The US 10-2 yield curved inverted overnight – signalling a recession may be coming along. It corrected after, but this was an important signal. We look at the latest numbers and discuss the implications.
Interestingly, Australian yield curves are not behaving the same way (at least for now).
Go to the Walk The World Universe at https://walktheworld.com.au/
Yesterday I warned about higher market volatility given all the moving parts in play at the moment. Well, we saw that in action again on Tuesday as FED Chair Powell gave evidence at the Senate Banking Committee.
Back in December Powell said “One of the two big threats to getting back to maximum employment is actually high inflation.” He stressed that getting back to pre-Covid levels of labor-force participation would require a long expansion, which couldn’t happen with runaway price growth.
This marked a shift in how he discussed the trade-off between wanting to see greater improvement in the labor market and tolerating persistently elevated consumer price growth. So the new line is that increasing interest rates and tightening monetary policy is a benevolent move on the Fed’s part. And this was in evidence on Tuesday when he said “In a way, high inflation is a severe threat to the achievement of maximum employment,” he said. “We think wages moving up is generally a good thing, but if you look back through history, there are times when wages have moved up in a way that has fostered persistent inflation, and that hurts everyone.”
This is a deft move on the part of Powell, who earned respect among both Democrats and Republicans for the Fed’s response to the onset of the Covid-19 pandemic.
The White House is driving a range of policies from climate, tax and foreign relations all of which have potential significant impact on Australia. And on some important issues we seem to be left behind….
Go to the Walk The World Universe at https://walktheworld.com.au/
The White House is driving a range of policies from climate, tax and foreign relations all of which have potential significant impact on Australia. And on some important issues we seem to be left behind….
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest edition of our finance and property news digest with a distinctively Australian flavour.
We look at the latest new lending stats in Australia and also the events in the USA as Jerome Powell jaw-bones the markets and a new rescue plan is mooted.
CONTENTS
0:00 Start 0:34 Introduction 1:06 New Lending For November 5:21 HIA On The Numbers 9:00 USA Economy 9:45 Biden’s Rescue Package 15:35 Jobless Claims Surged 21:40 Jerome Powell’s Jaw-boning 26:33 Conclusion 29:34 Ending
In part 2 of my discussion with Salvatore Babones we consider some of the policy implications of a Biden Presidency.
Salvatore Babones is Australia’s globalization expert. He is an associate professor at the University of Sydney, an adjunct scholar at the Centre for Independent Studies, a columnist for Foreign Policy and Quadrant, and a regular contributor to The National Interest. A proud American by birth and by habit, he has lived in Sydney since 2008.
In part 2 of my discussion with Salvatore Babones we consider some of the policy implications of a Biden Presidency.
Salvatore Babones is Australia’s globalization expert. He is an associate professor at the University of Sydney, an adjunct scholar at the Centre for Independent Studies, a columnist for Foreign Policy and Quadrant, and a regular contributor to The National Interest. A proud American by birth and by habit, he has lived in Sydney since 2008.