THOTH Newsroom

Summary of the UK Economy(Mar-2024) Technical Recession; 2 consecutive quarters of recession Rising Inflation Trade deficit United Kingdom, the Bank of England's base rate is 5.25% (2024-03-21) and has been frozen five times. Summary of the UK Economy GDP Projections; Bank of England The Bank of England's forecast for UK economic growth is shown above. 2022 (actual) : 4.3% 2023 (forecast) : 0.3% 2024(forecast) : 0.3% 2025 (forecast) : 0.8% We assume the 2023 forecast is nearly realistic, and we also forecast low growth of 0.3% in 2024. Quarterly economic growth rates for 2023 are shown below. 1Q 2023 : 0.2% 2Q 2023 : 0% 3Q 2023 : -0.1% 4Q 2023 : -0.3% With three and four consecutive quarters of negative growth in 2023, we are characterizing this as a technical recession. CPI Projections; Bank of England Looking at the inflation outlook, we expect inflation to stabilize after reaching +4.2% in Q4 2023. In January 2024, the Consumer Price Index (CPI) stood at 4.0%, down -0.6% mon

US Fed, FOMC Summary(2024-03) : Hold rates Hold Fed rates. Cuts 3 times this year. Considering easing QT. Q. When will the Fed cut rates? A. It is not appropriate to cut rates until there is more confidence in the 2% inflation target, which should be sometime this year. Q. Will QT (quantitative tightening) remain in place? A. QT will remain at $95 billion per month. However, Dallas Fed President Laurie Logan and New York Fed President John Williams have suggested that the pace of QT tapering should be adjusted. Q. What will happen to the U.S. economy? A. Compared to the outlook last December, the economy should be in good shape. The inflation forecast is now 2.4% to 2.6%, growth is now 1.4% to 2.1%, and the unemployment rate is now 4.1% to 4.0%. US Fed, FOMC Summary(2024-03) : Hold rates FOMC(March-2024), Economic Projections; median % THOTH Investing Opinion: Dovish FOMC statement, Fed considering a possible slowdown? Many investors have been waiting for the US FOMC's decision. Le

Shipbuilding: US-China Hegemonic Competition, Economic-Security Strategy Wartime manufacturing supply chain? Nations that conquer the seas have historically dominated the world, and those that lose them have fallen from grace. A nation's shipbuilding and shipping industries were key to its global hegemony, and therefore key to its national security. China dominates both the global shipbuilding and shipping industries, and the United States is losing its shipbuilding and shipping competitiveness due to high labor costs and a declining ability to trade goods. On March 12, several unions, including the United Steelworkers of America, asked the administration for trade relief and state aid for the shipbuilding industry, arguing that China is distorting global markets in the maritime, logistics, and shipbuilding industries. Shipbuilding: US-China hegemonic competition, Economic-Security Strategy World No. 1 (1975) U.S. shipbuilding ranks 19th in the world ... builds less than 1% of the

US Producer Price Index (PPI) Rises, Signs of Inflation... Will the US FOMC Delay Rate Cuts? U.S. PPI sees 6-month high The Producer Price Index (PPI) affects the Consumer Price Index (CPI). An increase in PPI can lead to an increase in CPI, usually with a 6-month lag. Based on the February 2024 PPI, it is likely that CPI and consumer prices will be higher by August. US PPI Rises, Signs of Inflation Will the U.S. Federal Reserve (Fed) FOMC Delay a Rate Cut? FOMC meets next week (Nov. 19-20) PPI; FRED Looking at the February 2024 PPI, inflation excluding food and energy prices was slightly lower than the previous month at +0.3%. However, the PPI was at its highest level in six months at +0.6%. Both were above expectations. The PPI is considered a leading economic indicator and, assuming a six-month lead, suggests that higher prices are likely to persist through the middle of the year. Looking ahead to the US FOMC meeting next week (19th-20th), the CPI and PPI releases suggest that infla

