Macro Briefing: 8 February 2023

* Biden outlines his economic agenda in State of the Union speech
* Death toll from Syria-Turkey quake keeps rising, close to 10,000
* Fed’s Powell gives hawkish speech but investors stay bullish
* Shipping giant Maersk expects global trade to shrink by as much as 2.5% in 2023
* Inflation’s “worst is behind us”, says Charles Schwab’s top fixed-income strategist
* Zoom is latest tech firm to announce big layoffs
* US trade deficit widens in December–reaches record high for 2022
* US junk bond yield spread stays low despite surge in tighter lending standards:

Federal Reserve Chair Jerome Powell lays out rationale for staying hawkish. Expecting that inflation “will go away quickly and painlessly…is not the base case,” he said at the the Economic Club of Washington, DC on Tuesday. “The base case for me is that…we’ll have to do more rate increases, and then we’ll have to look around and see whether we’ve done enough.” He also said the “disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy.” Meanwhile, the policy-sensitive 2-year US Treasury yield ticked up yesterday to 4.47%, the highest since November: