Australian consumer prices rose in August at the fastest annual pace in a year:Australian monthly CPI (August 2025) +3% (expected 2.9%, prior 2.8%)for the month, CPI was flatelectricity prices fell 6.3% on new government rebatesholiday travel and accommodation dropped A key measure of core inflation, the trimmed mean, eased to 2.6% from 2.7% in July. A measure excluding volatile items and holiday travel climbed to 3.4% from 3.2%.The prospect of an RBA rate cut next week, at the September 29-30 meeting diminished on the hot headline. The Australian dollar jumped:Australian dollar jumped after the hot CPI data that rules out an RBA rate cut next weekthree-year government bond futures slippedWhile you can rule out a rate cut next week, even the chance of a November cut was trimmed to around 60%, from about 70% before the data.-The RBA has played down the role of monthly CPI data, saying it was too volatile, and noted that recent rate cuts in February, May and August were based on quarterly inflation. Governor Michele Bullock said the economy was in solid shape, with inflation set to move back into the 2–3% target range and the labour market close to full employment. The bank expects headline inflation, which was 2.1% last quarter, to rise to 3.1% next year as energy rebates expire, while core inflation should hold near 2.6%. With unemployment at 4.2%, the RBA sees little urgency to cut rates at its September 29–30 meeting. This article was written by Eamonn Sheridan at investinglive.com.

China’s premier:China hopes the Canadian side can adopt a correct perception of ChinaChina and Canada should respect each other’s core interests and major concerns to cement the political foundation for the development of bilateral cooperation and tiesChina willing to make more active and practical efforts with Canada to promote further improvement of bilateral relationsBoth sides should steadily steer their ties onto a track of healthy, stable and sustainable developmentChina stands ready to address each other’s economic and trade concerns through dialogue and consultation with CanadaHopes Canada will provide a fair and non-discriminatory business environment for Chinese companies in Canada China ready to enhance communication and coordination with Canada to jointly promote economic globalization and free trade This article was written by Eamonn Sheridan at investinglive.com.

Reserve Bank of Australia Governor Bullock is not going to cut interest rates at the next meeting with this sort of data flashing across the terminals:Australian monthly CPI (August 2025) +3% (expected 2.9%, prior 2.8%)Read that post, the trimmed mean was a bit better. But kep in mind that the Australian government and the Reserve Bank of Australia have a firm agreement to target the mid point of the 2-3% band, its been well publicised. there is no way Bullock will allow a rate cut at the September 29-30 meeting with this data. ---Now, do note, as posted a couple of times already today:As noted earlier today, the monthly CPI data from Australia does not show all components of the CPI, that'll have to wait for the quarterly data release (late in October). The monthly CPI indicator does, however, provide a timelier indication of inflation using the same data collected for use in the quarterly CPI. The monthly reading includes updated prices for between 62 and 73 per cent of the weight of the quarterly CPI basket, its not the full picture.This is all the more reason for a hold next week, the RBA can reconsider at the November 3-4 meeting after the quarterly data late in October hits. This article was written by Eamonn Sheridan at investinglive.com.

Australian monthly CPI (August 2025) +3%, above July and above expected, and also right at the top of the RBA 2-3% target bandexpected 2.9%, prior 2.8%Trimmed mean 2.6% y/y, which is better news than that headline figure. prior 2.7% AUD/USD is ticking up a little on this hot data. ---As noted earlier today, the monthly CPI data from Australia does not show all components of the CPI, that'll have to wait for the quarterly data release (late in October). The monthly CPI indicator does, however, provide a timelier indication of inflation using the same data collected for use in the quarterly CPI. The monthly reading includes updated prices for between 62 and 73 per cent of the weight of the quarterly CPI basket, its not the full picture. This article was written by Eamonn Sheridan at investinglive.com.

The People's Bank of China (PBOC), China's central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a "band," around a central reference rate, or "midpoint." It's currently at +/- 2%.Previous close was 7.1119PBOC injected 401.5bn yuan via 7-day reverse repos at 1.40% This article was written by Eamonn Sheridan at investinglive.com.

