US ECONOMY & POLITICS

Fed’s Waller Says Central Bank Can ‘Proceed Carefully’ With Rate Hikes – Bloomberg, 9/5/2023

• Federal Reserve Governor Christopher Waller said policymakers can afford to “proceed carefully” with interest-rate increases given recent data showing inflation continuing to ease.
• “There is nothing that is saying we need to do anything imminent anytime soon,” Waller said in an interview on CNBC Tuesday, signaling he supports holding rates steady at the central bank’s next meeting. “We can just sit there and wait for the data.”
• “The data last week clearly showed the job market is starting to soften,” Waller said.
• “If we can keep inflation coming down for the next few months, on trend at like two tenths a month, we are in pretty good condition.”
• The Fed governor said he needed the data to show “a couple of months continuing along this trajectory before I say we’re done” raising interest rates.
• Cleveland Fed President Loretta Mester, who has also called for tighter policy to curb price pressures, said the Fed may need to raise rates “a bit higher.”

Chinese Gate-Crashers at U.S. Bases Spark Espionage Concerns – Wall Street Journal, 9/5/2023

• Chinese nationals, sometimes posing as tourists, have accessed military bases and other sensitive sites in the U.S. as many as 100 times in recent years, according to U.S. officials, who describe the incidents as a potential espionage threat.
• The Defense Department, FBI and other agencies held a review last year to try to limit these incidents, which involve people whom officials have dubbed gate-crashers because of their attempts—either by accident or intentionally—to get onto U.S. military bases and other installations without proper authorization.
• They range from Chinese nationals found crossing into a U.S. missile range in New Mexico to what appeared to be scuba divers swimming in murky waters near a U.S. government rocket-launch site in Florida.
• The incidents, which U.S. officials describe as a form of espionage, appear designed to test security practices at U.S. military installations and other federal sites.
• Officials familiar with the practice say the individuals are typically Chinese nationals pressed into service and required to report back to the Chinese government.
• Government officials referred queries to the Federal Bureau of Investigation, which said: “The Chinese government is engaged in a broad, diverse campaign of theft and malign influence without regard to laws or international norms that the FBI will not tolerate.”

Jill Biden Tests Positive for Covid-19 – Wall Street Journal, 9/5/2023

• First lady Jill Biden tested positive for Covid-19 and is experiencing “mild symptoms,” her office said Monday.
• President Biden tested negative on Monday evening following his spouse’s positive result, according to the White House.
• “The president will test at a regular cadence this week and monitor for symptoms,” White House press secretary Karine Jean-Pierre said in a statement.
• The Bidens were together in Delaware over the weekend.
• The president returned to the White House on Monday, while a spokeswoman for the first lady said she would remain at their home in Rehoboth Beach.

Biden’s Age, Economic Worries Endanger Re-Election in 2024, WSJ Poll Finds – Wall Street Journal, 9/5/2023

• Voters overwhelmingly think President Biden is too old to run for re-election and give him low marks for handling the economy and other issues important to their vote, according to a new Wall Street Journal poll that offers a stark warning to the 80-year-old incumbent ahead of the 2024 contest.
• The negative views of Biden’s age and performance in office help explain why only 39% of voters hold a favorable view of the president. In a separate question, some 42% said they approve of how he is handling his job, well below the 57% who disapprove.
• And Biden is tied with former President Donald Trump in a potential rematch of the 2020 election, with each holding 46% support in a head-to-head test.
• Voters in the survey rated Trump as less honest and likable than Biden, and a majority viewed Trump’s actions after his 2020 election loss as an illegal effort to stop Congress from declaring Biden the proper winner.
• Although the candidates are only three years apart, 73% of voters said they feel Biden is too old to seek a second term, compared with 47% of voters who said the same of the 77-year-old Trump. Two-thirds of Democrats said Biden was too old to run again.
• 58% of voters say the economy has gotten worse over the past two years, whereas only 28% say it has gotten better, and nearly three in four say inflation is headed in the wrong direction. Those views were echoed in the survey by large majorities of independents, a group that helped deliver Biden’s victory over Trump in the 2020 presidential race.

EUROPE & WORLD

Huawei Teardown Shows Chip Breakthrough in Blow to US Sanctions – Bloomberg, 9/5/2023

• Huawei Technologies and China’s top chipmaker have built an advanced 7-nanometer processor to power its latest smartphone, a sign Beijing is making early progress in a nationwide push to circumvent US efforts to contain its ascent.
• Huawei’s Mate 60 Pro is powered by a new Kirin 9000s chip that was fabricated in China by Semiconductor Manufacturing International Corp., according to a teardown of the handset that TechInsights conducted for Bloomberg News.
• The processor is the first to utilize SMIC’s most advanced 7nm technology and suggests the Chinese government is making some headway in attempts to build a domestic chip ecosystem, according to the research firm.
• Much remains unknown about SMIC and Huawei’s progress, including whether they can make chips in volume or at reasonable cost. But the Mate 60 silicon raises questions about the efficacy of a US-led global campaign to prevent China’s access to cutting-edge technology, driven by fears it could be used to boost Chinese military capabilities.
• With its export controls last year, the US administration tried to draw a line at preventing China from getting access to 14nm chips, or about eight years behind the most advanced technology.
• Apple’s current iPhones are built at 4nm and next week it will introduce a new flagship iPhone powered by a 3nm chip

