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[Quick Facts]

1. Fed's Harker expects no more rate hikes needed this year.

2. Turkey's central bank raises interest rates by the most since 2018.

3. U.S. initial jobless claims fell last week, indicating a tight labor market.

4. Job search site data shows slower U.S. wage growth.

5. U.S. durable goods data is weaker due to the sluggish manufacturing sector.

[News Details]

Fed's Harker expects no more rate hikes needed this year

I'm in the camp of 'let the restrictive stance work for a while, and let's just let this play out for a while', said Philadelphia Fed President Patrick Harker in a speech on Thursday. I think we've probably done enough, and it's probably a good idea to keep interest rates stable for the rest of the year and observe its impact on the economy, Harker said. He's not ready to predict when the Fed can start lowering rates.

Harker believed that inflation would fall to 4% this year, 3% next year, and back to the 2% target in 2025. He expected the unemployment rate to rise slightly to 4% or higher and economic growth to slow.

Harker made these remarks in an interview on the sidelines of the Jackson Hole Symposium. He was the first Fed official to comment ahead of Fed Chairman Jerome Powell's much-anticipated speech on Friday.

Turkey's central bank raises interest rates by the most since 2018

Turkey's rate hike, the biggest since 2018, far exceeded investor expectations and triggered a 6% jump in the lira, It's the latest sign that Turkey's new central bank governor is favoring aggressive measures to curb inflation, which is approaching 50%. Economists said the Turkish central bank had been prepared for a greater-than-expected rate hike, to send a strong message that the new central banker wants to change the current policy. Looking ahead, the Turkish central bank's policy actions are expected to focus on further revising and eliminating its complex regulations and practices.

U.S. initial jobless claims fell last week, indicating a still tight labor market

Despite the Fed's big interest rate hikes over the course of the year, job market conditions remain tight, with U.S. initial jobless claims falling last week by 230,000, compared to the previous reading of 240,000. Employers are now inclined to increase hiring after struggling to hire during the pandemic. The strong labor market and cooling inflation in the U.S. are stoking optimism that the U.S. economy may avoid a recession. And continuing jobless claims, at 1.702 million, remain low by historical standards, suggesting that some laid-off workers are in short-term unemployment.

Job search site data shows slower U.S. wage growth

The latest salary tracking data from job search site Indeed showed that salaries advertised on the site increased by 4.7% year-on-year, down from 5.8% this April and 8% in July of last year. That is consistent with a recent Cleveland Fed paper, in which the bank's researchers found that four-fifths of the increase in wages for the period from the fourth quarter of 2020 to the first quarter of 2023 was due to inflation, rather than an imbalance between labor supply and demand. If the current slowdown in payroll growth continues, wage growth is expected to return to pre-pandemic levels during the October-December period. This is undoubtedly good news for the Fed, but it remains to be seen if wage growth can continue that trend. After all, a single month of slowdown doesn't mean anything.

U.S. durable goods data is weaker due to the sluggish manufacturing sector

Some transportation orders have underperformed over the past two months, which has led to some volatility in this report, as is often the case. Underlying core orders were in line with this month's expectations, but note that June's data was revised sharply downward. Overall, the durable goods orders data were weaker due to the ongoing sluggish manufacturing sector. The auto industry will begin to suffer in the coming months and will struggle to gain traction through 2024 as interest rates remain high. Additionally, the United Auto Workers (UAW) is expected to strike in September, which will have a significant impact on economic data if the strike continues for a while.

[Focus of the Day]

UTC+8 22:05 Federal Reserve Chairman Jerome Powell speaks at the Jackson Hole Economic Symposium

UTC+8 23:00 Philadelphia Fed Chairman Harker accepts an interview with Bloomberg Television

UTC+8 23:30 Cleveland Fed chairman speaks on CNBC

UTC+8 00:30 Next Day: Chicago Fed Chairman Goolsbee accepts an interview with CNBC

UTC+8 02:00 Next Day: Chicago Fed Chairman Goolsbee accepts an interview with Bloomberg Television

UTC+8 02:30 Next Day: Cleveland Fed President Mester accepts an interview with Bloomberg Television

UTC+8 03:00 Next Day: European Central Bank President Christine Lagarde speaks at the Jackson Hole Economic Symposium