USA OUTLOOK OCTOBER 09 TO 13, 2023

USA OUTLOOK WEEKLY NEWSLETTER October 09 to 13

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October 09, 2023

October 10, 2023

California becomes first US state to ban 4 potentially harmful chemicals in food.

California Governor Gavin Newsom has signed a landmark law aimed at banning red dye No. 3 and other potentially harmful food additives in consumer good. On Saturday, the Golden State became the first in the country to forbid the use of the ingredients found in many popular candies, drinks and more, according to the Environmental Working Group, a nonprofit environmental health organization that cosponsored the law with Consumer Reports.

Photo: US News

2 Federal Reserve Officials Say Spike in Bond Yields May Allow Central Bank to Leave Rates Alone Two Federal Reserve officials have suggested that the central bank may leave interest rates unchanged at its next meeting in three weeks. Since late July, the yield, or rate, on the 10-year U.S. Treasury note has jumped from around 4% to about 4.8%, a 16-year high. The run-up in the yield has inflated other borrowing costs and raised the national average 30-year mortgage rate to 7.5%, according to Freddie Mac, a 23-year high. Business borrowing costs have also risen as corporate bond yields have accelerated.

Potassium bromate is added to baked goods to help dough strengthen and rise higher. In some beverages, brominated vegetable oil emulsifies a citrus flavoring, preventing separation.

Propylparabens are used for antimicrobial food preservation. Nearly 3,000 products use red dye No. 3 as an ingredient, including sweets such as Skittles, Nerds and Trolli gummies; protein shakes; instant rice and potato products; and boxed cake mixes, according to the Environmental Working Group’s Eat Well Guide.

Philip Jefferson, vice chair of the Fed's board and a close ally of Chair Jerome Powell, said in a speech Monday to the National Association for Business Economics that he would “remain cognizant” of the higher bond rates and “keep that in mind as I assess the future path of policy.”

Since March of last year, the Fed has raised its benchmark short-term rate 11 times, from near zero to roughly 5.4%. The rate hikes have been intended to defeat the worst bout of inflation in more than 40 years. But they have also led to much higher borrowing rates and sparked worries that they could trigger a recession.

Source: https://www.usnews.com/news/business/ articles/2023-10-09/2-federal-reservehttps://www.usnews.com/news/business/articles/2023-10-09/2-federal-reserveofficials-say-spike-in-bond-yields-mayofficials-say-spike-in-bond-yields-may-allow-central-bank-to-leave-rates-alone allow-central-bank-to-leave-rates-alone

Photo: CNN News.

Source: https://edition.cnn.com/2023/10/09/health/california-governor-bans-red-dye-no-3wellness/index.html

October 11, 2023

October 12, 2023

How U.S. soybeans influence global economics Treasury yields rose Thursday as investors weighed fresh economic data pointing to stubbornly high inflation. The yield on the 10-year Treasury was higher by about 11 basis points at 4.707%, off its lows from earlier in the session. The 2-year Treasury yield was last trading at 5.069% after rising by 6 basis points. Yields and prices move in opposite directions and one basis point is equivalent to 0.01%.

Photo: REUTERS

Gasoline, food drive US producer prices higher; core inflation cools U.S. producer prices increased more than expected in September amid higher costs for energy products and food, but underlying inflation pressures at the factory gate continued to abate.

Yields extended gains, pushing prices to their lows of the day, after a 30-year Treasury bond auction that saw weak demand. The yield at the auction was 4.837%, the highest since May 2007. Indirect bidders, which include major central banks, took around 65% of the auction.

That’s below an average of 69%. September’s CPI showed a rise of 0.4% on a month-over-month basis, and 3.7% from a year ago, according to the Labor Department on Thursday. That was more than the rise of 0.3% and 3.6%, respectively, anticipated by economists polled by Dow Jones.

The mixed report from the Labor Department on Wednesday was published ahead of the release on Thursday of September's consumer price index data, which is expected to show inflation moderated last month. The report is being closely watched for clues on whether the Federal Reserve will raise interest rates against the backdrop of higher U.S. Treasury yields and conflict in the Middle East.

The producer price index for final demand rose 0.5% last month after accelerating by an unrevised 0.7% in August. The economy continues to forge ahead despite the hefty rate hikes, having created 336,000 jobs in September, the most in eight months and almost double the amount economists had expected in a Reuters survey.

Based on the PPI data, economists estimated that the core PCE price index rose 0.2% in September after edging up 0.1% in August. That would push the annual increase in the core PCE price index to 3.7% in September from 3.9% in August.

Source: https://www.reuters.com/markets/us/us-producer-prices-increase-septemberhigher-energy-costs-2023-10-11/

Photo: CNBC Source: https://www.cnbc.com/2023/10/12/us-treasury-yields-investors-await-consumerinflation-data.html

October 13, 2023

Photo: US News

Biden Awards $7 Billion for Clean Hydrogen Hubs Across the Country to Help Replace Fossil Fuels The Biden administration has selected clean-energy projects from Pennsylvania to California for a $7 billion program to kickstart development and production of hydrogen fuel. Clean-energy projects in seven states from Pennsylvania to California have been selected by the Biden administration for a $7 billion program to kickstart development and production of hydrogen fuel, a key component of President Joe Biden's agenda to slow climate change.

His goal is to establish seven regional hydrogen hubs to help replace fossil fuels such as coal and oil with cleaner-burning hydrogen as an energy source for vehicles, manufacturing and generating electricity. The seven hubs selected by the administration will spur more than $40 billion in private investment and create tens of thousands of good-paying jobs, the White House said, including many high-paying union jobs. The White House calls clean hydrogen “essential to achieving the president’s vision of a strong clean energy economy" and net-zero greenhouse gas emissions in the U.S. by 2050.

Nearly every state had joined at least one proposed hub, and many have been working together, hoping to reap the economic development and thousands of jobs they would bring. Big fossil fuel companies, renewable energy developers and researchers in university and government labs are involved, too.

Environmental groups are skeptical, arguing that while hydrogen is a clean-burning source of power, it takes a great deal of energy to produce.

Source: https://www.usnews.com/news/business/articles/2023-10-13/biden-awards-7-billionfor-clean-hydrogen-hubs-across-the-country-to-help-replace-fossil-fuels