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US Mortgage Rates Fall, Call for AI Development Pause, BOE Warns Pension Funds

Shemesh Shahar
Latest News
March 31 2023 07:40AM

US Mortgage Rates Fall

US mortgage rates dropped to a six-week low of 6.45%, contributing to a fourth-straight rise in applications to buy a home. The 30-year fixed mortgage contract rate fell by three basis points in the week ended 24 March, leading to a 2% rise in the Mortgage Bankers Association’s index of mortgage applications to purchase a home. Despite this decline, mortgage rates are still around 2 percentage points higher than they were a year ago due to a series of Federal Reserve rate hikes.

Germany’s Coalition Agreement

After three days of negotiations, Germany’s ruling coalition reached an agreement on climate protection and infrastructure investment policies. The plans include modernising the railway network and imposing a carbon tax on German trucks, but they do not include a ban on oil and gas heaters, which was hoped for by the Green party. The budget for next year has yet to be agreed upon.

Call for AI Development Pause

Elon Musk and over 1,000 technology researchers and executives have called for a six-month “pause” on the development of advanced artificial intelligence systems, such as OpenAI’s GPT. In an open letter published by the Future of Life Institute, the signatories called the arms race to develop and deploy more powerful digital minds “dangerous.” The letter stated that recent months have seen AI labs locked in a race to create systems that no one can predict, understand or control.

BOE Warns Pension Funds

The Bank of England’s quarterly financial stability update recommended that pension funds prepare for a bond market shock more severe than the one they were previously tested against. The report urged pension funds to hold permanent liquidity to deal with future instability, and warned of potential issues in global private credit markets. However, the update concluded that the UK banking sector remained resilient, and the outlook for household indebtedness was better than expected.

US Encourages Africa Investment

The Biden administration is encouraging American businesses to invest in Africa, a continent that many Western investors still consider high-risk due to corruption, poor infrastructure and poverty. Vice President Kamala Harris pledged to bring billions of dollars in investments to Africa, and a string of top White House officials have travelled to the continent to unlock American investment. However, due to various challenges, investing in Africa isn’t easy.

US Accountant Salaries Rise

The salaries offered to U.S. accountants and auditors rose at their fastest pace last year, but increasing pay alone may not be enough to solve the national shortage of accountants. Fewer people are pursuing degrees in accounting, resulting in more open positions for related roles and longer job searches. Industry groups and firms are addressing the shortage of accountants by boosting salaries, offering signing bonuses, relying more on temporary help, shipping work abroad, courting college students, and giving entry-level and junior accountants more responsibility.

Cargill to Stop Grain Exports

Russia has announced that Cargill, the top agricultural commodities trader, will stop exporting grain, adding to uncertainty over the future of Black Sea crop shipments. Although Cargill is a big exporter of Russian wheat and a huge Western crop merchant, the Russian government said the firm’s decision shouldn’t affect overall shipments from the country. As the world’s biggest wheat exporter, Russian grain is vital to global crop trade and food supplies.

Turkey to Increase Minimum Wage

Turkey plans to increase its minimum wage in July, the second hike this year following a 55% hike in January. President Recep Tayyip Erdogan has announced several financial giveaways ahead of the upcoming elections, including debt relief, boosts to pensions, energy price cuts, and early retirement for over two million people. The worst cost-of-living crisis in Erdogan’s two decades in power threatens his popularity in the run-up to the May 14 vote.

Germany Increases Ukraine Support

The German government is reportedly increasing its financial support for Kyiv by up to €12 billion ($13 billion) to help arm Ukraine in its fight against Russia. Defense Minister Boris Pistorius will receive approval from parliament’s budget committee to more than double the pot for this year to €5.4 billion. An additional €8.8 billion will be available if needed in the coming years. The money isn’t part of the regular defense budget, nor is it part of a €100 billion special fund for the rearmament of Germany’s armed forces.