Mese: Agosto 2023

SYDNEY (Reuters) – A “tragic” incident involving a U.S. military aircraft occurred in northern Australia during military exercises on Sunday, Prime Minister Anthony Albanese said, adding that his government was focussed on providing support.

Sky News Australia reported a v-22 Osprey helicopter with about 20 U.S. Marines on board had crashed off the coast of Darwin. The Australian Broadcasting Corporation (ABC) said one person was in critical condition, two were stable and there were no reports of fatalities.

Albanese, speaking at a previously scheduled press conference, declined to provide details about the crash or rescue efforts, which he said took place on Melville Island north of Darwin during Exercise Predator’s Run 2023.

“Our focus as a government and as a department of defence is very much on incident response and on making sure that every support and assistance is given at this difficult time,” he said.

Australian personnel were not involved, Albanese said.

Northern Territory Police were responding to reports of an aircraft crash on Melville Island, the fire and emergency services said in an emailed statement.

The U.S. Defense Department was aware of media reports about the crash “but we do not have anything we can provide at this time”, a duty officer said in an emailed statement.

The U.S. and Australia, a key ally in the Pacific, have been stepping up military cooperation in recent years in the face of an increasingly assertive China.

Four Australian soldiers were killed last month during large bilateral exercises when their helicopter crashed into the ocean off the coast of Queensland.

(C) Reuters. FILE PHOTO: Bank of Japan Governor Kazuo Ueda speaks at a group interview with media in Tokyo, Japan, May 25, 2023. REUTERS/Kim Kyung-Hoon

JACKSON HOLE, Wyoming (Reuters) -Underlying inflation in Japan remains “a bit below” the Bank of Japan’s 2% target, BOJ Governor Kazuo Ueda said at a Federal Reserve research symposium on Saturday, and as a result the bank will maintain the current approach to monetary policy.

“We think that underlying inflation is still a bit below our target,” Ueda said. “This is why we are sticking with our current monetary easing framework.”

Japan’s core consumer inflation hit 3.1% in July, staying above the central bank’s 2% inflation target for the 16th straight month, as companies continued to pass on higher costs to households.

Ueda said domestic demand was “still at a healthy trend” and business fixed-investment was “supported by record high profits.”

Nevertheless, inflation “is expected to decline” from here, he said, with the underlying trend still less than the target.

The BOJ has said it needs to maintain ultra-low rates until it is clear that robust domestic demand and higher wages replace cost-push factors as key drivers of price gains, and keep inflation sustainably around its target.

Investors have been waiting for hints of when the BOJ may change its policy of yield curve control, under which the bank holds short-term interest rates at -0.1% and the 10-year bond yield around 0% as part of efforts to prop up growth and sustainably achieve its 2% inflation target. It also sets an allowance band of 50 basis point around the 10-year yield target. The BOJ nominally kept the band unchanged last month but said it would now allow the 10-year yield to rise to as much as 1.0%.

(C) Reuters. FILE PHOTO: Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde, and Bank of Japan Governor Kazuo Ueda take a break outside while attending the Kansas City Federal Reserve Bank’s annual Economic Policy Symposium in Jacks

By Howard Schneider, Ann Saphir and Balazs Koranyi

JACKSON HOLE, Wyoming (Reuters) – U.S. economic growth, still racing at a potentially inflationary pace as other key parts of the world slow, could pose global risks if it forces Federal Reserve officials to raise interest rates higher than currently expected.

The Fed’s aggressive rate increases last year had the potential to stress the global financial system as the U.S. dollar soared, but the impact was muted by largely synchronized central bank rate hikes and other actions taken by monetary authorities to prevent widespread dollar funding problems for companies and offset the impact of weakening currencies.

Now Brazil, Chile and China have begun cutting interest rates, with others expected to follow, actions that international officials and central bankers at last week’s Jackson Hole conference said are largely tuned to an expectation the Fed won’t raise its rate more than an additional quarter percentage point.

While U.S. inflation has fallen and policymakers largely agree they are nearing the end of rate hikes, economic growth has remained unexpectedly strong, something Fed Chair Jerome Powell noted in remarks on Friday could potentially lead progress on inflation to stall and trigger a central bank response.

That sort of policy shock, at a moment of U.S. economic divergence with the rest of the world, could have significant ripple effects.

