Macro Briefing: 20 January 2023

* US government hits debt ceiling, begins “extraordinary measures” to pay bills
* NATO meets amid dissent over sending tanks for Ukraine
* Global economic outlook improves but “doesn’t quite yet mean good:” IMF chief
* Big oil is moving into the electric-vehicle charging industry
* Google will cut about 12,000 jobs, or 6% of its workforce
* Japan inflation reaches 41-year high
* US jobless claims fall to 190,000, lowest in 15 weeks
* Philly Fed Mfg Index: softer pace of contraction in January
* US housing starts and building permits continue to slide in December:

Fed Governor Lael Brainard expects interest rates to stay high despite progress on taming inflation. “Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis,” she said in a speech.

US mortgage rates continue to fall, dropping to the lowest level since last September. “As inflation continues to moderate, mortgage rates declined again this week,” says Sam Khater, Freddie Mac’s chief economist. The decline is “boosting both homebuyer demand and home builder sentiment. Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern.”