The Federal Reserve Leaves the NGFS

The Federal Reserve recently announced its decision to exit the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). This global organization comprises banks and financial institutions focused on integrating climate concerns into their policies. The United States joined the NGFS in 2020; however, with the transition to a new presidential administration, the Fed has chosen to sever its ties with this organization. 

This decision has brought forth a range of reactions. Rep. Andy Barr, a strong supporter of the move, argues that it prioritizes American interests over global climate issues. Some analysts believe that the Fed's focus on climate risks has distracted from its traditional responsibilities, pointing to the Silicon Valley Bank failure in 2023 as an example of insufficient oversight. This withdrawal highlights a broader shift towards prioritizing domestic financial stability over international climate commitments. Jerome Powell, the chair of the Fed, stated that central banks should not become climate policymakers. Conversely, individuals like Ben Cushing express concerns that this move could further isolate the U.S. on the global stage. Many believe the timing aligns with President Trump's agenda to reduce U.S. involvement in international matters and global commitments. Trump has also already announced plans to withdraw from the Paris Climate Accord, which he previously labeled as detrimental to the economy. Officials argue that this isolating approach may weaken the United States’ influence globally. 

While I believe it is essential for our central banks to concentrate on their traditional roles—especially with events like the Silicon Valley Bank failure—I also think we must not completely ignore the global issue of climate change. The Federal Reserve should consider ecological decisions, but they should not dominate our policies. This balanced approach can prevent our economy from suffering due to a narrow focus on domestic issues. As a nation, we sometimes tend to concentrate solely on our internal challenges. However, we may be able to solve many of our problems by adopting effective global frameworks or policies. We may not be the best in every area, but we are not confined to our own knowledge and resources. This is the advantage of being part of global organizations which we are currently jeopardizing.

Article: https://www.theepochtimes.com/business/federal-reserve-withdraws-from-global-climate-group-as-trump-set-to-assume-power-5794554

Who is this new U.S. Treasury pick?

Trump's Immigration Plan on the US

I really do not think Trump's plan will affect the job market as much as we think.  We have 47.8 million immigrants with about 12 million of them in the category that Trump's party wants to deport.  He wants to deport the immigrants who have temporary visas that expire during his term (about 40% of the 12 million)  and "illegal" immigrants. Some in this “illegal” category came into the states lawfully under a plan Biden made but Trump's party says it is unlawful. 

Let’s also mention how slow the deportation process is. There is one deportation officer for every 7,000 cases.  If we take a look during Trump's first term, there were about 1.2 million immigrants deported.  Interestingly, during Obama's first term he deported 2.9 million and his second term he deported 1.9 million.  This leads to the question and makes me wonder how many immigrants is it possible for Trump's party to deport in this next term.  

Finally, I found this paper called “The Cost of Illegal Immigration to Taxpayers.”  I could get more in depth about the paper with things like 59% of illegal immigrant households use welfare programs compared to 39% of US born households.  This could be good for the economy because we can have more money to help US born citizens.  I am no expert and I am sure I am missing something so let me know if I overlooked something.  

https://cis.org/Testimony/Cost-Illegal-Immigration-Taxpayers?gad_source=1&gclid=Cj0KCQiAqL28BhCrARIsACYJvkfaYOXcjjBbYHfBuYiBaphn5zZY4AZ-gZIu4tFyB02waDVH7ZcGT8AaAuhFEALw_wcB  

Sources

https://www.nytimes.com/interactive/2025/01/17/us/immigrants-trump-deportations.html 

https://www.nbcnews.com/news/us-news/quickly-trump-will-able-carry-mass-deportation-plan-depends-factors-rcna188064 

Trump's 25% Tariff Plan: Economic Implications

President Donald Trump announced on Monday that he will impose 25% tariffs on imports from Mexico and Canada starting February 1, 2025. This move, part of his "America First trade policy," represents an escalation from his earlier 10% proposal during the campaign. 

Economists project these tariffs will increase consumer prices. Goldman Sachs estimates a 0.1% price rise for every 1% tariff increase, while the Peterson Institute for International Economics forecasts an annual $1,700 cost for middle-class households. Moody's predicts potential job losses of 675,000 and a 0.4% unemployment rate increase. 

The tariffs will affect various imports, including Canadian crude oil and Mexican cars, car parts, and electronics. While Trump has announced plans for Canada and Mexico, he hasn't confirmed universal tariffs on all imported goods.

These tariffs could impact the United States-Mexico-Canada Agreement (USMCA), potentially disrupting established North American supply chains. As the February implementation date approaches, businesses, policymakers, and consumers are closely watching the potential economic effects of this policy shift.

The Biden administration had largely maintained Trump-era tariffs, highlighting the complex political nature of trade policies.

Article: https://www.forbes.com/sites/alisondurkee/2025/01/21/will-trumps-tariffs-raise-prices-what-to-know-as-he-threatens-goods-from-canada-and-mexico-starting-feb-1/

Home Insurance Difficulties During Natural Disasters

As Southern California has recently dealt with extreme hardships due to the recent wildfires, homeowners insurance has become much more costly and unattainable to residents. For those who live in areas with the largest expected loss, premiums increased nearly 82% more than those in low risk areas. This creates an even larger challenge for the 180,000 residents who have been displaced due to the fires. 

