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FirstFT: US consumer prices rise despite Fed rate hikes

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The The rapid rise in consumer prices in the United States It showed no signs of abating in September, which led to a swing trading session on Wall Street, as investors weighed whether the Federal Reserve would have to become more aggressive to slow rampant inflation.

A measure of core CPI inflation, which strips out volatile energy and food costs, rose 6.6 percent year-on-year last month, faster than the 6.3 percent rate in August — and its fastest pace in four decades — suggesting core inflation. The pressures are still accelerating.

The increase in the overall CPI last month, including energy and food, rose 8.2 percent from a year earlier, unchanged from the 8.3 percent annual increase recorded in August.

Investors and economists were looking for signs that the Federal Reserve may start to slow the pace of interest rate hikes. However, yesterday’s CPI data indicated that no such movement was in immediate sight.

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Economists say It will also likely push the US central bank to continue its massive rate increases beyond that point and at least until there is more clear evidence that price pressures are easing.

Thanks for reading FirstFT Americas. Here’s the rest of the day’s news – Abby

1. January 6, the committee voted to subpoena Donald Trump The congressional committee that investigated last year’s attack on the US Capitol voted unanimously Subpoena issued to former President Donald Trump. And this is only the seventh time in history that Congress has issued a subpoena for a current or former president, according to legal historians.

2. The United States rejects Saudi Arabia’s defense of OPEC oil production cuts as a “fabrication”. The White House on Thursday Saudi Arabia’s allegations rejected That the recent OPEC+ production cuts were not relevant to the kingdom’s position on the Russian invasion of Ukraine and were the result of a unanimous decision by the cartel members. “The Saudi State Department can try to skew or skew, but the facts are simple,” said John Kirby, a spokesman for the US National Security Council.

3. The world’s top chip equipment suppliers have stopped working with China Major chip equipment suppliers have Sales suspension of semiconductor manufacturers in ChinaNew US export controls are disrupting China’s tech industry. Lam Research, Applied Materials and KLA Corporation have all taken immediate measures to comply with the rules banning the export of US semiconductor equipment to China that cannot be supplied by any foreign competitor.

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4. Delays at US custody bank exacerbate UK pension sales The incubator lender was the Northern Trust drenched in margin calls During the gold market turmoil, which hampered the ability of pension funds to raise funds, according to people involved in the trades.

5. Kwasi Quarting leaves Washington early to tackle the UK’s economic crisis UK consultant Left the IMF meetings last night for London Prime Minister Liz Truss has also come under increasing pressure to tear up the government’s “mini” budget. Expectations are growing in London and in financial markets that Kwarteng will soon announce a turnaround in his £43 billion unfunded tax cut package.

Coming days

bank profits JPMorgan, Morgan Stanley, Citigroup and Wells Fargo will report earnings before the opening bell. It is expected to own the largest US banks collectively aside About $4.5 billion in the third quarter to cover potential bad loans in a sign that they are concerned about the US economy.

Linear chart of $1 billion loan loss provisions shows US banks begin to hoard loan loss provisions

Retail US retail sales – including spending on fuel, cars and food – are expected to continue to rebound in September even though inflation rose sharply, albeit at a slower rate than the previous month. Economists polled by Refinitiv expected a 0.2 percent increase last month compared to August. However, when autos are excluded, retail sales are expected to decline 0.1 percent.

Consumer confidence Consumer sentiment, a key economic indicator, is expected to improve slightly in the first half of October as the Fed continued aggressively raising interest rates To combat persistent high inflation. Analysts expect the preliminary reading of the University of Michigan’s consumer confidence index to rise to 59 for October, up from 58.6 in September.


Fedspeak Kansas City Fed President Esther George will discuss the future view on inflation and Fed rate hikes in a virtual conversation series on leveraged financing by Standard & Poor’s Global. Federal Reserve Governor Lisa Cook will participate in a separate talk on the side of the fire in front of the National Bankers Association, discussing the US economy, minority deposit institutions and wealth creation. Christopher Waller, another Federal Reserve Governor, will speak about central bank digital currency at the Harvard Law School symposium on digital currencies and national security swaps.

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What else are we reading

The housing shortage threatens to break the American dream Higher interest rates make housing in the United States less expensive. For young buyers, the broken market that prevents them from reaching the housing ladder is a key indicator of a broken American dream of living a better life than the previous generation, The Financial Times Editorial Board writes.

The metafirian revolution may devour the dead Mark Zuckerberg is so enamored with the promise of the metaverse that he renamed his company and bet his company on the idea. But it is still not clear if ordinary people know what it means, and there are good reasons to doubt that Meta will ever “own” metaverses, John Thornhill writes.

