Macro Briefing: 3 August 2022

* House Speaker Pelosi’s visit to Taiwan raises U.S.-China tensions
* China’s planned war games appear to be defacto military blockade of Taiwan
* China Composite PMI, a GDP proxy, eased in July but still shows solid growth
* Eurozone survey data show currency bloc slipped into recession in July
* Turmoil looms for global semiconductor market as US eyes new China chip curbs
* Household debt rose above $16 trillion in Q2 for the first time
* US gasoline prices continue to ease, nearing $4 a gallon
* US job openings fell to nine-month low in June:

Federal Reserve may be able to tame inflation without causing a US recession in the US economy, says St. Louis Fed President James Bullard in prepared remarks for a speech. “Since modern central banks have more credibility than their counterparts in the 1970s, it appears that both the Fed and the ECB may be able to disinflate in an orderly manner and achieve a relatively soft landing.”

US economy still posting growth through June, despite despite recent slowdown, based on a set of business-cycle indicators updated this week in The US Business Cycle Risk Report. Forward estimates also suggest that the economy will sidestep an NBER-defined recession at least through August.

Real US M2 money growth falls deeper into negative terrain in June, another sign that the Federal Reserve’s monetary policy is becoming increasingly hawkish. This broad measure of money supply fell 2.8% vs. year-earlier level–steepest decline in several decades.