AFP

It likely will be “appropriate soon” for the US central bank to slow the pace of interest rate increases, Federal Reserve Vice Chair Lael Brainard said Monday.

Her comments came as red-hot consumer prices, which have squeezed American households, showed signs of easing, and after the Fed delivered a fourth straight super-sized rate hike to cool the economy.

But with inflation still hovering close to the highest level in recent decades, the Fed still has “additional work to do both on raising rates” and tamping down prices, she said in an event with Bloomberg.

The closely-watched consumer price index released last week showed US inflation logged its lowest annual increase since January, fueling hopes that soaring costs will start to pull back.

The US central bank has moved forcefully to lower demand and bring inflation closer to its two percent target, raising the benchmark lending rate six times this year despite fears that it could trigger a recession.

But there is a growing chorus of voices, including some Fed officials, advocating for smaller steps in coming months.

– ‘More deliberate’ –

Brainard acknowledged that policymakers have raised rates “very rapidly” in recent months, and said it will take time for tightening to flow through to the economy.

“By moving forward at a pace that’s more deliberate, we’ll be able to assess more data and be better able to adjust the path of rates to bring inflation down,” she said.

Russia’s war in Ukraine this year has sent food and fuel prices soaring, and the annual inflation rate hit a blistering 9.1 percent in June — its highest in four decades — but slowed to 7.7 percent in October.

“I think the inflation data was reassuring preliminarily,” Brainard said.

Excluding food and energy, officials are also beginning to see some goods prices turn down, and this is a key trend that “will need to continue over the next year,” she added.

– Regulating crypto –

Brainard also weighed in on the fallout from the stunning collapse of cryptocurrency platform FTX, which declared bankruptcy in the United States, expressing the need for regulation in the industry.

The situation at the company has reverberated across the digital currency landscape, and Brainard said it “reinforces” the fact that crypto finance “needs to be under the regulatory perimeter.”

She stressed that digital currencies are “no different than traditional finance in the risks that it exposes investors to” and flagged the need for “regulatory guardrails.”

This could mean bringing some into compliance with existing rules, or in some cases, expanding the reach of financial watchdogs, she said.

Cash-strapped FTX filed for bankruptcy on Friday and its high-profile founder and chief executive Sam Bankman-Fried resigned after Binance, the world’s biggest cryptocurrency platform, scrapped a takeover bid, sending chills across the cryptocurrency world.

FTX until recently was considered the world’s second-largest cryptocurrency platform, at one point valued at $32 billion.

Google on Monday agreed to settle a landmark privacy case with 40 US states over accusations that the search engine giant misled users into believing location tracking had been switched off on their devices.

A statement said it was the largest multi-state privacy settlement by state authorities in US history and included a binding commitment for improved disclosures by Google.

“Digital platforms like Google cannot claim to provide privacy controls to users then turn around and disregard those controls to collect and sell data to advertisers against users’ express wishes — and at great profit,” said New Jersey Attorney General Matthew Platkin in the statement.

The rare joint lawsuit by 40 states grew from impatience over the failure of federal authorities to crack down on big tech amid legislative gridlock in Washington.

Republican and Democratic lawmakers disagree on what national rules on online privacy should look like, with furious lobbying by tech companies to limit their potential impact.

Since 2018, the US tech giants have faced strict rules in Europe, with Google, Amazon and others subjected to hefty fines over privacy violations.

The US case began after an article in 2018 from the Associated Press reported that Google tracked users even when they had opted out of the practice.

Other states involved included Arkansas, Florida, Illinois, Louisiana, North Carolina, Pennsylvania and Tennessee.

Specifically at fault in their case was evidence that users continued to be tracked when they disabled the location history option on their phones as tracking continued through a separate Web & App Activity setting.

In a statement, Google said that the allegations were based on product features that were no longer up to date.

“Consistent with improvements we’ve made in recent years, we have settled this investigation which was based on outdated product policies that we changed years ago,” the company said.

Under the settlement, Google will provide more detailed information on tracking activity.

It likely will be “appropriate soon” for the US central bank to slow the pace of interest rate increases, Federal Reserve Vice Chair Lael Brainard said Monday.

Her comments came as red-hot consumer prices, which have squeezed American households, showed signs of easing, and after the Fed delivered a fourth straight super-sized rate hike to cool the economy.

But with inflation still hovering at the highest level in recent decades, the Fed still has “additional work to do both on raising rates” and tamping down high prices, she said in the event with Bloomberg.

The closely-watched consumer price index released last week showed US inflation logged its lowest annual increase since January, fueling hopes that soaring costs will start to pull back.

The Fed has raised the benchmark lending rate six times this year, but there is a growing chorus of voices recently, including some Fed officials, advocating for smaller steps in coming months.

– ‘More deliberate’ –

Brainard acknowledged that Fed policymakers have raised rates “very rapidly” in recent months, adding that it will take time for tightening to flow through to the economy.

“By moving forward at a pace that’s more deliberate, we’ll be able to assess more data and be better able to adjust the path of rates to bring inflation down,” she said.

Russia’s war in Ukraine this year has sent food and fuel prices soaring, and the annual inflation rate hit a blistering 9.1 percent in June — its highest in four decades — but slowed to 7.7 percent in October.

The US central bank has moved forcefully to lower demand and bring prices down, despite fears that it could trigger a recession.

– Regulating crypto –

Brainard also weighed in on the fallout from the stunning collapse of cryptocurrency platform FTX, which declared bankruptcy in the United States, expressing the need for regulation in the industry.

The situation at the company has reverberated across the digital currency landscape, and Brainard said: “It reinforces I think, this need to make sure that crypto finance … needs to be under the regulatory perimeter.”

She stressed that digital currencies are “no different than traditional finance in the risks that it exposes investors to.”

Cash-strapped FTX filed for bankruptcy on Friday and its high-profile founder and chief executive Sam Bankman-Fried resigned after Binance, the world’s biggest cryptocurrency platform, scrapped a takeover bid, sending chills across the cryptocurrency world.

FTX has been considered the world’s second-largest cryptocurrency platform, at one point valued at $32 billion.

Wall Street stocks slipped Monday following last week’s global surge as the dollar advanced against major rivals. 

The dollar crept higher as traders urged caution over expectations that the Federal Reserve would pull back from massive US interest hikes as inflation cools in the world’s biggest economy.

US stocks had bounded higher last week on the prospect the Fed might be able to let up on its aggressive interest rate hikes, with the tech-heavy Nasdaq jumping 8.1 percent and the blue-chip Dow rising 4.1 percent.

But Wall Street turned lower on Monday with the Dow slipping 0.1 percent in late morning trading, and the Nasdaq shedding 1.0 percent.

“This morning … there is a little bit of questioning as to whether the market overreacted last week,” said Briefing.com analyst Patrick O’Hare.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said “the burst of euphoria which erupted… at the end of last week is ebbing away after fresh warnings that the fight against inflation is still a hard slog yet to be won.”

Investors will get a look this week whether that cooling has spread to consumers, with US retail sales data due out on Wednesday. Earnings figures from major retailers Walmart and Target will also provide a window into how inflation is impacting consumer spending, a major driver of the US economy.

European stocks finished higher, where data helped improved sentiment.

“There was good news from the eurozone as industrial production came in better than expected this morning,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

While the eurozone is widely seen as heading for a recession, the data showed a month-on-month gain of 0.9 percent in September, while analysts had expected practically no gain.

The pound briefly fell by more than one percent against the dollar as the Thursday presentation of the budget by Chancellor of the Exchequer Jeremy Hunt approaches.

“The pound has also come under pressure ahead of this weeks budget statement with all manner of reports that the Chancellor will impose new taxes on business that will deter future investment in energy security,” CMC Markets analyst Michael Hewson said.

Sentiment also won a lift from China, which is relaxing some of its strict Covid-19 restrictions that have hammered growth in the world’s second largest economy.

Authorities have also reportedly unveiled a 16-point plan to support the beleaguered property sector, a major component of the country’s economic engine.

The industry has come under immense pressure since China imposed a number of restrictions in 2020 aimed at reeling in debt as major developers teetered on the brink of collapse.

