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Fed Officials’ Trading Draws Outcry, and Fuels Calls for Accountability. Central bank regional presidents traded securities in markets in which Fed choices mattered in 2020. Here’s why critics find that troubling…

“The Fed has gone from serving as a lender of last resort mostly to banks to, at extreme moments in both 2008 and 2020, using its tools to rescue large swaths of the financial system. That includes propping up the market for short-term corporate debt during the Great Recession and backstopping long-term company debt and enabling loans to Main Street businesses during the 2020 pandemic crisis.

“That role has helped to make the Fed and its officials privy to information affecting every corner of finance. Yet central bankers can still actively buy and sell most stocks and some types of bonds…”

https://www.nytimes.com/2021/09/09/business/economy/fed-stock-trading.html  


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The Federal Reserve should press ahead with a plan to dial down its massive pandemic stimulus programme despite an abrupt slowdown in US jobs growth last month, according to a top central bank official.

James Bullard, president of the St Louis Fed, dismissed concerns the labour market recovery was faltering, even after just 235,000 jobs were created in the month of August…”

https://www.ft.com/content/7c2fc0ce-e7c0-4083-92e8-e81d9235ab45  


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Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit.

In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.”

https://thehill.com/policy/finance/571237-yellen-us-on-track-to-default-on-national-debt-in-october  


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Our food supply is under threat from climate extremes: Congress must act to save it.

“…Further contraction in the [agricultural] industry and losses in productivity will ultimately threaten our access to safe, affordable food and worsen global hunger, which is already on a menacing rise.”

https://thehill.com/opinion/energy-environment/571461-our-food-supply-is-under-threat-from-climate-extremes-congress  


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Disastrous season means UK shoppers could pay 50% more for pasta.

“A scramble for durum wheat has pushed the price up nearly 90% this summer after drought and soaring temperatures hit farms in Canada, one of the biggest producers. There are also supply issues in Italy…”

https://www.theguardian.com/food/2021/sep/09/penne-in-your-pocket-uk-shoppers-could-pay-up-to-50-more-for-pasta


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UK GDP growth slows to a trickle as ‘pingdemic’ and materials shortages bite…

“The Office for National Statistics (ONS) said that gross domestic product (GDP) rose by 0.1% in July, a slowdown from 1% growth in June. Companies had faced problems with the so-called “pingdemic” and shortages of materials – especially in the construction sector.”

https://www.independent.co.uk/business/gdp-growth-slows-to-a-trickle-as-pingdemic-and-materials-shortages-bite-b1917612.html  


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Bank of England faces up to threat of ‘stagflation’ as cost of living crisis looms… Tighten policy and you risk further damaging growth without having much impact on the sort of “cost push” inflation we see today; leave things easy, and you further stoke the inflationary flames…

I wouldn’t be at all surprised to see it turn into a genuine political “crisis” later this year.

https://www.telegraph.co.uk/business/2021/09/08/bank-england-faces-threat-stagflation-cost-living-crisis-looms/  


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ECB Slows Crisis Stimulus in Shift Lagarde Says Isn’t Taper.

“The European Central Bank will slow the pace of its pandemic bond-buying program in the final quarter of 2021, a shift President Christine Lagarde insists isn’t a move heralding a wind-down in stimulus for the euro-region’s still-vulnerable recovery.”

https://www.bloomberg.com/news/articles/2021-09-09/ecb-slows-pandemic-bond-buying-amid-firming-european-recovery  


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Italian police raid Covid health pass protesters ‘planning violence’.

“Italian police raided the homes and searched the computers on Thursday of eight people suspected of planning violence during protests against the country’s coronavirus passport.”

https://www.thelocal.it/20210909/italian-police-raid-covid-health-pass-protesters-planning-violence/  


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China’s factory and consumer prices continue to diverge, ramping up concern of an economic slowdown…

“Analysts say the widening ‘scissors gap’ between factory and consumer prices points to worsening profit margins for Chinese companies.”

https://www.scmp.com/economy/china-economy/article/3148180/chinas-factory-and-consumer-prices-continue-diverge-ramping  


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China Factory Inflation Surge to Add Pressure to Global Prices…