Reserve Bank of New Zealand news. NZ Finance Minister Willis:Appoints Anna Breman as new governor of the Reserve Bank of New ZealandBreman was nominated for the role by the Reserve Bank board following a worldwide search in which 300 potential candidates were identified.Breman has been appointed for a term of five years. She begins her new role on 1 December and I look forward to working with her.I also want to acknowledge Christian Hawkesby who has done an admirable job of filling in as governor since 8 April. Mr Hawkesby will finish up at the Reserve Bank when Dr Breman starts.-Anna Breman is a Swedish banker and economist. Was serving as the First Deputy Governor of the Sveriges Riksbank, the central bank of Sweden. This article was written by Eamonn Sheridan at investinglive.com.

China said it will no longer seek the special treatment typically afforded to developing nations at the World Trade Organization, easing a long-standing dispute with the U.S. over trade rules.Premier Li Qiang announced in New York on Tuesday that China will stop requesting “new special and differential” treatment in any current or future WTO negotiations, a step that could help advance reforms of the global trade body. ---This move may unlock progress in WTO reform talks and reduce U.S.-China tensions. Dropping special treatment signals Beijing’s willingness to accept higher obligations in trade rules.Past position:Claimed developing-nation status for preferential treatmentUsed “special and differential” provisions to secure flexibility on trade rulesU.S. criticized this as unfair, arguing China is a major economyNew position:Premier Li Qiang says China will stop seeking new developing-nation perksApplies to all current and future WTO negotiationsSignals openness to higher obligations and reforms, reducing friction with U.S.---Earlier:Chinese President Xi won't meet with Trump in 2025, maybe next year! This article was written by Eamonn Sheridan at investinglive.com.

Japanese September S&P Global Manufacturing PMI Flash 48.4 manufacturing sector activity fell at the fastest pace in six monthsfurther declines in new orders, hit a five-month lowdecline in export orders eased from August's 17-month lowinput price inflation eased to levels not seen since early 2021output inflation accelerated from Augustmanufacturing jobs shrank for the first time since November last yearprior 49.7Services 53.0in expansionary territory for six monthsservices sector employment also saw a slight riseprior 52.0Composite 53.0slowest growth in overall business activity since Mayprior 52.0 (six-month high) This article was written by Eamonn Sheridan at investinglive.com.

Bank of Canada Governor Tiff Macklem says Fed Chair Powell is doing very good job under trying circumstancesTrump’s repeated attacks on the Fed are a concernsays history shows central banks that have operational independence for monetary policy do a better job at delivering price stability for their citizenssays accountability goes hand in hand with independenceEarlier:BOC's Macklem: For many investors, the value of the USD as a hedge has been dented This article was written by Eamonn Sheridan at investinglive.com.

BOC Macklem is supporting his US counterpart Powell. Says: Fed chair Powell is doing very good job under trying circumstances.Trump's the repeated attacks on the Fed are a concern.History shows a central banks that have operational independence for monetary policy do a better job at delivering price stability for their citizens.Accountability goes hand-in-hand with independenceNot market moving war policy related but supportive of the idea of the importance of central bank independence. This article was written by Greg Michalowski at investinglive.com.

Crude oil futures settled at $63.41, up $1.13 or 1.81% on the day. On the topside, the 100-day moving average at $64.38 remains the next key target. A break above and sustained move through that level would give buyers greater control and open the door for further upside momentum.On the downside, a swing area between $61.45 and $61.94 has provided solid support, holding both yesterday and today. As long as price action stays above that zone, buyers are still in play. However, the real test for bullish conviction remains a move through the 100-day moving average. This article was written by Greg Michalowski at investinglive.com.

