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The World
Powell Signals Recession May Be Price to Pay for Crushing Inflation: Jay Powell refused to rule out a recession in the world’s largest economy as the Federal Reserve implemented a third consecutive 0.75 percentage point rate rise and published a much gloomier set of projections. Powell’s downbeat commentary on the economy came as the Federal Open Market Committee lifted its benchmark interest rate to a target range of 3 per cent to 3.25 per cent and signaled an intention to keep monetary policy tight as it fights soaring inflation. Fed chair warns ‘chances of soft landing are likely to diminish’. (Bloomberg, Financial Times)
Wall Street CEOs Uncertain Fed Can Achieve Soft Landing: The heads of the largest U.S. banks expressed concerns about the state of the economy as they began two days of questioning from Congress. (Wall Street Journal)
Hong Kong Stocks Tumble to 2011 Low on Fed, Geopolitical Risks. (Bloomberg)
US bank chiefs warn of China exit if Taiwan is attacked: Leaders of JPMorgan Chase, Bank of America and Citigroup have committed to complying with any US government demand to pull out of China if Beijing were to attack Taiwan. The chief executives of the three largest US banks by assets made the commitments on Wednesday at a hearing of the committee on financial services at the House of Representatives. They spoke in response to a question by Blaine Luetkemeyer, a Republican congressman from Missouri, on whether they were prepared to pull their investments out of China in the event of a military assault on Taiwan. (Financial Times)
North Korea may be preparing to launch a new submarine believed to be capable of firing ballistic missiles, a U.S.-based think tank reported, citing commercial satellite imagery. Images of the Sinpo South Shipyard, on the east coast of the country, from Sept. 18 revealed six barges and vessels gathered around the construction hall quay, said 38 North, which monitors North Korea. (Reuters)
South Korean President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida held their first one-on-one talks and agreed on the need to improve relations dogged by historical disputes. The meeting took place in New York on the sidelines of the U.N. General Assembly, the first such talks between leaders of the two countries since 2019. (Reuters)
The US senator Joe Manchin released an energy permitting bill to speed up fossil fuel and clean energy projects. The bill is expected to be attached to a measure to temporarily fund the government that Congress must pass before 1 October. The legislation would require the federal government to issue permits for Equitrans Midstream Corp’s long-delayed $6.6bn Mountain Valley Pipeline to take natural gas between West Virginia, Manchin’s home state, and Virginia. (The Guardian)
House appropriators eye as much as $200M for Jackson water crisis: Democrats have accused the state of withholding resources from the majority Black state capital. (Politico)
Dozens of records smashed in Midwest during late-September heat wave: Temperatures rose above the century mark, smashing records in the latest in what has been a hot summer. (Washington Post)
Economy
The U.S. housing market slowed for a seventh straight month in August, the longest stretch of declining sales since 2007, as higher mortgage rates continued to undercut buyer demand. Home sales look poised to decline further in the coming months, economists say, as mortgage rates recently topped 6% for the first time since 2008, when the U.S. was in a recession. Many first-time buyers have been priced out of the market, and existing homeowners are opting to stay put rather than give up their current low rates. (Wall Street Journal)
China’s yuan is set for its longest losing streak since June even after the central bank sought to support the currency with stronger-than-expected fixings in every single session for nearly a month. The onshore yuan slid for the fourth straight day to trade just 0.5% shy of the weak end of its allowed trading range with the greenback following the Federal Reserve’s jumbo rate hike. The currency can trade up to 2% on either side of the fixing. The dollar-yuan’s discount to the fixing has also widened to 1,000 pips, a gap unseen since 2019. (Bloomberg)
Hong Kong’s base rate soars 75 basis points to the highest in 14 years: Hong Kong’s rate increase, conducted in concert with US monetary policy to preserve the city’s currency peg to the US dollar since 1983, came at an inopportune moment for the local economy. (South China Morning Post)
Walmart to Hire Fewer Workers for Holidays: The country’s largest private employer plans to add 40,000 mostly seasonal staff members to serve shoppers. (Wall Street Journal)
FTX in talks to raise up to $1 billion at valuation of about $32 billion, in-line with prior round. (CNBC)
Technology
Meta Quietly Reduces Staff in Cost-Cutting Push: Facebook’s parent is looking to reduce costs by at least 10%, people familiar with the plans said, while Google has required some employees to apply for new jobs. (Wall Street Journal)
The U.S. and its allies are joining forces on chips. That could stop China reaching the next level. Leading chipmaking nations including the United States, South Korea and Japan are forming alliances, in part to secure their semiconductor supply chain and to stop China from reaching the cutting-edge of the industry. The alliances underscore the importance of chips to economies and national security while at the same time highlighting a desire by countries to stem China’s advancement in the critical technology. (CNBC)
Volvo Cars intends to install laser-based sensors in all future models in an effort to cut serious accidents involving its vehicles by a fifth, becoming the first carmaker to roll out the technology across its entire fleet. (Financial Times)
TikTok has removed postings promoting migraine and epilepsy drugs to under-18s as weight loss aids after criticism that hosting them was a danger to young people’s health. The social media platform, which is popular among teenagers, acted after an investigation by the Pharmaceutical Journal found that users were being offered prescription drugs as diet pills. (The Guardian)
Air Taxi Startup Kittyhawk Is Winding Down: The closing of the company, backed by Google co-founder Larry Page, marks an exit from a crowded industry. (Wall Street Journal)
Twitch announces ban on unlicensed gambling livestreams after backlash. Twitch announced a policy update prohibiting streaming of sites that include slots, roulette or dice games that aren’t licensed in the U.S. or other markets with robust consumer protections. (CNBC)
Apple Watch Ultra review: comfortable, good battery life, handy action button, and durable, but no offline maps or turn-by-turn navigation, and too big for some. (The Verge)
Smart Links
Robert Sarver Says He Will Seek Buyers for Phoenix Suns and Mercury After NBA Probe. (Wall Street Journal)
United Airlines seeks to resume U.S. flights to Cuba. (Reuters)
Coloradans can now pay state tax bills with cryptocurrency. (Axios)
CEO of Crypto Exchange Kraken Steps Down. (Wall Street Journal)
A Great Copper Squeeze Is Coming for the Global Economy. (Bloomberg)
Salesforce aims for 25% operating margin in 2026 with more efficient spending. (CNBC)
Microsoft announces a Fall 2022 Event for October 12, where the company will “talk about devices”, amid rumors of a Surface Pro 9, a Surface Laptop 5, and more. (The Verge)