Daily update
Daily update
- No fewer than seven members of the Federal Reserve speak today. Some are highly qualified economists who grasp the complex structural upheaval affecting the US economy. Fed Chair Powell is also speaking. The initial success in talking down bond yields has reversed. The Powell Fed’s data dependency means markets overreact to every data release, and the farce on Capitol Hill makes things worse.
- The US House of Representatives again failed to elect a speaker. This creates two market risks. In the near term, there is the fear of a government shutdown on 17 November (with associated economic and credit risks). Longer term, this sends negative signals about the state of US politics and the economic risks if extreme partisans (from either party) gain influence.
- The Israel-Hamas war still creates a heightened sense of market risk, without provoking safe-haven flows. Oil prices remain elevated, but are not at economically destructive levels. The UK prime minister is the latest global leader to visit Israel—and may visit some other countries in the region too.
- Japan’s September export data was stronger, helped by auto exports. Trade with Europe and the US increased, but exports to China fell. Overall demand for consumer durable goods in Europe and the US is, at best, stagnant.