Pres. Trump on Truth Social is cheering on Ukraine in it's fight against Russia. In his post he says:Although Trump professes to want peace, he also wants to sell military to Europe and NATO too. What better way to reduce the deficit then my selling high ticket defense goods to allies? This article was written by Greg Michalowski at investinglive.com.

The EURUSD began the week with a modest dip that tested the 100-bar moving average on the 4-hour chart. Buyers leaned against that level and quickly rotated the price back to the upside. That move carried the pair to a high of 1.1820 earlier today.During the European and early U.S. session, a pullback found support near a swing area between 1.1779 and 1.1788. Buyers stepped back in at that zone and turned momentum higher once again, pushing the price toward the session high and the next key resistance target at 1.18289.A sustained break above 1.18289 would be required to open the door for a run toward 1.1909, a level defined by a double-top from August 2021. Notably, on FOMC day last week, the pair briefly extended above that double-top to 1.19178 before sellers re-entered and forced a rotation lower. However, that level at 1.1909 remains by key target if the buyers are to push this pair to even loftier levels going back to 2021. Note that the high price in January 2021 reached 1.23494. That was a highest level going back to 2018 This article was written by Greg Michalowski at investinglive.com.

The recent performance of the US dollar may be telling us somethingTrump's attempts to influence the FEd are raising questions about Fed independenceLiberation Day tariffs called into question USD safe haven roleCanadian leaders need to chart a more-independent course given new relationship with the USA, need to find new marketsThere are no monetary policy comments here but he's sounding like a guy whose predecessor became a politician. This article was written by Adam Button at investinglive.com.

I thought the comments from Powell today were more-dovish than at the FOMC press conference. He repeatedly emphasized risks to the jobs market, noting that the jobs market had softened over the summer."I can't say that the labor market is really solid anymore," he said.He offered some token comments about inflation risks but also said that he thinks tariff inflation will be passed through by year end. Given that timeline and monetary policy lags, that's as close as you're going to get to him endorsing the market-implied path of about 100 bps in easing in the coming 12 months.The FX market responded with some mild US dollar selling and that let the euro challenge the highs of the day at 1.1820. It wasn't able to get above though and remains in a tight range today.Bond markets pushed yields lower with US 2s down 1.5 bps on the day to 3.588%.Overall it's a small move but the direction is dovish. This article was written by Adam Button at investinglive.com.

NATO countries should shoot down Russian planes if they enter airspaceI think Orban (Hungary PM) will stop buying Russian oilI don't know exactly what happened in Denmark This article was written by Adam Button at investinglive.com.

The dip buyers won yesterday but today it's the sellers in charge. The weakness in equities has extended after Powell, despite what I thought were some fairly-dovish comments. The driver seems to be technology with Nvidia and Amazon both down about 2.5% in what's likely a round of profit taking. The circular spending and investment paths with Nvidia, OpenAI and Oracle is something of a concern. This article was written by Adam Button at investinglive.com.

High-yield 3.571%WI level at the time of the auction 3.572%tail -0.1 basis points versus 6 month average of -0.5 basis points.Directs 30.77% versus 6 month average of 27.3%.Indirects 57.75% versus 6 month average of 61.4%bid to cover 2.51X vs 2.61XAn average auction. Not too great. Not too bad. This article was written by Greg Michalowski at investinglive.com.

Beige book showed modest growth but not very fast.Right now is unusual. Risks to employment is to the downside and inflation is to the upside.Over the summer labor market has softened. Focus on inflation needs to moderate to a more balanced approachWe will look at labor market, growth data, inflation data and ask if policy is in the right place.If policy is not in the right place, we will move it thereAggregate households are in good shape.It is not a time of elevated financial stability risks.Cannot say that labor market is really solid anymoreNASDAQ index moves to new session lows. We are not targeting prices for financial assets. Equity prices are fairly highly valuedThe hiring rate has really droppedNot hiring may be one of the ways of passing off tariffs costsAI could be the reason for lack of hiring for new grads but can't say it's the main reasonTariff pass-through has been later and less than expectedOur forecast is for tariffs to be a one-time passthrough, finished by year-endIt's a reasonable base case that pass through will be done by year endThat's almost everyone's base case This article was written by Greg Michalowski at investinglive.com.