The latest moves indicate that China’s leadership is beginning to focus on supporting the economy, a crucial driver of global growth, according to analysts.

Nomura’s Lu Ting warned, however, that the “measures may have little direct impact on stimulating home purchases”.

Hong Kong’s stock exchange ended more than one percent higher Monday — having soared over seven percent Friday.

Oil prices fell.

“Crude oil prices have slipped back, after OPEC cut its oil demand forecast for the rest of this year, and 2023, by 100,000 barrels, citing concerns about rising inflation and interest rates,” CMC Markets’s Michael Hewson said.

“Increasing Covid cases within China alongside a rebound in the US dollar are also weighing on prices,” he added.

– Key figures around 1530 GMT –

New York – Dow: DOWN 0.1 percent at 33,705.83 points

London – FTSE 100: UP 0.9 percent at 7,385.17 (close)

Frankfurt – DAX: UP 0.6 percent at 14,313.30 (close)

Paris – CAC 40: UP 0.2 percent at 6,609.17 (close)

EURO STOXX 50: UP 0.5 percent at 3,887.51

Tokyo – Nikkei 225: DOWN 1.1 percent at 27,963.47 (close)

Hong Kong – Hang Seng Index: UP 1.7 percent at 17,619.71 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,083.40 (close)

Euro/dollar: DOWN at $1.0341 from $1.0361 on Friday

Pound/dollar: DOWN at $1.1723 from $1.1839 

Dollar/yen: UP at 140.39 yen from 138.70 yen

Euro/pound: UP at 88.14 pence from 87.49 pence

West Texas Intermediate: DOWN 1.9 percent at $87.26 per barrel

Brent North Sea crude: DOWN 1.4 percent at $94.63 per barrel

burs-rl/yad

The estranged wife of the billionaire owner of New York’s Chrysler Building is entitled to more than 37 million pounds ($43 million) under the terms of prenuptial agreements, a judge in London said Monday.

Michael Fuchs, 62, and Alvina Collardeau-Fuchs 47, who are in the process of divorcing, lived the “billionaire lifestyle” during their marriage with a string of luxury properties around the world.

Money was “never a concern” and the couple enjoyed “fully staffed homes” in fashionable locations such as the Hamptons, New York City, Paris, Miami, Cap d’Antibes, Capri and London, according to rulings and evidence given to London’s High Court.

Fuchs, who is originally from Germany but moved to the United States in the 1990s, and French former journalist Collardeau-Fuchs married in New York in 2012 and went on to have two children.

But after the couple separated in 2020, the High Court was asked to rule on how much Collardeau-Fuchs was entitled to.

Fuchs’ lawyers had argued his estranged wife should receive 30 million pounds while she claimed it should be more than 45 million.

At one hearing, the court heard that Fuchs had enjoyed an “extraordinarily successful career” and owned a “very significant amount of prime mid-town Manhattan real estate”.

The Art Deco Chrysler Building on the East Side of Manhattan, one of New York’s most distinctive landmarks, is owned by Fuchs’ company.

However, Fuchs said the value of his fortune had plummeted recently due to the turbulent economic climate.

Fuchs said he believed the correct sum to provide for his two young children should be 350,000 pounds a year, compared to the 1.2 million pounds requested.

He argued he did not want to smother his children in luxuries which could make them “jaded”, adding that he wanted them to “learn the value of money”.

The couple spent much of their time travelling by private plane or in first class and staying in luxury hotels or villas “at significant cost”.

At one point after they separated, Collardeau-Fuchs’s spending had topped $270,000 in a single month, prompting Fuchs to try to impose a limit of $20,000.

Following the breakdown of the marriage, Collardeau-Fuchs had remained at the family home in west London in a “substantial” six-floor property with an indoor underground swimming pool.

Fuchs has said the property is worth £30.2 million.

According to the judge, Nicholas Mostyn, the family’s “custom of unrestrained expenditure” had been extended to their litigation with “prodigious amounts” spent on their legal battle.

Figures showed their combined lawyers’ bills had topped 4.3 million pounds.