his release from jail after the Supreme Court quashed corruption convictions, Lula’s narrow election victory last year over far-right incumbent Jair Bolsonaro proved the vitality of the southern hemisphere’s largest democracy and the strength of its institutions.Fears of mass uprisings by Bolsonaristas have so far proved unfounded. The former army captain, who vowed that only God could remove him from the presidency, slunk away quietly before Lula’s inauguration on January 1 and was last seen eating fast food in Florida.Now 77, Lula inherits a deeply divided and heavily indebted country facing global economic headwinds. He is unlikely to benefit from a commodity boom like the one which lifted the economy in his first two terms from 2003-10. Many of Lula’s early moves have been encouraging. His determination to restore Brazil’s reputation as a global environmental leader by halting deforestation in the Amazon and protecting its indigenous peoples will be warmly welcomed. So will his commitment to social and racial justice in a highly unequal country. Few can argue with a vow to eradicate hunger in one of the world’s biggest food producers or to restore professional leadership to key ministries after the chaos of Bolsonaro-era ideologues.Abroad, Brazil’s status as a developing world power with clout in the west, Russia and China affords it diplomatic opportunities. This could be particularly valuable in negotiating with Venezuela and Cuba, where the US policy of “maximum pressure” sanctions has failed spectacularly. But Lula’s return has not been universally welcomed. Financial markets have tumbled as investors fret that the veteran leftist will prove more interventionist and less fiscally responsible than hoped. His dismissal of a constitutional spending cap as a “stupidity” may prove rash. Pledges to use the state-controlled oil company, Petrobras, and the national development bank as engines of economic development recall past failures.The narrow election result showed how many Brazilians still mistrust Lula’s Workers’ Party (PT). Its last period in power ended with the Car Wash scandal — Latin America’s biggest-ever corruption case — the impeachment of President Dilma Rousseff and Brazil’s deepest recession in at least 60 years. The PT needs to show it has learnt from these mistakes. In navigating a much less forgiving economic and political environment, Lula should govern pragmatically and draw on all the talents in the broad coalition which helped him win. His biggest challenge is to return Brazil to strong and sustainable growth after a decade of stagnation. This requires bold moves to simplify the tax system, open up the economy to trade, improve education and increase infrastructure investment. How to fund ambitious campaign promises is a pressing question. Brazil is not a low-tax country: the tax burden is close to the OECD average and there is little room to borrow more. But there is waste: Brazil spends more of its national wealth on education than France but the results are poor. The answer is better, rather than bigger, government. If he is to reconcile the imperatives of social justice, environmental protection and sustainable growth, Lula’s best bet is to harness the power of international investment and foreign trade to unlock Brazil’s considerable economic potential. That would open the way for a truly historic third term. More

Pharmacists in the UK and US are warning of shortages of cold and flu medicines, with an early winter season surge in respiratory infections leaving manufacturers struggling to keep up with demand. Some pharmacies are finding it hard to order over-the-counter drugs such as cough syrups and painkillers, restricting what customers can purchase, while some wholesalers are rationing the available medicines.Leyla Hannbeck, chief executive of the UK’s Association of Independent Multiple Pharmacies, said shortages — combined with other frustrations such as not being able to get hold of a GP family doctor — meant pharmacists on the frontline were dealing with a rise in abuse and violence from patients. She called on the UK government to bring together stakeholders and address problems in the supply chain. “We are running out of basic cold and flu medicines. As soon as demand goes up for something, we are falling on our faces. Supply cannot meet demand,” she said. Sufferers are buying the medicines to treat the symptoms of Covid-19, flu, and other conditions, including Strep-A and RSV, which have seen a resurgence after two winters of lockdowns. The supply problems come on top of a global shortage of antibiotics that led the UK to issue a serious shortage protocol for formulations given to children last month. Adrian van den Hoven, director-general of Medicines for Europe, which represents generic drugmakers, said they had anticipated an increase in demand compared with the last two years, but had not expected it to come earlier than a normal cold and flu season.He said governments should be sharing more data on infection rates — beyond what is already collected on Covid-19 and flu — so manufacturers can adapt supply chains, which takes several months.“We are not epidemiologists. We don’t know exactly what it is going to look like: will 2022-2023 be an off year, or is it going to look like this for the next five years?” he said. In the UK, pharmacy industry associations are reporting shortages of treatments including Reckitt Benckiser’s Lemsip and Haleon’s Beechams and Day and Night Nurse. Superdrug, one of the UK’s largest pharmacy chains, confirmed that shortages were a “national issue”, saying there had been a “huge peak in demand for both branded and own-brand cold and flu products”. Demand for Superdrug-branded remedies had been above their highest level in the acute phase of the pandemic, the company said. Pharmacists reported increases in prices for antibiotics amid last month’s shortage. But Paras Shah, executive director at UK wholesaler Sigma, said the prices of over-the-counter remedies did not react to market conditions as quickly as the prices of prescription drugs. In the US, CVS pharmacies have limited purchases of children’s pain relief products to two per customer since last month. Walgreens has restricted online customers to six per transaction to “prevent excess purchasing behaviour”. Johnson & Johnson, which makes Tylenol and Motrin pain relief, said its production sites were operating around the clock to deal with “high consumer demand driven by an extremely challenging cold and flu season”. Consumer health groups said the shortages were driven by the jump in demand rather than problems securing underlying ingredients. Reckitt reported “significantly increased demand” but said it was doing all it could to minimise disruption. Haleon said it was increasing its supply capacity but customers in some regions might experience shortages. More