UK-India trade talks halted … Post-Brexit trade talks continue, terms of trade remain tough Post-Brexit, bilateral trade talks are underway ... with tricky terms of trade and a general election on the horizon UK's new FTAs with South Korea, Australia, New Zealand, and South Korea... negotiations paused with Canada After BREXIT, the UK is preparing to enter into new trade agreements, mainly with countries that have trade agreements with the EU. South Korea also had a trade agreement with the EU through an FTA, but since the UK left the EU, South Korea has entered into a new trade agreement with the UK through a bilateral FTA. The advantage of a bilateral trade agreement, or FTA, is that it is relatively easy for both countries to fulfill the terms of trade they seek. The problem is that if the other country wants better terms, negotiations can reach a stalemate. The UK is preparing for a general election this year, and India is also preparing for a general election, so these were di

Spy equipment found on Chinese-made cranes at major U.S. ports Over 5 years, we will invest more than $20B ... in crane production and port security in the U.S. U.S. gets first homegrown crane production line in 30 years ... Mitsui E&S subsidiary Paceco produces The United States says it has identified spy equipment and suspicious communications equipment on Chinese-made cranes installed at major ports, and will replace them as a security measure for key strategic ports. The U.S. infrastructure investment budget is coming into play, with approximately $20 billion to be invested over the next five years. The cranes will be produced by Paceco, a subsidiary of Japan's MitsuiE&S, meaning the US will have a homegrown crane production line for the first time in nearly 30 years. Spy equipment found on Chinese-made cranes at major U.S. ports Strategic Materials Surveillance Threats, Espionage Threats of software misbehavior and sabotage The Biden administration has revealed that Ch

TSMC secures $5B in US CHIPS grants U.S. CHIPS grants: $39 billion + $75 billion (loans and loan guarantees) Samsung Electronics, Intel, Micron, and others expected to receive grants Taiwan's TSMC is expected to receive more than $5 billion in subsidies under the U.S. Semiconductor Support Act (CHIPS). Samsung Electronics, Intel (INTC: US), and Micron (MU: US) are also expected to benefit from the subsidies. The CHIPS Act will provide $39 billion in direct payments and $75 billion in loans and loan guarantees, with $28 billion of the $39 billion going to advanced semiconductor production lines. CHIPS grants The problem is that the direct subsidy payments from the U.S. Semiconductor Support Act (CHIPS) are $39 billion, while semiconductor companies have applied for more than $70 billion, making it difficult to fully fund the program. Samsung is reportedly discussing additional investments in the U.S., pledging to invest more. TSMC is investing about $40 billion to build two semicond

US Jobs report: Increased employment, Economic growth stable Wall Street focus on potential rate cuts U.S. February Nonfarm Payrolls: 275,000 ... up 200,000 for the third consecutive month U.S. February unemployment rate: 3.9% ... has remained below 4% since January 2022 US jobs report Unemployment: FRED unemployment rate increased +0.2 percentage points from the previous month (3.7%, January) to 3.9%. All employees, Total nonfarm: FRED Nonfarm payrolls increased slightly from the previous month (229K, January) to 275K. Along with solid employment, the eye is on the possibility of unemployment exceeding 4%. Since January 2022, the unemployment rate has been below 4% and inflation has been high. Could this change now? Wall Street still sees June as the time for the Fed to cut rates. Powered by, THOTH Investment Support the THOTH Newsroom

Fed rate cuts to be hard?… Inflation target 2% "Fed needs to be confident of reaching its 2% Inflation target." For the U.S. Federal Reserve to cut interest rates, it first needs to have strong confidence in reaching and maintaining its 2% inflation target. Over the past year, inflation has been falling steadily, but not enough to reach the target, and the economy is showing signs of improvement. The question for the Fed is. If it cuts rates too soon, it will fail to reach its 2% inflation target and potentially cause high inflation to become entrenched. If they cut rates too late, high-interest rates could push the economy into recession. Fed Chairman Jerome Powell's comments echo that concern. “Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2%.”, “At the same time, reducing policy restraint too late or too little could unduly weaken econom