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APRIL 13, 2023

U.S. WHOLESALE INFLATION EASES SIGNIFICANTLY IN LATEST REPORT

U.S. wholesale prices have decreased, which indicates that inflationary pressures in the economy are lessening and things are improving more than a year after the Federal Reserve began hiking interest rates. Energy prices went down, causing the producer price index to drop 0.5% from February to March. Furthermore, wholesale prices were up 2.7% in March, which is lower than the 4.7% increase in February. This index shows the charges of manufacturers, farmers and wholesalers, and can give an early indication of how consumer inflation might change.

INTEREST RATES TO HIKE

Federal Reserve officials are likely to continue increasing interest rates at their meeting next month. Although they decreased their expectations for the increase at their last meeting, they still raised the benchmark lending rate by a quarter point. Inflation rates in the U.S. showed signs of slowing down in March, but it is unlikely to be significant enough to prevent the planned interest rate hike in May.

OIL PRICES RISE

Oil prices are high due to falling U.S. inventories and surging Chinese imports, which points to a tighter global market. The crude oil inventories in the U.S. are decreasing while weak exports from Russia and supply interruptions from Iraqi Kurdistan are also impacting the oil market. China has imported the highest amount of oil in three years this March, indicating that the world’s largest crude importer’s demand is bouncing back. Currently, analysts are divided on the future of oil prices. Some expect short-term consolidation, while others project an undersupply of oil come May, leading to positive crude prices for the rest of the year.

UNEXPECTED SURGE IN CHINA’S EXPORTS

China’s exports increased unexpectedly in March as the country resumed factory productions and experienced an increase in demand from most Asian countries and Europe. The rise in exports was 14.8%, higher than predicted by economists who expected a fall of over 7%. The unexpected increase is attributed to a favorable economic cycle, but experts warn that challenges may arise in the second half of the year due to the anticipated stagnation of the U.S. economy and the tightening of Fed monetary policy affecting China’s foreign trade.

WARREN BUFFETT ADDRESSES CONCERNS OVER FUTURE BANK FAILURES

Warren Buffett, one of the most well-known investors in the world, has expressed concern about the possibility of more banks failing in the future following the recent Silicon Valley Bank crisis. Despite this, he reassured depositors that they do not need to worry, as they’re not at risk of losing their money. According to Buffett, maintaining public confidence in the safety of banks is crucial to preventing any further runs on funds. He highlighted the importance of avoiding unnecessary panic among the people, stressing that even though some banks may fail, depositors’ money is usually safe.

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