✂️ The Fed's Timing Is Right Says...?

Good morning. US stock futures ticked higher in Monday morning trading after the Federal Reserve indicated that rate cuts are forthcoming.

✂️ IMF exec: Right time for the Fed to cut rates

📝 Our report: The Fed's upcoming rate cuts align with IMF advice, which initially focused on controlling inflation but now sees labor market risks taking center stage, says IMF economic counsellor Pierre-Olivier Gourinchas. "What was telegraphed by (Fed chair Jerome) Powell is very much in line with what we've advocated," Gourinchas said on the sidelines of a Kansas City Fed economic conference.

 🔑 Key points:

• "Inflation has been improving and labor markets have shown signs of cooling...If labor markets are not contributing to inflation pressures anymore...then you might ease a little bit on cooling aggregate demand and bring (the policy rate of interest) back closer to neutral." Gourinchas added.

• The Fed has maintained its benchmark interest rate in the 5.25% to 5.5% range for more than a year, a level policymakers feel is curbing economic activity.

• Delivering remarks at Jackson Hole, Fed Chair Jerome Powell said bluntly that with inflation just a half-point above the Fed's 2% target and the unemployment rate rising, "the time has come for policy to adjust," remarks that cemented expectations for an initial rate cut at the Fed's September meeting.

💡 So what: The IMF endorsing the Federal Reserve's decision to cut interest rates, aligns with the Fed's shift from focusing solely on controlling inflation to also supporting the labor market and economic growth. As inflation cools, both institutions recognize the need to prevent potential disruptions in employment and ensure overall economic stability by easing monetary policy, making rate cuts a strategic move to balance these objectives.

Monday - San Francisco Fed President Daly TV Interview

Tuesday - Consumer Confidence

Wednesday - Atlanta Fed President Raphael Bostic Speech

Thursday - Pending Home Sales

Friday - Consumer Sentiment (final)

📈 Ray Dalio shares these 14 investing tips!

💰 Everything you need to know about the gig economy

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🛒 Largest proposed grocery store merger heads to court

WHAT: The biggest grocery store merger in U.S. history is heading to court. A judge in Portland, Oregon, will decide whether to grant the Federal Trade Commission’s request to pause the merger between grocery store chains Kroger and Albertsons while they take a closer look at the deal.

WHY: Kroger and Albertsons – two of the largest grocery chains in the U.S. – announced in October 2022 that they planned to merge. The companies say the $24.6 billion deal would hold down prices by giving them more leverage with suppliers and allowing them to combine their store brands.

🚄 Canadian rail employees ordered back to work

WHAT: A Canadian tribunal has told workers at the country’s two largest railways to get back on track—literally—and resolve their dispute through binding arbitration, helping to untangle the snarled North American supply chains. The Canada Industrial Relations Board agreed to Labor Minister Steven MacKinnon’s request for arbitration as well as an extension of the workers’ expired contracts and for the railways to resume operations “forthwith.”

WHY: Business groups in Canada and the US had been calling on the Canadian government to intervene, as the lockout disrupted their interconnected supply chain and thwarted C$1 billion ($740 million) in goods transported by train each day.

🚫 China takes offense with US adding firms to export control list

WHAT: China's Ministry of Commerce isn't happy about the U.S. adding more Chinese companies to its export control list over Russia-related issues, voicing strong opposition to the move. The United States recently added 105 Russian and Chinese firms to a trade restriction list over their alleged support of the Russian military.

WHY: China’s ministry said the U.S. action disrupts the international trade order and hinders normal economic exchanges, adding China would take necessary measures to resolutely safeguard the legitimate rights of its companies.

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