“If we get to a point where there is a need for … doing more than what’s already priced in, at some point markets might start getting nervous … Then you see a big increase in the risk premia in different asset classes including emerging markets, including the rest of the world,” said International Monetary Fund chief economist Pierre-Olivier Gourinchas. “The risk of a financial tightening, a very sharp financial tightening, I think we cannot rule that out.”

After the pandemic shock and the inflationary rebound that had most countries raising rates together, it’s normal now for policies to diverge, Cleveland Fed President Loretta Mester told Reuters on the sidelines of the Jackson Hole conference on Saturday.

But a lot rides on the Fed getting it right.

“The economy is a global economy, right? It’s an interconnected economy,” Mester said. “What we do with our policy – if we can get back to 2% in a timely way, in a sustainable way, if we have a strong labor market – that’s good for the global economy.”

GLOBAL DIVERGENCE

Fed policymakers will deliver a crucial update to their economic outlook at a Sept. 19-20 meeting, when they are expected to leave their policy rate unchanged at 5.25% to 5.5%.

If inflation and labor market data continue showing an easing of price and wage pressures, the current forecast for just one more quarter-point increase may hold.

Yet Fed officials remain puzzled, and somewhat concerned, over conflicting signals in the incoming data.

Some point to weakening in manufacturing, slowing consumer spending, and tightening credit, all consistent with the impact of strict monetary policy and cooling price pressures.

But gross domestic product is still expanding at a pace well above what Fed officials regard as the non-inflationary growth rate of around 1.8%. U.S. GDP expanded at a 2.4% annualized rate in the second quarter, and some estimates put the current quarter’s pace at more than twice that.

The contrast with other key global economies is sharp. The euro area grew at an annualized 0.3% in the second quarter, essentially stall speed. Difficulties in China, meanwhile, may drag down global growth the longer they fester.

Quizzed about the divergence after a speech here, European Central Bank President Christine Lagarde noted after the Russian invasion of Ukraine last year, the outlook was for a euro-area recession, and a potentially deep one in parts of it.

Growth, albeit slow, has continued, and inflation has fallen, an overall dynamic not dissimilar to that of the U.S.

“We expected all that to be a lot worse. It has turned out to be much more robust, much more resilient,” Lagarde said.

U.S. fiscal policy is driving some of the difference with $6 trillion in pandemic-era aid still bolstering consumer spending. A recent investment push from the Biden administration is supporting manufacturing and construction.

China may also play a role, economists say. Its slowdown after a short-lived growth burst earlier this year could pinch Germany’s exports and slow Europe’s growth, for instance.

But, Citigroup (NYSE:C) Chief Economist Nathan Sheets said, “when you hear economists give you three or four reasons for something, that’s usually because we really don’t know.”

TOO STRONG FOR COMFORT?

The longer the U.S. economy outperforms, the more Fed officials wonder if they understand what’s happening.

A recent improvement in productivity, for example, could explain how inflation continues falling even as growth remains strong.

Under current Fed thinking a period of below-trend growth is needed to drive inflation sustainably back to the 2% target. Key inflation measures are currently more than twice that.

Most officials do think the economy will slow, as tight policy and stringent credit are more fully felt and pandemic-era savings are spent down. Consumer loan delinquencies are starting to rise, and the restart of student loan payments could upend services spending less affected by Fed actions so far.

“There may be significant further drag in the pipeline,” Powell said on Friday, a reason to hold off on further hikes and study how the economy evolves.

But he added the Fed was “attentive to signs that the economy may not be cooling as expected,” with recent consumer spending “especially robust,” and a housing sector “showing signs of picking back up.”

Any significant surge in home prices or rents would undermine the Fed’s view that easing shelter costs would be key in helping to slow the overall pace of price increases.

While the focus is on inflation data, topline economic growth that remains above trend could undermine faith that inflation will fall, and increase concerns that it might rise — an outcome Fed officials view as particularly pernicious and have pledged to avoid.

“Evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said.

That’s the moment other countries need to watch and prepare for, Gourinchas said.

“The rest of the world has to make sure that they are ready for the potential risk that we’re not there yet in terms of the U.S. disinflation.”

