Good day. The Federal Reserve banks of Boston and Dallas said
their presidents, Eric Rosengren and Robert Kaplan, respectively,
would resign following reports of their investment trading
activity, which spurred calls for the Fed to review its ethics
rules. Mr. Kaplan acknowledged in a statement his stock trading
distracted from the central bank's work, while Mr. Rosengren said
in a statement he was leaving as he had qualified for a kidney
transplant to deal with a long-running condition. Meanwhile, Fed
governor Lael Brainard pushed back against concerns that inflation
might soon accelerate because of difficulties hiring workers, and a
preview of Mr. Powell's testimony before Congress today indicates
he will tell lawmakers inflation is likely to stay high in the
coming months before moderating.
Now on to today's news and analysis.
Fed Leaders Eric Rosengren, Robert Kaplan to Resign Following
The Federal Reserve banks of Boston and Dallas said their
presidents were resigning, following reports of the two leaders'
investment trading that prompted calls for their departures and a
central-bank review of its ethics rules.
The two banks gave different reasons for the exits. Dallas Fed
President Robert Kaplan, a 64-year-old who is resigning effective
Oct. 8., acknowledged in a statement released by the bank that his
stock trading distracted from the Federal Reserve's work. The
Boston Fed said its president, Eric Rosengren, also 64, would
retire Thursday, about nine months early, citing health reasons. He
said in a statement released by the bank that he was leaving as he
had qualified for a kidney transplant to deal with a long-running
Both men separately arrived at their decisions without being
forced to resign by Chairman Jerome Powell, according to people
familiar with the matter.
Powell Says Inflation Is Elevated but Likely to Moderate
Inflation caused by supply-chain bottlenecks and other
challenges related to the reopening of the U.S. economy is likely
to stay high in the coming months before moderating, Fed Chairman
Jerome Powell is set to tell Congress Tuesday.
Brainard: Jobs, Inflation Can Return to Pre-Pandemic
Fed governor Lael Brainard said the U.S. economy was likely to
make a complete recovery from the coronavirus and warned against
prematurely concluding that the central bank needed to raise
Fed's Williams: Tapering Bond Buying 'May Soon Be Warranted'
Federal Reserve Bank of New York President John Williams said
Monday the time for the central bank to pull back on asset buying
is coming up, but he indicated rate rises still lie well off.
Fed's Evans: Fed Likely to Taper Bond Buying Soon
Chicago Fed leader Charles Evans said he is on board with
scaling back the central bank's bond buying, but added that as high
as inflation is, it may not have risen enough to lift longer-term
expectations as policy makers have sought.
U.S. Durable-Goods Orders Rise Sharply Despite Supply
New orders for products meant to last at least three years
increased 1.8% to a record seasonally adjusted $263.5 billion in
August as compared with July, the Commerce Department said, marking
the biggest increase since May.
GOP Senators Block Bill to Fund Government, Suspend Debt
Senate Republicans blocked a Democratic bill that would both
fund the government and raise the country's borrowing limit,
escalating a political showdown over the government's finances just
days before it runs out of money.
Key Developments Around the World
Panic Buying in U.K. Creates Shortages at Gas Stations
The pandemic and the U.K.'s departure from the European Union
have resulted in a shortage of tanker drivers to ferry fuel. Panic
buying started last week after reports that a handful of gas
stations had to close due to dwindling supplies.
Housing Affordability Concerns Rise to the Fore World-Wide
The record-setting rise in home values is triggering fresh
debates about housing affordability world-wide, as policy makers
search for ways to rein in price appreciation without driving
prices sharply lower.
Financial Regulation Roundup
SEC Panel Backs Letting Ordinary Investors Into Private
The SEC's Asset Management Advisory Committee unanimously
approved a report recommending that the regulator increase ordinary
investors' access to private-equity, private-debt and real-estate
Crypto Exchanges Curb Trading From China After Beijing's
One of the world's largest cryptocurrency exchanges said it
would close all user accounts in mainland China by the end of the
year, days after the country's central bank declared all
crypto-related transactions illegal.