September 23, 2025Economic OutlookChair Jerome H. PowellAt the Greater Providence Chamber of Commerce 2025 Economic Outlook Luncheon, Warwick, Rhode IslandShareThank you. It is a pleasure to be back here in Rhode Island. The last time I had the opportunity to speak to the Greater Providence Chamber of Commerce was in the fall of 2019. I noted then that, "if the outlook changes materially, policy will change as well."1Little did any of us know! Just a couple of months later, the COVID-19 pandemic arrived. Both the economy and our policy evolved dramatically in ways no one could have predicted. Along with actions by Congress, the Administration, and the private sector, the Fed's aggressive response helped stave off historically severe downside risks to the economy.The COVID pandemic came on the heels of the painfully slow decade-long recovery from the Global Financial Crisis. These two back-to-back world historical crises have left behind scars that will be with us for a long time. In democracies around the world, public trust in economic and political institutions has been challenged. Those of us who are in public service at this time need to focus tightly on carrying out our critical missions to the best of our ability in the midst of stormy seas and powerful crosswinds.Throughout this turbulent period, central banks like the Fed have had to develop innovative new policies that were designed to deliver on our statutory goals during times of crisis, rather than for everyday use. Despite these two unique, extremely large shocks, the U.S. economy has performed as well or better than other large, advanced economies around the world. As always, it is essential that we continue to look back and learn the right lessons from these difficult years, and that process has been ongoing for more than a decade.Turning to the present day, the U.S. economy is showing resilience in the midst of substantial changes in trade and immigration policies, as well as in fiscal, regulatory and geopolitical arenas. These policies are still emerging, and their longer-term implications will take some time to be seen.Economic OutlookRecent data show that the pace of economic growth has moderated. The unemployment rate is low but has edged up. Job gains have slowed, and the downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated. In recent months, it has become clear that the balance of risks has shifted, prompting us to move our policy stance closer to neutral at our meeting last week.GDP rose at a pace of around one and a half percent in the first half of the year, down from 2.5 percent growth last year. The moderation in growth largely reflects a slowdown in consumer spending. Activity in the housing sector remains weak, but business investment in equipment and intangibles has picked up from last year's pace. As noted in the September Beige Book, a report that gathers qualitative information from across the Fed System, businesses continue to say that uncertainty is weighing on their outlook. Measures of consumer and business sentiment declined sharply in the spring; they have since moved up but remain low relative to the start of the year.In the labor market, there has been a marked slowing in both the supply of and demand for workers—an unusual and challenging development. In this less dynamic and somewhat softer labor market, the downside risks to employment have risen. The unemployment rate edged up to 4.3 percent in August but has remained relatively stable at a low level over the past year. Payroll job gains slowed sharply over the summer months, as employers added an average of just 29,000 per month over the past three months. The recent pace of job creation appears to be running below the "breakeven" rate needed to hold the unemployment rate constant. But a number of other labor market indicators remain broadly stable. For example, the ratio of job openings to unemployment remains near 1. And multiple measures of job openings have been moving roughly sideways, as have initial claims for unemployment insurance.Inflation has eased significantly from its highs of 2022 but remains somewhat elevated relative to our 2 percent longer-run goal. The latest available data indicate that total PCE prices rose 2.7 percent over the 12 months ending in August, up from 2.3 percent in August 2024. Excluding the volatile food and energy categories, core PCE prices rose 2.9 percent last month, also higher than the year-ago level. Goods prices, after falling last year, are driving the pickup in inflation. Incoming data and surveys suggest that those price increases largely reflect higher tariffs rather than broader price pressures. Disinflation for services continues, including for housing. Near-term measures of inflation expectations have moved up, on balance, over the course of this year on news about tariffs. Beyond the next year or so, however, most measures of longer-term expectations remain consistent with our 2 