MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

CBI Price Expectations for Three Months Ahead Lowest Since December 2020

MNI: UK JUL CBI INDUSTRIAL TRENDS TOTAL ORDERS -32

Broad-Based IFO Weakness Reinforces Narrative of Recovery Stall

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Powell On Productivity Forecasts and Neutral Rate Estimates

FED
  • Estimating longer-term productivity is very, very uncertain. People lowered their longer run growth expectations of 1.8%, something below 2%, with expectations that productivity growth would be 1-1.5%. That’s a pretty good place to be. We’ve had higher productivity growth recently and the question is whether it’s going to be sustained. It is productivity growth that lifts all boats. It’s unknowable what we need to see to get 1-1.5% productivity. It’s too soon for AI to be affecting the productivity numbers but the logic is that it could increase productivity.
  • Neutral rate estimates: The question of what will be the equilibrium neutral interest rate going forward doesn’t really matter for policy today. We’re really asking about once the pandemic is well and truly behind us and we’re well into the AI investment boom and the effects of AI, and what it will look like. It doesn’t really matter that much for getting inflation down to 2% while keeping the economy growing and the labor market strong.
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