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china fund news reporter taylor

brothers and sisters, let’s continue to take a brief look at the overseas news tonight.

canada cuts interest rates

on wednesday, september 4, the bank of canada announced a 25 basis point interest rate cut, in line with market expectations. this is the third consecutive interest rate cut by the bank of canada. after this rate cut, the latest policy rate is 4.25%, which was 4.5% in august.

bank of canada governor steve macklem said he hopes to see economic growth pick up to absorb spare capacity in the economy, and that overall economic weakness is still "holding down inflation."

but policymakers also reiterated their concern that inflation will fall short of their 2% target. "we need to continually guard against the risk that the economy will weaken too much and inflation will fall too much," macklem said.

these statements reinforced a shift in officials' thinking on inflation - policymakers are increasingly concerned about downside risks to the economy and have begun to gradually ease monetary policy to achieve a soft landing for the economy.

“we care just as much about inflation being below target as we do about inflation being above target,” macklem said.

while the central bank acknowledged that the economy grew faster than expected in the second quarter, officials noted that was largely due to government spending and business investment. officials said there were "some downside risks" to the central bank's forecast for a pickup in growth in the second half of 2024.

macklem said housing prices remain too high but there are early signs of a slowdown. job growth "has been weak," and the slack in the labor market is expected to slow wage growth.

in june this year, macklem became the first central bank governor of the group of seven (g7) to initiate monetary easing policies, and then cut interest rates again in july.

stephen brown, deputy chief economist for north america at capital economics, said: "after cutting rates by 25 basis points for the third time in a row, the bank of canada reiterated in its statement that further rate cuts are possible. the tone of this communication was less dovish than we expected after signs of slowing gdp growth at the beginning of the third quarter, suggesting that the bar for a larger rate cut of 50 basis points at the next meeting in october is relatively high."

us stocks fluctuate

the u.s. stock market was volatile tonight, with the three major indexes rising and falling. wall street just experienced a negative trading day yesterday, with the major stock indexes posting their worst performance since the sell-off on august 5, and the latest economic data suggesting a slowdown in u.s. economic growth.

traders are expecting more volatility in september, historically a weak month for stocks. many investors expect stock market volatility to increase in september, although some fund managers see any dips as buying opportunities.

in terms of economic data, u.s. job vacancies fell to the lowest level since early 2021 in july, and layoffs increased, consistent with signs of slowing demand for other workers. the u.s. bureau of labor statistics' job openings and labor turnover survey showed on wednesday that u.s. job vacancies fell to 7.67 million in july from a downwardly revised 7.91 million in the previous month. this figure was lower than all economists' expectations, with economists surveyed by dow jones expecting 8.1 million.

federal reserve policymakers have made clear they do not want to see the labor market cool further and are expected to start cutting interest rates at their next meeting in two weeks.

the decline in job openings fits with recent data showing a weakening labor market, which has worried federal reserve officials. job growth has been slowing, unemployment is rising and job seekers are having a harder time finding work, fueling fears of a potential recession.

after disappointing july jobs data and a sharp downturn in wages last year, federal reserve officials and market participants are closely watching august employment data due out on friday, with the fed likely to cut interest rates sharply if the report is another weak one.

u.s. short-term interest rate futures show that the probability of the federal reserve cutting interest rates by 50 basis points in september is currently higher than that of cutting interest rates by 25 basis points.