Daily update
Daily update
- Federal Reserve minutes indicated that Fed economists see a meaningful slowdown in US economic growth in the second half of the year. With real incomes so negative, this is not a surprise. The tone of the minutes is consistent with a slower pace of tightening policy, which is also logical. Consumers may react faster to news and policy (the possibility of tweeting the US into a recession is real), requiring a measured policy response.
- US initial jobless claims have been trending up lately. Job security is important to keeping consumers on the path to slowdown, not the path to slump. Today’s data is unlikely to show an alarming level, however. US existing home sales are due, giving more insight into a sector of the economy that is slowing significantly.
- Eurozone July final consumer price inflation is not especially market moving (we know the major economies’ data). Eurozone inflation was always going to peak later than the US (the transitory durable goods inflation peak was later) but gas prices made that story worse.
- Chinese state media has announced more local government spending on infrastructure to boost the economy. Zero-COVID policies have left consumers looking to save rather than spend, and consumer weakness is not being addressed by fiscal policy.
