Joe Biden's Stance On China, Warren Buffett's Business Signals And July Inflation Data: Key Economic Highlights This Week

This week, the global economic landscape was dominated by significant events and policy decisions. From inflation data to geopolitical tensions, the macro-economic sphere was rife with developments that could shape the future. Here’s a recap of the most impactful stories of the week.

Bond Market’s Inflation Anticipation

The bond market is showing signs of heightened anticipation for long-term U.S. inflation, suggesting that the Federal Reserve might face prolonged high inflation rates. As the market keenly awaits the consumer price index figures, a key long-term inflation predictor is hinting at a trend nearing 2.5%. This rise in the bond market’s inflation gauge challenges the prevalent belief that the Fed’s aggressive interest rate hikes will curb the significant surge in consumer prices. Read the full article here.

Biden’s Order on China’s Tech Sectors

President Joe Biden has issued an executive order imposing strict restrictions on specific U.S. investments in China’s sensitive technology sectors. This move predominantly targets sectors like semiconductors, microelectronics, and select AI systems. The decision stems from concerns over the rapid advancements by nations like China in crucial tech areas with significant military and cyber implications. Read the full article here.

Berkshire Hathaway’s Consumer Business Decline

Warren Buffett’s Berkshire Hathaway has reported significant declines in its consumer-facing businesses, hinting at a potential economic downturn. Despite an overall 7% growth in operating earnings, the slowdown in consumer businesses might be indicative of a broader recession looming in the U.S. economy. Read the full article here.

Paul Krugman on China’s Economic State

Nobel Prize-winning economist Paul Krugman has shared his insights on the current state of the Chinese economy. With China experiencing deflation and drawing parallels with Japan’s slowdown in the 1990s, Krugman believes China’s economic challenges are more systemic. He emphasizes the need for fundamental reforms to rejuvenate the economy. Read the full article here.

U.S. Inflation Data for July

The U.S. Consumer Price Index (CPI) for July has been released, showing a 3.2% annual increase, slightly below economist expectations of 3.3%. This data continues to support market expectations of a gradual return to the Fed’s 2% inflation target. The core inflation, which is closely monitored by the Federal Reserve, fell from 4.8% to 4.7% year-on-year. Read the full article here.

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