As part of its most restrictive monetary measures in years, the Fed is letting $60 billion in Treasuries and $35 billion in mortgage-backed securities mature without reinvestment every month. And this "quantitative tightening" reached a key waypoint last week: the Fed had shed $1 trillion in bonds since starting balance sheet reductions last year. Fortunately, this has been achieved without causing the market strains that alarmed policymakers in previous efforts. With consumer demand and the labor market both flexing some muscle, especially in the US, economists have boosted this year's growth estimates to 2.4%. But they’ve been cutting their 2024 forecasts too, most recently to 2.1%, according to Consensus Economics. The crux of the argument is that 2023 has been outpacing expectations, and that’ll make it challenging for 2024 to match up – especially if this year’s robustness prompts central banks to keep interest rates high, potentially slowing global economies. A key measure of international oil prices soared above $90 a barrel for the first time in 2023 last week after Saudi Arabia and Russia said they’d extend their voluntary supply cuts. Saudi Arabia has cut one million barrels daily since July, a temporary move that’s now been extended until the end of the year. Russia, similarly, has curbed exports by 300,000 barrels daily but is extending the reduction to year-end. Arm is set to raise up to $4.9 billion in its upcoming initial public offering (IPO), and that’s less than initially expected because its owner SoftBank decided to hang onto a heftier share in the company. Mind you, it’ll still be the world's biggest IPO this year, and would value Arm at up to $54.5 billion – or roughly 20 times its recently disclosed annual revenue. That lofty valuation reflects a belief that Arm will benefit from the stampede toward generative AI and the chips needed to power the technology – an industry shift that has helped boost Nvidia’s valuation to $1.2 trillion. China’s trade slump eased in August, with exports falling 8.8% in dollar terms from a year earlier and imports slipping 7.3%. Both were actually better than feared and far less severe than July’s dips of 14.5% and 12.4%, respectively. And August’s milder decline in imports could be a sign that the downturn in domestic demand may be bottoming out. That’s what Chinese policymakers are hoping for: they recently introduced a series of measures to boost business confidence and support the struggling property market. | 