REUTERS
"Wall Street keeps selling as world assets fail to recover"
By Lawrence Delevingne
27 SEPTEMBER 2022
Summary
* U.S. and global equity indexes deepen bear market
* Government bond yields climb again
* Dollar holds huge gains; sterling can't recover
* Oil rallies from Monday's nine-month lows
Sept 27 (Reuters) - U.S. stocks gave up early gains to fall deeper into a bear market on Tuesday, while sterling showed scant movement a day after hitting a record low, as investors remained nervous about a potential global recession.
The pound was little changed at $1.071 after sterling collapsed to $1.0327 on Monday on concern over the funding of recently announced UK tax cuts, which follow huge energy subsidies.
The Bank of England said late on Monday it would not hesitate to change interest rates and was monitoring markets "very closely."
BoE Chief Economist Huw Pill added on Tuesday that central bank was likely to deliver a "significant policy response" to last week's announcement but it should wait until its next meeting in November before making its move.
The yield on five-year gilts rose about 0.1% to about 4.6%, holding its spike on Monday from just over 4%.
U.S. stocks mostly faltered after a morning bounce, with the S&P 500 hitting a two-year intraday low.
The Dow Jones Industrial Average fell 0.42%, the S&P 500 lost 0.20%, and the Nasdaq Composite added just 0.25%
The S&P benchmark index fell more than 20% from its early January high to a low on June 16, confirming a bear market.
The index then rallied into mid-August before petering out.
"We don't see a quick retrenchment or a return to 2% inflation, keeping the Fed in hiking mode."
"This implies more volatility and a need for caution and balance in equity allocations," Tony DeSpirito, BlackRock's chief investment officer for U.S. Fundamental Equities, wrote in a note released on Tuesday.
Markets see a 65% probability of a further 75 basis points move at the next U.S. Federal Reserve meeting in November.
The Fed needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday, a more aggressive stance than he has previously embraced that underscores the central bank's resolve to quash excessive inflation.
"Central bankers have been walking a tightrope trying to curb inflation while attempting to limit recessionary risks," Bank of America strategists wrote in a note released Tuesday.
"However, their recent tone and 'jumbo' rate hikes have reinforced that the foremost priority is controlling inflation, even at the potential cost of a recession."
GLOBAL CONTAGION
Spillover from Britain kept other assets on edge.
The MSCI world equity index reversed early gains on Tuesday, falling about 0.3% to a near two-year low early Tuesday afternoon.
European stocks slipped 0.13%.
MSCI's broadest index of Asia shares outside Japan hit a fresh two-year low and was flat on the day.
Japan's Nikkei gained about 0.5%.
Bond selling in Japan pushed yields up to the Bank of Japan's ceiling and prompted more unscheduled buying from the central bank, while euro zone government bond yields rose to new multi-year highs on Tuesday.
Benchmark U.S. 10-year Treasury yields also rose to their highest in more than 12 years as investors braced for higher interest rates.
The dollar held gains on Tuesday in its relentless rally while sterling, the euro and Japanese yen regained little ground from multi-year lows after unusually volatile trading in recent sessions.
There was some good news.
New orders for U.S.-manufactured capital goods increased more than expected in August, suggesting that businesses remained keen to invest in equipment, and a survey showed consumer confidence rising for a second straight month in September.
Oil rallied after plunging to nine-month lows in the previous session, helped by supply curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and by a slightly softer dollar.
Brent crude settled 2.6% higher at $86.27 a barrel, and U.S. crude ended at $78.50, up 2.3%.
Dutch and British gas prices spiked on news that the Nord Stream gas pipeline from Russia to Europe had suffered damage, raising concerns over the security of the bloc's energy infrastructure and triggering a sabotage probe.
Gold, which hit a 2-1/2-year low on Monday, rose around 0.3% to $1,626 an ounce.
Bitcoin briefly broke above $20,000 for the first time in about a week, as cryptocurrencies bounced.
Reporting by Lawrence Delevingne in Boston and Carolyn Cohn in London; Additional reporting by Xie Yu in Hong Kong; editing by Jonathan Oatis, Richard Chang and Marguerita Choy
https://www.reuters.com/markets/europe/ ... 022-09-27/
THE DAILY NEWS
Re: THE DAILY NEWS
CNBC
"Stock market losses wipe out $9 trillion from Americans’ wealth"
Robert Frank @ROBTFRANK
PUBLISHED TUE, SEP 27 2022
KEY POINTS
* Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year.
* With major market indexes falling further since July, experts say losses from financial markets could total $9.5 trillion to $10 trillion.
* Economists say the drops could add pressure to Americans’ balance sheets and possibly hurting spending.
Falling stock markets have wiped out more than $9 trillion in wealth from U.S. households, putting more pressure on family balance sheets and spending.
Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year, according to data from the Federal Reserve.
With major market indexes falling even further since early July, and the bond market adding further losses, market experts say the current wealth losses from financial markets could total $9.5 trillion to $10 trillion.
Economists say the drops could soon start rippling through the economy, adding pressure to Americans’ balance sheets and possibly hurting spending, borrowing and investing.
Mark Zandi, chief economist of Moody’s Analytics, said the losses could reduce real GDP growth by nearly 0.2 percentage points over the coming year.
“The loss of stock wealth suffered to date, if sustained, will be a small, but meaningful headwind to consumer spending and economic growth in coming months,” Zandi said.
The wealthy are bearing the largest losses, since they own an outsize share of stocks.
The top 10% of Americans have lost over $8 trillion in stock market wealth this year, which marks a 22% decline in their stock wealth, according to the Federal Reserve.
The top 1% has lost over $5 trillion in stock market wealth.
The bottom 50% have lost about $70 billion in stock wealth.
The losses mark a massive and sudden reversal for shareholders who saw record wealth creation from soaring stocks since the pandemic.
From the market lows of 2020 to the peak at the end of 2021, America’s stock wealth nearly doubled, from $22 trillion to $42 trillion.
The bulk of that wealth went to those at the top, since the wealthiest 10% of Americans own 89% of individually held stocks, according to the Federal Reserve.
With stocks declining, and with those at the top bearing most of the losses, wealth inequality has fallen slightly this year.
The top 1% owned 31% of the nation’s household wealth at the end of the second quarter, down from 32.3% in the beginning of the year.
The share of wealth held by the top 10% slipped from 69% to 68%.
While Americans have gained wealth from rising housing prices, the gains have been more than offset by stock market losses.
America’s housing wealth rose by $3 trillion in the first half of the year to $41 trillion.
The gain is only about a third of the amount lost in the stock market.
Yet with rising mortgage rates, home prices have started to decline or cool in many markets.
The drop in stock wealth also far exceeds the $6 trillion in quarterly stock losses during the beginning of the pandemic in 2020.
While stock markets have seen larger drops on a percentage basis, this year’s stock losses are among the largest ever on a dollar basis.
The big question is how much the stock declines will impact consumer spending.
So far, there are few signs that affluent consumers have cut their spending.