China’s factory-gate inflation accelerated to a 13-year high, adding to the pressure on global consumer prices which have been pushed up by a commodities boom, soaring shipping costs and an uneven economic recovery from the pandemic.”

https://www.bloomberg.com/news/articles/2021-09-09/china-factory-inflation-surges-again-as-commodity-boom-persists  


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Inflation splits emerging countries into doves and hawks… More than in the developed world, rising prices already pose a real threat to stability

It is a question for policymakers everywhere: which is worse, stagnation or instability. But in emerging markets the stakes are arguably higher if inflation gets out of control.”

https://www.ft.com/content/cd189742-776f-470c-914a-fee4549a70f8  


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Brazil’s central bank will need to “act fast” to prevent a further deterioration of the country’s inflation expectations, its President Roberto Campos Neto said.

““We are seeing many different inflationary shocks building on top of each other. It’s very important to act fast to prevent inflation expectations from de-anchoring,” Campos Neto said…”

https://www.bloomberg.com/news/articles/2021-09-08/brazil-s-campos-neto-sees-need-to-act-fast-as-inflation-speeds


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Bolsonaro Calls on Truckers to Lift Protests Blocking Roads.

“Brazilian President Jair Bolsonaro asked truckers to lift any blockades on highways as concerns over the possibility of a broader strike add to an already charged political climate and worries about galloping inflation.”

https://www.bloomberg.com/news/articles/2021-09-09/bolsonaro-calls-on-truckers-to-lift-protests-blocking-roads  


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COVID-19 pushes Kenya’s economy into first contraction in nearly 30 years.

“Kenya’s economic output contracted for the first time in nearly three decades last year, pummeled by the impact of the coronavirus crisis that hit key sectors like tourism, official data showed on Thursday.”

https://www.cnbcafrica.com/2021/covid-19-pushes-kenyas-economy-into-first-contraction-in-nearly-30-years/  


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Cholera kills 2,000 in Nigeria in worst outbreak for more than a decade.

“…this year a health system already stretched by Covid-19 and staff shortages has struggled to counter the cholera outbreak, while insecurity in Nigeria’s northwestern states is making it more difficult to respond to the crisis.”

https://www.telegraph.co.uk/global-health/science-and-disease/cholera-kills-2000-nigeria-worst-outbreak-years/  


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Africa: Record Numbers Nabbed At Sea to Europe.

“More than 23,000 people have been intercepted at sea and returned to Libya after failed attempts to reach Europe. This is almost double the total for the whole of 2020 and the highest number on record since interceptions by the Libyan Coast Guard began in 2017.”

https://allafrica.com/stories/202109070172.html  


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North Korean Restaurants Abandon Price Controls Amid Food Shortages.

“With food prices on the rise in North Korea, a Pyongyang restaurant serving the city’s signature dish has had to abandon price controls, causing a more than twentyfold increase and making a casual meal outside the house an expensive luxury that ordinary residents of the capital can no longer afford…”

https://www.rfa.org/english/news/korea/naengmyeon-09092021192155.html  


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Toyota cuts production target on parts and chips shortages.

“Toyota Motor Corp (7203.T) cut its annual production target on Friday by 300,000 vehicles as a slowdown in output at COVID-19 hit parts factories in Vietnam and Malaysia added to the pain of a global shortage of auto chips.”

https://www.reuters.com/business/autos-transportation/toyota-cuts-annual-auto-production-target-shortage-chips-parts-2021-09-10/  


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Container Shipping Giant Freezes Spot Rates Amid Trade Chaos…

The cost of shipping a 40-foot container from Shanghai to Los Angeles reached $11,569 in the past week, nearly eight times higher than pre-pandemic levels, according to the Drewry World Container Index.”

https://www.bloomberg.com/news/articles/2021-09-10/container-shipping-giant-freezes-spot-rates-amid-trade-chaos


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 Global gas prices soar as industry struggles to meet resurgent demand.

“Global gas prices have climbed to their highest level for seven years in real terms, as traders anticipate a shortage this winter, with consumption rebounding more quickly than production from the pandemic slump last year.”

https://www.reuters.com/business/energy/global-gas-prices-soar-industry-struggles-meet-resurgent-demand-kemp-2021-09-09/  


You can read the previous ‘Economic’ thread here. I’ll be back over the weekend with a ‘Climate’ thread.

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