Former Treasury Secretary Lawrence Summers said that Washington is forgoing a key tool in helping the Federal Reserve quell inflation, and urged that lawmakers look at raising taxes. “Fiscal policy makes a big difference,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin. “Just the right thing to do is to raise taxes right now to take some of the demand out of the economy." Summers said that any tax hikes shouldn’t go toward funding fresh outlays -- in contrast to the package of tax hikes and expanded social investment that President Joe Biden has sought from Congress for more than a year now.

함의: 전 재무장관은 증세를 통한 수요억제로 인플레이션을 통제할 수 있음에도 정부가 사용하지 않고 있음을 지적함.

We estimate that dollar appreciation since mid-2021 has reduced the Fed’s preferred inflation gauges -- the headline and core PCE deflator -- by just 0.1 ppt (on a year-on-year basis) so far. The peak effect, of close to 0.2 ppt, will arrive early next year. The Fed will likely welcome any inflation relief they can get, but with headline PCE inflation likely ending the year at 5.9%, that amount of disinflation is a drop in the bucket. On growth, using the Fed’s trade model we estimate the deterioration in the trade balance from dollar appreciation will knock 0.7 ppt off GDP growth this year. Those numbers likely underestimate the total hit, as rapid dollar appreciation in the past has usually led to a tightening in global financial conditions that significantly slows growth and further drags on demand for US exports.

함의: 달러 강세를 촉발시킨 통화정책, 이를 통한 인플레이션 하락은 최대 -0.2ppt지만, 달러 강세로 인한 무역 열위 등에 의한 성장률 하락은 -0.7ppt임.

The Sahm Rule, a reliable indicator of contemporaneous recession since 1950s, says a recession usually begins when the national unemployment rate’s three-month moving average rises by 0.5 percentage points above its low from the past 12 months. The unemployment rate has lingered at 3.6% for the past four readings, suggesting the economy is not in a recession. Although the near-term models currently are sending a benign signal, that could change quickly. Historical experience is that economic variables tend to behave in a nonlinear way at the onset of a recession. Our model-predicted recession probabilities in the near-term tend to spike when the underlying data cross certain thresholds. The model sees a recession risk above 50% for 4Q 2022 in the following scenario: Corporate profit margins fall below 10%, from the current 11.7%. The Fed raises interest rates to 3.5% quickly. Year-on-year nominal GDP growth slows to below 6%.

함의: 경기침체를 잘 판단하는 클라우디아 삼의 모델을 통하면 아직 침체로부터 멀지만, 침체 전 지표들은 비선형으로 움직이는 경향이 있기 때문에 안심할 순 없음. 참고로 올해 4분기 침체 확률이 50% 이상이 되려면 기업 이익률이 10% 미만으로 하락, 중앙은행이 3.5%까지 빠르게 금리인상, 명목경제성장률 6% 미만으로 하락임.

Our US inflation-risk model predicts inflation topped out at 9.1% year over year in June and will fall back to 7% by the first quarter of 2023. A gradual slowdown toward 5% may follow later next year.

함의: 인플레이션은 내년 말이 되서야 5%에 닿을 것임.

Some global money managers betting on China stocks are taking July’s selloff in their stride, keeping the faith that Beijing will pull out all the stops to boost the economy. Fidelity International Ltd., abrdn plc and GAM Investment Management are among those expecting China to outperform global equities in the second half as recession fears grip major markets. For heavyweight tech firms traded in Hong Kong, Federated Hermes Inc. and Brandes Investment Partners LP say the worst of the crackdown is priced in. China and Hong Kong shares have seen their world-beating rebound fizzle out in July as rising virus cases, mortgage boycotts and fresh regulatory action on internet giants triggered knee-jerk selling. But to bulls, a gradual reopening from lockdowns, wrapping up of the regulatory probe into Didi Global Inc. and hopes of market-friendly measures leading up to the all-important National Party Congress are reasons to be optimistic.

함의: 7월 매도에 의한 낙폭에도 불구 경제활동 정상화, 기술 기업 규제의 마무리 국면, 전당대회에 대한 기대 등을 이유로 일부 투자자들은 여전히 중국이 하반기 가장 우월한 성과를 낼 지역으로 보고 있음.

British satellite firm OneWeb is nearing a deal to combine with France’s Eutelsat Communications SA in a transaction that would create a pan-European operator that could better compete with Elon Musk’s Starlink project, according to people familiar with the matter. OneWeb and Eutelsat could reach an agreement as soon as next week, the people said, asking not to be identified because the discussions are private. OneWeb, in which the UK government has a minority stake, would be valued at about $3 billion or more, the people said. Musk’s Starlink fleet of more than 1,500 satellites launched in the past three years by SpaceX has created an unprecedented challenge for rivals, leading to a wave of consolidation in the sector.

함의: Space X가 쏘아올린 1,500여개의 위성은 동종 업계에 위협이 되었고, 전통 기업들은 합병을 통해 스타링크와의 경쟁에 대응코자 함.

Russia attacked Odesa’s sea port with cruise missiles on Saturday, less than 24 hours after signing an agreement aimed at restarting Ukrainian grain exports from Odesa and two other Black Sea locations. Two Kalibr missiles hit the port’s infrastructure and two were shot down by Ukraine’s air defense, Serhiy Bratchuk, adviser to the head of the Odesa regional military administration, said on Telegram. The extent of damage to grain loading facilities was unclear. A large plume of smoke was visible across the city after the strikes. 

