Market worries about Federal Reserve independence grow, pushing up longer US bond yields. The RBA’s August meeting minutes support another rate cut in Australia.
In our Deep Dive interview, ANZ Group Chief Economist Richard Yetsenga looks at how developed economies are grappling with low birthrates following debate at the Jackson Hole central bankers’ summit.
5 things to know in 5 minutes:
US markets were weaker overnight as consumer confidence weakened slightly in August, and as traders worried about the Federal Reserve’s independence, says ANZ Economist Bansi Madhavani. US President Donald Trump announced he would fire Fed Governor Lisa Cook based on allegations of mortgage fraud.
Longer-dated US bond yields rose as traders worried about central bank independence and inflation. Bansi says in the near-term, markets had already shifted to expecting a September cut.
The Reserve Bank of Australia August meeting board minutes were released yesterday. They support ANZ Research’s call of another 25 basis point cut to 3.35% in November, says ANZ Senior Economist Adelaide Timbrell.
The RBA Board also felt there has been no discernable impact of global uncertainty on indicators like business and consumer confidence, Adelaide says.
Australian consumer confidence was hit last week though as all sub-indices fell, according to the ANZ-Roy Morgan measure. Headline confidence fell 3.4 points to 88.8. ANZ Economist Maddy Dunk says the four-week average is still at its second highest level in three years.
Cheers,
Bernard.
PS: Catch you tomorrow with analysis of Australia’s July CPI inflation data out later today.