While this topic has been brought to attention due to the raging California wildfires, this has been occurring for quite some time now. Other recent disasters, such as hurricanes in the Southeast and severe storms in the Midwest, have also created significant challenges for Americans. One may wonder, how does this affect the long term wellbeing of those affected? According to CNBC, non-renewal rates in these high risk areas are 80% higher than the national average. Insurers in these areas also typically paid claims up to $5,000 more than low risk regions. 

The Treasury Department released this information to the public on January 17th, with just three days before the change in administration. Officials are hopeful that the administration under President Trump can use this information to spring a plan into action that makes insurance affordable for those affected by natural disasters. 

Link : https://www.cnbc.com/2025/01/16/home-insurance-costs-soar-as-climate-events-surge-treasury-dept-says.html 

Australian's are Struggling to Make Ends Meet Under Their Current Economy

 Australia’s economy was the envy of the world. Now it’s falling behind. 

Australia has recorded an impressive 28 straight years of steady economic growth since 1992 until the 2020 pandemic. Since then citizens of the country are finding it harder to support themselves with the rising inflation. I thought it was interesting to note that Australia has an interesting background in recessions. After the Great Depression, Australia was one of the only major developing economies that experienced a relatively short recession before getting back on their feet in little time, and they did pretty well during the 2008 housing crisis because of their strong banking regulations. Now, they seem to be in a hard position because their economy is growing at its slowest pace since the 90s. 

The first three quarters of 2024 the United States experienced an expansion of 3.1 percent, but Australia’s GDP only grew by 0.8 percent. I also thought it was interesting to note that if it wasn't for the immigration-driven population they would actually be in a recession since their per capita growth has been negative for seven straight quarters. Meaning if you factor out the population growth driven by immigration then Australia’s economy is shrinking on a per individual basis. Australia experienced a 7.8 percent peak in inflation and stagnant wages during the pandemic and they are still seeing lingering effects from this today. For many residents, they are finding it hard to build up savings because of this slow growth causing many to find any sort of housing too expensive. 

One of the main causes of the slowdown have to do with the high interest rate. During the pandemic the RBA (Reserve Bank of Australia) lowered the benchmark rate to almost zero, and then raised them later to 4.35 percent to try and tame inflation, but many claim it was actually the cause of it. With a federal election next year, both major parties are looking at reducing the migration as a way to ease the cost of living. While it was stated earlier that if it wasn’t for their immigration Australia would be in a recession, that doesn’t necessarily mean that the migration was beneficial for the economy. This influx of individuals put pressure on housing and strained infrastructure which is why many native Australians do not expect to be homeowners under the current economic conditions unless something is done. 

Trump says He Will Declare National Energy Emergency

In his inaugural address, Trump said he will declare a national energy emergency with the goal of fighting inflation. With this action, he is aiming to increase fossil fuel production and ultimately withdraw the United States from international commitments to combat climate change. In combination, Trump also promised to revoke what he described as the "electric vehicle mandate." Trump is also citing the AI race with China and the need to stay at the forefront of global technology as a reason for the declaration of a national emergency.

With this promise of a declaration of a national energy emergency, many questions remain unanswered. The Trump Administration has promised to cut energy costs in half within the first year of his administration, which sounds like a large task to undertake. It will be interesting to see if Trump has these capabilities along with what possible repercussions there could be for the global climate in the short run and in the very long run.

Link: https://www.cnbc.com/2025/01/20/trump-to-declare-national-energy-emergency-expanding-his-legal-options-to-address-high-costs.html

Trump's Mass Deportations Effect the Job Market

As President-Elect Donald Trump is set to be inaugurated this January, his promises of mass deportation loom large. President Trump said that this is priority one and that immigrants in America could see themselves deported as early as day one in office. While Trump voters may have supported this on the surface, they may not have seen the underlying economic ramifications that certain economists have brought to life.

Experts are saying that mass deportations would not only put a large hole in the job market, but would also carry large job losses for American citizens. A 2023 study shows that 44,000 US born workers could lose their job for every 500,000 immigrants. Additionally, stories from all over America are popping up about companies, big and small, who are reliant on the immigrant workforce to support their companies.

https://www.cnbc.com/2025/01/11/trumps-mass-deportation-plan-could-have-a-big-effect-on-inflation.html

Here’s why inflation may look like it’s easing but is still a huge problem

The Federal Reserve may be nearing its inflation goal, but challenges remain as high prices continue to strain the U.S. economy. Key highlights include recent reports suggesting inflation over the past year is approaching the Fed's 2% target and predictions of upcoming data from the Bureau of Economic Analysis that might show an inflation rate close enough to round down to 2%. The broader cost of living challenges persist, even as inflation trends align more closely with the central bank's objectives. These dynamics underscore the complex balance the Federal Reserve must strike between achieving inflation goals and addressing the lingering impacts of high prices on the economy. In the article, Federal Reserve Bank of San Francisco, President Mary Daly’s anecdote illustrates the nuanced challenges the Fed faces in balancing inflation and interest rates. The Fed’s half-point rate reduction aimed to align interest rates with moderating inflation, which is well below its mid-2022 peak. This highlights the Fed’s challenge of navigating a delicate economic environment, ensuring inflation remains contained while supporting overall economic stability. 

