Fed Minutes Out Today; Another Sign U.S. May Avoid Recession

Fed Minutes Out Today; Another Sign U.S. May Avoid Recession By James Christie

Good day. The Federal Reserve today releases minutes of deliberations among its officials at their January gathering. At the meeting, they held the benchmark federal-funds rate steady in a range between 5.25% and 5.5%, the highest level in more than two decades, awaiting more convincing evidence that a downturn in inflation at the end of last year would endure. Also, Fed Chair Jerome Powell volunteered officials lacked confidence about a March interest-rate cut. Since then, consumer-price index and producer-price index reports noted unexpected increases in January. As of Friday, interest-rate futures suggested there was a greater-than-50% chance the Fed would start cutting rates by its June policy meeting. Meanwhile, over the past six months six of 10 components of the Leading Economic Index have posted positive results, potentially a sign that a slump won't strike the U.S. economy.

Now on to today's news and analysis.

Top News Recession Signs Fade Despite Drop in Leading Economic Index

The Leading Economic Index dropped 0.4% last month, the Conference Board said Tuesday, extending a streak of declines every month since March 2022, MarketWatch reported. Yet six of the 10 index components have shown positive results over the past six months, the board said. It's the first time that's happened in two years. "As a result, the leading index currently does not signal recession ahead," said Justyna Zabinska-La Monica, senior manager of business cycle indicators at the board. (MarketWatch)

U.S. Economy It's Been 30 Years Since Food Ate Up This Much of Your Income

The last time Americans spent this much of their money on food , George H.W. Bush was in office, "Terminator 2: Judgment Day" was in theaters and C+C Music Factory was rocking the Billboard charts.

Don't Build That E-Commerce Warehouse in My Backyard

Warehouse developers in the U.S. are increasingly contending with a headache that is all too familiar to residential builders: not-in-my-backyard community opposition to their projects.

Key Developments Around the World India's Most Powerful Politician Can't Win Over Farmers

Thousands of farmers on tractors have surrounded India's capital threatening to descend on it with demands the government put a legal floor under prices, as one of the country's largest constituencies flexes its muscles .

Banana Ban Means Ecuador Won't Source Arms for Ukraine

Russian-made gear in Ecuador now will not find its way to Ukraine, as a senior Ecuadorean official told The Wall Street Journal last week that the Noboa administration didn't want to become enmeshed in any far-off conflicts.

Ukraine's Bloody Decade: A Visual History of 10 Years at War Cheap Chinese Goods Are Becoming a Costly Problem for Hong Kong

Prices are falling in mainland China. That's a boon for people living in Hong Kong, but a problem for the city's businesses . Hong Kong residents are increasingly hopping across the border to load up on frozen food and furniture.

Financial Regulation Roundup Barclays Leans Away From Wall Street in Overhaul Plan

Chief Executive C.S. Venkatakrishnan unveiled a broad plan to lift the U.K. lender's share price from a 15-year slumber. The crux: a renewed focus on lending to British households and businesses-and a little less focus on Wall Street .

New Rules Will Force Buyout Firms to Flag Suspicious Investments

Private-equity firms are about to be drafted into the fight against dirty money after the Treasury Department proposed extending anti-money-laundering rules to investment advisers following more than 20 years of debate.

Forward Guidance Wednesday (all times ET)

8 a.m.: Atlanta Fed's Bostic speaks to Airports Council International CFO Summit in Atlanta

9:10 a.m.: Richmond Fed's Barkin interview on SiriusXM Channel 132 "The Business Briefing"

10 a.m.: EU FCCI Flash Consumer Confidence Indicator for February; Atlanta Fed Business Inflation Expectations

2 p.m.: FOMC minutes of Jan. 30-31 meeting

Thursday

4 a.m.: Eurozone flash PMI for February

5 a.m.: EU harmonized consumer-price index for January

7:30 a.m.: ECB minutes of Jan. 24-25 monetary policy meeting

8:30 a.m.: U.S. weekly jobless claims; Chicago Fed National Activity Index

10 a.m.: U.S. existing home sales for January; Fed's Jefferson speaks at the Peterson Institute for International Economics, Washington D.C.

3:15 p.m.: Philadelphia Fed's Harker speaks at 2024 Lyons Center for Economic Education and Entrepreneurship, University of Delaware

5 p.m.: Minneapolis Fed's Kashkari speaks on panel at Northside Economic Opportunity Network; Fed's Cook speaks at Annual Conference of Julis-Rabinowitz Center for Public Policy & Finance

7:35 p.m.: Fed's Waller speaks to Notre Dame Club of Minnesota and University of St. Thomas Finding Forward Speaker Series

Research Bank of Canada Near-Term Rate Cuts 'Look Plausible'

Canada's consumer-price index data for January indicates interest-rate cuts by the Bank of Canada are "much more plausible in the coming months, " BMO Capital Markets chief economist Doug Porter tells clients. Canada's inflation slowed to 2.9% in January, after a 3.4% reading in the prior month. Shelter costs in Canada have kept inflation elevated, and Porter calculates that when mortgage-interest charges, which are directly affected by rate policy, are excluded, Canada's total inflation sits at exactly 2%, or the BOC's target. Porter predicts the BOC is likely to move cautiously, given core CPI is still above 3%, but slowing, and wage gains remain in the 4% to 5% range.

-Paul Vieira

Commentary How India Became the World's Most Nimble Energy Buyer

Global energy markets have been on a roller coaster for the past few years, and while major industrial economies have been thrown for a loop, India, facing record import needs, is almost enjoying the ride, Megha Mandavia writes.

Basis Points Consumer prices in Canada rose 2.9% from a year earlier in January, following December's gain of 3.4%, Statistics Canada reported, marking the lowest level since June and undershooting the 3.3% advance economists expected. On a month-over-month basis, Canada's consumer-price index was unchanged, after falling 0.3% in December and compared with an expected 0.4% increase. (Dow Jones Newswires) German housing construction is expected to tumble by more than a third in the next few years, as tight financing conditions persist and the cost of building materials climbs. Housing completions in Europe's largest economy are expected to fall 35% by 2026 compared with 2023, the Ifo Institute says, using forecasts by the research group Euroconstruct. (DJN) Sales of new cars in the European Union rose in January, overcoming the prior-month's slump, as registrations grew in the bloc's major markets, including those of electric vehicles. The European Automobile Manufacturers' Association said Tuesday new car registrations, which mirror sales, grew 12% on year to 851,690 units last month. (DJN) Indonesia's central bank stood pat at its February policy meeting, reiterating plans to start easing this year if inflation stays well-behaved, economic growth resilient and the rupiah stable. (DJN) Feedback Loop

This newsletter is compiled by James Christie in San Francisco.

Send us your tips, suggestions and feedback. Write to:

James Christie , Perry Cleveland-Peck [mailto:[e-mail]], Nihad Ahmed , Michael Maloney

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

(END) Dow Jones Newswires

02-21-24 0715ET