Fed Governor Anticipates Higher Rates; Pain at the Gas Pump Again

Fed Governor Anticipates Higher Rates; Pain at the Gas Pump Again By James Christie

Good day. More interest rate increases are likely needed to bring inflation in the U.S. down, Federal Reserve Governor Michelle Bowman said on Monday, noting she is "looking for evidence that inflation is on a consistent and meaningful downward path." Americans aren't likely to get a break from price pressures when they go to fill up their fuel tanks. Booming oil prices last year powered U.S. inflation to 40-year highs, and that trend was reversing this year-until now. Many analysts say higher oil prices evident at gasoline stations are impossible to ignore even if they don't figure into the Fed's preferred inflation metric. A continued climb in oil prices could signal the economy's resilience. But too steep an increase could suggest the Fed will need to keep rates higher for longer.

Now on to today's news and analysis.

Top News Fed's Bowman Expects More Rate Hikes

The highest interest rates in 22 years likely aren't high enough, according to Federal Reserve Governor Michelle Bowman.

On Monday, she said additional rate hikes will likely be needed to tame inflation. Her remarks were prepared for a Fed Listens event in Atlanta, and echoed a sentiment she expressed over the weekend: Inflation is still too high, and will likely remain so with solid job growth and economic expansion.

U.S. Economy Rising Oil Prices Are Bad News for Drivers-and the Fed

Benchmark crude prices are up 21% over the past six weeks , driving up the cost of American workers' commutes, freight haulers' trips to and from warehouses and the production of everything from plastics to clothing.

How Yellow's Downfall Is Rippling Through the Economy

The rapid wind-down of Yellow last month, capped by the shutdown of all operations and a bankruptcy filing in recent days, is leaving behind a trail of winners and losers as the 99-year-old trucker disappears from the highways.

New Lending by Mortgage REITs Has Dried Up

Some of the biggest names in commercial real-estate lending have all but turned off the spigot. Blackstone Mortgage Trust and KKR Real Estate Finance Trust have halted loans to new borrowers to shore up their balance sheets.

Key Developments Around the World Chinese Exports Fall at Steepest Pace Since February 2020

China's exports to the rest of the world tumbled in July , adding to the challenges for the world's second-largest economy and offering fresh evidence that a drying up of Western demand is hurting Beijing's attempts to rekindle growth.

China Reassures Russia on Ukraine After Meeting on How to End War Ukraine's Ammunition Chief Battles to Boost Production

Like any good boss, Oleksandr Kamyshin keeps on top of production numbers for the factories he oversees. But for Kamyshin, Ukraine's minister of strategic industries, it is a matter of life and death .

Kim Jong Un Touts Weapons, as U.S. Worries About Arms Exports

North Korean leader Kim Jong Un sought to showcase his country's defense industries and its nuclear-weapons arsenal, as U.S. and South Korean officials worry Pyongyang may seek to expand its illegal weapons trade .

Financial Regulation Roundup Amazon to Meet With FTC Ahead of Expected Antitrust Complaint

Representatives of Amazon are set to meet next week with Federal Trade Commission officials, a person familiar with the plans said, in the latest sign the agency is close to bringing an antitrust complaint against the online retail giant.

PayPal Launches Dollar-Pegged Stablecoin

PayPal is launching a U.S.-dollar pegged stablecoin, expanding its digital asset business into a highly lucrative area and making the payments group the latest mainstream financial company to push into an area long-dominated by crypto natives, many of which have been beaten up by volatile markets and harsh regulators recently. (Dow Jones Newswires)

Credit Card, PayPal or Cash App? How You Pay Matters Forward Guidance Tuesday (all times ET)

8:30 a.m.: Canada trade report for June; U.S. trade report for June; Richmond Fed President Tom Barkin speaks to Loudoun County Chamber of Commerce in Herndon, Va.

Thursday

4 a.m.: ECB Economic Bulletin

8:30 a.m.: U.S. consumer-price index for July; U.S. weekly jobless claims

3 p.m.: Prerecorded remarks by Atlanta Fed's Bostic to "Connecting Communities: Shifting Perspectives and Expectations on Employment" webinar

Research U.K. Inflation Lowers Chance of Early Rate Cuts

The U.K.'s high level of inflation and the risk of it persisting in the medium term lowers the chances of early interest-rate cuts by the Bank of England, Barclays fixed-income strategist Moyeen Islam writes in a note. "Historically, the gap between the last hike and the first cut has been around six months," he writes. He adds that, "The BOE monetary policy committee is now focusing less on the terminal level of rates given that policy is now described as 'restrictive' and more on keeping the stance 'sufficiently restrictive for sufficiently long'."

-Miriam Mukuru

Basis Points The Conference Board's Employment Trends Index climbed to 115.45 in July from a downwardly revised 113.56 in June, the private-research group said, signaling more jobs should be added to an already tight U.S. labor market in the coming months. (Dow Jones Newswires) China's vehicle sales slid in July, crimped by a high base a year earlier and weak consumer confidence that weighed on purchases, though exports remained robust. (DJN) German inflation eased in July, confirming initial estimates, despite an uptick in energy prices after recent months' decline. (DJN) U.K. retail sales increased in July, though this masks a drop in volumes as wet weather dampened shopper demand, the latest sales-monitor report from the British Retail Consortium showed. (DJN) Feedback Loop

This newsletter is compiled by James Christie in San Francisco and Perry Cleveland-Peck in Barcelona.

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James Christie , Nell Henderson , Nick Timiraos , Tom Fairless , Megumi Fujikawa , Perry Cleveland-Peck [mailto:[e-mail]], Nihad Ahmed , Michael Maloney , Paul Kiernan

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

08-08-23 0715ET