The Dollar Still Dominates
The centrality of the U.S. dollar in world affairs is mainly determined by economic factors, but geopoliticalforcesarethreateningtoweakenitstop spot in the currency hierarchy. U.S. sanctions in response to Russia’s invasion of Ukraine have pushed some countries to further reduce their reliance on the dollar. The geopolitical tug of war between allies and foes, liberal and illiberal states carrieshighstakes.
A more fragmented global economy in which securitypartnershipsdetermineeconomicrelations is coming into view. But an end to the dollar’s dominanceisstillunlikely.Countriesparticipatingin thesanctionsagainstRussiaorbenefitingfromU.S. currency coercion aimed at upholding the liberal international order’s core principle of nonaggressionhaveno incentives todiversifyaway from the dollar. Even countries opposing Western sanctions are likely to stick with the dollar to preserve their own security and U.S. security guaranteesinahardeninggeopoliticalclimate.
Thedollaristhepreferredcurrencyofgovernments, accounting for approximately 60 percent of central bankreservesinlate2022,comparedwiththeeuro’s 20percent,andtheyen’ssixpercent.
Souce:
https://www.foreignaffairs.com/united-states/dollar-still-
U.S. Economy Expanded in February for First Time in Eight Months
The U.S. economy unexpectedly returned to growth in February after seven months contracting, a sign of resilience even as higher interestrateshitactivity,accordingtodatafroma purchasingmanagerssurveyreleasedTuesday.
The S&P Global Flash Composite Output Index, which gauges activity in the manufacturing and servicessectors,increasedto50.2inFebruaryfrom 46.8 in January. This is the second monthly improvement in the index, exceeding the 50.0 mark which signals expansion for the first time sinceJune.
Still, the reading points to a marginal expansion which was led by an uptick in the services sector, a rebound that could partly be attributed to unseasonablywarmweather,thereportsaid.
Thesurveyshoweddemandcontinuedtocontract in February, albeit at a softer pace. The flash U.S. servicesPMIincreasedto50.5from46.8,aneightmonth high and above the 47.0 consensus forecast from economists polled by The Wall StreetJournal.
US Housing Market Posts $2.3 Trillion Drop, Biggest Since 2008
Real estate brokerage Redfin said that the total valueofUShomesdeclinedbyUS$2.3trillion,or4.9 percent,inthesecondhalfof2022.Thiscameafter a peak of US$47.7 trillion in June 2022 and was the largest drop in percentage terms since the 2008 housing crisis, when home values slumped by 5.8 percentfromJunetoDecember.
Homebuyers are already facing record-high prices. They took an additional hit from mortgage rates that more than doubled last year. With less competitioninthemarket,themediansalepriceof US homes was US$383,249 in January. This was downfromapeakofUS$433,133inMay2022.
How much homeowners lost depends on where they bought. The biggest declines were in pricey cities, such as San Francisco and New York. On the other hand, buyers who moved to pandemic boomtowns are still seeing returns on their investments,particularlyinFlorida.
To be sure, home prices are not collapsing. In December 2022, the total value of US houses was still6.5percenthigherthanitwasayearearlier. Souce: https://www.businesstimes.com.sg/property/us-housing-market-posts-us23-trillion-
US Banking Regulators Warn Banks About Crypto Liquidity Risks
The Federal Reserve and other U.S. banking agencies are warning banks that crypto poses significant liquidity dangers, according to a joint statement issued Thursday, further reinforcing their campaign to generally steer lenders away fromdigitalassets.
While the agencies – which also included the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. – insist that it’s not illegal for U.S. banks to engage in cryptocurrency activities, this latest in a series of formal cautionary statements makes it clear that any lender dabbling in crypto will have a lot of explainingtodotoitsregulators.
The agencies’ joint statement points out that cryptofirms’bankdepositscouldbeunstableand driven by “crypto-asset sector dynamics,” even if thecompanyitselfisstable.
“Such deposits can be susceptible to large and rapid inflows as well as outflows, when end customers react to crypto-asset-sector-related market events, media reports, and uncertainty,” theregulatorssaid
No cow needed: Oat and soy can be called milk, FDA proposes
FoodandDrugAdministrationofficials issuedguidancethatsays plant-basedbeveragesdon'tpretendto befromdairyanimals—andthatU.S.consumersaren'tconfusedbythedifference.
DairyproducersforyearshavecalledfortheFDAtocrackdownonplant-baseddrinksandotherproducts thattheysaymasqueradeasanimal-basedfoodsandcloudtherealmeaningof"milk."
Under the draft rules, the agency recommends that beverage makers label their products clearly by the plantsourceofthefood,suchas"soymilk"or"cashewmilk."
Therulesalsocallforvoluntaryextranutritionlabelsthatnotewhenthedrinkshavelowerlevelsofnutrients than dairy milk, such as calcium, magnesium or vitamin D. They would continue to allow labels that note whenplant-baseddrinkshavehigherlevels.Fortifiedsoymilkistheonlyplant-basedfoodincludedinthe dairycategoryofU.S.dietaryguidelinesbecauseofitsnutrientlevels.
Thenew guidelines are aimedatproviding consumersclearnutrition information, FDA CommissionerDr. Robert Califf said in a statement. The draft rules do not apply to nondairy products other than beverages, suchasyogurt.
Souce:
https://www.ksl.com/article/50585030/no-cow-needed-oat-and-soy-can-be-called-milk-fda-proposes