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Business and Market Discussion / US Economy

2022-03-21

Business and Market Discussion / US Economy

2022-03-21
 A two-hour call Friday between US President Joe Biden and President Xi Jinping failed to resolve their differences over the war in Ukraine. President Biden warned China not to provide Russia with military equipment while President Xi criticised the “sweeping and indiscriminate sanctions” imposed on Russia by the west.

James Bullard, president of the St Louis Fed, and a voting member on the FOMC, which voted to raise US interest rates by 0.25% last week, called on Friday for the US central bank to raise its benchmark interest rate above 3% this year, arguing that policymakers need to move quickly to combat inflation and avoid “losing credibility”.

Carrie Lam, announced on Friday that the government will launch a new round of the employment support scheme, providing three months of subsidy to up to 1.3 million workers affected by the fifth wave of the pandemic. Under the scheme, each eligible worker will receive HK$24,000 from May to July, or HK$8,000 each month. Workers earning a monthly salary of under HK$30,000 are set to benefit.

President Xi Jinping has pledged to reduce the economic impact of China's Covid curbs, calling for "the maximum prevention and control effect at the least cost." He told a meeting of the Politburo standing committee, the Communist Party’s top decision-making body, that virus controls should be coordinated with economic development. It is the first time that President Xi has called for the economic cost of Covid-19 prevention to be taken into account since the start of the pandemic in 2020.

Chinese stocks listed in mainland China, Hong Kong and New York saw one of the most volatile weeks in history. By Tuesday, the historic rout in Chinese equities had erased US$1.5 trillion in value in two days. However, shares posted a spectacular rally on Wednesday and Thursday after a meeting of China’s State Council, chaired by vice-premier Liu He, promised unspecified “policies that are favourable to the market.” The Hang Seng Index surged 17% on Wednesday and Thursday, recouping US$468 billion, more than index members lost in the sell-off earlier in the week.

On today’s Money Talk, we’re joined by Le Xia at BBVA Research and Sam Faveur from Mandarin Capital. Speaking about the US economy is John Taylor, Professor of Economics, Stanford University and Senior Fellow, Hoover Institution.

Money Talk

A fast moving and topical business and finance show bringing you breaking business and economic news and financial market updates. Presented by former CEO and investment bank global trading head Peter Lewis, with over 30 years' industry experience. Join Peter and his expert guests for analysis and discussion on the day's top business stories live every weekday morning 8 to 8:30 a.m. on RTHK Radio 3. We have a podcast to download after the show and you can also listen through the RTHK Radio 3 website live or later in the day. We welcome your questions, comments and feedback to read out in the show. You can email us at moneytalk@rthk.hk, post on our Facebook page "Money Talk on RTHK Radio 3 " or find us on twitter "MoneytalkRadio3") .
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