Link to article: https://www.cnbc.com/2024/10/19/why-inflation-may-look-like-its-easing-but-is-still-a-huge-problem.html

SpaceX Starship Breaks During Test Flight

 

Link:https://www.nbcnews.com/science/space/spacex-lost-starship-rocket-debris-videos-rcna188078

This past Thursday, SpaceX tested the Starship which is “the most powerful rocket ever developed” and measures at “400 feet tall.” During the flight mission the ship broke up and bits of it have disintegrated over the Gulf of Mexico and the Caribbean Sea. 

Despite its failure, the system is expected to play a crucial part in NASA’s plan to return to the moon which is scheduled to happen in 2027 on the Artemis III mission. More than that however, the Starship could possibly even take astronauts to Mars. 

For me, reading this article made me realize how close “science fiction” really is. I can’t help but wonder what space exploration will bring in terms of policy which is inextricably connected to economics. Will space exploration mean planetary expansion? Will it be something we get to see in our lifetime? Space colonies?

Inflation is Stubborn. Is the Federal Budget Deficit Making it Worse?

     A very critical question still looming in the economy is why consumer prices continue to grow, even after an effort by the Federal Reserve to raise interest rates. Some explanations economists give include quirks of the current economic moment, such as a delayed post-pandemic surge in cost of home and auto insurance. Others include structural issues such as the lack of affordable housing that has caused rent prices in big cities to skyrocket. Other economists, including top officials, say the federal government bore some of the blame because it continued to pump borrowed money into the economy in a time when we did not need a fiscal boost. The borrowing is a result of a federal budget deficit that was elevated by tax cuts and spending increases. 

    I.M.F. officials warned that the deficit was also increasing prices. A report earlier this month stated that performance was impressive, but it was fueled in part by a pace of borrowing that is out of line with long-term fiscal sustainability. I.M.F. said that U.S. fiscal policies added about half a percentage point to the national inflation rate and raised short-term risks to the disinflation process. Essentially the government was working at cross-purposes with the Fed. Biden administration officials have sided against the I.M.F. but have been careful not to comment directly on the central bank's interest rate decisions instead just simply saying that their fiscal stance is not fighting the Fed. 

    The deficit is now larger, as a share of the economy than is historically normal for this point in an economic recovery, especially when employment is low and economic growth remains strong. This high deficit could affect inflation in numerous ways. It could increase demand for goods or services that remain in short supply, which drives up prices. It could also affect consumers' views about how much inflation they expect in the future and chip away at the effectiveness of Fed rate increases to slow growth. 

New York Times Article

Scotland's first minister may stepdown after power-sharing deal falls through

Scotland is dealing with a few issues regarding First Minister Humza Yousaf. Yousaf has been having issues with recent dissolutions of power sharing deals with Scottish Greens. These challenges have put immense strain upon the Minister, causing his consideration for resignation due to his unlikely and eventual loss of support from the Scottish Greens. The unprompted end to the power deal caused the strain within the Greens and is now causing a likely 2 ‘no confidence’ votes motioned after the ending of the deal. He is now awaiting unlikely support from the Greens and one vote from an opposition member in support, however unlikely they may come. He complicated his situation even more by now with knowledge of the ability to keep the deal in place, but his refusal to form an alliance with the Alba party.

Source : https://www.bbc.com/news/articles/c72p91kznz8o

Key Inflation Measure Rose 2.8% in March From a Year Ago

 Inflation did not slow in March, with core personal consumption expenditures price index excluding food and energy being up 2.8% from a year ago. This is the same figure that was seen in February and is higher than the 2.7% estimate given by Dow Jones. Both PCE and core PCE increased 0.3% equaling the increase from February. Markets did not show a reaction to this as Wall Street opened higher and the probability of two rates cuts being seen this year increased to 44% according to the CME Group's FedWatch gauge. 

Consumers increased personal spending by 0.8% on the month and the personal savings rate fell to 3.2% which is 2% lower than last year. This indicates households are saving less to keep up with their level of expenditure. It is believed with these reports that the Fed will hold interest rates high at least through the summer unless there are significant changes. 

Source - https://www.cnbc.com/2024/04/26/pce-inflation-march-2024-key-fed-inflation-measure-rose-2point8percent.html

Challenges increase for international students as unemployment rises in Canada

              In recent years, Canada has become one of the preferred destinations for international students seeking quality education and promising career opportunities. However, a tightening job market, primarily due to rapid job growth and immigration, has posed significant challenges to these students as most of them work part-time to support themselves while studying. With over 1 million foreign students in Canada, the competition for part-time jobs has increased. Furthermore, due to the increased cost of living in cities like Vancouver, international students have been struggling quite a bit. Canada's unemployment rate increased to 6.1 percent in March, with youth unemployment double the natural average. As a result, the government recently decided to place a cap on the number of foreign students admitted to universities in Canada to ease financial strain for residents. However, this has raised concerns about access to education for international students.