Qatar is counting down to the World Cup In just one month, Qatar will host the most prestigious event in international football. But the Gulf country is not known for its tourist attractions, and accommodation and recreational facilities are seen as a particular weak point. A rich gas country can do the trick?

The tragic consequences of the politicization of science in the United States Anti-vaccine positions are not the preserve of the American right, but the breadth and depth of politicization and polarization in the United States far exceeds what we see elsewhere in the developed world. John Byrne Murdoch writes.

Chart Showing Republicans Have Become an Anti-Science Party

Twentieth Congress of the Communist Party of China The Party’s 20th Congress, which opened in Beijing on Sunday, will unveil a new leadership that is set to be headed by Xi Jinping again. In doing so, the Congress would bring down the curtain on a two-decade period defined by orderly and predictable transitions from one party leader to another. What can we expect from the party convention?

life and arts


The moderate professor who broke with American conservatives Adrian Vermeule’s ideas are far-reaching Shedding light on the growing rift on the right about how to use power.

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Climate chart: an explanation – Identify the most important weather data for the week. Participation over here

long story short – The biggest stories and best reads in one smart email. Participation over here


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Economic

Coinbase says Apple blocked latest app release on wallet NFTs by Reuters

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© Reuters. FILE PHOTO: A representation of the cryptocurrency is seen in front of the Coinbase logo in this illustration taken March 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – Coinbase Global Inc said on Thursday that customers using Apple Inc’s (NASDAQ::) iOS will no longer be able to send non-fungible tokens (NFTs) to its wallet.

Coinbase (NASDAQ:) added in a tweet: “Apple’s claim is that gas fees required to send NFTs must be paid through an in-app purchase system, so they can charge you 30% of the gas fee.”

The 30% fee has been a point of contention between the world’s most valuable company and other app developers like Spotify (NYSE: ) and “Fortnite” maker Epic Games, which has accused the company of abusing its “monopoly.”

Apple did not immediately respond to a Reuters request for comment.

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UK regulator to investigate rising mobile phone and broadband prices

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The UK’s telecoms regulator has launched an investigation into whether telecoms companies were upfront with customers about price increases in a contract after complaints of a lack of transparency.

Ofcom will study whether mobile and broadband service providers made customers who signed a deal with the company between March 2021 and June 2022 sufficiently aware of changes to their pricing terms.

As inflation soared as the cost-of-living crisis intensified, telecom groups collapsed audit From the regulator and politicians about whether they acted enough to support struggling families and broke the rules of transparency. UK inflation hit a 41-year high of 11.1 percent in October.

Most operators chose to significantly increase their prices above the rate of inflation earlier this year, which boosted core revenue. For example, BT, Vodafone and EE raised their prices in line with the CPI, plus 3.9 percent.

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Ofcom He said he was concerned that such intra-contract price differences were not “sufficiently prominent or transparent” at the point of sale, as required by the regulator’s rules. If cases of non-compliance are identified, Ofcom may initiate an investigation into said operators.

said Lindsey Fossell, group director of regulator networks and communications.

Ofcom’s latest affordability report, published on Thursday, found that 32 per cent of households had problems paying for phone, broadband, pay TV or broadcast bills – more than double the level of April 2021.

It also found that 17 percent of households are currently cutting back on other spending, such as food and clothing, to afford telecom services — up from 4 percent in June 2021.

Dana Toback, chief executive of Hyperoptic, a broadband provider that chose not to raise its prices above inflation rates this year, said Ofcom’s investigation was “a huge step forward in preventing the consumer from harm caused by higher mid-price contracts”.

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This year’s Hyperoptic survey found that 60 percent of people were unaware that the price of their broadband would increase mid-decade.

“We work hard to make sure that the annual price increase is clearly defined and discussed at each registration or renewal,” said BT, which also owns EE, adding that the company also showed customers how price changes worked in the contract.

“We follow industry best practices, and will participate fully in the Ofcom programme,” she said.

Vodafone did not immediately respond to a request for comment.

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Georgieva of the International Monetary Fund to discuss the economy and Covid with Chinese authorities via Reuters

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© Reuters. International Monetary Fund Managing Director Kristalina Georgieva attends a press conference following a meeting at the Federal Chancellery in Berlin, Germany on November 29, 2022. REUTERS/Michel Tantosi

NEW YORK (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that she will travel to Beijing next week with heads of other international institutions to discuss China’s economic outlook and COVID-19 policies with the country’s leadership.

“This is the first time, and we hope we can sit down together and discuss the very pressing issues facing China and the world,” Georgieva told the upcoming Reuters conference.

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