Jay Powell remains calm about the United States’ economic outlook, although perhaps too calmly. The Federal Reserve made the decision to keep interest rates steady at its midweek meeting, while also adjusting its tone, citing moderating job creation and emerging unemployment as symptoms of a slowing economy. This opens the door to rate cuts imaginable in September.
The challenge is that weakening economic activity can accelerate and potentially lead to a recession. Has the Federal Reserve waited too long to act?
Since May, U. S. economic data has been on the rise. U. S. prices have been unexpectedly lower, according to Citi’s Economic Surprise Index. However, the symptoms of a U. S. slowdownwere evident before the Fed’s recent change in stance. Full-time household employment began to decline toward the end of 2023, with credit card defaults surpassing pre-pandemic levels around the same time.
The fact that the United States avoided the recession expected in 2023 has increased confidence in a comfortable economic landing this year and would have possibly led to overly positive interpretations of the data. For example, economic expansion in the second quarter beat expectations at an annualized rate of 2. 8 percent, which was perceived as a sign of a healthy economy. However, a closer look shows underlying weaknesses.
Government spending, supported by a really large deficit, supported the expansion. Job creation was supported by a sharp increase in public sector hiring. Consumer spending, when broken down, shows that the largest spending goes to essential goods such as rent, utilities, health care, and food, rather than discretionary items. The expansion of consumption also exceeds the expansion of the source of income.
These likely figures mask a weaker underlying economy.
Major economic signs also look worrisome. The ISM index of new orders in the productive sector is in contraction territory, which is traditionally a reliable sign of recession. Jobless claims hit an 11-month high last week, small businesses are scaling back their hiring plans and many consumer-facing businesses are reporting profit shortfalls.
The main cause is the Federal Reserve’s interest rate policy. The committee considered cutting rates at its July meeting and would likely regret not doing so. Annual inflation in the United States, as measured by the Federal Reserve’s preferred public-private spending index, 0. 5 percent issuances are far from the 2% target set by the central bank in June. Price pressures are also easing: the labor market is cooling and wage expansion is slowing.
A precautionary mid-week rate cut would not have amounted to truly extensive easing. Many families and businesses will continue to face high borrowing prices if they want to refinance fixed rate loans. The question is whether they deserve to meet the existing maximum or reduce rates slightly, in relation to the slowdown in demand. Goldman Sachs recently estimated that the optimal median interest rate, based on financial policy rules, is close to 4%. All of this suggests that the Federal Reserve could possibly be putting in too much effort for too long.
Market signals are also concerning. Based on the slope of the yield curve, the New York Federal Reserve estimates that the threat of a recession in the coming year is greater than 50%. Stock market valuations also stretched. The concentration of the S-index.
In September, the Fed will probably realize that demand has become too constrained and may want to implement deeper cuts (perhaps a 0. 50 percentage point cut from 0. 25 point relief). This can also disrupt the stock markets.
While this situation might seem unlikely at present, the economy is not slowing in a linear fashion. The continued and deeper-than-expected loss of economic momentum can also become a self-reinforcing spiral. Unemployment, defaults, and bankruptcies can also rise suddenly, and a market that is predicted to have a comfortable landing may also temporarily collapse. Recession warnings are intermittent and don’t deserve to be ignored.
Some argue that rate cuts would only fuel an asset bubble. The prospect of rate cuts would likely partly support stocks, but the relentless rise in the S
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Overall increases for Deep Leads resources: quality, tonnage and target area ABx Group has reported a 30% increase in its mineral resource estimate (MRE) at the rare Deep Leads ion adsorption clay (IAC) earth deposit Leads in northern Tasmania. The accumulation at MRE comes from 36 assayed extension wells, representing significant northward extension to the existing Deep Leads prospect.
Lake Resources (LKE. ASX) – LKE has signed two non-binding memorandums of understanding in the 10-day area. Ford Company (Ford) signed a memorandum of understanding for around 25,000 t/year and last week, Hanwa, a Japanese raw materials trader, signed a memorandum of understanding for up to 25,000 t/year. Subject to execution, this is a feat as Ford and Hanwa are set to engage in longer-term strategic partnerships with LKE. Commercial negotiations are still ongoing but should, if Ford and Hanwa inject new capital into LKE, further de-risk the project financing and thus ensure that LKE and Kachi are fully funded.
Two recent gravity studies have particularly exceeded expectations and revealed prospects for extension of the existing MRE at Throssell Lake, as well as a significant expansion opportunity at Yeo Lake. This reinforces the prospect of a multi-decade Tier 1 SOP production center around Lake Throssell.
Lately, TMG is completing paints in preparation for the PFS planned for early 2023, adding the start of drilling in Q3 2022, evaporation testing and permitting activities. The effects of these systems will affect the PFS and any long-term resource improvements.
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Despite the fall in oil and fuel prices, which fell 5. 4% and 19. 7% respectively in August, Calima managed to show an improvement in its main indicators.
WT Financial Group Limited (WTL) is a rapidly growing diversified monetary company, founded in 2010 and indexed on the Australian Stock Exchange (ASX) in 2015. Its recommendations and product offerings are provided primarily through an advisory organization independent monetary advisors who act as legal advisors. representatives. WTL in relation to its broker organization activities Wealth Today Pty Ltd (Wealth Today) and Sentry Group Pty Ltd (Sentry Group). It has approximately 275 advisors in over two hundred money advice companies across Australia. It also operates a direct-to-consumer operation under its Spring Financial Group brand.
In May 2021, Corporate Connect analyst Marc Sinatra published a full study report on ASX-listed biotech Immutep Ltd (ASX: IMM). He was so inspired by IMM that Corporate Connect found it imperative to publish a follow-up report that valued the company, as the market did not see the great prospects of eftilagimod alfa (efti).
This follow-up report was released today. Using comparables, after adding a monetary rebate to its EV estimate and dividing by the total number of percentages issued, Corporate Connect now puts the fair price of a percentage of Immutep at AU$2. 20.