(C) Reuters. FILE PHOTO: A worker welds a bicycle steel rim at a factory manufacturing sports equipment in Hangzhou, Zhejiang province, China September 2, 2019. China Daily via REUTERS/File Photo

BEIJING (Reuters) -Profits at China’s industrial firms fell 6.7% in July from a year earlier, extending this year’s slump to a seventh month with weak demand squeezing companies as a post-pandemic recovery faltered in the world’s second-biggest economy.

Earnings shrank 15.5% year-on-year for the first seven months, following a 16.8% decline in the first half of the year, data from the National Bureau of Statistics showed on Sunday.

Profits were down 8.3% in June, according to the bureau, which only occasionally publishes monthly figures.

“Commodity prices are running low, the pressure on raw material costs in the midstream and downstream industries has eased. Unit cost of industrial enterprises has improved overall,” NBS statistician Sun Xiao said in an accompanying statement, adding that unit costs in July posted the first year-on-year decrease since the beginning of this year.

Big Chinese manufacturers posted losses for the first half, with engineering firm China Aluminum International reporting a net loss of 830.6 million yuan ($114.2 million), compared with a year-earlier net profit of 123.6 million yuan.

Major banks have downgraded their growth forecasts for the year to below the government’s target of about 5% as recovery sputters on a worsening property slump, weak consumer spending and tumbling credit growth, prompting the authorities to slash interest and promise further support.

State-owned enterprises saw earnings tumble 20.3% in the first seven months of this year, foreign firms posted a 12.4% decline and private-sector companies recorded a 10.7% fall, a breakdown of the data showed.

Profits dived for 28 of 41 major industrial sectors during the period, with the ferrous metal smelting and rolling processing industry reporting the deepest slump at 90.5%.

The central bank said this month it would keep its policy “precise and forceful” to support recovery. It remains to be seen if more significant measures would come to shore up growth.

President Xi Jinping on Tuesday told a forum in South Africa that the economy was resilient and the fundamentals for long-term growth remained unchanged.

Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.77 million) from their main operations.

($1 = 7.2761 Chinese yuan)

By Jasper Ward and Patricia Zengerle

(Reuters) – A white man armed with a high-powered rifle and a handgun killed three Black people at a Dollar General (NYSE:DG) store in Jacksonville, Florida, on Saturday, before shooting himself, in what local law enforcement described as a racially motivated crime.

“This shooting was racially motivated, and he hated Black people,” Jacksonville Sheriff T.K. Waters (NYSE:WAT) told a press conference.

The suspect, whom Waters described as a white male wearing a tactical vest, was not identified. Waters said all three victims – two men and a woman – were Black.

Waters said authorities believed the shooter acted alone, and that before the shooting he had authored “several manifestos” for media, his parents and law enforcement detailing his hatred for Black people.

Waters described his weapons as a Glock and an “AR-15 style” rifle, with swastikas on it, referring to a lightweight semi-automatic long gun often used in mass shootings.

“The hate that motivated the shooter’s killing spree adds an additional layer of heartbreak,” Waters said.

He said the shooter was spotted at a local historically Black college, Edward Waters University, where he put on his vest and a mask before going to the local branch of the Dollar General, a discount chain with stores across the United States.

Sherri Onks, special agent in charge of the Jacksonville FBI office, said federal officials had opened a civil rights investigation and would pursue the incident as a hate crime.

“Hate crimes are always and will always remain a top priority for the FBI because they are not only an attack on a victim, they’re also meant to threaten and intimidate an entire community,” Onks said.

U.S. President Joe Biden and Attorney General Merrick Garland were briefed on the incident.

Mass shootings have become commonplace in the U.S., with more than 469 so far in 2023, according to the Gun Violence Archive. The nonprofit group defines a mass shooting as any in which four or more people are wounded or killed, not including the shooter.

Saturday’s incident in Jacksonville bears similarity to last year’s shooting in Buffalo, where a white supremacist killed 10 Black people, and took place five years after another gunman opened fire during a video game tournament in Jacksonville, killing two people before shooting himself.

Florida Governor Ron DeSantis condemned the shooting and the shooter took “the coward’s way out”.

“The shooting, based on the manifesto that they discovered from the scumbag who did this, was racially motivated. He was targeting people based on their race. That is totally unacceptable,” DeSantis said.

(This story has been corrected to remove refernces about 2016 in paragraph 11)