Good day. Chicago Federal Reserve President Charles Evans said yesterday that the Fed may not need to be so aggressive with its interest-rate increases for the rest of the year, noting that, “in spite of less favorable inflation reports than I expected in June, I’m still hopeful that that rate path is a reasonable one after all.” With the rate path Mr. Evans outlined on Tuesday, rates would rise to between 3.25% and 3.5% by December, levels that could slow growth and bring down inflation. He also said that, “If we don’t see improvement before too long, we might have to rethink the path a little bit higher.” Meanwhile, Brazil’s central bank is expected to continue raising interest rates after its policy meeting today. “The economy has been significantly more resilient than expected, and buoyant domestic demand makes it more difficult to contain inflation,” said Alberto Ramos, an economist at Goldman Sachs in New York.

 Now on to today’s news and analysis.

Chicago Federal Reserve President Charles Evans said he is hopeful the central bank will be able to slow its pace of rate rises over the remainder of the year as it pushes borrowing costs to levels aimed at slowing the economy.

In projections submitted at the Fed’s meeting in mid-June, Mr. Evans said he anticipated raising rates by a half percentage point at the central bank’s meeting in September after completing two rate rises of 0.75-percentage point, or 75 basis points, this summer.

U.S. job openings fell in June to their lowest level in nine months and hiring slowed, in new signs of a cooling labor market. The Labor Department on Tuesday said there were a seasonally adjusted 10.7 million job openings in June, down from 11.3 million in May. That was the lowest level since September. Additionally, the number of times workers quit their jobs edged down to 4.2 million from the prior month’s 4.3 million, extending a stretch of unusually high job turnover that started in early 2021.

U.S. gas prices have fallen for seven straight weeks and are approaching an average price of $4 a gallon, easing the pain of record-high fuel costs amid shrinking global demand for oil.

• Europe’s Coal-Buying Frenzy Means Windfall for Producers
• Japan Investors Take Billion-Dollar-Plus Hit on Russian Gas Assets

By its own admission this week, Australia’s central bank is raising interest rates at a hectic pace as it navigates toward an economic horizon “clouded in uncertainty.”

The Reserve Bank of Australia on Tuesday raised the cash rate for a fourth straight month, and economists are warning that every successive increase raises the risk of an over-tightened monetary policy snuffing out the country’s economic recovery.

There are also huge global uncertainties to contend with, and nobody really knows how well Australia’s hugely-indebted households will hold up. The RBA would do well to look to its nearby counterpart in New Zealand for hints about what’s to come. Read more.

10 a.m.: U.S. factory orders for June; ISM Report on Business (services) PMI

7 a.m.: Bank of England monetary policy summary and minutes of Monetary Policy Committee meeting
8:30 a.m.: U.S. exports, imports and trade balance for June
12 p.m.: Cleveland Fed’s Mester speaks on monetary policy to Economic Club of Pittsburgh

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• Annual house price growth in the U.K. increased slightly in July to 11.0% from 10.7% in June, according to the Nationwide House Price Index. Prices rose 0.1% month-on-month, after taking account of seasonal effects, versus 0.2% in June. (Dow Jones Newswires)
• Brazil’s industrial production fell by 0.4% in June from May, the first decline in five months, and by 0.5% from a year earlier, the country’s statistics agency said. (DJN)
• Singapore’s purchasing managers index fell from 50.3 in June to 50.1 in July, the Singapore Institute of Purchasing and Materials Management said. The July reading still marks the 25th straight month of expansion as index readings above 50 indicate growth. (DJN)
• Inflation in the Philippines is expected to have risen 6.3% in July from a year earlier, according to the median forecast of five economists polled by The Wall Street Journal. That would be higher than the 6.1% rise in June and above the Philippine central bank's inflation target range of 2%-4%. (DJN)
• Turkey's annual inflation rate accelerated again in July, marking its highest print since September 1998, the country's statistics office Turkstat said Wednesday. The consumer price index rose 79.6% in July compared with the same month of 2021. The annual inflation rate in June was 78.62%. A FactSet poll showed economists had expected the annual inflation rate to reach 79.8% in July. (DJN)

This newsletter is compiled by James Christie in San Francisco.

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