Yet some say the “negative wealth effect ” — the theory that wealth declines lead to spending declines — could soon start to bite, especially if market declines continue.
Zandi said lost stock wealth in the U.S. could reduce consumer spending by $54 billion in the coming year.
Yet he added that the “stock-wealth effect” is smaller that in the past, since the wealthy own such a large share of stocks and have “have substantial excess saving built up during the pandemic.”
“Since their saving cushion is so large, they won’t feel as compelled to save more given the decline in their stock wealth,” he said.
https://www.cnbc.com/2022/09/27/stock-m ... alth-.html
"Stock market losses wipe out $9 trillion from Americans’ wealth"
Robert Frank @ROBTFRANK
PUBLISHED TUE, SEP 27 2022
KEY POINTS
* Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year.
* With major market indexes falling further since July, experts say losses from financial markets could total $9.5 trillion to $10 trillion.
* Economists say the drops could add pressure to Americans’ balance sheets and possibly hurting spending.
Falling stock markets have wiped out more than $9 trillion in wealth from U.S. households, putting more pressure on family balance sheets and spending.
Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year, according to data from the Federal Reserve.
With major market indexes falling even further since early July, and the bond market adding further losses, market experts say the current wealth losses from financial markets could total $9.5 trillion to $10 trillion.
Economists say the drops could soon start rippling through the economy, adding pressure to Americans’ balance sheets and possibly hurting spending, borrowing and investing.
Mark Zandi, chief economist of Moody’s Analytics, said the losses could reduce real GDP growth by nearly 0.2 percentage points over the coming year.
“The loss of stock wealth suffered to date, if sustained, will be a small, but meaningful headwind to consumer spending and economic growth in coming months,” Zandi said.
The wealthy are bearing the largest losses, since they own an outsize share of stocks.
The top 10% of Americans have lost over $8 trillion in stock market wealth this year, which marks a 22% decline in their stock wealth, according to the Federal Reserve.
The top 1% has lost over $5 trillion in stock market wealth.
The bottom 50% have lost about $70 billion in stock wealth.
The losses mark a massive and sudden reversal for shareholders who saw record wealth creation from soaring stocks since the pandemic.
From the market lows of 2020 to the peak at the end of 2021, America’s stock wealth nearly doubled, from $22 trillion to $42 trillion.
The bulk of that wealth went to those at the top, since the wealthiest 10% of Americans own 89% of individually held stocks, according to the Federal Reserve.
With stocks declining, and with those at the top bearing most of the losses, wealth inequality has fallen slightly this year.
The top 1% owned 31% of the nation’s household wealth at the end of the second quarter, down from 32.3% in the beginning of the year.
The share of wealth held by the top 10% slipped from 69% to 68%.
While Americans have gained wealth from rising housing prices, the gains have been more than offset by stock market losses.
America’s housing wealth rose by $3 trillion in the first half of the year to $41 trillion.
The gain is only about a third of the amount lost in the stock market.
Yet with rising mortgage rates, home prices have started to decline or cool in many markets.
The drop in stock wealth also far exceeds the $6 trillion in quarterly stock losses during the beginning of the pandemic in 2020.
While stock markets have seen larger drops on a percentage basis, this year’s stock losses are among the largest ever on a dollar basis.
The big question is how much the stock declines will impact consumer spending.
So far, there are few signs that affluent consumers have cut their spending.
Yet some say the “negative wealth effect ” — the theory that wealth declines lead to spending declines — could soon start to bite, especially if market declines continue.
Zandi said lost stock wealth in the U.S. could reduce consumer spending by $54 billion in the coming year.
Yet he added that the “stock-wealth effect” is smaller that in the past, since the wealthy own such a large share of stocks and have “have substantial excess saving built up during the pandemic.”
“Since their saving cushion is so large, they won’t feel as compelled to save more given the decline in their stock wealth,” he said.
https://www.cnbc.com/2022/09/27/stock-m ... alth-.html
Re: THE DAILY NEWS
RIGZONE
"Bring Down Pump Prices Now, Biden Says"
by Andreas Exarheas | Rigzone Staff
Tuesday, September 27, 2022
Bring Down Pump Prices Now, Biden Says.
'Do it now.'
'Do it now.'
'Not a month from now - do it now'.
'Bring down the prices you’re charging at the pump, now.'
That’s the message U.S. President Joe Biden delivered to companies running gas stations at the Third Meeting of the White House Competition Council on Monday.
“The price of oil worldwide is down … in fact, lower than any price since Putin invaded Ukraine …"
"We haven’t seen the lower prices reflected at the pump though,” Biden stated at the meeting.
“Meanwhile, oil and gas companies are still making record profits — billions of dollars in profit."
"But guess what?"
"The price of oil comes down … don’t you think the price at the pump should come down?"
"The price of [a] gallon of gasoline."
"But it takes a long time for that to happen in relative terms,” Biden added.
“My message is simple."
"To the companies running gas stations and setting those prices at the pump: Bring down the prices you’re charging at the pump to reflect the cost you pay for the product."
"Do it now."
"Do it now."
"Not a month from now — do it now,” Biden continued.
When Rigzone sent an email to the American Petroleum Institute (API) asking if it had any comment on Biden’s statement, API’s SVP of Policy, Economics and Regulatory Affairs, Frank Macchiarola, replied with the below:
“Americans are looking for solutions, not political posturing."
"This is an industry of price takers, not price makers, and repeated in-depth investigations by the FTC have shown that changes in gasoline prices are based on market factors and not due to illegal behavior."
"The price at the pump that Americans are currently paying is a function of increased demand and lagging supply combined with geopolitical turmoil and policy uncertainty from Washington”.
As of September 27, the average price of regular gasoline in the U.S. is $3.747 per gallon, according to the AAA gas prices website.
Yesterday’s average was $3.725 per gallon, the week ago average was $3.674 per gallon, the month ago average was $3.857 per gallon, and the year ago average was $3.189 per gallon, the AAA site shows.
The highest recorded average price of regular unleaded in the U.S. was seen on June 14 at $5.016 per gallon, the AAA site outlines.
https://www.rigzone.com/news/bring_down ... 8-article/
"Bring Down Pump Prices Now, Biden Says"
by Andreas Exarheas | Rigzone Staff
Tuesday, September 27, 2022
Bring Down Pump Prices Now, Biden Says.
'Do it now.'
'Do it now.'
'Not a month from now - do it now'.
'Bring down the prices you’re charging at the pump, now.'
That’s the message U.S. President Joe Biden delivered to companies running gas stations at the Third Meeting of the White House Competition Council on Monday.
“The price of oil worldwide is down … in fact, lower than any price since Putin invaded Ukraine …"
"We haven’t seen the lower prices reflected at the pump though,” Biden stated at the meeting.
“Meanwhile, oil and gas companies are still making record profits — billions of dollars in profit."
"But guess what?"
"The price of oil comes down … don’t you think the price at the pump should come down?"
"The price of [a] gallon of gasoline."
"But it takes a long time for that to happen in relative terms,” Biden added.
“My message is simple."