Today’s top storiesSalesforce became the latest tech company to reduce costs as demand slows, announcing plans to cut 10 per cent of its workers. UK prime minister Rishi Sunak in his first major policy speech since taking office outlined five promises on which he wants the public to judge him come the general election. One of those big issues is the state of the health service: here’s our explainer on why the NHS is in its worst ever crisis. The EU is set to impose pre-departure Covid tests on travellers from China in light of the new wave of infections in the country, news of which is spreading, despite Beijing’s propaganda efforts. The WHO called for more transparency.For up-to-the-minute news updates, visit our live blogGood evening.“We expect one-third of the world economy to be in recession” was the IMF’s cheerful New Year message as it signalled another potential cut in its projections for 2023, most likely during its annual get-together at Davos later this month.But although the US, Europe and China will all be subject to some kind of slowdown over the next 12 months, fresh data this week have highlighted some key differences.In mainland Europe at least, optimism is growing that inflation has peaked. A better than expected fall in the German CPI to 9.6 per cent from 11.3 per cent lifted European stocks and government bonds to one of the best starts to the year ever. German companies have reported an improvement in supply chain disruption and the number of jobs is at a post-reunification high.Inflation in Spain and France also fell more than expected, suggesting the eurozone-wide figure due on Friday could drop lower than the forecast 9.7 per cent. Outside the EU, Turkey also reported a substantial drop in inflation, albeit from elevated levels of 85 per cent, down to 64 per cent, thanks to lower food and fuel costs. However, crumbs of comfort are hard to find across the Channel.Industry data today showed UK food inflation hitting 13.3 per cent, putting further pressure on struggling households. Other data this week have shown manufacturing output shrinking at one of the quickest rates since 2009; shop closures hitting their highest totals in five years; and mortgage approvals falling to their lowest levels in more than two years, highlighting the turmoil in the housing market sparked by the disastrous September “mini” Budget of then-prime minister Liz Truss.Unsurprisingly, the FT’s annual survey of economists concludes that the UK faces the worst and longest recession in the G7.China’s economy, which was until recently under severe pressure from crippling pandemic restrictions, is now struggling with a new wave of infection after the country’s sudden reopening, denting factory activity in the process. For the first time in 40 years, China is likely to be a major drag on the global economy in 2023 rather than a driving force, according to the IMF. The US, which the IMF thinks is likely to escape the worst of the downturn, thanks in part to its strong labour market, publishes monthly figures on Friday, but new data on job openings today were better than forecast. The country’s manufacturing sector, however, is still struggling, shrinking in December for the second month in a row, according to the closely watched ISM survey, also out today. As for the fight against inflation, minutes from the Federal Reserve’s last policy meeting later (2pm ET/7pm London) will give more clues on policymakers’ next steps. Need to know: UK and Europe economyIn better news for beleaguered Britons, recent warm weather across Europe means household energy bills are likely to be lower than previously expected, falling below the government’s price guarantee in the second half of the year. The EU, meanwhile, is planning to overhaul the bloc’s electricity market to prioritise cheaper renewable power. At present, the most expensive fuel — currently gas — sets the price for all power generated. Our Big Read explores whether consumer moves to reduce consumption will have a lasting effect.Need to know: Global economyDhananjayan Sriskandarajah, head of Oxfam Great Britain, argues in the FT for an urgent overhaul of the financial architecture for global aid, with less of an emphasis on charity and more about responsibility — and enlightened self-interest.Pakistan is turning to China to fund an overhaul of its creaking railway system, despite already owing $100bn in external debt and being at risk of defaulting after a plunge in its foreign exchange reserves.2023 could well be remembered as the year a new world energy order takes shape as the oil market slowly “de-dollarises”, says columnist Rana Foroohar. And if you can’t enough of those predictions for 2023, check out this compendium of FT writers’ punts on everything from the war in Ukraine to the likelihood of Fed rate cuts and the future of crypto. Need to know: businessUS tech stocks had a bumpy start to the year, led by big falls for electric-car company Tesla and Apple, which was hit by concerns over waning demand. Markets globally shed more than $30tn last year thanks to inflation, interest rates rises and the impact of war in Ukraine. Premium subscribers can check out commentator Robert Armstrong’s stocks to watch in 2023.For more positive tech news, try our Tech Champions special report, with winners and shortlists for the cleverest use of technology. And here’s how readers of our sister publication Sifted see the year ahead in European tech.Hollywood chiefs expect a “year of turmoil” as the economic downturn coincides with a slowdown in streaming growth, an ailing cinema industry and a possible writers’ strike. The boom in TV content spending is also expected to slow. Cineworld, the cinema operator in US bankruptcy protection, is seeking buyers as it tries to avoid being picked apart piecemeal. The cost of reinsurance has surged up to 200 per cent in crucial January renewals, thanks to the war in Ukraine and extreme weather events. Reinsurers share losses with primary insurers and so have a vital role in what can be insured and at what price.A strong and prolonged cold and flu season as people mix indoors more after two years of pandemic restrictions, is good news for one sector at least: consumer health. Sales of cold and flu medicines in the UK jumped 28 per cent by value to £288.5mn in the year to November 27. The World of WorkWill the economic downturn put paid to post-Covid work trends? The FT team discusses what’s in store for 2023 in the new Working It podcast. Be prepared for what could be a tough year with our new series: Make work better. Read about how to network more efficiently, ask for a pay rise, and, if all else fails, leave on better terms.Another route to improve life at work is through mental health therapies. Companies have begun to realise that basic wellbeing programmes are failing to make a dent in burnout and stress-related absences among executives.And in case you missed it, here’s some FT research on how the City of London has adapted to hybrid working and is increasingly adopting a Tuesday-Thursday working week.

