Macro Briefing: 21 August 2023

* Is the era of low US interest rates over?
* Natural gas prices soar as potential supply disruption threatens in Austrialia
* China economic model is broken and its 40-year economic boom may be ending
* China cuts 1-year prime loan rate but leaves 5-year rate unchanged
* US-China de-risking appears set to escalate
* Russia, China look to advance agendas at this week’s developing-world summit
* US Dollar Index rose for fifth week as China’s real estate fallout spreads

Despite rising yields in the Treasury market recently, Fed funds futures continue to price in a high probability of no change in interest rates for the next Federal Reserve policy meeting on Sep. 20, according to CME data. The current outlook follows last week’s news that Fed officials are divided over the need for more hikes. Reuters reports that at the US central bank’s July 25-26 policy meeting, ‘some participants’ cited the risks to the economy of pushing rates too high while others focused on the need to continue battling inflation.