"To the companies running gas stations and setting those prices at the pump: Bring down the prices you’re charging at the pump to reflect the cost you pay for the product."
"Do it now."
"Do it now."
"Not a month from now — do it now,” Biden continued.
When Rigzone sent an email to the American Petroleum Institute (API) asking if it had any comment on Biden’s statement, API’s SVP of Policy, Economics and Regulatory Affairs, Frank Macchiarola, replied with the below:
“Americans are looking for solutions, not political posturing."
"This is an industry of price takers, not price makers, and repeated in-depth investigations by the FTC have shown that changes in gasoline prices are based on market factors and not due to illegal behavior."
"The price at the pump that Americans are currently paying is a function of increased demand and lagging supply combined with geopolitical turmoil and policy uncertainty from Washington”.
As of September 27, the average price of regular gasoline in the U.S. is $3.747 per gallon, according to the AAA gas prices website.
Yesterday’s average was $3.725 per gallon, the week ago average was $3.674 per gallon, the month ago average was $3.857 per gallon, and the year ago average was $3.189 per gallon, the AAA site shows.
The highest recorded average price of regular unleaded in the U.S. was seen on June 14 at $5.016 per gallon, the AAA site outlines.
https://www.rigzone.com/news/bring_down ... 8-article/
Re: THE DAILY NEWS
CNBC
"Fed’s Evans says he’s getting a little nervous about going too far, too fast with rate hikes"
Sam Meredith @SMEREDITH19
PUBLISHED TUE, SEP 27 2022
KEY POINTS
* Speaking to CNBC’s “Squawk Box Europe” on Tuesday, Evans said he remains “cautiously optimistic” that the U.S. economy can avoid a recession — provided there are no further external shocks.
* His comments come shortly after a slew of top Fed officials said they would continue to prioritize the fight against inflation, which is currently running near its highest levels since the early 1980s.
Chicago Federal Reserve President Charles Evans says he’s feeling apprehensive about the U.S. central bank raising interest rates too quickly in its quest to tackle runaway inflation.
Speaking to CNBC’s “Squawk Box Europe” on Tuesday, Evans said he remains “cautiously optimistic” that the U.S. economy can avoid a recession — provided there are no further external shocks.
His comments come shortly after a slew of top Fed officials said they would continue to prioritize the fight against inflation, which is currently running near its highest levels since the early 1980s.
The central bank raised benchmark interest rates by three-quarters of a percentage point earlier last week, the third consecutive increase of that size.
Fed officials also indicated they would continue hiking rates well above the current range of 3% to 3.25%.
Asked about investor fears that the Fed didn’t seem to be waiting long enough to adequately assess the impact of its interest rate increases, Evans replied, “Well, I am a little nervous about exactly that.”
“There are lags in monetary policy and we have moved expeditiously."
"We have done three 75 basis point increases in a row and there is a talk of more to get to that 4.25% to 4.5% by the end of the year, you’re not leaving much time to sort of look at each monthly release,” Evans said.
‘Peak funds rate’
Traders have been concerned that the Fed is remaining more hawkish for longer than some had anticipated.
The Fed’s Evans, 64, has consistently been one of the Fed’s policy doves in favor of lower rates and more accommodation.
He will retire from his position early next year.
“Again, I still believe that our consensus, the median forecasts, are to get to the peak funds rate by March — assuming there are no further adverse shocks."
"And if things get better, we could perhaps do less, but I think we are headed for that peak funds rate,” Evans said.
“That offers a path for employment, you know, stabilizing at something that still is not a recession, but there could be shocks, there could be other difficulties,” he said.
“Goodness knows every time I thought the supply chains were going to improve, that we were going to get auto production up and used car prices down and housing and all of that something has happened."
"So, cautiously optimistic.”
— CNBC’s Jeff Cox contributed to this report.
https://www.cnbc.com/2022/09/27/feds-ev ... hikes.html
"Fed’s Evans says he’s getting a little nervous about going too far, too fast with rate hikes"
Sam Meredith @SMEREDITH19
PUBLISHED TUE, SEP 27 2022
KEY POINTS
* Speaking to CNBC’s “Squawk Box Europe” on Tuesday, Evans said he remains “cautiously optimistic” that the U.S. economy can avoid a recession — provided there are no further external shocks.
* His comments come shortly after a slew of top Fed officials said they would continue to prioritize the fight against inflation, which is currently running near its highest levels since the early 1980s.
Chicago Federal Reserve President Charles Evans says he’s feeling apprehensive about the U.S. central bank raising interest rates too quickly in its quest to tackle runaway inflation.
Speaking to CNBC’s “Squawk Box Europe” on Tuesday, Evans said he remains “cautiously optimistic” that the U.S. economy can avoid a recession — provided there are no further external shocks.
His comments come shortly after a slew of top Fed officials said they would continue to prioritize the fight against inflation, which is currently running near its highest levels since the early 1980s.
The central bank raised benchmark interest rates by three-quarters of a percentage point earlier last week, the third consecutive increase of that size.
Fed officials also indicated they would continue hiking rates well above the current range of 3% to 3.25%.
Asked about investor fears that the Fed didn’t seem to be waiting long enough to adequately assess the impact of its interest rate increases, Evans replied, “Well, I am a little nervous about exactly that.”
“There are lags in monetary policy and we have moved expeditiously."
"We have done three 75 basis point increases in a row and there is a talk of more to get to that 4.25% to 4.5% by the end of the year, you’re not leaving much time to sort of look at each monthly release,” Evans said.
‘Peak funds rate’
Traders have been concerned that the Fed is remaining more hawkish for longer than some had anticipated.
The Fed’s Evans, 64, has consistently been one of the Fed’s policy doves in favor of lower rates and more accommodation.
He will retire from his position early next year.
“Again, I still believe that our consensus, the median forecasts, are to get to the peak funds rate by March — assuming there are no further adverse shocks."
"And if things get better, we could perhaps do less, but I think we are headed for that peak funds rate,” Evans said.
“That offers a path for employment, you know, stabilizing at something that still is not a recession, but there could be shocks, there could be other difficulties,” he said.
“Goodness knows every time I thought the supply chains were going to improve, that we were going to get auto production up and used car prices down and housing and all of that something has happened."
"So, cautiously optimistic.”
— CNBC’s Jeff Cox contributed to this report.
https://www.cnbc.com/2022/09/27/feds-ev ... hikes.html
Re: THE DAILY NEWS
REUTERS
"Analysis: Gaffe or insight? Deciphering Biden's unguarded answers"
By Trevor Hunnicutt
September 27, 2022
WASHINGTON, Sept 27 (Reuters) - "Yes," U.S. forces will defend Taiwan if it is invaded by China.
Russian President Vladimir Putin is a "butcher" who "cannot remain in power."
And the COVID-19 pandemic is "over."
U.S. President Joe Biden's tendency to ad-lib in impromptu press situations is often referred to in Washington as his "gaffe" problem.
While the term refers to a blunder, Biden's remarks often aren't quite that - they betray deeper truths about his thinking and occasionally offer the public a better window into the administration's approach than that offered by spokespeople, from press secretary Karine Jean-Pierre to members of his Cabinet.
