Global economy chart: Powell aims to cut rates in September

Chair Jerome Powell He said that the time has come Federal Reserve to cut its key policy rate, affirming expectations that officials will begin cutting borrowing costs next month and making clear its intention to prevent a further cooling in the labor market.

“The time has come for policy to tighten,” Powell said Friday at the Kansas City Federal Reserve’s annual conference in Jackson Hole, Wyoming. He acknowledged recent progress in inflation and an “unmistakable” slowdown in the labor market.

Below are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

United States and Canada

While Powell’s remarks provided some clarity to financial markets in the short term, they offered few clues as to how the Fed might proceed after its September meeting. Still, the speech confirmed that the U.S. central bank is about to reach a key turning point in its two-year battle against inflation.

U.S. job growth will likely be revised down by 818,000 for the 12 months through March, the biggest downward revision since 2009. The Bureau of Labor Statistics provided at least three Wall Street firms with the long-awaited figure that was delayed on the agency’s website, renewing questions about procedures for releasing some of the world’s most sensitive data. economic information.

The busiest U.S. port complex is seeing import volumes close to pandemic highs despite concerns about a cooling economy. Demand is now being driven by retailers and other importers stocking up ahead of U.S. tariffs on Chinese goods and a possible strike by a large group of American dockworkers, adding to the usual pre-holiday ordering frenzy that comes this time of year.

A union filed a strike notice against Canada’s largest rail company on Friday, just hours after trains resumed running, likely derailing plans to restart vital shipping networks. The Teamsters’ Canadian Railway Conference said in a letter to Canadian National Railway Co. that it plans to pull the plug on its roughly 6,500 members starting at 10 a.m. Toronto time on Monday.

Europe

Bloomberg

The euro zone economy received an unexpectedly strong boost from the Paris Olympics, which boosted private sector growth to the fastest pace in three months. Many signs suggest the Olympic spirit will not last, even in France, where growth momentum gathered momentum this month. Output in Germany, Europe’s largest economy, contracted more than expected.

Ukrainian President Volodymyr Zelenskiy wants refugees to return to keep the war-ravaged economy going and resist Russia. Meanwhile, much of central and eastern Europe is suffering from a labour shortage and countries such as Poland and the Czech Republic are reluctant to lose their citizens.

Asia

South Korea’s household debt grew at a rapid pace last quarter, driven by mortgage lending. South Korea has one of the highest household debt-to-economy ratios in the world, and many people have most of their wealth in real estate.

Singapore’s core inflation slowed more than expected in July, opening up room for the island’s central bank to consider easing monetary policy later this year.

Chinese consumers continued to cut back on gold purchases last month as record prices and a sustained economic slowdown curbed demand in the world’s largest bullion-buying country.

Emerging markets

It has been nearly two years since Luiz Inácio Lula da Silva won his way back to power in Brazil. For investors, they have been bleak, a stark contrast to Lula’s first term in office two decades ago. The president has balked at calls for spending cuts to rein in a budget deficit that has ballooned to the equivalent of about 10% of Brazil’s gross domestic product.

World

Sweden’s Riksbank cut rates for the second time since May, and Botswana also cut rates. Turkey kept rates steady for a fifth month. Chinese banks kept their benchmark interest rates unchanged for August as profit margins come under pressure, while Iceland, Thailand, Indonesia, Korea and Paraguay kept their rates on hold.