Publications

Sam Fleming of the Financial Times reports that former Fed chair Janet Yellen is worried about deteriorating lending standards in the market for corporate loans. Yellen also said that there are a lot of weaknesses in the corporate debt market, especially where debt has been repackaged and sold off as financial derivatives. FT

The Wall Street Journal reports that Atlanta Fed President Raphael Bostic says that a continued, gradual raising of interest rates is appropriate. Bostic also said that the Fed is still a few rate hikes away from reaching a “neutral” policy rate that is neither accommodative nor contractionary. WSJ

According to the Wall Street Journal, foreign purchases of U.S. Treasurys were down by nearly 50% in the first 8 months of 2018 compared to the same period last year. Foreign buyers now hold just 41% of outstanding Treasury debt, down from 50% in 2013, which has helped fuel a run-up in long-term yields and has sent tremors through U.S. equity markets. WSJ

The Wall Street Journal reports that steel producers were successful in 50% of their petitions for tariff relief in September while other trade groups were far less successful. Groups representing the retail, consumer technology, restaurant, and homebuilding sectors were successful in fewer than 5% of their applications for tariff exemptions, though some steel producers say that comparing success rates does not account for the higher dollar value of some tariff lines. WSJ

Christopher Alessi of the Wall Street Journal writes that Saudi Arabia has pledged to increase oil production from 10.7 million to 11 million barrels per day. The move to boost production — and to ease recent supply shortages — comes just two weeks before U.S. sanctions on Iranian oil exports take effect. WSJ

The Financial Times writes that National Economic Council director Larry Kudlow has accused Beijing of doing too little to defuse trade tensions between the two nations. Kudlow said that China has shown no signs that it is willing to negotiate on key U.S. demands, including ending industrial subsidies and forced technology transfers. FT

Rebecca Elliott of the Wall Street Journal reports that U.S. oil companies are moving to expand export capacity at key American ports. Many firms already face significant pipeline bottlenecks that are forcing them to sell their crude at steep discounts, so they are moving to expand export capacity in order to avoid further price reductions. WSJ

The Wall Street Journal reports that China’s economic growth slowed to its weakest pace since the financial crisis in the third quarter of 2018 as consumer spending and industrial output weakened. Other factors contributing to the slowdown include a protracted trade conflict with the U.S. and a massive local government and corporate debt overhang. WSJ

Kate Davidson of the Wall Street Journal writes that Federal Reserve Vice Chairman for Supervision Randal Quarles reaffirmed the Federal Reserve’s plan to gradually hike interest rates as the economy heats up. Quarles also said that usual measures of inflation may not be good indicators of potential overheating in the economy and that the Fed should instead pay more attention to indicators of labor utilization or signs of production bottlenecks. WSJ