Link: https://www.voanews.com/a/rising-unemployment-hits-canada-s-international-students-especially-hard/7585796.html

India seen overtaking Japan in nominal GDP in 2025

According to recent estimates by the International Monetary Fund (IMF), India is projected to surpass Japan in nominal gross domestic product (GDP) in dollar terms by 2025. The IMF forecasts India's GDP to reach $4.34 trillion, slightly higher than Japan's projected $4.31 trillion. This shift is happening a year earlier than previously anticipated, largely due to the continued depreciation of the yen.

Japan's economy has been steadily slipping in global rankings. In 2023, it was surpassed by Germany, falling to the fourth-largest economy in the world. Factors contributing to India's rise include not only the weakened yen but also its robust economic growth, which outpaces Japan's. India's economy expanded by 7.8% in 2023, far surpassing Japan's 1.9% growth.

The key drivers of India's economic growth include its massive domestic demand, fueled by its population overtaking China's to become the world's largest in 2023. Additionally, India is attracting investment from advanced economies, while investment in China is slowing.

Experts attribute Japan's sluggish growth to government and central bank policies aimed at weakening the yen. They argue that relying on yen depreciation for economic growth has its limitations. Instead, there's a need to focus on boosting productivity through energy-saving initiatives and encouraging investment.

German Consumer Confidence Reaches Two-Year High

 German consumer confidence has reached its highest level since May 2022, indicating a possible economic upturn. The GfK's consumer-climate index predicts a continued rise in consumer confidence for May 2024. This improvement is driven by increased income expectations and reduced inflation, enhancing household purchasing power. Additionally, the willingness to buy has grown, though there's also a greater inclination to save, reflecting some economic uncertainty. Despite this positive trend in consumer sentiment and business surveys, the overall economic recovery is still uncertain, with a modest growth forecast of 0.3% for 2024.

https://www.wsj.com/economy/central-banking/german-consumer-confidence-reaches-two-year-high-38e91927?mod=economy_feat1_central-banking_pos4

The U.S. Could See Another 1970's Stagflation Event

    With the recent release of the first quality GDP numbers for the year, it has now become a concern the the US economy could be slowing down. First Quarter numbers show that the economy grew at an annualized rate of 1.6%, compared to the 3.4% growth the economy saw in the Forth Quarter of the year prior. While this has been a known condition from the Fed, the concern happens when we include inflationary data. The data suggest that the US economy is moving further and further away from our target inflation rate, which is 2%. Slowing GDP growth rate mixed with increasing inflation rate is a certain economic condition which is feared by investors and the government. Its called stagflation. According to JPMC CEO, Jamie Dimon, global and economic conditions are looking similar to the U.S. economy's last major period of stagflation, which was in the 70's  when oil prices rose dramatically. With all the concern, the good news is the the United State's inflation rate and economic growth is in a better position than similar market economies such as the UK and Germany. Our recent GDP growth numbers are also going to be reviewed and finalized twice which way create a better story, as our economic slow down can be less severe than we think or not a concern at all.

Source: https://www.cnn.com/2024/04/25/economy/stagflation-us-economy-gdp/index.html

  

Even if the Fed Cuts, the Days of Ultralow Rates Are Over

    This article discusses how the economy's response to the current interest rate climate may mean the neutral rate is higher than previously believed. The neutral rate is the rate that keeps the demand and supply of savings in equilibrium. This neutral rate is where economists expect rates to settle in the long run. Five years ago, the Fed raised the benchmark federal funds rate to 2.4%, implying the neutral rate was at that level, or lower.  

    The economy has handled the current rate hikes "exceptionally well" according to Joe Davis, chief global economist at Vanguard. He states, "Our conviction in a higher neutral rate is going up as every quarter of data comes in." If growth continues to be solid and inflation is stubborn the case for a rising neutral rate will strengthen. Consequently, the Fed may have less reason to cut rates. 

    However, some figures remain skeptical that the neutral rate is rising. Some believe the economy's resilience means the market is not sensitive to interest rates right now. Jerome Powell states the economy's response to current rates could be explained by "idiosyncrasies of the pandemic." Last month he commented "It's not that the policy isn't restrictive and it's not responsive to rates. It's that we had this outside force temporarily affecting that." Further data will inform economists on the progression of the neutral rate.  

https://www.wsj.com/economy/central-banking/why-high-interest-rates-could-be-here-for-the-long-run-c6670448?mod=hp_lead_pos1

 There are positive signs of a recovery in Germany's economy, especially in service sectors like tourism and hospitality. Business confidence is rising and a winter recession is likely to be avoided. This is good news for the government as rising wages, lower inflation, and potential interest rate cuts could boost the outlook and weaken the far-right AfD party.

