● Slow Burn: The Hidden Costs of a Warming World
Robert Jisung Park
Review via International Monetary Fund
As the world warms, anxiety over the effects continues to rise. A survey conducted by the United Nations found two-thirds of the global population believe that climate change is a global emergency. Fears abound on the risks of triggering tipping points in the climate system, such as the melting of ice sheets or the release of underground methane. But alongside future risks of climate catastrophe, there are also slow-burning effects already being felt around the globe. In Slow Burn: The Hidden Costs of a Warming World, environmental and labor economist R. Jisung Park documents these effects, from the expected, like worsening inequality, to the unexpected, such as declining productivity and economic growth.

Macroeconomic Announcement Premium
Hengjie Ai (University of Wisconsin-Madison), et al.
November 2023
The paper reviews the evidence on the macroeconomic announcement premium and its implications on equilibrium asset pricing models. Empirically, a large fraction of the equity market risk premium is realized on a small number of trading days with significant macroeconomic announcements. We review the literature that demonstrates that the existence of the macroeconomic announcement premium implies that investors’ preferences must satisfy generalized risk sensitivity. We show how this conclusion generalizes to environments with heterogeneous investors and demonstrate how incorporating generalized risk sensitivity affects economic analysis in dynamic setups with uncertainty.

* Biden urged to ban imports of Chinese-made electric cars to US
* IMF chief warns central banks against cutting interest rates too soon
* Gold rallies above $2400/oz.
* China’s exports fell sharply in March in US dollar terms
* US jobless claims fell last week, holding near multi-decade low
* US producer price inflation rises less than expected in March:

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The market continues to price the US 10-year Treasury yield well above its estimated “fair value,” based on the average of three models run by CapitalSpectator.com.

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* Investors adapt to a year that may witness no rate cuts
* Former Treasury Sec. Larry Summers says Fed may raise interest rates
* Has the business cycle been tamed? Some analysts are cautiously optimistic
* Rising oil prices could soon approach $100/bbl, BoA analyst predicts
* China’s consumer price inflation slowed more than expected in March
* US headline consumer inflation rises more than expected in March:

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Most slices of the US equity market continue to enjoy solid gains so far in 2024, but the momentum risk factor is still the upside outlier, based on a set of ETFs through Tuesday’s close (Apr. 9).

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The list of things that could derail risk-on sentiment is long and varied, but at the moment the crowd has shown little enthusiasm for abandoning winning trades. That’s the message via several pairs of ETF proxies for profiling the appetite for risk — a review that reaffirms that bullish enthusiasm remains strong, based on prices through Apr. 8, 2024.

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* Yellen won’t rule out new US tariffs on China’s green energy exports
* Uncertainty among economists continues to rise about prospects for rate cuts
* Short-Term consumer inflation expectations are stable at 3%: NY Fed survey
* Higher-for-longer interest rates could support US dollar
* Gold futures rise to yet another record high on Tuesday
* Rally in commodities reflects strong economy but also poses inflation risk:

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The consensus outlook is still projecting that the Federal Reserve will trim its target interest rate by the end of the year. But as economic growth endures and energy prices rise, market sentiment is pricing in fewer cuts. Meanwhile, some analysts are now saying the quiet part out loud: there may no rate cuts in 2024.

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* Expectations for rate cuts in 2024 continue to fade
* US and China to hold financial shock exercises, says Treasury Sec. Yellen
* Oil-price rise is main threat to US economy, warns Moody’s economist
* Global pushback rising against China’s heavily subsidized factory sector
* US offers TSMC up to $6.6 billion for Arizona chip factories
* Gold trades at new record high ahead of US inflation report on Wednesday
* US nonfarm payrolls trend growth strengthens in March:

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