As Biden himself told steelworkers this month: "No one has ever doubted I mean what I say; the problem is I sometimes say all that I mean."
Biden's casual and unscripted remarks can cause far-reaching diplomatic ripples, forcing White House staff to scurry to "walk back," to use another Washington term, his remarks, trying to smooth over upsets, without saying outright that he misspoke.
After Biden spoke on defending Taiwan in a CBS News "60 Minutes" interview this month, officials quickly said that U.S. policy towards Taiwan is unchanged.
But he has said similar things before as president.
His apparent willingness to commit U.S. forces to a battle in Taiwan clears up a long-standing disconnect in U.S. policy towards Taiwan.
Presidents have said since the 1970s that they support a "One China" policy that declares Taiwan a part of China, but also that they are bound by a 1979 law to help Taiwan defend itself.
Biden's response suggests the U.S supports One China in concept, but Taiwan's defense in practice.
'WALK BACK' ON PUTIN
His statement about Putin in Warsaw in March was quickly walked back by a White House official who said "the President's point was that Putin cannot be allowed to exercise power over his neighbors" and not a discussion of "regime change."
Whatever the White House says, it is clear that the president's private view is that Putin is unfit for office, implying that he will use U.S. policy to weaken Putin whenever possible.
The White House has long said that it would be "driven by science" in determining when to end the COVID public health emergency.
Biden made his "the pandemic is over" remark on the sidelines of September's Detroit auto show as hundreds of Americans continue to die of the disease daily.
But they reflect changes in the administration's approach to the disease.
A new vaccine campaign is being compared by U.S. officials to annual flu shot drives, and the Centers for Disease Control and Prevention relaxed its guidance that masks always be worn in healthcare settings after Biden spoke.
The loose-lipped quality is not new.
As vice president during the Obama administration, Biden famously disclosed support for same-sex marriage before the president had been willing to do so.
"He's always had a reputation for saying what he was thinking," said former U.S. Senator Ted Kaufman, who has worked with Biden for a half century and remembers the onetime senator taking constituents' questions at a Wilmington, Delaware, train station.
MANAGING BIDEN'S CANDOR
The candor is the bane of anxious young press aides who let out long sighs or expletives when the president approaches reporters to answer questions in ad hoc briefings - which he enjoys doing but has suggested gets him in trouble with his staff.
Senior aides, worried about having to explain an indelicate, imprecise or speculative remark, rarely make Biden available for long-form interviews.
The "60 Minutes" interview, which included both the troop commitment in Taiwan and the pandemic comment, was Biden's first since a brief exchange in July with an Israeli television anchor.
"Generally, staff are risk-averse, and they figure in news conferences or high-profile events, if you make a mistake, it takes some while to clean up," said Towson University political science professor emerita Martha Joynt Kumar.
Biden has had far fewer formal interviews than his recent predecessors, Kumar's research shows.
Biden has held 17 press conferences, 39 interviews and engaged in 300 hundred informal back-and-forth exchanges with reporters in his presidency, according to Kumar's data through July.
That compares with an average of 41 press conferences, 112 interviews and 172 informal exchanges for the six preceding presidents over the same time frame.
While Biden's off-the-cuff remarks sometimes reveal deeper truths about his policy or opinions, other times they are simply misleading.
Biden, 79, said at a July event that he has cancer.
An aide later said on Twitter that Biden had non-melanoma skin cancers removed before he took office in January 2021 and that "this is what the President was referring to."
Reporting by Trevor Hunnicutt; Editing by Heather Timmons and Grant McCool
https://www.reuters.com/world/us/gaffe- ... 022-09-27/
"Analysis: Gaffe or insight? Deciphering Biden's unguarded answers"
By Trevor Hunnicutt
September 27, 2022
WASHINGTON, Sept 27 (Reuters) - "Yes," U.S. forces will defend Taiwan if it is invaded by China.
Russian President Vladimir Putin is a "butcher" who "cannot remain in power."
And the COVID-19 pandemic is "over."
U.S. President Joe Biden's tendency to ad-lib in impromptu press situations is often referred to in Washington as his "gaffe" problem.
While the term refers to a blunder, Biden's remarks often aren't quite that - they betray deeper truths about his thinking and occasionally offer the public a better window into the administration's approach than that offered by spokespeople, from press secretary Karine Jean-Pierre to members of his Cabinet.
As Biden himself told steelworkers this month: "No one has ever doubted I mean what I say; the problem is I sometimes say all that I mean."
Biden's casual and unscripted remarks can cause far-reaching diplomatic ripples, forcing White House staff to scurry to "walk back," to use another Washington term, his remarks, trying to smooth over upsets, without saying outright that he misspoke.
After Biden spoke on defending Taiwan in a CBS News "60 Minutes" interview this month, officials quickly said that U.S. policy towards Taiwan is unchanged.
But he has said similar things before as president.
His apparent willingness to commit U.S. forces to a battle in Taiwan clears up a long-standing disconnect in U.S. policy towards Taiwan.
Presidents have said since the 1970s that they support a "One China" policy that declares Taiwan a part of China, but also that they are bound by a 1979 law to help Taiwan defend itself.
Biden's response suggests the U.S supports One China in concept, but Taiwan's defense in practice.
'WALK BACK' ON PUTIN
His statement about Putin in Warsaw in March was quickly walked back by a White House official who said "the President's point was that Putin cannot be allowed to exercise power over his neighbors" and not a discussion of "regime change."
Whatever the White House says, it is clear that the president's private view is that Putin is unfit for office, implying that he will use U.S. policy to weaken Putin whenever possible.
The White House has long said that it would be "driven by science" in determining when to end the COVID public health emergency.
Biden made his "the pandemic is over" remark on the sidelines of September's Detroit auto show as hundreds of Americans continue to die of the disease daily.
But they reflect changes in the administration's approach to the disease.
A new vaccine campaign is being compared by U.S. officials to annual flu shot drives, and the Centers for Disease Control and Prevention relaxed its guidance that masks always be worn in healthcare settings after Biden spoke.
The loose-lipped quality is not new.
As vice president during the Obama administration, Biden famously disclosed support for same-sex marriage before the president had been willing to do so.
"He's always had a reputation for saying what he was thinking," said former U.S. Senator Ted Kaufman, who has worked with Biden for a half century and remembers the onetime senator taking constituents' questions at a Wilmington, Delaware, train station.
MANAGING BIDEN'S CANDOR
The candor is the bane of anxious young press aides who let out long sighs or expletives when the president approaches reporters to answer questions in ad hoc briefings - which he enjoys doing but has suggested gets him in trouble with his staff.
Senior aides, worried about having to explain an indelicate, imprecise or speculative remark, rarely make Biden available for long-form interviews.
The "60 Minutes" interview, which included both the troop commitment in Taiwan and the pandemic comment, was Biden's first since a brief exchange in July with an Israeli television anchor.
"Generally, staff are risk-averse, and they figure in news conferences or high-profile events, if you make a mistake, it takes some while to clean up," said Towson University political science professor emerita Martha Joynt Kumar.
Biden has had far fewer formal interviews than his recent predecessors, Kumar's research shows.
Biden has held 17 press conferences, 39 interviews and engaged in 300 hundred informal back-and-forth exchanges with reporters in his presidency, according to Kumar's data through July.
That compares with an average of 41 press conferences, 112 interviews and 172 informal exchanges for the six preceding presidents over the same time frame.
While Biden's off-the-cuff remarks sometimes reveal deeper truths about his policy or opinions, other times they are simply misleading.
Biden, 79, said at a July event that he has cancer.
An aide later said on Twitter that Biden had non-melanoma skin cancers removed before he took office in January 2021 and that "this is what the President was referring to."
Reporting by Trevor Hunnicutt; Editing by Heather Timmons and Grant McCool
https://www.reuters.com/world/us/gaffe- ... 022-09-27/
Re: THE DAILY NEWS
REUTERS
"U.S. Congress' Jan. 6 hearing postponed due to hurricane"
By Patricia Zengerle
September 27, 2022
WASHINGTON, Sept 27 (Reuters) - Leaders of the U.S. congressional committee investigating the Jan. 6, 2021, attack on the Capitol said the panel had postponed a hearing scheduled for Wednesday, citing the threat to the state of Florida by a major hurricane.
In a statement on Tuesday, the Democratic chairperson, Bennie Thompson, and Republican vice chairperson, Liz Cheney, did not announce a new date for the House of Representatives Select Committee's hearing.
"In light of Hurricane Ian bearing down on parts of Florida, we have decided to postpone tomorrow’s proceedings."
"We’re praying for the safety of all those in the storm’s path."
"The Select Committee’s investigation goes forward and we will soon announce a date for the postponed proceedings," Thompson and Cheney said in a statement.
Some 2.5 million residents of Florida were under evacuation orders or warnings on Tuesday due to the approach of Hurricane Ian, which was expected to make landfall in the state about the same time as the hearing on Wednesday afternoon.
Thompson had said he expected the hearing would be the last from the Democratic-led panel.
It held eight in June and July, presenting findings of its more than year-long probe of events surrounding the deadly assault on the seat of the government by supporters of former Republican President Donald Trump.
In its earlier hearings - including one held in July 2021 - the panel made its case that, after losing the 2020 presidential election, Trump ignored allies who told him his claims of widespread election fraud were untrue and then sat back and watched as followers who believed his false accusations stormed the Capitol.
Trump has denied wrongdoing.
The panel has not said when it will release a final report on its probe, although the document is expected to be made public before the Nov. 8 mid-term elections, when control of Congress is up for grabs.
Reporting by Patricia Zengerle; Editing by Franklin Paul and David Gregorio
https://www.reuters.com/world/us/us-cap ... 022-09-27/
"U.S. Congress' Jan. 6 hearing postponed due to hurricane"
By Patricia Zengerle
September 27, 2022
WASHINGTON, Sept 27 (Reuters) - Leaders of the U.S. congressional committee investigating the Jan. 6, 2021, attack on the Capitol said the panel had postponed a hearing scheduled for Wednesday, citing the threat to the state of Florida by a major hurricane.
In a statement on Tuesday, the Democratic chairperson, Bennie Thompson, and Republican vice chairperson, Liz Cheney, did not announce a new date for the House of Representatives Select Committee's hearing.
"In light of Hurricane Ian bearing down on parts of Florida, we have decided to postpone tomorrow’s proceedings."
"We’re praying for the safety of all those in the storm’s path."
"The Select Committee’s investigation goes forward and we will soon announce a date for the postponed proceedings," Thompson and Cheney said in a statement.
Some 2.5 million residents of Florida were under evacuation orders or warnings on Tuesday due to the approach of Hurricane Ian, which was expected to make landfall in the state about the same time as the hearing on Wednesday afternoon.
Thompson had said he expected the hearing would be the last from the Democratic-led panel.
It held eight in June and July, presenting findings of its more than year-long probe of events surrounding the deadly assault on the seat of the government by supporters of former Republican President Donald Trump.
In its earlier hearings - including one held in July 2021 - the panel made its case that, after losing the 2020 presidential election, Trump ignored allies who told him his claims of widespread election fraud were untrue and then sat back and watched as followers who believed his false accusations stormed the Capitol.
Trump has denied wrongdoing.
The panel has not said when it will release a final report on its probe, although the document is expected to be made public before the Nov. 8 mid-term elections, when control of Congress is up for grabs.
Reporting by Patricia Zengerle; Editing by Franklin Paul and David Gregorio
https://www.reuters.com/world/us/us-cap ... 022-09-27/
Re: THE DAILY NEWS
REUTERS
"Fed's Harker says housing shortage a key inflation driver"
By Michael S. Derby
September 27, 2022
NEW YORK, Sept 27 (Reuters) - Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday a housing shortage is a key driver of the nation's historic surge in inflation.
"Since the Great Recession, the United States has not built enough housing to keep price growth relatively modest," Harker said in an essay published on the bank's website.
This shortage is "a major driver of the far-too-high inflation plaguing our country," he added.
"Inflation is far too high across most goods and services in our economy," Harker said, noting that the Fed "is working to stabilize inflation and put the economy on a firmer footing for the long haul."
Harker, a nonvoting member of the rate-setting Federal Open Market Committee, did not comment on the monetary policy outlook in his essay.
The central bank has been pressing forward with aggressive rate hikes aimed at taming the highest inflation in four decades.
Last week, the FOMC hiked its overnight target rate range by 0.75 percentage point, to between 3% and 3.25%, as it signaled more increases ahead.
Fed officials and many private sector economists tie the inflation surge to pandemic-related disruptions and periods of aggressive government stimulus.
Housing has been a key factor in rising prices.
Harker's essay noted that housing-driven inflation is "particularly alarming" in part because along with food price increases, housing factors affect almost all Americans.
Moreover, "high housing inflation is a macroeconomic problem; money spent on housing is money not spent on education, durable goods, or meals out," he added.
"We must do everything we can to get shelter inflation under control."
Reporting by Michael S. Derby; Editing by Chris Reese and Richard Chang
https://www.reuters.com/markets/us/feds ... 022-09-27/
"Fed's Harker says housing shortage a key inflation driver"
By Michael S. Derby
September 27, 2022
NEW YORK, Sept 27 (Reuters) - Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday a housing shortage is a key driver of the nation's historic surge in inflation.
"Since the Great Recession, the United States has not built enough housing to keep price growth relatively modest," Harker said in an essay published on the bank's website.
This shortage is "a major driver of the far-too-high inflation plaguing our country," he added.
"Inflation is far too high across most goods and services in our economy," Harker said, noting that the Fed "is working to stabilize inflation and put the economy on a firmer footing for the long haul."
Harker, a nonvoting member of the rate-setting Federal Open Market Committee, did not comment on the monetary policy outlook in his essay.
The central bank has been pressing forward with aggressive rate hikes aimed at taming the highest inflation in four decades.
