Raphael Stevens

The stockmarket is not the economy, as the old investing cliché goes. That is obvious enough to anyone paying attention in America this year. President Donald Trump’s tariff fervour has dented growth, even if not by as much as expected after “Liberation Day”, and yet the stockmarket has soared: the S&P 500 index of large American companies is up by nearly 15% so far this year, comfortably ahead of the historical average. More

On a sunny afternoon aboard an icebreaker in Helsinki’s harbour, it is possible to forget that the border of a warmongering dictatorship is just 150km away. The ships, powerful enough to provide electricity for a small town, are a potential high-tech export to America. They are also a sign of the strains on the Finnish economy. Ever since war in Ukraine broke out and Finland closed its border with Russia, it must trade via the Baltic Sea, hoping to eke out growth in icy conditions. More

How rich must a country be to count as “developed”? The question is preoccupying India’s government, which wants India to attain the status by 2047, the 100th anniversary of its independence from Britain. Narendra Modi recently suggested the government was aiming for a $10trn economy by the centenary year. That was a retreat by the prime minister from earlier rhetoric. In 2022 Piyush Goyal, the commerce minister, aimed for a $30trn economy, a goal echoed by NITI Aayog, the government’s in-house think tank. More

Over the Oct. 1 to 8 public holiday — dubbed “Golden Week” — official figures showed a rise in domestic travelers and tourism revenue, both slower than increase recorded during a public holiday in May.
“The Golden Week was ‘Golden Weak,'” said Mix Shi, founder of PoshPacker Hostels Chengdu Group.
Average spending per domestic tourist trip during the Golden Week was also around 3% lower than prior to the pandemic in 2019, Goldman Sachs pointed out Thursday.

Tourists visit the Confucius Temple market area in Nanjing, Jiangsu province, China, on Oct. 1, 2025.
Cfoto | Future Publishing | Getty Images

BEIJING — The latest sign of hyper-competition, or “involution,” has emerged in China’s tourism industry, adding to concerns about growing deflationary pressure in the broader economy.
Over the Oct. 1 to 8 public holiday — dubbed “Golden Week” — total domestic tourism trips reached 888 million and generated 809.01 billion yuan ($113.63 billion) in revenue, according to official data released Thursday. That’s up by 1.8% and 7.6% from last year, respectively, according to CNBC’s calculations of the figures.

The gains, however, slowed from the May 1–5 holiday earlier this year, when domestic trips and tourism revenue grew 6.4% and 8% respectively. In fact, average spending per domestic tourist trip during the Golden Week was also around 3% lower than in 2019 before the pandemic, Goldman Sachs pointed out Thursday.
“The Golden Week was ‘Golden Weak,'” said Mix Shi, founder of PoshPacker Hostels Chengdu Group.
Although his three hostels in the city ended up being fully booked, Shi said he had to cut nightly rates by about 60% — because nearby hotels dropped prices even more.
“Way too much money has been pouring into the hotel industry lately,” Shi said, noting, “the competition is insane, and some really nice places are going for dirt cheap. It’s great for travelers because they have more choices, but it’s a real blow to hostels.”
Chengdu, the capital of Sichuan province in southwestern China, ranked second to Nanjing, capital of Jiangsu province in the east, in tourism spending for the holiday on the Meituan online booking platform.

Among local and international visitors to hostels in mainland China, Chengdu’s popularity more than doubled from last year’s Golden Week, second only to Shanghai, according to HostelWorld. Still, average bed prices fell more than 20% in both cities — to 165.70 yuan ($23.27) in Shanghai and 80.99 yuan in Chengdu.
While most locals have only a handful of paid days off each year, China has sought to encourage businesses to give workers more vacation days and extended official public holidays to boost consumption.
This year’s Golden Week was one day longer than usual because it coincided with the Mid-Autumn Festival, which follows the agrarian calendar. The festival fell on Oct. 6 this year, versus Sept. 17 last year.
“The Mid-Autumn Festival is considered to be a family reunion festival,” said AJ Wang, owner of the X Hotel and Observatory Hill House venues in the northeastern coastal city of Qingdao.
“The real Golden Week, in terms of revenue generation, actually ends on the 6th,” he said, noting he had to cut prices after that date by 60% due to falling demand.
Official domestic tourism revenue for the Golden Week alone rose by 15.4% from 2024, but when including last year’s Mid-Autumn Festival revenue figures, the comparable revenue growth slowed to 7.6%, CNBC calculations showed.
“Everyone’s working harder, spending more, but the profit gap stays small,” said Sasa Yau, who runs a hostel and restaurant in the southern city of Guangzhou.
Yau said his daily restaurant sales surged from the typical 3,000 yuan to as much as 10,000 yuan during the Golden Week, with the average customer spending just 30 yuan.
“We were busier than ever and broke our revenue record,” Yau said. “There are only four of us running the show, so by the end of the week we were so tired that when I said, ‘Let’s celebrate with a late-night meal!’ everyone just said, ‘Can we celebrate by sleeping instead?'”

Hunting for deals

In Chengdu, famous for its Giant pandas and spicy food, Shi said travelers tend to book rooms only a day or two in advance instead of a week or two ahead, making accommodation rates unpredictable
China’s vast network of high-speed trains and airports — with flights sometimes cheaper than train tickets — has made travelling on a whim fairly easy. Large price swings and challenges in booking tickets for the first or last day of a public holiday are pushing travelers to stagger their trips when possible — and save money.
Many tourists chose to travel slightly before or after the Golden Week period this year, according to Chinese travel booking site Trip.com. It noted that hotel prices in late September were about 20% cheaper than during the Golden Week, while mid-holiday airfares were more than 30% cheaper than at the start of the break.

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Alibaba-owned travel booking site Fliggy said average spending per travel booking rose 14.6% from a year earlier, and noted that far cheaper flights started the weekend after the holiday, such as a flight from Shanghai to Hong Kong for less than 400 yuan ($56).
Official figures also pointed to a rise in road trips, with the holiday seeing an average of 304 million trips per day, mostly by car.
“The Golden Week unleashed a wave of energy across China: record-breaking travel, booming business activity, and fresh spending trends all gave domestic demand a solid boost,” said Bruce Pang, adjunct associate professor at CUHK Business School.
“Still, it might take a while before the [consumer price index] returns to positive [year-on-year] growth, as food prices and oil prices remain soft compared to their peak,” he said.
China’s official consumer prices fell by 0.4% in August from a year earlier but rose 0.9% when stripping out food and energy prices. The tourism sub-segment saw prices rise 0.7% year over year in August, but they were 0.3% lower for the January to August period compared with the same period in 2024.
Travel platforms also reported increased demand in smaller cities, where prices can be far lower. Chinese booking site Tongcheng said hotel bookings in at least 30 such cities and less developed areas more than doubled from a year ago.
China’s inflation data for September is due Oct. 15, and retail sales on Oct. 20. Retail sales rose just 3.4% in August from a year ago, missing analysts’ expectations.  More

Debt suffers from a bad reputation. In almost every culture, lending and borrowing are maligned, with unflattering idioms common. Yet credit is the lifeblood of capitalism: the ability to lend and borrow facilitates hundreds of billions of dollars of activity every day. More

Fed officials in September were strongly inclined to lower interest rates, with the only dispute seeming to be over how many cuts were coming, meeting minutes released Wednesday showed.
The “dot plot” of individual members’ expectations showed the group split 10-9, with the slim majority expecting two more cuts before the end of the year.
Officials grew concerned with the state of the labor market, which they saw as weakening as upside threats to inflation continued though they still expected it to ease back to the Fed’s 2% target.

Federal Reserve officials in September were strongly inclined to lower interest rates, with the only dispute seeming to be over how many cuts were coming, meeting minutes released Wednesday showed.
The meeting summary indicated near unanimity among participants at the Federal Open Market Committee that the central bank’s key overnight borrowing rate should be cut due to weakness in the labor market.

They split, however, on whether there should be two or three total reductions this year, including the quarter percentage point move approved at the Sept. 16-17 meeting.
“In considering the outlook for monetary policy, almost all participants noted that, with the reduction in the target range for the federal funds rate at this meeting, the Committee was well positioned to respond in a timely way to potential economic developments,” the minutes stated.
“Participants expressed a range of views about the degree to which the current stance of monetary policy was restrictive and about the likely future path of policy,” the document added. “Most judged that it likely would be appropriate to ease policy further over the remainder of this year.”

A one-vote difference

Projection materials released at the meeting exemplified the close split among the 19 officials who take part at FOMC meetings, 12 of whom vote.
While the full Federal Open Market Committee voted 11-1 to lower its benchmark interest rate by a quarter percentage point, participants had varying views on how aggressive they should be through the rest of 2025 and the next several years. The reduction took the federal funds rate down to a target range of 4%-4.25%.

Ultimately, a slight 10-9 majority favored the equivalent of quarter-point cuts at each of the two remaining meetings this year. Projection materials indicated the likelihood of one more cut in both 2026 and 2027 before the funds rate settles in a long-term range around 3%.
However, the meeting featured a range of viewpoints. The Sept.16-17 session was the first for newly appointed Governor Stephen Miran, who took office just hours before the start.
Miran singled himself out as a lone voter who favored a much more aggressive easing path. Though the minutes do not identify individual participants, the post-meeting statement noted that Miran was the dissenting vote, preferring instead a half-point cut.
Moreover, in subsequent public appearances, Miran noted that he was a lone “dot” that indicated a much more aggressive path of easing than the rest of the committee.

Concerns over the labor market

The meeting appeared to see views across the spectrum, with some preferring a more cautious approach to cuts.
“Some participants noted that, by several measures, financial conditions suggested that monetary policy may not be particularly restrictive, which they judged as warranting a cautious approach in the consideration of future policy changes,” the minutes said.
Officials grew concerned with the state of the labor market, which they saw as weakening as upside threats to inflation continued though they still expected it to ease back to the Fed’s 2% target.
“Participants generally noted that their judgments about this meeting’s appropriate policyaction reflected a shift in the balance of risks,” the minutes said. “In particular, most participants observed that it was appropriate to move the target range for the federal funds rate toward a more neutral setting because they judged that downside risks to employment had increased over the intermeeting period and that upside risks to inflation had either diminished or not increased.”
Tariffs were a significant part of the discussion, with a general feeling that President Donald Trump’s levies would not be a major source of lasting inflation after pushing prices higher this year.
The committee’s sentiment on rates matched a survey the Fed sends to primary dealers in financial markets, the summary said.
“Almost all respondents to the Desk survey expected a 25 basis point cut in the target range for the federal funds rate at this meeting, and around half expected an additional cut at the October meeting,” the minutes stated. “The vast majority of survey respondents expected at least two 25 basis point cuts by year-end, with around half expecting three cuts over that time.”
One basis point equals 0.01%, so a 25 basis point move is the equivalent of a quarter percentage point.
Along with the unusual level of diverse opinions, policymakers now face fallout from the government shutdown. Data providers such as the Labor and Commerce departments have shuttered operations while the impasse continues and are not releasing or collecting data.
Should the shutdown not end by the FOMC’s Oct. 28-29 meeting, policymakers essentially will be flying blind on key economic metrics for inflation, unemployment and consumer spending. Market pricing implies a near certainty that the Fed will cut both at the upcoming meeting and one in December, but that decision could be influenced by the lack of data.
Correction: An earlier version misattributed the opinion of a market survey to that of Fed officials. A survey of market participants indicated that “around half” expect three total cuts this year. More