Economists expect that US inflation will remain subdued – below the Federal Reserve’s 2.0% target — in Thursday’s update on consumer prices for August. If the forecast is right, the news will continue to stoke expectations that the central bank will delay the next rate hike into next year.
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Hurricane damage will temporarily slow US economic growth: AP
Irma’s damage expected to be less than forecast: Bloomberg
Consumer inflation outlook for year ahead holds steady at 2.5%: NY Fed
UN Security Council tightens sanctions on North Korea: NY Times
Trump considers more aggressive Iran strategy: Reuters
MSCI All Country World stock index touches record high: Reuters
US stocks (S&P 500) close at record high: Reuters

The US Dollar Index last week slumped to its lowest level in over two-and-a-half years, boosting returns in foreign bonds. Non-dollar corporate bonds topped the performance list among the major asset classes, based on a set of exchange traded products. Notably, the top-four market performers for last week are offshore fixed-income funds.
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Hurricane Irma will take a bit out of Florida’s economy: CNN Money
Will global warming increase hurricane risk? Bloomberg
Inflation in China rises to fastest pace since Jan: RTT
Will oil rebound to $80/bbl? Fuhgettaboutit: Oil.com
GDPNow’s US Q3 GDP forecast ticks up to 3.0%: Atlanta Fed
NY Fed US Q3 GDP now cast eases to 2.1%: NY Fed
US Dollar Index fell to lowest since Jan 2015 last week: CNBC

The Sep. 10 edition of The US Business Cycle Risk Report has been published and emailed to subscribers.

● The Myth of Independence: How Congress Governs the Federal Reserve
By Sarah Binder and Mark Spindel
Review via Publishers Weekly
Binder and Spindel have written an extremely thorough study of the Federal Reserve that shows how the institution, while in theory insulated from politics, is in reality anything but. Binder and Spindel persuasively argue that Congress and the Federal Reserve are interdependent entities. By giving the Fed the power to control monetary policy and steer the economy, lawmakers gain their own convenient scapegoat when the economy sours. Likewise, the Fed relies on Congress for political support to implement “unpopular but necessary” policies.
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Even better, there’s a weekend bonus: Subscribe for one year by Sunday, Sep. 10, 2017 and you’ll receive 5 additional issues at no extra charge.

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Technology shares have overtaken financial stocks as the top sector performer for the trailing one-year period, based on a set of ETFs. The formerly high-flying financials have been clobbered recently, in part due to worries that falling bond yields and the blowback due to hurricanes striking the US will take a bite out of earnings for banks and insurers. Tech shares, by contrast, have been relatively steady this week, holding on to nearly all of the sector’s 2017 rally.
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Florida braces for Hurricane Irma: WaPo
Jobless claims rise sharply due to Hurricane Harvey: Bloomberg
Govt’s services survey suggests Q2 growth will be revised up: Reuters‘
European Central Bank holds interest rates steady… for now: CNBC
German industrial output flat in July: MarketWatch
China’s export growth slows in August: RTT
US Treasury yield edges down to 10-month low: MarketWatch

The yield difference on the benchmark 10-year Treasury Note less the 3-month T-bill fell to 1.03 percentage points on Wednesday (Sep. 6), the lowest since Jan. 2008, according to daily data published by Treasury.gov. The latest dip pushed the spread below the previous post-recession low of 1.08 set in July.
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