—— Fed cuts interest rate forecast to 75 basis points; Biden visits Saudi Arabia; Canadian house prices slashed; China’s economic growth forecast slows; Centaur virus spreads in India; Trump’s first wife passed away; ESPN+ subscription prices surge.
1. Fed cuts interest rate forecast
This week, the Fed’s plan to raise interest rates by 100 basis points (1%) this month was met with fierce resistance from two Fed officials.
Although the U.S. consumer price index remained high in June, according to survey data, the U.S. CPI in July is expected to fall by more than 2.8%, so after hearing the opinions of dissenting officials, the rate hike in July is now expected to be 75% basis points (0.75%).
Global inflation this year has made central banks all over the world. After announcing a series of interest rate hikes, the United States raised the Fed Fund Interest Rate by 75 basis points in June, the largest increase since 1994. In June, it set an astonishing record of 9.1% year-on-year growth.
It seems that U.S. officials have yet to find an effective way to curb inflation after the pandemic period is over.
St. Louis Fed’s James Bullard to delay a rate hike until the end of the month
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2. Biden visits Saudi Arabia
U.S. President Joe Biden arrived in Saudi Arabia on Air Force One on Friday for a meeting with Saudi Crown Prince Mohammed bin Salman.
During the 2020 presidential campaign, the U.S. also moved to cut off offensive weapons sales to Saudi Arabia after Biden accused Saudi Arabia’s crown prince of ordering the murder of Washington Post columnist Jamal Khashoggi in a sour relationship between the two countries.
But after the Ukrainian-Russian war, the United States began to try to repair relations with Saudi Arabia. Biden’s visit this time will start to break the ice in terms of commercial cooperation and negotiate to strengthen cooperation between Saudi Arabia and Israel, so that Saudi Arabia will open up the business of EL AL in Saudi Arabia and allow its flights to fly into the airspace.
On the other hand, the Ukrainian-Russian war has made global crude oil prices soar, and the United States is also trying to persuade countries such as Saudi Arabia and the United Arab Emirates to use unused production capacity to increase oil production in order to achieve the goal of stabilizing global oil prices.
Biden will also meet with representatives of other Arab countries this Saturday to discuss regional security issues
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3. Canadian house prices slashed
Canadian house prices fell sharply According to data released by the Canadian Real Estate Association on Friday, Canadian housing benchmark prices fell 1.9% in June from the previous month, the third consecutive monthly decline and the largest decline since 2005.
Due to the global inflation problem, the Bank of Canada has also greatly increased the cost of borrowing this year, and the annual interest rate has risen from 0.25%, which was originally close to zero, to 2.5%. Many Canadians who originally decided to buy a house because of low-interest rates completely gave up their plans to buy a house.
The decline in home prices came as total home sales in Canada fell 5.6 percent in June.
The National Bank of Canada predicts that by 2023, two of Canada’s largest housing markets, Montreal and Toronto, are expected to see house price declines of 10 percent and 15 percent, respectively.
The skyrocketing Canadian house prices begin to cool
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4. China’s economic growth is expected to slow
Since the outbreak of the new crown epidemic two years ago, China’s economy has entered the slowest stage of growth, and economists have further lowered their forecasts for China’s GDP growth this year.
In June, China’s GDP recorded its second-lowest growth on record, at just 0.4%. Many financial institutions are beginning to worry that China’s economy will not be able to achieve 5.5% GDP growth this year. Goldman Sachs recently lowered its forecast for China’s GDP growth this year to 3.3%.
Growth in China’s economy, which rebounded rapidly in the first quarter of last year and hit a new all-time high year-on-year growth rate, has since slowed again.
As China’s influence on the global economy is increasing, as an importer of oil, coal, corn, and a large number of commodities, China’s economic slowdown has also increased the risk of a global recession.
China’s GDP growth fell again in the first and second quarters of this year
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5. Centaur mutant virus spreads in India
Recently, a new variant of the coronavirus known as “Centaurus” has begun to spread in India and parts of Europe.
Currently, the variant has been found in many countries including Germany, Japan, the UK, and the US. On Wednesday, the Dutch health agency also announced that the virus had been detected in the country.
According to scientists at the World Health Organization, a variant of the virus known as the “centaur” may have mutated in escaping the body’s immune system and show a growth advantage over many other variants, but it’s unclear what this variant is. Whether it is more infectious or destructive to the human body.
As the new variant spreads, health authorities in several countries have recently renewed calls for a second booster vaccine, especially for people over 60 and immunocompromised.
The threat of coronavirus variants is in the spotlight since the global outbreak of COVID-19
Source: Financial Times – Coronavirus sub-variant ‘Centaurus’ spreads across India and parts of Europe
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6. Trump’s first wife passed away in her New York home
Ivana Trump, the first wife of former U.S. President Donald Trump, passed away at her home in Manhattan, New York, on Thursday, July 14, at the age of 73, according to the Associated Press.
According to two people familiar with the matter, police are now investigating the cause of Ivana’s death. From the current situation, she, unfortunately, fell down the stairs and fell into a coma. The cause of death may be an accident.
After Ivana’s death, relatives of the Trump family issued statements expressing their condolences and grief.
Ivana Trump, a Czech-born skier, and former model married Trump in 1977 and publicly divorced in 1992.
The husband-and-wife duo was successful business partners, co-developing projects such as Trump Tower in the 1980s, and she herself managed a casino in Atlantic City. In the years before her death, Ivana was still keen on business, promoting an Italian weight loss program in 2018.
Ivana dies amid eventful Trump family investigation by New York attorney general
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7. ESPN+ subscription prices soar
This week, The Walt Disney Company announced that ESPN, its sports channel, will increase the monthly subscription price of its online streaming service ESPN+ from $6.99 to $9.99, and the annual subscription price from $69.99 to $99.99 starting August 23, 2022.
ESPN officials said the price increase was due to the rising cost of sports rights and the need to increase live sports and original programming.
Shares in ESPN parent Walt Disney rose 3.7% on Friday after the price increase was announced.
But many institutions believe that Disney’s choice to raise prices at this point in time of inflationary pressure and economic downturn is taking a high business risk because ordinary American households are tightening their spending budgets and may not necessarily accept large price increases for entertainment services.
However, for The Walt Disney Company itself, the price war in the streaming media field in recent years has made the profitability of these services questioned by shareholders and investors. Among the many streaming media sub-brands, ESPN+ is still losing money. But the customer growth rate was outstanding.
Disney’s streaming brands lose more than $880 million in recent years
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.