* House will vote this week on infrastructure bill approved by Senate
* Germany’s center-left party claims narrow win over Merkel’s party
* Is risk rising for a US debt default?
* Nomura’s chief China economist cuts forecast for Chinese GDP growth this year
* China may now be the biggest risk factor for emerging markets
* New US home sales rose for a second straight month in August
* Conditions may now be favorable for rising yields
* US 10-year Treasury rebounds to 1.47%, near three-month high:

● The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance
Eswar S. Prasad
Q&A with author via Bloomberg
Q: Why is there such urgency for central banks to develop digital currencies?
A: The reality is that the end of physical cash is not too far away. We are seeing digital payments in various forms beginning to dominate in economies small and large, developing and advanced. So I think for central banks, if you think about their money being used at the retail level, this is at some level an existential question. Central banks will still be able to conduct their main functions and maybe they can continue doing so without having their money being used for retail payments, but having a CBDC has a variety of advantages.

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The US economy remains on track to post a strong increase in output for the third quarter, but the current estimate reflects an ongoing deceleration from previous nowcasts.

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* House Speaker Pelosi: Congress won’t let government funding expire next week
* Senate may vote on Monday on raising the US debt ceiling
* Treasury Secretary Yellen under pressure as possible debt default approaches
* China flies fighter jets into Taiwan airspace
* China’s central bank says all cryptocurrency-related transactions are illegal
* China Evergrande silent on whether it will make a key interest payment
* US Leading Economic Index continues to indicate strong growth
* US jobless claims rose again last week, increasing more than forecast
* Chicago Fed Nat’l Activity Index: slower but-still above-average growth in August
* US economic growth continued to slow in September via PMI survey data:

Recent updates continue to suggest that the recent surge in US inflation is cresting. The mystery is how long the peaking process will last.

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* FDA authorizes Pfizer booster shots for older and higher-risk Americans
* Pace of new US Covid-19 cases expected to rise in weeks ahead, experts predict
* Federal Reserve expects ‘transitory’ inflation to persist
* Fed chief says taper may start ‘soon,’ perhaps as early as November
* US economy continued to strengthen, but at a slower rate, Fed says
* Eurozone growth eases to 5-month low in September via PMI survey data
* UK economic output rises at softest pace in 7 months via PMI survey data
* Chip shortage will take a heavy bite out of auto company revenues in 2021
* US existing home sales fell more than expected in August:

And now for something completely (or at least partially) different: The ETF Portfolio Strategist herewith rolls out two actively managed strategies that will be periodically updated and discussed on these pages. Why would we do that? So glad you asked.

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In the first installment of kicking the tires on alternatives to the standard 60/40 US stock/bond asset allocation, I reviewed three relatively tame possibilities. The results, based on adding various flavors of foreign equities and fixed income, were less than impressive, albeit in part because US markets have been on a tear in recent years. Let’s take another dive into the possibilities with a more radical approach with a volatility ETF.

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* House passes spending bill, setting up showdown in Senate over debt limit
* Biden addresses UN, says ‘the world must wake up’
* Iran says it’s ready to restart nuclear talks
* Biden plays down odds for post-Brexit US-UK free-trade deal
* Taper timetable in focus for today’s Fed meeting
* Fed will wait till November for taper announcement, CNBC survey reports
* Former China central bank advisor: Evergrande crisis will slow economic growth
* Cracks in China’s growth engine raise risks for emerging markets, analysts warn
* Is the US losing the race to decide the future of money?
* US housing starts rebounded in August to slightly above-average level for 2021:

If you hold a diversified portfolio of world stocks and give China more than a trivial weight, you’re feeling the pinch this year. Shares in the world’s second-largest economy continue to tumble, exacerbated in recent days by the liquidity crisis in Evergrande, a large Chinese property developer with a deepening liquidity crisis that’s roiling global markets lately.

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