Elevated inflation will compel the Federal Reserve to raise US interest rates at least twice by the end of 2023, according to a new poll of leading academic economists for the Financial Times.
The inaugural survey conducted by the FT and the Initiative on Global Markets at the University of Chicago’s Booth School of Business points to a potentially more hawkish path for monetary policy than indicated by the Fed’s chair, Jay Powell.
The economists’ views align closely with the “dot plot” of Fed officials’ own forecasts for when and how quickly rates will have to rise from their current level near zero, as the US economy rebounds from the pandemic and inflation runs ahead of the long-term average targeted by the Fed.
1. US home prices rise at fastest pace in more than 30 years US home price growth accelerated in April at the fastest pace in more than three decades. In a separate survey, which covers 20 US cities, Phoenix, San Diego, and Seattle reported the highest year-over-year gains.
Go deeper Why are housebuilders’ shares not rising in line with rising house prices? Today’s Unhedged email explains. (Sign-up here)
2. Microsoft and Google end truce on legal battles The end of the six-year agreement clears the way for direct conflict between the two Big Tech groups. Under the agreement, the companies had settled outstanding lawsuits and agreed not to litigate or complain about each other to regulators without first trying to resolve disagreements at the highest level internally.
3. NYC mayor’s race thrown into chaos The New York mayoral race was thrown into confusion yesterday after the city’s board of elections admitted it had bungled the count by including more than 130,000 test ballots in its latest tally of votes. The blunder, linked to the trial of new software, unleashed a torrent of abuse on social media on a city agency that has long had a reputation for dysfunction.
4. Deutsche Bank Hong Kong IPO licence to expire after staffing error The German lender will be unable to sponsor initial public offerings in Hong Kong from July after it failed to replace two regulated staff on time, disrupting the company’s plans to relaunch its Asia equities business. The error means the IPO sponsor licence of Deutsche Securities Asia, the bank’s regional equity capital markets division, will lapse from next month.
5. England send Germany out of Euro 2020 England won their first knockout game at the European championship without the aid of a penalty shootout since 1968 by beating Germany 2-0 at Wembley. The victory sets up a quarter-final for England against Ukraine in Rome on Saturday. Follow all our Euro 2020 coverage here and sign up to Scoreboard for weekly updates on the business of sport.
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Didi’s New York IPO China’s ride-hailing app Didi will begin trading on the NYSE today after raising at least $4bn in one of the largest foreign listings since Alibaba’s in 2014.
US-Taiwan trade talks Taiwan and the US will discuss supply chain security and digital trade in their first such talks in five years, which kick off today, as the countries seek to deepen economic ties in the face of tensions with China. For the latest developments in global trade, sign up for our Trade Secrets newsletter.
Donald Trump visits US-Mexico border The former president will join Texas governor Greg Abbott at the US-Mexico border, as he seeks to recapture the national limelight by returning to a hallmark issue of his political career.
Amazon’s changing of the guard With founder Jeff Bezos just days away from stepping down, whether Amazon can survive without him remains a pressing concern. But news of his departure did little to move the company’s stock price or dent its $1.7tn market value. The market’s shrug was testament, perhaps, to investors’ trust in the corporate machine Bezos built over the past 27 years — and in his replacement, Andy Jassy.
Monetary policy is not the solution to inequality Should central banks do something about inequality and, if so, what? This has become a hot topic, writes Martin Wolf. But the necessary structural reforms will be harder than many economists imagine.
Bitcoin’s limits What’s the point of making a killing if you can’t spend the loot? Customers of Binance, one of the world’s largest cryptocurrency exchanges, are confronting that question after their accounts were cut off from one of the UK’s main payments systems. Brooke Masters explores.
What’s fuelling China’s online nationalists? Chinese nationalist sentiment is mounting online, especially on Weibo, the country’s biggest social media platform. It used to be outsiders, such as a US politician criticising Beijing, who received the worst of bloggers’ attacks. Now, insiders bear the brunt, writes Yuan Yang.
How Brexit reshaped British politics Five years after the referendum and six months after the UK left the EU single market, the “earthquake” is still being felt. “It has made Britain more divided and considerably more angry,” said one pollster. Sign up to our weekly Brexit Briefing email for regular updates on post-Brexit Britain.
After “‘the worst year for property sales in a decade”, the Greek island of Mykonos is getting back to the business of hedonism. DJs have returned to the bars, umbrellas are back on the beaches and the serpentine, whitewashed alleyways of the old port are again thrumming with tourists.