Rio Times Global Economy Briefing
The Big Three
Warsh puts a September hike on the table. In his first Jackson Hole keynote as Fed Chairman, Kevin Warsh stressed that 12-month PCE inflation “stands at 3.7 percent” — with 54% of the basket still rising faster than 3% — and futures ended the day implying about a 57% chance of a September rate hike, up from roughly 35% before the speech.
Stocks slip, yields and the dollar firm. The S&P 500 fell 0.25% to 7,711.76 and the Nasdaq lost 0.52%, while the two-year Treasury yield touched its highest since July around 4.32% and the dollar index rose 0.50% to 99.65; gold slid about 3% to near $4,455 an ounce.
Brazil bucks the mood. The Ibovespa rose 0.30% to 175,664.62 — an eighth straight gain and a 3.06% weekly rise — while the real slipped to 5.196 per dollar; the Selic has stood at 14.0% since the August 5 cut, with mid-August inflation at 4.24% over 12 months.
