Good day. Federal Reserve Chairman Jerome Powell’s remarks at the Jackson Hole Economic Symposium this Friday will round off a full week of economic data, including August polls from purchasing managers in the US and some of the other largest economies in the world. The surveys will provide the most up-to-date clues on how the rapid spread of the Delta variant of Covid-19 is affecting economic activity. Citing health concerns, the Kansas City Fed said the Jackson Hole meeting would be held virtually rather than in person. Dallas Fed President Robert Kaplan said Friday that he might reconsider urging the Fed to scale back its bond buying campaign if it looks like the Delta option is cooling the economy.
Now for today’s news and analysis.
Top news
Fed chaplain may reconsider his call for Taper to start in October
Federal Reserve Bank of Dallas President Robert Kaplan said Friday that he may reconsider his call for the Fed to quickly cut its $ 120 billion per month bond purchases if it looks like it will The spread of the coronavirus delta variant will slow economic growth, reports MarketWatch. Earlier this month, Kaplan said the Fed should announce its intention to cut back purchases in September and start slowing in October. In an interview with Fox Business Network on Friday, he said the Delta variant made him open to the monetary policy path. The variant is “the great imponderability” in the outlook.
Analysis: What we don’t know about the Fed’s bond purchase
Three major issues for investors remain uncertain as the Federal Reserve plans to scale back bond purchases, writes James Mackintosh. Will this quantitative tightening cause government bond yields to rise or fall? Will stocks do better as bond yields go up or down? And, a related problem, is the stock-bond relationship that has sustained for the past three decades reversing?
US economy
Withdrawal of the US Federal Reserve from the personal detection of signals wider withdrawal
The Federal Reserve’s decision to cancel its own in-person event is representative of a broader decline in economic activity, according to Barron, as virus concerns mount. New data from the Transportation Security Administration shows a slowdown in travel, with the number of people passing TSA checkpoints down 10% on Friday from a recent high in mid-July. Meanwhile, data from restaurant book company OpenTable shows another decline in reservations. Economists at Oxford Economics say their recovery tracker, a mashup of roughly two dozen indicators, has stalled as consumers become more cautious and overall mobility declines.
Pelosi, centrist democrats in stalemate with important pre-vote
Centrist House Democrats were at a stalemate with House Speaker Nancy Pelosi when they were asked to vote on a roughly $ 1 trillion infrastructure bill, which jeopardized the Chamber’s ability to keep a large part of the President’s agenda Pushing Biden forward.
New appetite for mortgage bonds dodging Fannie and Freddie
Wall Street is re-diving into the business of converting home loans into bonds, bringing new competition to a market that has long been dominated by state-sponsored mortgage giants Fannie Mae and Freddie Mac.
Important developments around the world
Japan’s love of debt offers a glimpse into the US future
Japan often serves as a testing ground for policies that later debuted on the world’s largest stage, Fed Fed. Japan is ahead of the pack when it comes to debt. National debt first exceeded the size of the economy around 20 years ago. Now the US is crossing that threshold and Congress is debating more of the proposed spending.
Iron ore prices are falling as China’s steel production slows
The price of iron ore has fallen by around 40% since mid-July amid fears of demand from China, which produces more than half of the world’s steel. The downturn has dealt a blow to the producing countries Australia and Brazil.
Summary of the Financial Regulation
Cryptocurrency Firms Leave China in “Big Mining Migration”
When China promised to take action against the mining of cryptocurrencies earlier this summer, Bit Digital Inc., listed on the Nasdaq, stepped up.
US banks are proceeding cautiously in Taliban-controlled Afghanistan
American banks are scrutinizing transactions with Afghan counterparts as they wait for clarity on whether US sanctions against the Taliban will apply across the country after the Islamist group takes control.
China Postpones Hong Kong Anti-Sanctions Law
Beijing delayed plans for a new law that could prevent Hong Kong banks and corporations from complying with sanctions against China’s people, reflecting caution over a measure that has sparked a wave of concern in the city’s business community.
Foresight
Monday (all times ET)
9 a.m .: Bank of Israel publishes policy statement
10 a.m .: National Association of Realtors announces July US home sales
Tuesday
Hungarian National Bank publishes policy statement
8:30 a.m.: Schnabel from the European Central Bank speaks at the virtual EEA-ESEM conference on the podium on the subject of non-bank financial intermediation
10 a.m.: US Department of Commerce announces July new home sales
comment
Australia is likely to split on tapering as Covid-19 rages on
The suspension of the Reserve Bank of Australia’s plans to curb its government bond purchase program in September is now a 50/50 proposal as the central bank is already undoing the bullish economic forecasts it released a few weeks ago, writes James Glynn.
Huarong’s survival does not mean that Chinese companies cannot fail
China’s biggest bad debt manager will fight one more day, as will its dollar bondholders, but that doesn’t mean investors can afford to ignore President Xi Jinping’s war on debt and shadow banking, writes Nathaniel Taplin.
Basis points
A large container terminal in the Chinese port of Ningbo-Zhoushan remained closed for a single Covid-19 case a week after it ceased operations, and dozens of ships lined up to load cargo for western markets ahead of the year-end shopping season.
Canadian retail sales rose 4.2% to a seasonally adjusted $ 56.16 billion or $ 43.78 billion in June after two straight months of economic restraints tackling a destabilizing third wave of Covid-19 infections Statistics Canada said there was a decline. (Dow Jones Newswires)
New home prices in Canada rose 0.4% in June versus May and 11.9% year-over-year, the largest increase in more than 14 years, Statistics Canada said. (DJN)
(END) Dow Jones Newswires
Aug 23, 2021 9:06 AM ET (1:06 PM GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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