함의: 러시아는 오데사와 다른 두 지역에서 곡물 수출을 할 수 있도록 한 협정 24시간도 지나지 오데사 항구를 공격, 곡물 적재소의 피해는 불명확하나 미사일 2기는 격추되고 2기는 피해를 입혔음.

WHO Declares Monkeypox Outbreak an International Emergency.

The bond market wants to believe that Federal Reserve boss Jerome Powell will succeed in getting inflation under control. It’s unclear just when the economy might witness an actual slowdown in consumer-price gains, which are presently running at the fastest pace in four decades. But as investors brace for the Fed’s next hike on Wednesday, bond-market measures suggest the traders’ outlook for inflation has been tempered and is back where it was in February, before the Russia-Ukraine war turbocharged commodity prices and exacerbated global supply-chain problems. That’s also encouraged investors to bet the Fed may end interest-rate increases earlier and at a lower level than previously thought. A key gauge of investors’ inflation expectations, known as the five-year, five-year forward breakeven rate, on Thursday fell to 2.02%, just beneath where it stood on Feb. 18 and the lowest closing level since early 2021. And while it rose Friday, the rate is well below the 2.57% mark hit back in April and much closer to the rate of 2% that the US central bank tries to anchor policy around.

함의: 채권시장은 파월이 인플레이션 통제를 성공하길 바라는 눈치로, 어느새 물가기대가 2월 18일 수준인 2.02%로 하락하며 중앙은행의 목표치인 2%에 근접함. 다만, 채권시장에는 중앙은행이 금리를 올린 뒤 당초보다 빨리 인하 사이클로 돌아설 것이란 베팅도 녹아있음.

The world’s largest economy remained in a precarious position in the second quarter, a government report is projected to show, adding to mounting recessionary angst just as the Federal Reserve leans in harder against inflation. US gross domestic product -- the sum of goods and services produced -- is forecast to have risen an annualized 0.5% during the April-June period, according to the median estimate in a Bloomberg survey of economists. Following the 1.6% rate of decline in the prior quarter, the economy’s first-half performance would be the worst of the pandemic recovery. Their challenge in tightening policy is to avoid overdoing it and nudging the economy into a downturn. A number of economists, in addition to the Atlanta Fed’s GDPNow estimate, forecast a second quarterly decline in GDP that would fit the technical definition of a recession. 

함의: 미국 2분기 경제성장률은 연환산 0.5%로 예상되며, 1분기 1.6% 성장에 이어 대확산 이후 최악의 지표로 기술적 경기침체에 해당함.

In the past two weeks, Peter Brotman found himself evaluating two multimillion-dollar car collections offered for private sale. Each collection—one with more than a dozen significant Porsches, the other featuring a cache of heavy hitter Ferraris—represents a massive potential transaction on an ultra-rare group of cars that were so undercover that until recently, even Brotman himself wasn’t sure they existed. But if you ask the Philadelphia- and Los Angeles-based specialist whether he worries that the sales’ timing coincide with some precipitous drops in the stock market, he’ll smile. “These are not people who make decisions based on the stock market,” he says. Proverbial wisdom dictates that as market values tank, many investors seek the perceived stability of such commodities as gold. But many of the world’s wealthiest choose instead to sink money into tangibles, including cars. “Historically, when markets are down, that tends to be when money starts to flow into alternative assets, such as collector cars,” says Michael Caimano, a car specialist with RM Sotheby’s. “People see the disappointing performance of the stock market as a reason—or an excuse—to pour more money into cars,” wrote John Wiley, a Hagerty spokesperson, last month. There are levels to this mentality, though. Values are starting to plateau for the sub-million-dollar vintage sports cars that enjoyed a sales bonanza during the novel coronavirus pandemic, when records for both pricing and volume were set on such online platforms as Bring a Trailer and Market by Bonhams. But people shopping for blue chip items such as 1950s Ferraris, Mercedes-Benz Gullwings, and race cars from Jaguar and Porsche exist blissfully outside that field. They are simply not susceptible to market volatility. “In cars under a quarter of a million dollars, that's starting to correct a little bit. The COVID bump, if you will, has come off a little bit,” says Stephen Serio, a Boston-based broker of rare European vehicles. “But the markets don't mean a thing to anybody that can stroke a check for a $5 million or $10 million car.”

함의: 역사적으로 불황에 접어들 때 시장 하락에 전혀 영향을 받지 않는 막대한 부를 소유한 사람들은 희소한 가치를 지닌 올드카 수집에 더 많은 돈을 투입함.

This 1937 Mercedes-Benz 540 K Special Roadster—to be offered by RM Sotheby’s in Monterey, Calif., in August—is expected to be worth up to $12 million. 

The pandemic has put unprecedented strain on global supply chains -– and also on the workers who’ve kept those systems running under tough conditions. It looks like many of them have had enough. A surge in strikes and other labor protests is threatening industries all over the world, and especially the ones that involve moving goods, people and energy around. From railway and port workers in the US to natural-gas fields in Australia and truck drivers in Peru, employees are demanding a better deal as inflation eats into their wages. Precisely because their work is so crucial to the world economy right now –- with supply chains still fragile and job markets tight –- those workers have leverage at the bargaining table. Any disruptions caused by labor disputes could add to the shortages and soaring prices that threaten to trigger recessions.

함의: 인플레이션이 잠식해버린 임금으로 인해 더 나은 조건을 요구하는 노동자들의 파업과 시위가 증가하고 있으며, 이런 일련의 움직임이 침체를 더 가속화 시킬 수 있음.