This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.
It’s Fed day! The U.S. central bank will soak up investor attention but there’s plenty of other economic news around the globe. Jeff Sparshott here to take you through some of the key developments. Send us your questions, comments and suggestions by replying to this email.
RUNNING TO STAND STILL
The Federal Reserve is expected to leave interest rates unchanged Wednesday and officials could indicate they are comfortable holding them steady for a while. The Fed had taken some action to withdraw stimulus from the economy every quarter since late 2016—that streak will end this week. So if rates are already a done deal, what’s worth watching?
Fed officials haven’t released projections for the path of rates since December, before they signaled their new “wait-and-see” approach. An update—including the so-called dot plot—will show for the first time just how patient they expect to be. Back in December, most officials planned to raise rates between one and three times in 2019. The new forecast could fall somewhere between one and zero.
Read Nick Timiraos’ full preview here.
WHAT TO WATCH TODAY
The Federal Reserve releases a policy statement and economic projections at 2 p.m. ET. Chairman Jerome Powell hold a press conference at 2:30 p.m. ET.
President Trump heads to Ohio. His itinerary includes remarks at the Lima Army Tank Plant at 2:50 p.m. ET.
TOP STORIES
WHEN THE FED TALKS, MARKETS LISTEN
The Fed’s message on rates is rippling through markets. Data from the past three months suggest financial institutions are again jostling for customers by offering lower rates, particularly to those with good credit scores. The decline has been most pronounced in mortgage rates, which fell last week to their lowest level since February 2018, Paul Kiernan reports.
BIG DEAL
Negotiators for the U.S. and China have scheduled a new round of high-level trade talks, aiming to close a deal by late April. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to fly to Beijing next week to meet with Chinese Vice Premier Liu He, Bob Davis reports. The following week, Mr. Liu is expected to continue talks in Washington.
The two sides are aiming for a package that includes substantial increases in U.S. exports, and Chinese pledges to boost protection of intellectual property, end pressure on U.S. companies to transfer technology to their Chinese partners and reduce subsidies for Chinese firms. But they still have important issues to resolve including how to enforce a deal and the pace at which the U.S. and China will roll back the tariffs imposed over the past year.
STUCK IN THE MIDDLE WITH YOU
Chinese President Xi Jinping visits Italy and France this week, two countries with opposing views on how to shape relations with the world’s second-biggest economy. France, with newfound support from Germany, wants the EU to protect itself more robustly against China’s growing economic and political clout. Italy wants to make money through closer China ties, Marcus Walker writes.
Europe’s quest for a coherent approach comes as the region finds itself squeezed by the growing rivalry between China and the U.S. One of the biggest challenges facing the EU in coming decades: how to promote an international order based on rules and reciprocity in a world containing two superpowers that aren’t shy about flexing their muscles.
OH, BOTHER
The U.K. government won’t ask the European Union for a “long” Brexit delay, a British government official said Wednesday, suggesting any extension request would likely be for months rather than upward of a year. The leaders of the EU’s other 27 member states ultimately determine if and how long that delay would be, Max Colchester reports.
DELIVERING BAD NEWS
Global investors received some unsettling news from FedEx this week. The shipping giant’s latest financial results suggest a softer economy than most on Wall Street would like to see. Finance chief Alan Graf cited “slowing international macroeconomic conditions and weaker global trade growth” to explain the weakness. FedEx also trimmed its fiscal 2019 profit forecast for the second consecutive quarter, Charley Grant reports.
With its global reach and dependence on shipment of high value-added goods like semiconductors, FedEx is widely considered a macroeconomic bellwether.
BONUS
The share of U.S. workers’ compensation coming from bonuses rose after Congress overhauled taxes late in 2017. Those gains appear to be fading. The share of private-sector worker compensation that came from nonproduction bonuses fell to 2.1% in the fourth quarter of 2018, the lowest level since 2014. Bonus-related compensation had been at the highest level on record the three prior quarters. The decline suggests that some of the income boost from the tax law was only temporary, a potential headwind for consumer spending. The bonus data, however, is notoriously fickle, so the trend bears watching in the coming months. —Eric Morath
GIMME SHELTER
California’s economy is adding jobs faster than it’s adding homes. That’s a new wrinkle for the state: Companies that move from California have historically left for lower taxes and lighter regulation. But now home prices and rents, higher on average than anywhere else in the country, have surged to the top of concerns for businesses and workers, Nour Malas reports. More than half of California’s renters, and over a third of mortgage-holding homeowners, spend more than 30% of their income on housing, the maximum experts consider affordable.
BIT THE DUST
Bitcoin is in the longest slump of its 10-year history. That is forcing even its most ardent supporters to shelve dreams of global disruption and focus on simply tightening their belts long enough to outlast the downturn. While bitcoin is trading well above its December 2016 level, the severity of the recent drop is raising concerns that it may never recover. The market’s long-term viability now hinges on the development of tangible uses for bitcoin and its underlying blockchain technology, Paul Vigna reports.
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ELSE WE’RE READING
Automation and international trade have wiped out the bulk of jobs that used to pay good wages to non-college grads in big cities. “The unwinding of the urban non-college occupational skill gradient has shunted non-college workers out of specialised middle-skill occupations into low-wage occupations, diminished the set of non-college workers that hold middle-skill jobs in high-wage cities, and attenuated the steep urban wage premium for non-college workers that prevailed in earlier decades,” MIT’s David Autor writes at the Center for Economic Policy Research.
White men without a college degree born in the 1960s live shorter lives, face higher medical expenses and earn lower wages than their counterparts from a generation earlier. “[W]e find that the observed changes in the wage schedule had by far the largest effect on the labor supply of men and women born in the 1960s cohort. Specifically, it depressed the labor supply of men and increased that of women, especially in married couples,” Margherita Borella, Mariacristina De Nardi and Fang Yang write in a Minneapolis Fed working paper.
SIGN UP FOR OUR CALENDAR
Real Time Economics has launched a downloadable Google calendar with concise previews, forecasts and analysis of major U.S. data releases.
- To add to your Google Calendar on desktop, click here.
- To add to your Google calendar app on mobile, click here.
- If you prefer to view the calendar using a web browser, with the option of adding select Real Time Economics entries to your calendar, click here.
- And here’s our how-to.
Let us know what you think. This is a pilot project, so we’d appreciate your feedback.
from Real Time Economics https://ift.tt/2WidAAx
No comments:
Post a Comment