Aurelia Butler

“I whole heartedly supported the decision,” Cook said in remarks prepared for delivery to The Ohio State University. “That decision reflected growing confidence that, with an appropriate recalibration of our policy stance, the solid labor market can be maintained in a context of moderate economic growth and inflation continuing to move sustainably down to our target.”Cook voted with the 11-1 majority at the Fed to reduce the policy rate by a half of a percentage point on Sept 18. Her prepared remarks, mostly about the impact of artificial intelligence on productivity and jobs, did not touch on her views about how much more or how quickly the Fed should cut rates from here. “In thinking about the path of policy moving forward, I will be looking carefully at incoming data, the evolving outlook, and the balance of risks,” she said, using the same language the Fed did in its statement announcing the rate cut. The U.S. labor market remains “solid,” she said, but has cooled noticeably this year, with the unemployment rate rising to 4.2% from a low of 3.4%. “As labor demand and supply are now more evenly balanced, it may become more difficult for some individuals to find employment,” she said, noting that less-educated and minority workers tend to suffer more from weakening economic conditions. Meanwhile, she said, inflation pressures have eased, running 2.5% in the 12 months through July. That’s “notably closer” to the Fed’s 2% goal than it was just a year ago, she said.”The return to balance in the labor market between supply and demand, as well as the ongoing return toward our inflation target, reflects the normalization of the economy after the dislocations of the pandemic,” she said. “This normalization, particularly of inflation, is quite welcome, as a balance between supply and demand is essential for sustaining a prolonged period of labor-market strength.” More

(Reuters) – A look at the day ahead in Asian markets.Will this week be Chinese President Xi Jinping’s equivalent of Mario Draghi’s famous “whatever it takes” moment?Only time will tell if China’s volley of monetary, liquidity and fiscal stimulus shots this week sparks a sustainable economic recovery, but the rally ripping through Chinese stocks suggests investors are willing to give Beijing the benefit of the doubt.At the very least, downside risks to growth and inflation have been pared back. Remove the near-term pessimism, and the outlook is suddenly a lot brighter, regardless of the underlying fundamental and structural challenges China’s economy faces.Couple that with a U.S. economy still seemingly on track for a ‘soft landing’ and a central bank determined to get ahead of the curve to deliver that outcome, the global picture is a lot brighter too. Risk assets around the world are responding accordingly. The MSCI World and S&P 500 both hit new highs on Thursday. In Asia, Shanghai’s blue chip equity index is up 10.8% so far this week, which would be its biggest weekly rise since December, 2014. The broader Shanghai composite index is up 9.7%. A close at that level on Friday would mark its best week since November, 2008.Hong Kong’s benchmark Hang Seng index’s 4% rally on Thursday brings its weekly gains to 9%, the most in 13 years. An index of mainland Chinese property stocks, meanwhile, leapt 16%.The main potential brake on this momentum on Friday will be a wave of profit-taking ahead of the weekend, especially as it is coming up to the end of the quarter, and Chinese markets will be closed Oct. 1-7 for the Golden Week holiday.While the euphoria and relief are understandable given how beaten down sentiment and asset prices were, a sense of caution is warranted. Although Draghi’s “whatever it takes” commitment in 2012 to save the euro greatly reduced the risk of financial and political catastrophe – bond yield spreads have been lower ever since – the actual policies behind it didn’t fundamentally solve the euro zone’s severe economic problems. Similarly, Beijing’s measures this week won’t fully solve China’s property bust, banish the threat of deflation, or address its long-term demographic challenges. But that’s for another day. Or year. The main Asian economic indicator on deck on Friday is Tokyo consumer price inflation for September, which is expected to show a fairly sharp slowdown in the annual core rate to 2.0% from 2.4%. Minutes from the Bank of Japan’s July meeting on Thursday showed that policymakers were divided on how quickly interest rates should be raised again, highlighting uncertainty on the timing of the next increase in borrowing costs.Here are key developments that could provide more direction to Asian markets on Friday:- Tokyo inflation (September)- Japan leading indicators (July)- German unemployment (September) More

Fitch said in a report that Brazil’s strong recent economic performance may be partially driven by the government’s relaxed fiscal stance. If fiscal performance was weak when economic growth was strong, it could deteriorate further in an unexpected slowdown, the ratings agency said.”Uncertain consolidation prospects are therefore a key macroeconomic vulnerability constraining Brazil’s ‘BB’/Stable sovereign rating,” it added. All three major ratings agencies have either upgraded Brazil’s rating or improved its outlook since last year, when President Luiz Inacio Lula da Silva’s current term started. Still, Latin America’s largest economy remains two notches away from regaining its investment grade rating lost in 2015 amid a sharp drop in commodity prices and loosening of fiscal policies.This week, Lula met representatives from Standard & Poor’s and Moody’s (NYSE:MCO) in New York. He said on Wednesday in a press conference that it was important for the agencies to hear directly from him about Brazil’s situation.In the Thursday report, Fitch said some of the government’s efforts to raise revenues were “improvisational measures” that showed a commitment to fiscal targets but did not offer structural fiscal improvements. It forecast the government would meet its fiscal target of zeroing out the primary deficit this year, with a tolerance margin of 0.25% of gross domestic product and allowances for extraordinary spending that bypasses the official goal. However, it revised Brazil’s primary deficit to 1% of GDP next year, up from the previous estimate of 0.7%.Fitch also noted the country’s gross debt-to-GDP ratio is expected to rise to 77.8% this year, up from 74.4% last year, and reach 83.9% by 2026, the final year of Lula’s term.”This is faster than previously forecast, widening the gap to the ‘BB’ category median of 55%,” it said. More

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