Last week, the FOMC hiked its overnight target rate range by 0.75 percentage point, to between 3% and 3.25%, as it signaled more increases ahead.
Fed officials and many private sector economists tie the inflation surge to pandemic-related disruptions and periods of aggressive government stimulus.
Housing has been a key factor in rising prices.
Harker's essay noted that housing-driven inflation is "particularly alarming" in part because along with food price increases, housing factors affect almost all Americans.
Moreover, "high housing inflation is a macroeconomic problem; money spent on housing is money not spent on education, durable goods, or meals out," he added.
"We must do everything we can to get shelter inflation under control."
Reporting by Michael S. Derby; Editing by Chris Reese and Richard Chang
https://www.reuters.com/markets/us/feds ... 022-09-27/
Re: THE DAILY NEWS
REUTERS
"IMF says UK fiscal measures will 'likely increase inequality,' urges rethink"
By Andrea Shalal
September 27, 2022
WASHINGTON, Sept 27 (Reuters) - The International Monetary Fund on Tuesday took aim at new British financial plans that have roiled markets, warning that "large and untargeted fiscal packages" would likely increase inequality in Britain and could undermine monetary policy.
In its first comments on plans by Britain's new finance minister Kwasi Kwarteng, which have sent sterling and bonds into free fall, the IMF urged UK authorities to consider providing more targeted support to families and business instead of sizable tax cuts and sharply higher government spending.
“We are closely monitoring recent economic developments in the UK and are engaged with the authorities," an IMF spokesperson said, in response to a query from Reuters after the British pound hit an all-time low amid spiking market concerns.
"Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy," the spokesperson said in the IMF's first public reaction.
Kwarteng, who on Friday unveiled a budget aimed at growing the economy by cutting taxes and sharply increasing government borrowing, responded to market mayhem by promising to roll out medium-term debt-cutting plans on Nov. 23.
The global lender understands that Britain's "sizable fiscal package" was intended to help residents deal with higher energy prices and to boost growth via tax cuts and supply measures, but such measures could put fiscal policy at cross purposes with monetary policy, the spokesperson said.
"The nature of the UK measures will likely increase inequality," it added.
Kwarteng's Nov. 23 budget would provide an "early opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners,” the spokesperson added.
Britain was forced to apply for an IMF loan of nearly $4 billion during the 1976 financial crisis, with IMF negotiators insisting on deep cuts in public expenditure at the time.
IMF officials have warned repeatedly in recent months of the need to carefully calibrate fiscal and monetary policy as central bankers raise interest rates across the globe to get inflation under control.
Reporting by Andrea Shalal; Editing by Chizu Nomiyama and Jonathan Oatis
https://www.reuters.com/world/uk/imf-sa ... 022-09-27/
"IMF says UK fiscal measures will 'likely increase inequality,' urges rethink"
By Andrea Shalal
September 27, 2022
WASHINGTON, Sept 27 (Reuters) - The International Monetary Fund on Tuesday took aim at new British financial plans that have roiled markets, warning that "large and untargeted fiscal packages" would likely increase inequality in Britain and could undermine monetary policy.
In its first comments on plans by Britain's new finance minister Kwasi Kwarteng, which have sent sterling and bonds into free fall, the IMF urged UK authorities to consider providing more targeted support to families and business instead of sizable tax cuts and sharply higher government spending.
“We are closely monitoring recent economic developments in the UK and are engaged with the authorities," an IMF spokesperson said, in response to a query from Reuters after the British pound hit an all-time low amid spiking market concerns.
"Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy," the spokesperson said in the IMF's first public reaction.
Kwarteng, who on Friday unveiled a budget aimed at growing the economy by cutting taxes and sharply increasing government borrowing, responded to market mayhem by promising to roll out medium-term debt-cutting plans on Nov. 23.
The global lender understands that Britain's "sizable fiscal package" was intended to help residents deal with higher energy prices and to boost growth via tax cuts and supply measures, but such measures could put fiscal policy at cross purposes with monetary policy, the spokesperson said.
"The nature of the UK measures will likely increase inequality," it added.
Kwarteng's Nov. 23 budget would provide an "early opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners,” the spokesperson added.
Britain was forced to apply for an IMF loan of nearly $4 billion during the 1976 financial crisis, with IMF negotiators insisting on deep cuts in public expenditure at the time.
IMF officials have warned repeatedly in recent months of the need to carefully calibrate fiscal and monetary policy as central bankers raise interest rates across the globe to get inflation under control.
Reporting by Andrea Shalal; Editing by Chizu Nomiyama and Jonathan Oatis
https://www.reuters.com/world/uk/imf-sa ... 022-09-27/
Re: THE DAILY NEWS
REUTERS
"EXCLUSIVE Afghan Taliban sign deal for Russian oil products, gas and wheat"
By Mohammad Yunus Yawar and Charlotte Greenfield
September 27, 2022
KABUL, Sept 27 (Reuters) - The Taliban have signed a provisional deal with Russia to supply gasoline, diesel, gas and wheat to Afghanistan, Acting Afghan Commerce and Industry Minister Haji Nooruddin Azizi told Reuters.
Azizi said his ministry was working to diversify its trading partners and that Russia had offered the Taliban administration a discount to average global commodity prices.
The move, the first known major international economic deal struck by the Taliban since they returned to power more than a year ago, could help to ease the Islamist movement's isolation that has effectively cut it off from the global banking system.
No country formally recognises the group, which fought a 20-year insurgency against Western forces and their local Afghan allies before sweeping into Kabul as U.S. troops withdrew.
Western diplomats have said the group needs to change its course on human rights, particularly those of women, and prove it has cut ties with international militant groups in order to gain formal recognition.
Russia does not officially recognise the Taliban's government, but Moscow hosted leaders of the movement in the run-up to the fall of Kabul and its embassy is one of only a handful to remain open in the Afghan capital.
Azizi said the deal would involve Russia supplying around one million tonnes of gasoline, one million tonnes of diesel, 500,000 tonnes of liquefied petroleum gas (LPG) and two million tonnes of wheat annually.
Russia's energy and agriculture ministries did not immediately respond to requests for comment on the agreement.
The office of Russian Deputy Prime Minister Alexander Novak, who is in charge of oil and gas, also did not immediately respond.
Azizi said the agreement would run for an unspecified trial period, after which both sides were expected to sign a longer term deal if they were content with the arrangement.
He declined to give details on pricing or payment methods, but said Russia had agreed to a discount to global markets on goods that would be delivered to Afghanistan by road and rail.
The deal was finalised after an Afghan technical team spent several weeks in discussions in Moscow, having stayed on after Azizi visited there last month.
ECONOMY IN CRISIS
Since the Taliban regained power, Afghanistan has been plunged into economic crisis after development aid upon which the country relied was cut and amid sanctions that have largely frozen the banking sector.
The trade deal is likely to be watched closely in the United States, whose officials have held regular talks with the Taliban on plans for the country's banking system.
Washington has announced the creation of a Swiss trust fund for some of the Afghan central bank reserves held in the United States.
