WSJ Interview With Chicago Fed's Goolsbee; Cleveland Fed Is Seeking a New President; Fed Chair Powell to Speak at IMF Conference Today By James Christie

Good day. Federal Reserve Bank of Chicago President Austan Goolsbee told The Wall Street Journal in an interview that Fed officials will need to keep a close watch on the effects of higher longer-term bond yields. "The historical evidence suggests that long rates, even more than short rates, have a very substantial effect on real economic performance in a number of predictable areas-construction, investment, consumer durables, " Goolsbee said. "If that is sustained, the Fed will have to think about the tightening impact of those credit conditions on economic performance, and would there be dangers of overshooting." Meanwhile, at the Cleveland Fed, a nationwide search is in the works for a new president of the regional Fed bank as Loretta Mester approaches retirement. And later today, Federal Reserve Chair Jerome Powell will speak on an International Monetary Fund panel about monetary-policy challenges, starting at 2 pm E.T.

Now on to today's news and analysis.

Top News Goolsbee: Fed Will Need to Monitor Risks of Overshooting on Rates

A Federal Reserve official said the central bank will need to pay close attention to the effects of higher longer-term bond yields to make sure they don't slow the economy more than expected over the coming year.

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said in an interview Wednesday that the recent run-up of longer-term borrowing costs could become more important as the central bank shifts its focus from how high to raise interest rates and toward how long to hold them near a 22-year high.

Cleveland Fed Searching for Next Chief as Mester Nears Retirement

The Federal Reserve Bank of Cleveland has launched a search for a new president and chief executive, as Loretta Mester reaches the central bank's mandatory retirement age. Her tenure will conclude on June 30, 2024 .

Some BOC Officials Believed Rates Would Need to Rise, Minutes Say

The Bank of Canada held its policy rate unchanged last month at 5% even though some senior officials believed another rate increase would eventually be necessary to damp inflation, according to minutes of central bank deliberations ahead of the Oct. 25 decision. The minutes, published Wednesday, suggest a compromise emerged among the six members of the Bank of Canada's governing council, in which they agreed to exhibit patience and keep rates unchanged, and clearly state in the rate-policy statement the central bank was prepared to raise its policy rate further should inflation fail to slow. (Dow Jones Newswires)

Analysis: BOE Could Cut Interest Rates by More Than The Fed

The Bank of England could cut interest rates by more than the U.S. Federal Reserve, while U.S. rates should remain higher for longer than both the U.K. and eurozone, Alex Brazier, deputy head of the BlackRock Investment Institute, told Dow Jones Newswires. "The BOE may well ultimately end up cutting [rates] by more than the Fed because fiscal policy is looser in the U.S.," he said in an interview. The U.K. economy has flatlined in the past 18 months and Brazier expects it will stay weak in the coming 18 months under the weight of restrictive interest rates.

U.S. Economy U.S. Population Projected to Shrink by 2100, Census Figures Show

America's long streak of population growth is expected to come to an end. Census Bureau projections released Thursday show that, under the most likely scenario, the U.S. will stop growing by 2080 and shrink slightly by 2100. It is the first time that the bureau has projected a population decline as part of its main outlook for the coming decades.

Hollywood Actors Reach Deal With Studios, Streamers to End Strike

Striking Hollywood actors reached a tentative agreement with major studios and streamers Wednesday that could clear the way for the entertainment industry to restart its content factory after six months of labor strife.

Las Vegas Strip Workers Reach Tentative Labor Deal with Caesars

The Culinary and Bartenders unions said Wednesday that after 20 consecutive hours of negotiations, Caesars tentatively agreed to a new five-year contract covering about 10,000 workers at nine Las Vegas properties.

The $2 Million Coal Mine That Might Hold a $37 Billion Treasure

Twelve years ago, former Wall Street banker Randall Atkins bought an old coal mine outside Sheridan, Wyo. for about $2 million. He thought the mine might eke out a profit. Instead, Atkins recently learned it could bring a windfall .

Key Developments Around the World China Falls Back Into Deflation, Reviving Fears Over Weak Recovery

China slipped back into deflation in October after a brief reprieve, highlighting how hard it is for Beijing to reinvigorate domestic demand. A string of stimulus measures so far have failed to boost consumer confidence.

The Land Where Inflation Is Good News

Higher energy and food costs triggered by the Ukraine war, coupled with Covid-era supply-chain snags, are bringing a surprise end to the long, bleak era of Japanification-the economic curse of falling prices and stagnant growth.