However, the picture is not all good. Manufacturing is still struggling due to high energy costs and weak Chinese demand. This is a major concern as the sector is a significant driver of German growth. There are some signs of hope for the future though, with expectations of a pick-up in global trade and looser monetary policy. The government is also taking steps to address structural weaknesses in the economy, but it faces challenges in finding budget savings and implementing reforms.

https://finance.yahoo.com/news/germany-economy-shows-signs-life-050000459.html

Key Fed inflation measure rose 2.8% in March from a year ago, more than expected

 Link: https://www.cnbc.com/2024/04/26/pce-inflation-march-2024-key-fed-inflation-measure-rose-2point8percent.html

Bad news from a key indicator's report on the 27th left the market with little hope of an interest rate drop this upcoming month, and core (excludes food & energy) personal consumption expenditure (PCE) numbers for March 2024 came in at 2.8% from a year ago (March 2023). 

This is especially discouraging for investors as core PCE is an important indicator to the FED, as they have relied on it historically to base their rationale to decisions made by the board. The initial estimates aimed to have core PCE come in at 2.7%, and all-item PCE (less important) come in at 2.6%. The actual numbers from March were 2.8%, and 2.7%, respectively. 

Other bad news came in from inflation reports with consumer spending coming in higher than expected, and the opposite happening for consumer savings. This will likely lead to the FED keeping interest rates where they are at, as necessary signs of inflation slowing have not shown yet.

Despite the results, shockingly usually reactive markets opened high Thursday morning, after coming off a bad week of decreases. I'd expect this to be a sign of market ignorance, as investors spent all of last week watching the market tumble, this is probably just investors in the market tired of the pitfalls, and blissfully turning away from the negative reports. 

Alaska's seafood industry getting a bit rocky

 The Alaska seafood industry, estimated at $6 billion in 2021-2022, is projected to suffer a price collapse in 2023 as a result of inflation and increased worldwide supply. Despite supplying 60% of US seafood, Alaska accounts for only 1.8% of the global market. Salmon and crab account for 40% and 9% of industry value, respectively, competing with farmed and Russian products. Employment fell to 48,000 jobs in 2021-2022, with the Arctic-Yukon-Kuskokwim region being hurt the hardest. A proposed task group attempts to solve these difficulties, such as market losses and plant closures, in order to ensure the industry's viability. This emphasizes the critical need for targeted actions to protect Alaska's significant fishing industry and assist the communities that rely on it.

https://finance.yahoo.com/news/report-portrays-mixed-picture-alaska-130034976.html?fr=yhssrp_catchall

Global Recession Risk Minimal despite Geopolitical Concerns

The International Monetary Fund says that risk of a global recession is not indicated right now, while they are increasing their predicted global growth rate. They also talks about how the U.S. is having a strong economic performance as well as many different developing market economies. Europe is a mixed bag with the growth forecast decreasing for Germany, France, and Italy; but increasing for Spain, Belgium, the U.K, and Portugal. Tensions growing in the Middle East as well as Russia and Ukraine have led to uncertainty and issues with oil and energy prices and distribution. This is having an impact on global inflation. The IMF is also monitoring geopolitical concerns and says that this will continue to play a huge role in future economic forecasts. 

https://www.cnbc.com/2024/04/17/risk-of-a-global-recession-is-minimal-imf-economist-says.html

Spain seeing economic boost from immigrant workers

Over the past few years, Spain has been struggling economically. It has had the highest unemployment rate out of any European country, and economic growth has slowed. However, recently Spain's economy has been performing much better, and immigrant workers are helping this boost. Many workers who have found their skillsets undervalued in other countries have gone to Spain where their skills are in much higher demand. Despite Spain's high unemployment rate in comparison to other countries in Europe, many immigrants coming from other countries find it much easier to find work in Spain than in their home country. Spain currently needs skilled workers to fill gaps in its labor markets, and has looked to immigrants to fill these gaps.

How the NHL playoffs Impact The Economy

Since the NHL playoffs starting a few days ago, I wanted to see if the cities/states with playoff teams saw any economic boost from their team making the playoffs. This article focuses around the New Jersey Devils and the economic impact they had on the city of Newark during last years playoff run. 

The New Jersey Devils' resurgence in the NHL playoffs is not just a win for hockey fans but also for the economy, particularly in Newark and beyond. After years of underperformance, the team's success has revitalized local businesses and generated excitement in the community. Partnerships with New Jersey-based businesses have further boosted economic activity, with increased spending at restaurants, bars, and hotels during game nights. 

The Devils' deep playoff run is expected to bring significant revenue through merchandise sales, sponsorship, and ticket sales. With a young roster and a strategic vision for sustainability, the team's success is seen as a long-term opportunity for economic growth in the region.

Aside from the Devils playoff run last year, the 2017 Nashville Predators generated an additional $50M in economic activity during their 11 additional home games during the playoffs that year. Although no economy should rely on a sports team to generate additional economic activity, its interesting to see the value of short term investment associated with the playoffs.

Source: https://www.njspotlightnews.org/2023/04/nj-devils-playoffs-brings-economic-boost-to-newark-region/

Turkey restricts exports to Israel

As Israel has prevented Turkey from providing humanitarian aid to Palestinians suffering in Gaza, Turkey has chosen to begin restricting 54 exports to Israel. Announced on April 9th, 2024 by the Turkish Ministry of Trade, the restrictions will be imposed until a ceasefire is in effect and aid is provided to Palestinians. The majority of trade restricted by the Turkish is construction materials -- equipment and machinery, fuel and chemicals, and building materials such as iron and steel.