percent inflation goal.The overall economic effects of the significant changes in trade, immigration, fiscal and regulatory policy remain to be seen. A reasonable base case is that the tariff-related effects on inflation will be relatively short lived—a one-time shift in the price level. A "one-time" increase does not mean "all at once." Tariff increases will likely take some time to work their way through supply chains. As a result, this one-time increase in the price level will likely be spread over several quarters and show up as somewhat higher inflation during that period.But uncertainty around the path of inflation remains high. We will carefully assess and manage the risk of higher and more persistent inflation. We will make sure that this one-time increase in prices does not become an ongoing inflation problem.Monetary PolicyNear-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation. Two-sided risks mean that there is no risk-free path. If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation. If we maintain restrictive policy too long, the labor market could soften unnecessarily. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate.The increased downside risks to employment have shifted the balance of risks to achieving our goals. We therefore judged it appropriate at our last meeting to take another step toward a more neutral policy stance, lowering the target range for the federal funds rate by 25 basis points to 4 to 4-1/4 percent. This policy stance, which I see as still modestly restrictive, leaves us well positioned to respond to potential economic developments.Our policy is not on a preset course. We will continue to determine the appropriate stance based on the incoming data, the evolving outlook, and the balance of risks. We remain committed to supporting maximum employment and bringing inflation sustainably to our 2 percent goal. Our success in delivering on these goals matters to all Americans. We understand that our actions affect communities, families, and businesses across the country.Thank you again for having me here. I look forward to our discussion.Here is the breakdown by topicEconomic growth & employment“The U.S. economy is showing resilience in the midst of substantial changes in trade, immigration, fiscal, regulatory, and geopolitical arenas.”“Recent data show that the pace of economic growth has moderated. The unemployment rate is low but has edged up. Job gains have slowed, and the downside risks to employment have risen.”“Payroll job gains slowed sharply over the summer months, as employers added an average of just 29,000 per month over the past three months.”“The recent pace of job creation appears to be running below the ‘breakeven’ rate needed to hold the unemployment rate constant.”“There has been a marked slowing in both the supply of and demand for workers—an unusual and challenging development.”Inflation“Inflation has risen recently and remains somewhat elevated.”“Total PCE prices rose 2.7% over the 12 months ending in August, up from 2.3% in August 2024. Core PCE rose 2.9%.”“Goods prices, after falling last year, are driving the pickup in inflation… largely reflect higher tariffs rather than broader price pressures.”“Disinflation for services continues, including for housing.”“Near-term measures of inflation expectations have moved up… most long-term expectations remain consistent with our 2% goal.”“Tariff increases will likely take some time to work their way through supply chains… a one-time increase in the price level spread over several quarters.”“We will make sure that this one-time increase in prices does not become an ongoing inflation problem.”Monetary policy stance“Near-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation.”“Two-sided risks mean that there is no risk-free path. If we ease too aggressively, we could leave the inflation job unfinished. If we maintain restrictive policy too long, the labor market could soften unnecessarily.”“The increased downside risks to employment have shifted the balance of risks to achieving our goals.”“We judged it appropriate at our last meeting to take another step toward a more neutral policy stance, lowering the target range for the federal funds rate by 25 basis points to 4 to 4-1/4 percent.”“This policy stance, which I see as still modestly restrictive, leaves us well positioned to respond to potential economic developments.”“Our policy is not on a preset course.”“We remain committed to supporting maximum employment and bringing inflation sustainably to our 2 percent goal.”✅ Key takeaways:Growth is slowing, jobs are weaker, risks to employment rising.Inflation picked up (PCE 2.7%, core 2.9%), largely tariff-driven.Fed cut rates 25 bps but still describes stance as “modestly restrictive.”Powell stresses vigilance: one-time tariff inflation must not turn persistent.Policy remains flexible (“not on a preset course”) This article was written by Greg Michalowski at investinglive.com.