June 30, 2023
United States:
US Inflation Cools, Spending Stagnates as Economy Loses Steam
The Federal Reserve’s preferred measures of US inflation cooled in May and consumer spending stagnated, suggesting the economy’s main engine is starting to lose some momentum.
The personal consumption expenditures price index rose 0.1% in May, Commerce Department figures showed Friday. From a year ago, the measure eased to the slowest pace in more than two years.
Europe:
Euro-Area Core Inflation Quickens Again in Setback for ECB
Euro-area core inflation re-accelerated in June, a setback for the European Central Bank that may reinforce its determination to raise interest rates next month.
The measure of underlying consumer-price gains, which excludes items like fuel and food, came in at 5.4% — just below the median estimate in a Bloomberg survey of economists — as the cost of services picked up markedly.
Asia:
China Has $3 Trillion of ‘Hidden’ Currency Reserves, Setser Says
China is sitting on a $6 trillion pile of money, half of which is “hidden,” and that presents a new kind of risk to the global economy, according to Brad Setser.
A lot of the country’s foreign-exchange reserves don’t show up in the official books of the People’s Bank of China, the former US trade and Treasury official wrote in a report on The China Project, a New York-based news platform. Instead, what can be called “shadow reserves” appear among the assets of entities such as state commercial lenders and policy banks, Setser said.
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