In response, Israeli Foreign Minister Israel Katz commented that Turkey was making a usual economic mistake by choosing to refrain from participating in the genocidal Israeli market. Additionally, he mentions that Israel will be calling their friends in the US Congress to encourage the United States to impose sanctions upon Turkey. 

However, Turkey will not let up on their conviction to support the liberation of Palestinians. Turkey and Israel have long had a tumultuous relationship surrounding Palestine, and recent events have influenced the Turkish population to decrease trade and relations with Israel.

I find this interesting for a couple of reasons including: US involvement in foreign relationships, what the economy has to do with political issues, why does Turkey choose to prevent the trade of these products, etc. Let me know what you all think. 

https://www.aljazeera.com/news/2024/4/9/turkey-restricts-exports-of-54-products-to-israel-until-gaza-ceasefire

Here's why economists are so worried about soaring US debt levels

        The US has the biggest public debt in its history. As of this year, the federal debt balance hit 34 trillion dollars, and the government is on pace to rack up another 1 trillion in debt every 100 days. The rising debt will cause a multitude of economic problems, including higher inflation rates and lower quality of life, and can destabilize the financial system. 

      The US government's operations are heavily reliant on debt. This means that it's not just the government's problem-it's our problem. It's crucial that the government is able to sell its debt to a wide range of investors, including institutions, individuals, and other countries. However, the mounting debt levels have cast serious doubt on the government's ability to repay its loans, raising concerns about our collective financial security. 

      The US treasury had 22 trillion dollars in government bonds as of last year, but that number has shrunk significantly as of this year, suggesting very little demand for government assets. This leads to concerns about whether or not the government will be able to continue funding itself and paying its bills.

https://www.businessinsider.com/us-debt-problem-explained-deficit-gdp-inflation-economy-interest-rates-2024-4

Lack of Purchasing Power in the Housing Market Continues

 The cost of buying a new house just hit a fresh record as mortgage rates rose to the highest level this year. Findings from Redfin show the combination of steep mortgage rates and elevated home prices has pushed the median monthly housing payment to a record $2775- an 11% increase from the same time last year. There are a number of driving forces behind the affordability crisis. Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials. Higher mortgage rates over the past three years have created a "golden handcuff" effect in the housing market. Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.

uk unemployment increases

 Although the UK government has been praising itself on its low unemployment rate, there are worrying patterns. There has been an increase in the number of working-age individuals quitting their jobs early because of health issues, childcare obligations, or other reasons. The fact that this inactivity rate has been declining since the COVID lockdowns makes it even more concerning.

Experts think that this increase in inactivity is the result of government actions. They consider a mental health crisis, benefit cuts, and government battles with healthcare unions as the main causes of the the departure from the workforce. Many families are also being forced to work fewer hours themselves due to the high cost of residential care and growing childcare expenses.

Investors increasingly expect 'no landing' for US economy

This article explains how investors are changing their outlook on the economy. In previous months people thought there would either be a "hard landing" where the US would enter a recession or a "soft landing" where the economy cools off and inflation rates and interest rates return to a regular level. However, now 36% of investors expect there to be "no landing" where the economy continues in the direction that it is going. One of the analyses said that the US economy does not enter recession for no reason, and right now there is no reason for demand to slow down leading to this no-landing scenario. 

https://finance.yahoo.com/news/investors-increasingly-expect-no-landing-for-us-economy-123944030.html

Charlotte saw nearly $80M economic impact from big 2023 sports events

The Charlotte Sports Foundation said $79.7 million was generated by the Jump man Invitational, the Duke’s Mayo Classic, the Ally Tipoff, and the Duke’s Mayo Bowl. In addition to the $79.7 million, CSF said $42.9 million was also generated in direct spending and $2.5 million in taxes. More than 70,000 hotel rooms were booked during those events and over 216,000 fans were in attendance. CEO of CRVA Steve Bagwell said, “Sporting events are a significant contributor to the region’s $7.3 billion visitor economy, with a large portion of the annual hotel room nights booked by the CRVA attributable to that market segment." He also continued, “Our partnership with the Charlotte Sports Foundation is tremendously important in creating positive economic activity for the community. Their industry connections and operational expertise are vital when we pursue and host strategic sporting events. The collaboration has been incredibly successful at drawing visitors, generating media exposure, and delivering fantastic experiences in the Queen City.” The Charlotte Sports Foundation said $2.7 million of the money generated was donated to charitable causes including Charlotte-Mecklenburg Schools.

link: Charlotte saw nearly $80M economic impact from big 2023 sports events - Yahoo Sports

Biden to forgive $7.4 billion more in student loan debt for 277,000 borrowers

 The Biden administration has already authorized the cancellation of $153 billion in student loan debt for nearly 4.3 million people across America. That's more than 9% of all outstanding federal student loan debt.  