Crypto Guru Pleads Guilty to Advising North Korea
Cryptocurrency expert Virgil Griffith pleaded guilty to
conspiring to violating U.S. law by traveling to North Korea to
give a presentation on how to use blockchain technology to launder
money and evade sanctions.
Tuesday (all times ET)
8 a.m.: European Central Bank's Lagarde gives introductory
speech at virtual ECB forum on central banking
8:30 a.m.: European Central Bank's de Guindos chairs session on
the corporate bankruptcy process and zombie lending at virtual ECB
forum on central banking; U.S. Commerce Department releases August
advance economic indicators report
9 a.m.: Chicago Fed's Evans speaks virtually at Chicago Fed
9:45 a.m.: European Central Bank's Panetta chairs session on
corporate debt and macroeconomic stabilization at virtual ECB forum
on central banking
10 a.m.: Fed's Powell testifies on coronavirus and Cares Act
before Senate Banking Committee
11 a.m.: European Central Bank's Schnabel chairs panel on the
future of inflation at virtual ECB forum on central banking
1:40 p.m.: St. Louis Fed's Bullard gives introductory remarks at
virtual community banking conference; Fed's Bowman speaks on
creating a new model for the future of supervision at virtual
community banking conference
2 p.m.: European Central Bank's Panetta gives prerecorded
remarks at Luiss University ceremony in Rome
7 p.m.: St. Louis Fed's Bullard speaks virtually on economy and
monetary policy at Bangko Sentral ng Pilipinas-Reinventing Bretton
Woods Committee conference
Time N/A: Bank of Thailand releases policy statement
8 a.m.: European Central Bank's de Guindos chairs session on the
pandemic and countries' business sectors at virtual ECB forum on
10:30 a.m.: European Central Bank's Lane chairs panel on
monetary policy, employment and inequality at virtual ECB forum on
11:45 a.m.: Fed's Powell, European Central Bank's Lagarde speak
on policy panel at virtual ECB forum on central banking
1 p.m.: San Francisco Fed's Daly speaks at virtual UCLA Anderson
5 p.m.: New York Fed's Williams moderates discussion with Tala
CEO Shivani Siroya at Economic Club of New York webinar
U.S. Companies Getting Less Bang for Investment Bucks
The supply chain problems that are creating shortages throughout
the economy are making it harder to obtain capital equipment, too,
and driving up prices as a result, Justin Lahart writes.
The yield on the benchmark 10-year U.S. Treasury note topped
1.5% for the first time since June, lifted by optimism about the
economic outlook and the prospects of tighter monetary policy.
Manufacturing production in Texas gained momentum this month
compared with August, although overall activity in the sector
expanded at the slowest level in more than a year, according to
data from the Federal Reserve Bank of Dallas. The production index
of its Texas Manufacturing Outlook Survey, a key measure of state
manufacturing conditions, rose from 20.8 in August to 24.2, while
its index for general business activity fell from 9.0 in August to
4.6. (Dow Jones Newswires)
Sentiment in the German export industry has improved, the Ifo
Institute said, noting its export expectations index rose to 21.0
points this month from 17.0 points in August. (DJN)
Brazilian economists see faster inflation this year than they
did a week ago, according to the Central Bank of Brazil's weekly
survey. The median forecast by 134 economists is for Brazil's main
inflation index to rise 8.45% during 2021, up from 8.35% a week
ago, while the forecast for inflation in 2022 increased to 4.12%
from 4.10%. (DJN)
Mexico ran up a $3.9 billion trade deficit in August, as exports
rose 9% from a year earlier to $40.31 billion, while imports grew
43.3% to $44.22 billion, the National Statistics Institute said.
(END) Dow Jones Newswires
September 28, 2021 09:24 ET (13:24 GMT)
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