Overseas Headlines – May 19, 2023

May 19, 2023

United States:

US Economy Headed for Downturn in Second Half of 2023, Forecasters Say

Forecasters see the US economy continuing to cool in the current quarter before a further slowdown in consumer spending and pullback in business investment cause the economy to shrink in the second half of the year.

Gross domestic product is seen rising an annualized 0.5% in the second quarter, according to the latest Bloomberg monthly survey of 70 economists. While slightly better than the 0.2% rate expected a month ago, reflecting an upward adjustment in household spending to a still-weak 1%, the latest projection is less than half the first-quarter pace.




Lagarde Sees Key Juncture as ECB Needs Sustainably High Rate

The European Central Bank is at a key juncture because it needs to keep persevering with its monetary policy just as consumer-price growth shows signs of slowing, President Christine Lagarde said.

“Now is a moment which is also quite critical because inflation is beginning to go down,” she said in an interview with Spanish state-run channel TVE broadcast Friday. “We are beginning to see efficiency of measures, but we still need to have high and sustainably high interest rates.”




China’s Yuan Jumps After Central Bank Vows to Curb Speculation

China’s yuan jumped on Friday after the country’s central bank moved to shore up the currency following a recent selloff, vowing to curb speculation and calling for more stability in the foreign exchange market.

The People’s Bank of China and the foreign exchange regulator will “strengthen market expectation guidance and take actions to correct pro-cyclical and one-way market behaviors when necessary,” according to a statement Friday.




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