The administration has been very on top of this topic as they’ve been making new announcements about debt relief monthly and they have another group of student debt relief proposals that could go into effect this fall. The Biden administration has made it easier to qualify for loan forgiveness for specific groups such as public sector workers. They have also launched a new plan to shorten the pathway to loan forgiveness for many low income borrowers, although the Republicans are pushing hard against this. They argue this cost is going to taxpayers who chose not to go to college or are already paying for it themselves.

$3.6 billion of this student debt relief will be delivered to people enrolled in the SAVE (Saving on a Valuable Education) program. Since it launched last year, almost 8 million borrowers enrolled and 360,000 people have seen their debt canceled. 

There were previously repayment plans within the government in other presidencies but SAVE requires way less time to receive the debt relief. In addition, unpaid interest does not accrue as long as monthly payments are made in SAVE. 

The Biden administration has canceled more student debt than any other President in history and it doesn’t look as if they’re done yet.

Cooper Meek

https://apple.news/A13tpyRA8T1OOCiXfG8SMnw

Hong Kong Sovereignty Threatened

     The traditional picture of Hong Kong from a western perspective is as an international financial oasis within the hostile Chinese market as Hong Kong, with its semi-independence from China, has for the past few decades served as a gateway between China and the west. This status, however, has come under scrutiny recently, as many western investors have left Hong Kong in the past few years due to COVID, China's crackdown on pro-democracy protests, and Chinas trade war with the United States. In addition, China imposed a national security law on Hong Kong back in 2020, and there are rumblings of further laws to come. This has caused the number of global companies with regional headquarters in Hong Kong to fall by 8.4% since 2019, with a particular emphasis on firms within the United States which have fallen by a third in the last four years. Other eastern countries, such as Singapore, have benefited from the decrease in activity in the Hong Kong market, however, analysis are not counting Hong Kong out just yet, predicting that they will continue to serve as a gateway to China, just less with the west and more with other Asian countries. 

https://www.dw.com/en/hong-kongs-economy-feels-the-weight-of-chinas-crackdown/a-68453085

U.S. Monthly Mortgage Payments Hit New Record High Amid High Rates and Home Prices

 For the second week in a row, U.S. mortgage rates rose followed by higher-than-expected inflation and unemployment. The 30-year fixed mortgage rate increased and averaged 6.88%, which increased by 62 basis points since the previous year with an average of 6.27%. The 15-year mortgage rose to 6.16%, an increase of 10 basis points compared to last week's 6.06% and an increase of 73 basis points from the previous year's 5.54%. Sam Khater, chief economist at Freddie Mac stated, “Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve’s monetary policy path.” While this may be disheartening news for new and eager homebuyers, there's a glimmer of hope as new listing activating jumped by 15.5% in March.  Although higher rates erode housing affordability, the median monthly mortgage payment for a median-priced $378,250 home hit an all-time high of around $2800. Despite these challenges, there is optimism that the market might stabilize later in the year as mortgage rates and housing supplies adjust. 

https://apple.news/ALQZineSJTPeR90DqEE5PhQ

Wholesale prices rose 0.2% in March, less than expected

Title- Wholesale prices rose 0.2% in March, less than expected

link- https://www.cnbc.com/2024/04/11/ppi-inflation-report-march-2024-wholesale-prices-rose-0point2percent-in-march.html

In March, the producer price index (PPI) rose 0.2%, below expectations, suggesting less inflationary pressure. However, on a 12-month basis, the PPI increased by 2.1%, indicating ongoing inflation pressures. Excluding food and energy, the core PPI rose 0.2%. On the consumer side, the CPI rose 3.5% from a year ago in March, exceeding expectations. Market reaction was muted, with stock futures slightly higher and Treasury yields declining. Initial jobless claims fell to 211,000, below expectations, while continuing claims increased to 1.82 million. The market is now pricing in the possibility of two interest rate cuts this year, likely not starting until September.

Why few companies in Europe are hiring workers from abroad despite shortages

Many European companies, especially small and medium-sized enterprises (SMEs), are facing labor and skill shortages, particularly in roles requiring vocational training qualifications. This shortage has become a significant challenge across various sectors, affecting businesses in numerous countries.

Despite efforts to recruit from abroad, such as within the EU or from non-EU countries, the proportion of companies hiring foreign workers remains relatively small. Challenges in recruiting from abroad include language barriers and administrative obstacles.

The European Commission has proposed measures to address these issues, including making it easier to recognize professional qualifications and creating an EU Talent Pool to match European companies with non-EU jobseekers. Additionally, there are efforts to review rules to facilitate the movement of third-country nationals within the EU.

BusinessEurope, a confederation of industry associations in Europe, sees economic migration as a solution to labor and skills shortages and supports initiatives to increase worker mobility within the EU and attract skilled workers from outside the EU.

Overall, while labor and skill shortages persist, there are ongoing efforts at both the EU and industry levels to address these challenges and improve worker mobility across Europe.

https://www.thelocal.dk/20231204/why-few-companies-in-europe-are-hiring-workers-from-abroad-despite-shortages 

Denmark Debt

The recent figures released by Denmark's central bank, Nationalbanken, reveal a positive trend in the country's finances. At the start of 2024, the national debt stands at 294 billion kroner, which is 28.6 billion kroner lower than the previous year. This places Denmark's debt at around 10.5 percent of its GDP, marking the lowest level since such records began.

