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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

The US CPI rose in September, which is expected to strengthen the FED's willingness to withdraw this year, and gold plummets by nearly $11

Eden

Oct 26, 2021 11:03

GMT+8 At 20:30 on Wednesday (October 13), the September CPI data released by the United States rose, which strengthened the Fed's November announcement to reduce its will to purchase debt. As of press time, spot gold plummeted by nearly 11 U.S. dollars to 1,764.34 U.S. dollars per ounce; the U.S. dollar index jumped 14 points to 94.47.

Specific data show that the annual rate of CPI in the United States rose to 5.40% in September, 0.1 percentage points higher than the previous value and expected value; the annual rate of core CPI in September remained unchanged at 4%, which is also in line with expectations.

The increase in the US CPI in September exceeded expectations, highlighting the persistence of inflationary pressures in the economy. Unprecedented shipping challenges, material shortages, high commodity prices, and rising wages are all driving up the costs for manufacturers.

As the U.S. economy reopened, Americans had accumulated at least $2.5 trillion in excess savings during the pandemic and began to release, and consumer spending was strong. The surge in demand has led to a surge in inflation, and the continued supply bottleneck will cause prices to rise much higher than the 2% average inflation target set by the Fed. The surge in energy prices intensifies inflation doubts and arouses people's concern that the Fed may need to go faster than expected. A bet on a rate hike.

Consumers pay for high oil prices


Since October last year, US oil prices have risen by approximately $1.10 per gallon. Moody's Analytics Chief Economist Zandi said that for every penny increase in the cost of a gallon of gasoline, American consumers would lose $1 billion; an increase of $1 would cost US$100 billion.

Joe LaVorgna, chief economist for the Americas at Natixis, said that two persistent problems make inflation likely to continue to rise in the coming months. One is that supply chain disruptions have led to very low stocks of certain commodities, and the other is due to higher energy prices. The soaring oil and natural gas prices are relatively new factors that change the outlook for inflation.

Bruce Kasman, chief economist at JPMorgan Chase, said: “Surprising oil prices tend to get you into trouble, mainly driven by insufficient supply, and often destructive factors, which are more extensive in dragging down potential growth.” He added, This is not the time we warn of a recession, but the time you have to worry that it will harm growth in a substantial way. "

Anwiti Bahuguna, director of multi-asset strategy at Columbia Threadneedle, said: "We expect GDP growth to be in the range of 4% to 6%... But if oil prices double, or even triple, it will have a bad effect and lead to negative growth."

FED officials believe that the economy has "healed"


Overnight, three Fed policy makers, including Fed Vice Chairman Clarida, said that the US economy has recovered enough to start scaling back its asset purchase program. Most Fed policymakers continue to say that inflationary pressures will prove to be short-lived.

Clarida: Upside inflation is temporary

Clarida, Vice Chairman of the Federal Reserve, said at a first-up event held by the Institute of International Finance (IIF): “I personally believe that we have exceeded the standard of'making substantial further progress' in terms of stabilizing prices. We are promoting employment. It has almost reached the standard."

Clarida said that the economy has strengthened and "conditions in the labor market continue to improve." He also pointed out that the decision makers agreed at the last meeting that “it may be necessary soon” to reduce the scale of debt purchases, and may end debt purchases in the middle of next year, although the pandemic continues to put pressure on the employment participation rate.

The number of job vacancies in the United States decreased in August, but still exceeded 10 million, which is a very high level. Due to the tight labor supply, the number of voluntary resignations surged to a record high in August, hindering employment growth. In September, 194,000 non-agricultural jobs were added, which was far below the expectations of many economists.

Clarida's latest optimistic assessment may echo the mood of Fed Chairman Powell. Powell has previously stated that he only needs to see a "decent" September U.S. employment report to be ready to start reducing bond purchases in November.

Clarida also said: "The biggest unknown at the moment is how long it will take for the supply chain bottlenecks to be eliminated, but it is expected that they will subside, and I do not expect stagflation in the medium term. The inflation risk is upward, but the upward movement can be temporary. , Inflation expectations are stable, and wage increases have not contributed to the worrying price spiral."

Bostic: The sooner the policy is tightened, the better

Atlanta Fed President Bostic said: "I think progress has been made, and the sooner we take action, the better... The financial market now has sufficient liquidity to minimize the detriment of the market or the economy from curtailing debt purchases. The possibility of impact. I think the economy actually has a lot of positive momentum."

Bostic emphasized that it will take more than a year for the central bank to raise interest rates from close to zero. He predicts that high inflation will not persist, nor will it cause lasting damage to the economy, so that it will not make people question our policy stance on interest rates.

Brad: The economy is still in good shape

St. Louis Federal Reserve Chairman Brad said on Tuesday (October 12) that he supports the Fed starting to reduce the pace of asset purchases next month and end the plan next spring to raise interest rates if necessary to keep inflation down.

In an interview with CNBC, Brad said: “The argument that inflation naturally fades is reasonable, but I only want to give this scenario a 50% possibility.” He added that he hopes to keep inflation high or otherwise for the next few months. Be prepared for the possibility of further gains. "I just want to be prepared in case we have to act in advance so that we can take action next spring or summer as a last resort."

Brad also said that such a move does not have to be at the expense of labor market gains. Although the recent surge in new crown cases has slowed growth in the last quarter, the economy is still in "good condition." He expects that economic growth will rebound in the fourth quarter of this year and the first quarter of next year, and the unemployment rate is expected to fall below 4%, and reach the level before the outbreak of the new crown in the spring.