This month, the benchmark 10-year US Treasury yield has begun to rise after a summer characterized by a downward drift and stabilization within a narrow range. Does this spike indicate a significant shift in financial trends after years of decline? Or is this merely a transient occurrence? While it’s impossible to draw definitive conclusions, we can adjust our expectations by exploring a myriad of perspectives.
* Treasury Secretary Yellen: The US will run out of funds by October 18 unless the debt ceiling is raised.
* President Biden is focusing on two Democratic senators to secure a $3.5 trillion plan.
* JPMorgan’s Jamie Dimon cautions that a US default would be ‘potentially catastrophic’.
* Senator Warren opposes the reappointment of Fed Chair Powell.
* The sharp increase in bond yields is testing investor confidence in major tech firms.
* Rising commodity prices heighten the risk of stagflation for the global economy.
* An analyst asserts that data indicates a stock market bubble driven by indexing.
* US home prices have shown continued gains, increasing by 19.7% year-over-year as of June.
* The US Consumer Confidence Index has dropped again in September:
As oil and gas prices surge, energy stocks have reclaimed the top position in year-to-date performance among US equity sectors as of September 27, according to a set of exchange-traded funds.
* Senate Republicans have blocked legislation to prevent a government shutdown.
* Will Democrats abandon efforts on the debt limit to avert the shutdown?
* Treasury and Fed leaders are warning that the Delta variant is hampering economic recovery.
* The energy crisis in Europe is an ominous sign for the US, according to a prominent gas trader.
* US bank mergers are expected to reach their highest level since 2008.
* Power outages in China present challenges for manufacturing.
* US durable goods orders increased significantly in August.
* Brent crude oil (the international benchmark) surpassed $80 a barrel—the highest level since 2018:
Amid a week largely marked by declining prices across major asset classes, commodities posted a notable increase, based on data from ETFs for the trading week ending September 24.
* The House is set to vote this week on the infrastructure bill that passed the Senate.
* Germany’s center-left party claims a narrow victory over Merkel’s party.
* Is there a rising risk of a US debt default?
* Nomura’s chief economist for China lowers GDP growth forecasts for the country this year.
* China might now be the main risk for emerging markets.
* New home sales in the US increased for the second consecutive month in August.
* Conditions may now be favorable for rising yields.
* The US 10-year Treasury yield has risen to 1.47%, approaching a three-month high:
Eswar S. Prasad
Q&A with the author via Bloomberg
Q: Why is there urgency for central banks to develop digital currencies?
A: The truth is, the end of physical cash is fast approaching. Digital payments are starting to dominate economies of all types. For central banks, the use of their money at the retail level presents an existential challenge. While they will continue to perform their core functions, having a central bank digital currency (CBDC) offers multiple advantages.
The US economy is poised for a strong output increase in the third quarter, though current estimates indicate a continuing slowdown in growth compared to earlier forecasts.
* House Speaker Pelosi assures that Congress will not allow government funding to lapse next week.
* The Senate is set to vote on Monday regarding raising the US debt ceiling.
* Treasury Secretary Yellen faces pressure as a potential debt default looms.
* China has sent fighter jets near Taiwan.
* China’s central bank has declared all cryptocurrency transactions illegal.
* China Evergrande has not indicated whether it will make a crucial interest payment.
* The US Leading Economic Index continues to forecast robust growth.
* US jobless claims rose again, exceeding predictions.
* The Chicago Fed National Activity Index suggests slowed but still above-average growth in August.
* US economic growth appears to have decelerated in September according to PMI survey data:
Recent reports suggest that the recent surge in US inflation may be reaching its peak. The question remains: how long will this peak last?