U.K. Hits Russian Gold, Oil Sectors With New Sanctions Package

The U.K. government on Wednesday sanctioned 29 entities and individuals operating in and supporting Russia's gold and oil sectors, in an effort to cut off revenue streams funding its war in Ukraine.

Qatar Pursues Oil Deal After Brokering End to Venezuela Sanctions

Qatar quietly hosted talks between U.S. and Venezuelan officials that led to a breakthrough when Washington lifted sanctions on Venezuela's energy industry. Now the Arab state, and a Qatari conglomerate, are trying to cash in .

Financial Regulation Roundup Fed Probes Morgan Stanley's International Wealth Practices

Morgan Stanley's wealth-management arm is being scrutinized by the Federal Reserve, which is looking into whether the bank has sufficient controls in place to prevent rich foreign customers from laundering money.

Former NYSE President in Talks to Reboot FTX Exchange

A company run by former New York Stock Exchange President Tom Farley is among three suitors vying to buy the remnants of FTX, as the auction for the collapsed cryptocurrency exchange reaches its final stages.

Citigroup Fined for Discriminating Against Armenian Americans

Citigroup was fined more than $25 million for discriminating against Armenian Americans and blocking them from getting credit cards , with a special emphasis on Glendale, Calif., known as "Little Armenia," the CFTC said Wednesday.

Hong Kong Tries to Figure Out How to Rein In Loose-Lipped Bankers

The Securities and Futures Commission of Hong Kong wants to tighten rules governing what banks and brokers can say to investors when discussing potential transactions, including bond and share sales.

Forward Guidance Thursday (all times ET)

8:30 a.m.: U.S. weekly jobless claims

11 a.m.: MNI Webcast with Richmond Fed's Barkin

12 p.m.: Bank of Canada's Rogers speaks to Advocis Vancouver

12:30 p.m.: ECB's Lagarde inaugurates House of the Euro

2 p.m.: Fed's Powell speaks in policy panel discussion at research conference in Washington

Friday

2 a.m.: U.K. industrial production for September

7:30 a.m.: ECB's Lagarde in fireside chat at Financial Times' Global Boardroom 2023 in London

Research Goldman's Chief Economist Downplays Recession Fears

Economists worried about a recession next year often cite the lagged effect of the Federal Reserve's 11 increases in interest rates over the past 20 months. But Goldman Sachs's chief economist, Jan Hatzius, isn't concerned [https://www.marketwatch.com/story/goldmans-chief-economist-downplays-recession-fears-from-past-fed-rate-hikes-f1e5f56b#::text='Biggest%20negative%20impact%20is%20already%20behind%20us%2C'%20Hatzius%20says&text=Economists%20worried%20about%20a%20recession, Jan%20Hatzius%2C%20is%20not%20concerned.]. In an interview Wednesday with CNBC, Hatzius said he thinks "the biggest negative impact is already behind us." The question of the lagged effects of prior hikes is one of the clearest dividing lines among Fed officials. In general terms, Fed officials who think the central bank has raised interest rates enough believe that the economy is still going to be hit by these "lagged" effects.

-Greg Robb

Credit-Card, Auto-Loan 'Stress' Rises in the U.S.

Consumers are showing some signs of stress even as the unemployment rate-at least for now-remains historically low, according to Renaissance Macro Research. "Credit quality is worsening," said Neil Dutta, head of economics at RenMac in a note Wednesday. He pointed to a modest deterioration in credit quality for credit cards and auto loans, citing the Federal Bank of New York's most recent household debt and credit report. The portion of auto-loan balances that are "seriously delinquent," meaning payments are late by at least 90 days, jumped to 2.53%, said Dutta. That's the highest since the third quarter of 2010, he said, while "seriously delinquent" credit-card balances increased to 5.78%.

-Christine Idzelis

Canada's Economy Points to Waiting Game on Rates

The summary of deliberations from the latest Bank of Canada meeting shows policy makers are watching growth clearly struggle, but they are also nervously eyeing core inflation trends hold above their target. "It's a waiting game now, and it sounds like inflation will either break more convincingly or the bank will be willing to go back to the rate-hike well," says BMO senior economist Robert Kavcic, who still expects the former will play out.

-Robb Stewart

Commentary Robinhood No Longer Looks Like a Steal

One of the biggest assets online brokerage Robinhood Markets has had going for it has been its cash pile , but with the Federal Reserve hitting the pause button, that uplight has started to fade, Telis Demos writes.

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11-09-23 0716ET