ECB Says Consumer Inflation Expectations Edged Up in July – Bloomberg, 9/5/2023

• Consumer expectations for euro-area inflation inched up in July, remaining above the European Central Bank’s 2% target as officials ponder whether to hike or hold interest rates next week.
• Expectations for the next 12 months failed to slow, staying at 3.4%, the ECB said Tuesday in its monthly survey.
• For three years ahead, they rose to 2.4% from 2.3%.
• The results are the last major piece of price data before a Sept. 14 announcement that President Christine Lagarde has said will either extend or pause the ECB’s unprecedented campaign of monetary tightening.
• Numbers last week showed underlying inflation — a metric officials have been watching keenly — slowed in August, though the headline number held steady. At 5.3%, both are significantly above the ECB’s 2% goal.
• Money markets maintained tightening wagers, placing one-in-four odds on a rate increase to 4% next week while 15 basis points of hikes are priced by the year-end peak.

Russian Private Military Companies Move to Take Over Wagner Fighters – Wall Street Journal, 9/5/2023

• Security groups loyal to the Kremlin are moving to take control of Wagner’s military forces in Ukraine and Africa in the wake of the death of its founder, Yevgeny Prigozhin.
• Mercenary groups with ties to Russian security forces and oligarchs close to the Kremlin are moving to absorb thousands of Wagner soldiers.
• In doing so, the Kremlin is seeking to commandeer experienced troops for the war in Ukraine and retain the influence Wagner had earned in parts of Africa.
• Now, in the wake of Prigozhin’s death, the Kremlin is moving to take over Wagner’s valuable military assets, including many battle-tested and skilled soldiers who were deployed in Ukraine.
• Meanwhile, Prigozhin had built a presence in a half-dozen countries in the Middle East and Africa, counting some 6,000 fighters who often provide security to local political leaders, sometimes in return for access to valuable resources.
•  According to African and Western officials, the Kremlin is also beginning to take control of those units.

Modi Replaces ‘India’ in G-20 Invite in Nationalist Push – Bloomberg, 9/5/2023

• Prime Minister Narendra Modi’s government has replaced India with an ancient Sanskrit word in dinner invitations for the Group of Twenty summit, echoing his party’s Hindu nationalist push to erase from society what it deems to be colonial-era names.
• India’s President Droupadi Murmu was referred to “President of Bharat,” according to a copy of the dinner invitation sent to guests attending the G-20 seen by Bloomberg.
• Navika Gupta, the president’s deputy secretary, confirmed the invitation for dinner that’s scheduled for Sept. 9.
• Bharat is used interchangeably with India in the South Asian country’s constitution and often appears in popular songs and movies.
• In recent months, members in Modi’s Bharatiya Janata Party have pushed to use the Sanskrit version, saying the word India is a symbol of colonial slavery and should be removed from the constitution.
• Local media reported the government is looking at using a special session in parliament after the G-20 summit to change the South Asian country’s official name to Bharat.

More Ukrainians Who Fled War May Never Return, Study Shows – Bloomberg, 9/5/2023

• As many as 3.3 million Ukrainians — or almost 8% of the country’s pre-war population — may not return home after fleeing Russia’s invasion, a study showed.
• That estimate is up by as many as 600,000 since December, Ukraine’s Center for Economic Strategy said in a report issued Monday, citing a similar study then. The Kyiv-based think tank attributed the increase to the duration of the conflict, now in its 18th month, Russian attacks on Ukraine’s energy infrastructure and growing adaptation to life abroad.
• The longer the war lasts, the more Ukrainians who fled the conflict — as many as 6.7 million, according to CES — are likely to make temporary shelters their new home. Ukrainian women, who make up a majority of asylum seekers, will increasingly seek better prospects for their children, the study said.
• The study said the potential population drain could undercut economy, whose exports and infrastructure has been battered by the invasion, by sapping as much as 6.9% of potential output per year.
• The Economy Ministry has said the country, whose pre-war population was 43 million, is some 4.5 million short — including workers and entrepreneurs — of achieving a goal to double the size of the economy by 2032.

Man United Shares Plunge By Record on Uncertainty Over Sale – Bloomberg, 9/5/2023

• Manchester United shares fell by a record amount on Tuesday after a report in the Mail On Sunday that said the Glazer family is going to take the club off the market after failing to receive offers that match their asking price.
• Shares of the Premier League team fell as much as 21% — the most in its 11 years as a public company — cutting its market cap by about $700 million. As of last close, Manchester United was valued at $3.9 billion.
• The newspaper cited a source with long-standing close ties to the Glazers as saying the family may try to sell the club again in 2025 when improved conditions could attract more bidders. A spokesperson for Manchester United declined to comment on what they called “rumors and speculation,” when contacted by Bloomberg.
• Sheikh Jassim Bin Hamad J.J. Al Thani, a member of Qatar’s royal family, and Ineos head Jim Ratcliffe have made offers to buy Manchester United from the Glazers, who have owned the club since 2005.

Factmonster – TODAY in HISTORY

• Russia’s Peter the Great levied a tax on bearded men. (1698)
• The first Continental Congress met in Philadelphia. (1774)
• The Republic of Texas made military hero Sam Houston its first president. (1836)
• The Treaty of Portsmouth, which ended the Russo-Japanese War, was signed at the Portsmouth naval base in New Hampshire. (1905)
• Humanitarian Mother Teresa, who won a Nobel Peace Prize for her work with the poor, died in Calcutta, India, at age 87. (1997)