9/19 Sunny

 From WSJ

中國增長乏力很可能危及歐洲經濟

法國外貿銀行企業及投資銀行全球市場戰略主管Mabrouk Chetouane表示，中國經濟增長乏力將危及歐洲經濟增長，特別是德國和意大利經濟。

法國外貿銀行企業及投資銀行(Natixis Corporate and Investment Banking)全球市場戰略主管Mabrouk Chetouane表示，中國經濟增長乏力，主要歸因於當前的房地產行業危機，這也將危及歐洲增長，特別是德國和意大利經濟。他表示，德國和意大利對中國的風險敞口很大，正在受到負面影響，其中製造業方面所受影響尤其明顯

美國財長葉倫預計飆升的油價將企穩

美國財政部長葉倫周一表示，她認為油價將停止上漲，但拜登政府正在密切關注。

The Market-Beating Investment That’s Defying Wall Street Skeptics

Rising interest rates are boosting risky corporate-loan returns instead of hurting them

    

The Big Employer Still Adding Jobs and Boosting Pay: The Government

As many companies slow hiring, the public sector is adding workers

“After two years of very underwhelming government hiring, it’s a necessary catch-up,” said Julia Pollak, an economist at online jobs site ZipRecruiter.

Much of the recent hiring spree has been to backfill jobs left open by millions of teachers, police officers and other public servants who quit during the pandemic. Other roles at government agencies languished because the public sector couldn’t effectively compete against private employers that were offering pay raises and signing bonuses to attract talent during several years of a white-hot labor market.

The Yuan and Yen Need the Fed’s Help. They Might Not Get It.

Being a loose monetary policy outlier is an uncomfortable place to be these days

Widening interest rate differentials with the U.S. have put both currencies under pressure. Yields on Japan’s 10-year government bonds are 3.6 percentage points lower than on U.S. equivalents. The difference between Chinese and U.S. bonds is 1.7 points.

Both currencies have nonetheless staged a modest rebound from their lows lately. The People’s Bank of China warned speculators not to bet against the yuan earlier this month. Around the same time, 

Bank of Japan

 Gov. Kazuo Ueda told domestic media that an end to the BOJ’s negative rate policy could be in the cards if its 2% inflation target is sustained.

 While the Fed looks likely to pause its rate increases, a stronger-than-expected economy could keep U.S. rates higher for longer

UAW Strike Collides With Biden’s Manufacturing Agenda

Administration is caught between support for unions and need to make U.S. auto industry more competitive

Big wage increases will make it harder for the U.S. to build an electric-vehicle industry that can challenge China’s dominance, said Willy Shih, a management professor at Harvard Business School. 

The UAW, some of whose members walked off the job on Friday, wants a pay raise of more than 30% over four years, 32-hour workweeks, an end to the use of temporary workers and a reversal of some concessions made during the 2007-09 recession when 

General Motors GM 1.86%increase; green up pointing triangle

 and Chrysler, now part of 

Stellantis STLA 2.11%increase; green up pointing triangle

, went bankrupt. Among them: restoring cost-of-living adjustments so that wages rise with inflation.

UAW base wages have risen an average 6% since their last contract in 2019, the union said. Its members have also received lump-sum payments and profit-sharing. In that time, vehicle prices are up almost 23% and overall consumer prices 19%, according to the Labor Department.

It takes less labor to produce an electric than a gasoline-powered vehicle, said Robert Atkinson, president of the Information Technology and Innovation Foundation. In the long run that could also weaken the UAW’s influence, he said. “There’s no real way around that,” Atkinson said. “You could try to slow down the transition to EVs, but the Biden administration doesn’t want to do that.”

Biden said Friday that the transition to EVs should be a “win-win” for union workers and companies. “Workers deserve a fair share of the benefits they helped create for an enterprise,” he said.Administration officials say it is possible to have both high union wages and competitive automakers, especially now that profits are soaring. Directing some of those profits to wages and enlisting workers to find productivity improvements could help achieve both, said a senior administration official.

EVs and batteries accounted for roughly 87% of all automaker investment in North America over the past two years, said Alan Amici, president of the Center for Automotive Research, a Michigan think tank. But much of that has been in the South, where wages are lower and unions weaker. More EV jobs have been announced in Georgia than any other state, according to the Southern Alliance for Clean Energy, an advocacy group. 

Fed Debates When to Stop Raising Rates. What to Watch at Wednesday’s Meeting

Officials are likely to be ‘cautiously optimistic, with an emphasis on cautiously,’ says a former adviser to Chair Jerome Powell

The Fed has signaled it will hold rates steady and make no substantive changes to its postmeeting policy statement. The public’s attention will focus heavily on officials’ quarterly interest-rate projections displayed in the so-called “dot plot.”

Another major focus on the dots: Do officials expect to need somewhat higher rates in 2024 than they did in June? Last time, the median projection showed they anticipated reducing rates next year by 1 percentage point, to around 4.6%. If officials now think inflation will slow somewhat less, they might project fewer rate cuts next year. 

If Powell wants to stay in the middle he could strike his best impersonation of the late Kobe Bryant. In 2009, with his Los Angeles Lakers jumping to a 2-0 advantage in the best-of-seven NBA Finals, Bryant frowned when a reporter asked him why he didn’t seem more excited. “Job’s not finished,” Bryant shot back.

Officials are likely to wrestle with two questions here: First, would stronger consumer spending or business investment in the coming months raise enough concern about inflation to warrant higher rates? Second, could officials signal an end to rate increases this fall if core inflation remains mild?

In recent economic projections, a few officials appear to have raised their expectations for the long-term neutral fed-funds rate. Most officials estimate this rate to be around 2.5% when inflation is 2%. If more officials lift their projections for the neutral rate, that would suggest that interest rates on mortgages, credit cards, and business loans are likely to settle at higher levels even if inflation falls lower. Officials will also provide their economic forecasts for 2026 for the first time this week. Those projections offer another way to show that rates might not return to the low levels that prevailed before the pandemic.