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Get the latest worldwide picture with our vaccine trackerSome good newsThere may be troubles ahead but it’s important to acknowledge progress too. Here is Reasons to be Cheerful’s list of 183 ways the world got better in 2022.

A Monarch butterfly arrives in Mexico after migrating from Canada. The number of the endangered species found in Mexican forests rose by 35% last year © AP More

The US is sending a delegation of trade and economic officials to Taiwan next week, as the administration of Joe Biden seeks to bolster America’s commercial relationship with the island.The office of the US trade representative announced on Wednesday that Terry McCartin, its top official responsible for trade with China, would lead a US delegation to Taiwan from January 14-17. The USTR said officials from other government agencies would also be present. Beijing is opposed to a trade initiative between Taipei and Washington.Since Biden became president, US government officials have visited Taiwan on rare occasions. In early 2021, John Hennessey-Niland, Washington’s ambassador to Palau, travelled to the island and met with top officials on a trip that was condemned by Beijing. Last month, Tony Fernandes, a deputy assistant secretary of state, visited Taiwan last to discuss economic issues.When Nancy Pelosi travelled to Taiwan last summer, the then Democratic Speaker of the House of Representatives’ visit sharply raised tensions with China, putting Biden in a difficult position.The Biden administration has been looking to expand the US economic relationship with Taiwan, even though the island has not been included in the Indo-Pacific Economic Framework, America’s flagship trade initiative with the region.In June Washington agreed to launch trade negotiations with Taiwan — which have included some virtual sessions as well as an in-person meeting in New York.

According to the USTR’s negotiating mandate, the talks will focus on a range of issues from agricultural and digital trade to the role of state-owned enterprises and labour, environmental and anti-corruption standards.A US official said additional rounds of talks were likely to follow next week’s negotiations in Taiwan. The official added the US delegation would be travelling on commercial aircraft and was in contact with the state department about security arrangements as was standard protocol. The USTR emphasised the talks would be held “in accordance” with the US’s “one China policy” as well as the 1979 Taiwan Relations Act. The US has no formal diplomatic ties with Taipei. But the acceleration of the trade negotiations could upset an attempt by Biden and Xi Jinping, China’s president, to steady their relationship after they met at the G20 in Indonesia in November.Additional reporting by Felicia Schwartz More