The Taliban have demanded the release of the entire amount of around $7 billion and said the funds should be used for central bank operations.
Azizi said international data showed most Afghans were living below the poverty line, and his office was working to support trade and the economy through international outreach.
"Afghans are in great need," he said.
"Whatever we do, we do it based on national interest and the people's benefit."
He said Afghanistan also received some gas and oil from Iran and Turkmenistan and had strong trade ties with Pakistan, but also wanted to diversify.
"A country ... shouldn't be dependent on just one country, we should have alternative ways," he said.
The Group of Seven (G7) nations are trying to find ways to limit Russia's oil export earnings in the wake of its invasion of Ukraine in February.
Moscow has managed to maintain revenues through increased crude sales to Asia, particularly China and India.
The European Union will ban Russian crude imports by Dec. 5 and Russian oil products by Feb. 5.
Reporting by Charlotte Greenfield and Mohammad Yunus Yawar; Editing by Mike Collett-White and Jane Merriman
https://www.reuters.com/markets/commodi ... 022-09-27/
"EXCLUSIVE Afghan Taliban sign deal for Russian oil products, gas and wheat"
By Mohammad Yunus Yawar and Charlotte Greenfield
September 27, 2022
KABUL, Sept 27 (Reuters) - The Taliban have signed a provisional deal with Russia to supply gasoline, diesel, gas and wheat to Afghanistan, Acting Afghan Commerce and Industry Minister Haji Nooruddin Azizi told Reuters.
Azizi said his ministry was working to diversify its trading partners and that Russia had offered the Taliban administration a discount to average global commodity prices.
The move, the first known major international economic deal struck by the Taliban since they returned to power more than a year ago, could help to ease the Islamist movement's isolation that has effectively cut it off from the global banking system.
No country formally recognises the group, which fought a 20-year insurgency against Western forces and their local Afghan allies before sweeping into Kabul as U.S. troops withdrew.
Western diplomats have said the group needs to change its course on human rights, particularly those of women, and prove it has cut ties with international militant groups in order to gain formal recognition.
Russia does not officially recognise the Taliban's government, but Moscow hosted leaders of the movement in the run-up to the fall of Kabul and its embassy is one of only a handful to remain open in the Afghan capital.
Azizi said the deal would involve Russia supplying around one million tonnes of gasoline, one million tonnes of diesel, 500,000 tonnes of liquefied petroleum gas (LPG) and two million tonnes of wheat annually.
Russia's energy and agriculture ministries did not immediately respond to requests for comment on the agreement.
The office of Russian Deputy Prime Minister Alexander Novak, who is in charge of oil and gas, also did not immediately respond.
Azizi said the agreement would run for an unspecified trial period, after which both sides were expected to sign a longer term deal if they were content with the arrangement.
He declined to give details on pricing or payment methods, but said Russia had agreed to a discount to global markets on goods that would be delivered to Afghanistan by road and rail.
The deal was finalised after an Afghan technical team spent several weeks in discussions in Moscow, having stayed on after Azizi visited there last month.
ECONOMY IN CRISIS
Since the Taliban regained power, Afghanistan has been plunged into economic crisis after development aid upon which the country relied was cut and amid sanctions that have largely frozen the banking sector.
The trade deal is likely to be watched closely in the United States, whose officials have held regular talks with the Taliban on plans for the country's banking system.
Washington has announced the creation of a Swiss trust fund for some of the Afghan central bank reserves held in the United States.
The Taliban have demanded the release of the entire amount of around $7 billion and said the funds should be used for central bank operations.
Azizi said international data showed most Afghans were living below the poverty line, and his office was working to support trade and the economy through international outreach.
"Afghans are in great need," he said.
"Whatever we do, we do it based on national interest and the people's benefit."
He said Afghanistan also received some gas and oil from Iran and Turkmenistan and had strong trade ties with Pakistan, but also wanted to diversify.
"A country ... shouldn't be dependent on just one country, we should have alternative ways," he said.
The Group of Seven (G7) nations are trying to find ways to limit Russia's oil export earnings in the wake of its invasion of Ukraine in February.
Moscow has managed to maintain revenues through increased crude sales to Asia, particularly China and India.
The European Union will ban Russian crude imports by Dec. 5 and Russian oil products by Feb. 5.
Reporting by Charlotte Greenfield and Mohammad Yunus Yawar; Editing by Mike Collett-White and Jane Merriman
https://www.reuters.com/markets/commodi ... 022-09-27/
Re: THE DAILY NEWS
REUTERS
"U.S. core capital goods orders surge; consumer confidence rises further"
By Lucia Mutikani
September 27, 2022
Summary
* Core capital goods orders increase 1.3% in August
* Core capital goods shipments rise 0.3%
* Consumer confidence index increases to 108.0 in September
* House price growth decelerates in July
WASHINGTON, Sept 27 (Reuters) - New orders for U.S.-manufactured capital goods increased more than expected in August, suggesting that businesses remained keen to invest in equipment despite higher interest rates, which could keep the economy on a moderate growth path.
Some of the largest gain in orders in seven months reported by the Commerce Department on Tuesday, however, reflected higher prices.
The data suggested that business spending on equipment probably rebounded in the third quarter, further dispelling fears that the economy was in recession.
That was reinforced by a survey showing consumer confidence rising for a second straight month in September, supported by a resilient labor market, which continues to churn out jobs at a brisk clip and generate strong wage gains, as well as falling gasoline prices.
More consumers planned to buy big-ticket items like motor vehicles and household appliances over the next six months, which should help to underpin consumer spending.
"It is hard to know whether companies are ordering up more widgets to produce the goods and provide the services for a stronger economy in the future or whether the jump in spending reflects the higher prices from inflation that remains out of control," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"The economy may be more resilient than we think."
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, surged 1.3% last month.
That was the biggest gain since January.
Data for July was revised higher to show these so-called core capital goods orders gaining 0.7% instead of 0.3% as previously reported.
The data is not adjusted for inflation.
Economists polled by Reuters had forecast core capital goods orders rising 0.2%.
There were increases in orders for machinery, primary metals, computers and electronic products as well as electrical equipment, appliances and components.
But orders for fabricated metal products fell.
Core capital goods shipments rose 0.3% after climbing 0.6% in July.
Core capital goods shipments are used to calculate equipment spending in the gross domestic product measurement.
Business spending on equipment contracted by the most in two years in the second quarter.
That together with a sharp slowdown in the pace of inventory accumulation resulted in GDP contracting at a 0.6% annualized rate last quarter after declining at a 1.6% pace in the January-March period.
But the economy was not in recession in the first half, with the income side of the growth ledger showing moderate expansion.
Goldman Sachs is forecasting GDP rebounding at a 1.2% rate in the third quarter.
The economy is hanging on despite the aggressive monetary policy tightening by the Federal Reserve to fight inflation.
The U.S. central bank last week raised its policy interest rate by 75 basis points, its third straight increase of that size.
It signaled more large increases to come this year.
Stocks on Wall Streets were trading lower after a brutal beating over the last six sessions.