According to Kristian Skriver, a senior economist with the Danish Chamber of Commerce, this achievement reflects the robustness of Denmark's public finances. Factors contributing to this include surpluses in public finances in recent years, driven by high employment, low unemployment, and strong consumer spending. Additionally, Denmark's political discipline in adhering to budget allocations prevents overspending.

The low national debt not only signals healthy finances but also allows for relatively low interest rates, enhancing economic stability. Denmark's ability to maintain low debt levels provides flexibility in borrowing during times of crisis, bolstering its economic resilience.

Comparatively, Denmark's national debt is notably lower than many other European countries, with only Estonia, Bulgaria, and Luxembourg having lower debt-to-GDP ratios. This underscores Denmark's strong position and fiscal responsibility within the European context.

Overall, Denmark's achievement of significantly reducing its national debt reflects a combination of economic factors and prudent fiscal management, positioning the country favorably in the global economic landscape.

https://www.thelocal.dk/20240123/denmarks-national-debt-at-lowest-level-for-25-years

Service Sector Leads Eurozone Recovery

    There has been some optimism among European businesses recently, with their expectations reaching a level not seen since early 2022. Private sector activity in the eurozone increased last month, with southern European economies leading the charge, but Germany and France lagged behind. There has been a positive shift in the economy following a prolonged period of stagnation caused by the war between Ukraine and Russia. The conflict pushed prices soaring and damaged consumer and business confidence. Despite these challenges, evidence of recovery is beginning to emerge: inflation is beginning to slow down, and households are starting to recover spending power.

    According to the latest Eurozone Composite PMI Output Index, which measures activity in the manufacturing and services sectors, the economy is showing signs of improvement. Since May of last year, the index rose above the growth threshold, suggesting that the economy may have expanded in the first quarter of the year following a period of stagnation in late 2023. In comparison, Germany and France have continued to contract, although at a slower pace than the Spanish and Italian economies.

    In the past nine months, the services sector experienced its most significant expansion, being one of the key drivers of such a recovery. The manufacturing sector, however, continues to face challenges because of ongoing contractions. Spain's tourism sector contributed to its noticeable economic performance matching U.S. growth last year.  Due to weak export demand, Germany, on the other hand, experienced difficulties regarding weak export demand, highlighting the difference between two of the major European economies. The article highlights that despite the challenges, there are encouraging signs for European countries. Consumer spending is strengthening and inflation is easing, increasing optimism about a more sustained recovery.

'Resilience' of Belgian Economy Supports Local Start-ups

     With Belgium's economy now being among the fastest growing in the eurozone, young businesses appear to be flourishing. Belgium now has 15 businesses in the FT 1000 list, when added to the Netherlands' 29, is highlights the role of Benelux counties in such sectors as fintech, smart logistics, and advanced manufacturing. Economists at Belgian bank KBC emphasize the country's economic strength as its real GDP growth in the final quarter of 2023 was 0.4 percent, which was double their forecast. Economists say this positive surprise shows the continued resilience of the Belgian economy. Belgium is one of very few European countries that has not recorded a single negative quarterly growth rate since the beginning of 2022. 

    The main driver in growth seen has been in the Dutch-speaking region of Flanders. Unlike other regions, Flanders has little legacy of heavy industry, such as coal mining and steel making, and instead tends to host companies in high-margin industries. As Belgium is a federal state, Flanders has its own government which controls over half of state spending. Flander's economy is supported by a dedicated resilience plan, which aims to keep it competitive, and includes financial and administrative help for start-ups. The fastest-growing sectors include life science, automotive, media, and entertainment. Anthony de Bruyn, marketing director, says Belgium is a great place to start businesses, but adds that the biggest issues for start-up businesses are finding staff and investors to scale up.

Switzerland's Economic Outlook

 The Swiss economy weathered the storms of the global pandemic admirably. Stringent health measures, coupled with a robust healthcare system and effective government support, helped mitigate the worst economic impacts. Despite facing adversity, Switzerland displayed remarkable resilience, with GDP growth bouncing back steadily in the post-pandemic era. Switzerland has and will continue to face various geopolitical tensions, trade uncertainties, and supply chain disruptions pose risks to its export driven economy. Aging population also is an area of concern. Switzerland's commitment to innovation has continued post-pandemic. The country sets entrepreneurship and technological advancement first. One differentiator is their desire to innovate in a sustainable manner. They have maintained an extremely adaptable while coupling with an innovative system.

Immigration May be Key Factor in Economic Growth in the U.S

According to economist, it is believed that the recent surge in immigration following the 2021 pandemic is a driving reason behind the economic boost in the U.S. job market. All without causing significant inflation. The increase of immigration has caused employers to fill job positions at levels of pay that have not increased the overall price levels. In turn, the growth of the labor force has helped companies meet stronger consumer demand. Economist also believe that immigrants who are authorized to work within the U.S. spend a large portion of their pay which will further increase consumer demand. 

Source: 

https://www.nbcnews.com/business/economy/immigrants-are-helping-us-job-market-grow-without-affecting-inflation-rcna146570