Evening Report | March 13, 2023
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Biden reassures U.S. banking system ‘safe,’ pledges ‘whatever needed’... President Joe Biden has called the U.S. banking system “safe” and pledged tighter banking regulation after U.S. regulators were forced to step in with a series of emergency measures following the collapse of Silicon Valley Bank and Signature Bank. “Americans can trust that the banking system is safe. Your deposits will be there when you need them,” Biden said.
Biden also promised new regulation after the country’s biggest bank failure since the 2008 financial crisis. “I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure would happen again,” Biden added.
The U.S. Federal Deposit Insurance Corporation said on Monday it had transferred all deposits from Silicon Valley Bank to a newly created bank and that all depositors would have access to their money.
Rep. Maxine Waters (D-Calif.) said Democrats and Republicans must work together to protect bank deposits and ensure the safety of the financial system. Waters, who is ranking member on the House Financial Services Committee, told CNBC everything was on the table to ensure U.S. banks are safe.
Russia eyes 60-day extension of Black Sea grain deal... Russia is not opposed to extending the Black Sea grain deal, but only for a period of 60 days, the RIA Novosti news agency cited Russia’s deputy foreign minister as saying. The current deal expires on March 18 and can only be extended with Russia’s permission. Russia has repeatedly complained about impacts Western sanctions are having on its grain and fertilizer exports. Even though the sanctions aren’t directly targeted at those shipments, Russia says they are hurting the ability of exporters to acquire financing.
NY Fed: Inflation expectations retreat sharply... Near-term expectations for inflation fell to levels not seen in nearly two years, the Federal Reserve Bank of New York said Monday. In its latest Survey of Consumer Expectations, the bank said that in February, respondents projected inflation a year from now to stand at 4.2%, a notable drop from January’s 5%. The year ahead reading was the lowest since 4% seen in May 2021. The expected level of inflation three years from now held at 2.7%, matching the mark last seen in October 2020. Expectations for inflation five years from now is seen hitting 2.6%, up modestly from January’s 2.5%.
Beijing tightening its military grip in the South China Sea... The Wall Street Journal reports China has become dominant in the region after gradually changing both the geography and balance of power in the area over the past decade. Beijing’s reach could now enable the country to obstruct or interfere with international trade, military experts say. Its large coast guard harasses offshore oil-and-gas operations of Southeast Asian nations, and its fishing militia swarms the rich fishing waters, lingering for days. The article says the broader challenge posed by China to America’s long pre-eminence in the region puts U.S. allies and the world’s supply of advanced semiconductors produced in Taiwan at risk. Former U.S. and Southeast Asian officials and security analysts warn China’s gains are so entrenched they are unlikely to be reversed short of military conflict.
EU to unveil its Net Zero Industry Act... On Tuesday, the European Union will unveil its Net Zero Industry Act, an effort to regain the initiative in clean technology production in Europe. The plan, according to draft proposals seen by the Financial Times, is to enable homegrown green energy businesses to produce 40% of the bloc’s capacity needs in five low carbon technologies — solar, wind, heat pumps, batteries and electrolyzes.
U.S. chicken producers want to do their part…Producers have made efforts bring down soaring egg prices by selling their 400 million surplus eggs to food producers. But first they must convince the FDA to change the rule that prevents eggs laid by chickens in the meat industry to be used for human consumption. The National Chicken Council trade group recently submitted a formal petition to the Food and Drug Administration asking officials to drop a rule passed in 2009 that keeps chicken producers from selling their excess eggs because they aren’t refrigerated right away.
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