The dollar was steady against a basket of currencies.
Longer-dated U.S. Treasury prices fell.
TIGHT LABOR MARKET
A second report from the Conference Board on Tuesday showed its consumer confidence index rose to 108.0 this month from 103.6 in August, beating economists' expectations for a reading of 104.5.
Households' worries about inflation eased, largely reflecting lower gasoline prices.
Consumers' 12-month inflation expectations slipped to 6.8%, the lowest since January, from 7.0% in August.
The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, rose to 38 from a reading of 36 in August.
This measure correlates to the unemployment rate from the Labor Department and points to a still-tight jobs market.
"The labor market differential suggests that joblessness fell in September, contrary to the Fed's goal of creating slack in the labor market to bring down wage growth," said Bernard Yaros, an economist at Moody's Analytics in West Chester, Pennsylvania.
There were increases in the share of consumers planning to buy motor vehicles and appliances such as refrigerators, washing machines and vacuum cleaners over the next six months.
But consumers were less inclined to buy a house as soaring mortgage rates and still-high home prices eroded affordability.
While a third report from the Commerce Department showed new home sales surged 28.8% to a seasonally adjusted annual rate of 685,000 units in August, that was likely due to builders offering incentives to clear inventory.
With the 30-year fixed mortgage rate now at levels last seen during the Great Recession, the rebound in new home sales is likely temporary.
There was, however, some good news for prospective buyers, who have been priced out of the market.
A fourth report on Tuesday showed the S&P CoreLogic Case-Shiller national home price index increased 15.8% year-on-year in July, slowing from an 18.1% advance in June.
On a monthly basis, prices fell 0.3% in July, the first drop since late 2018.
The cooling house price inflation was corroborated by a fifth report from the Federal Housing Finance Agency showing home prices increased 13.9% in the 12 months through July after rising 16.3% in June.
Prices fell 0.6% on a monthly basis.
An outright house price collapse, however, is unlikely as housing remains in short supply.
"Rapid home price deceleration was anticipated given the Fed's actions and will bring home price growth closer in line with income growth," said Selma Hepp, deputy chief economist at CoreLogic.
"Returning to a long-term average of 4% to 5% annual price growth is closer than initially anticipated, potentially by early 2023."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-c ... 022-09-27/
"U.S. core capital goods orders surge; consumer confidence rises further"
By Lucia Mutikani
September 27, 2022
Summary
* Core capital goods orders increase 1.3% in August
* Core capital goods shipments rise 0.3%
* Consumer confidence index increases to 108.0 in September
* House price growth decelerates in July
WASHINGTON, Sept 27 (Reuters) - New orders for U.S.-manufactured capital goods increased more than expected in August, suggesting that businesses remained keen to invest in equipment despite higher interest rates, which could keep the economy on a moderate growth path.
Some of the largest gain in orders in seven months reported by the Commerce Department on Tuesday, however, reflected higher prices.
The data suggested that business spending on equipment probably rebounded in the third quarter, further dispelling fears that the economy was in recession.
That was reinforced by a survey showing consumer confidence rising for a second straight month in September, supported by a resilient labor market, which continues to churn out jobs at a brisk clip and generate strong wage gains, as well as falling gasoline prices.
More consumers planned to buy big-ticket items like motor vehicles and household appliances over the next six months, which should help to underpin consumer spending.
"It is hard to know whether companies are ordering up more widgets to produce the goods and provide the services for a stronger economy in the future or whether the jump in spending reflects the higher prices from inflation that remains out of control," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"The economy may be more resilient than we think."
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, surged 1.3% last month.
That was the biggest gain since January.
Data for July was revised higher to show these so-called core capital goods orders gaining 0.7% instead of 0.3% as previously reported.
The data is not adjusted for inflation.
Economists polled by Reuters had forecast core capital goods orders rising 0.2%.
There were increases in orders for machinery, primary metals, computers and electronic products as well as electrical equipment, appliances and components.
But orders for fabricated metal products fell.
Core capital goods shipments rose 0.3% after climbing 0.6% in July.
Core capital goods shipments are used to calculate equipment spending in the gross domestic product measurement.
Business spending on equipment contracted by the most in two years in the second quarter.
That together with a sharp slowdown in the pace of inventory accumulation resulted in GDP contracting at a 0.6% annualized rate last quarter after declining at a 1.6% pace in the January-March period.
But the economy was not in recession in the first half, with the income side of the growth ledger showing moderate expansion.
Goldman Sachs is forecasting GDP rebounding at a 1.2% rate in the third quarter.
The economy is hanging on despite the aggressive monetary policy tightening by the Federal Reserve to fight inflation.
The U.S. central bank last week raised its policy interest rate by 75 basis points, its third straight increase of that size.
It signaled more large increases to come this year.
Stocks on Wall Streets were trading lower after a brutal beating over the last six sessions.
The dollar was steady against a basket of currencies.
Longer-dated U.S. Treasury prices fell.
TIGHT LABOR MARKET
A second report from the Conference Board on Tuesday showed its consumer confidence index rose to 108.0 this month from 103.6 in August, beating economists' expectations for a reading of 104.5.
Households' worries about inflation eased, largely reflecting lower gasoline prices.
Consumers' 12-month inflation expectations slipped to 6.8%, the lowest since January, from 7.0% in August.
The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, rose to 38 from a reading of 36 in August.
This measure correlates to the unemployment rate from the Labor Department and points to a still-tight jobs market.
"The labor market differential suggests that joblessness fell in September, contrary to the Fed's goal of creating slack in the labor market to bring down wage growth," said Bernard Yaros, an economist at Moody's Analytics in West Chester, Pennsylvania.
There were increases in the share of consumers planning to buy motor vehicles and appliances such as refrigerators, washing machines and vacuum cleaners over the next six months.
But consumers were less inclined to buy a house as soaring mortgage rates and still-high home prices eroded affordability.
While a third report from the Commerce Department showed new home sales surged 28.8% to a seasonally adjusted annual rate of 685,000 units in August, that was likely due to builders offering incentives to clear inventory.
With the 30-year fixed mortgage rate now at levels last seen during the Great Recession, the rebound in new home sales is likely temporary.
There was, however, some good news for prospective buyers, who have been priced out of the market.
A fourth report on Tuesday showed the S&P CoreLogic Case-Shiller national home price index increased 15.8% year-on-year in July, slowing from an 18.1% advance in June.
On a monthly basis, prices fell 0.3% in July, the first drop since late 2018.
The cooling house price inflation was corroborated by a fifth report from the Federal Housing Finance Agency showing home prices increased 13.9% in the 12 months through July after rising 16.3% in June.
Prices fell 0.6% on a monthly basis.
An outright house price collapse, however, is unlikely as housing remains in short supply.
"Rapid home price deceleration was anticipated given the Fed's actions and will bring home price growth closer in line with income growth," said Selma Hepp, deputy chief economist at CoreLogic.
"Returning to a long-term average of 4% to 5% annual price growth is closer than initially anticipated, potentially by early 2023."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-c ... 022-09-27/