the economic outlook in the United States, however cloudy, is still better than in most other regions.

loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.

A fragile currency can sometimes work as “a buffering mechanism,” causing nations to import less and export more, Mr. Prasad said. But today, many “are not seeing the benefits of stronger growth.”

Still, they must pay more for essential imports like oil, wheat or pharmaceuticals as well as for loan bills due from billion-dollar debts.

debt crisis in Latin America in the 1980s.

The situation is particularly fraught because so many countries ran up above-average debts to deal with the fallout from the pandemic. And now they are facing renewed pressure to offer public support as food and energy prices soar.

Indonesia this month, thousands of protesters, angry over a 30 percent price increase on subsidized fuel, clashed with the police. In Tunisia, a shortage of subsidized food items like sugar, coffee, flour and eggs has shuttered cafes and emptied market shelves.

New research on the impact of a strong dollar on emerging nations found that it drags down economic progress across the board.

“You can see these very pronounced negative effects of a stronger dollar,” said Maurice Obstfeld, an economics professor at the University of California, Berkeley, and an author of the study.

central banks feel pressure to raise interest rates to bolster their currencies and prevent import prices from skyrocketing. Last week, Argentina, the Philippines, Brazil, Indonesia, South Africa, the United Arab Emirates, Sweden, Switzerland, Saudi Arabia, Britain and Norway raised interest rates.

World Bank warned this month that simultaneous interest rate increases are pushing the world toward a recession and developing nations toward a string of financial crises that would inflict “lasting harm.”

Clearly, the Fed’s mandate is to look after the American economy, but some economists and foreign policymakers argue it should pay more attention to the fallout its decisions have on the rest of the world.

In 1998, Alan Greenspan, a five-term Fed chair, argued that “it is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress.”

The United States is now facing a slowing economy, but the essential dilemma is the same.

“Central banks have purely domestic mandates,” said Mr. Obstfeld, the U.C. Berkeley economist, but financial and trade globalization have made economies more interdependent than they have ever been and so closer cooperation is needed. “I don’t think central banks can have the luxury of not thinking about what’s happening abroad.”

Flávia Milhorance contributed reporting from Rio de Janeiro.

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Canada, South Korea seek deeper cooperation on critical minerals

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OTTAWA, Sept 23 (Reuters) – Canadian Prime Minister Justin Trudeau and South Korean President Yoon Suk-yeol on Friday agreed to deepen cooperation on critical minerals used in electric vehicles (EVs) batteries as both countries seek to cut emissions to fight climate change.

Yoon visited London for the funeral of Queen Elizabeth, and then New York in his first U.S. trip to attend the U.N. General Assembly, before arriving in Canada on Thursday. On Friday, Yoon met Trudeau in Ottawa, and then they both spoke to reporters.

“Yoon and I discussed ways to collaborate in a variety of areas, including essential minerals, batteries for electric vehicles, and emerging technologies, including AI (artificial intelligence),” Trudeau told reporters.

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Canada has many of the critical minerals – like lithium, cobalt and nickel – that are now used to make batteries for EVs, and the government is in the process of seeking to help producers and processors scale up production.

“Canada, as a global leader in the production of minerals, and Korea, a major semiconductor and battery maker – each play crucial roles in global supply chains,” Yoon said through an interpreter.

“The governments and businesses of our two nations will work together for the mineral resources sector to build a cooperative architecture… to respond to the shocks resulting from the changing world order,” Yoon added.

China is currently by far the dominant global supplier of critical minerals used in EVs. Yoon said it was strategically important for both countries to find an alternative supplier.

Canada and South Korea are already cooperating in the sector, Trudeau pointed out.

In March, Stellantis (STLA.MI), the parent of Jeep and Chrysler, said it would build an EV battery plant in a joint venture with South Korea’s LG Energy Solution (373220.KS) in Windsor, across the border from Detroit. read more

In a joint statement, the two countries said they agreed to deepen their “strategic partnership on supply chain resiliency” and would seek to position themselves as “competitive players in the critical minerals supply chain and battery and EV value chains”.

To that end, both countries agreed to develop a memorandum of understanding in the coming months to “support clean energy transition and energy security, including with respect to critical minerals”.

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Reporting by Steve Scherer; Editing by Sandra Maler

Our Standards: The Thomson Reuters Trust Principles.

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U.S. Aircraft Carrier Arrives In South Korea For Joint Military Drills

By Associated Press
September 23, 2022

The South Korean navy said the training is meant to boost the allies’ military readiness in response to North Korean nuclear and missile tests.

The nuclear-powered aircraft carrier USS Ronald Reagan arrived in the South Korean port of Busan on Friday ahead of the two countries’ joint military exercise that aims to show their strength against growing North Korean threats.

The joint drills will be the first involving a U.S. aircraft carrier in the region since 2017, when the U.S. sent three aircraft carriers including the Reagan for naval drills with South Korea in response to North Korean nuclear and missile tests.

The allies this year have revived their large-scale military drills that were downsized or shelved in previous years to support diplomacy with Pyongyang or because of COVID-19, responding to North Korea’s resumption of major weapons testing and increasing threats of nuclear conflicts with Seoul and Washington.

The South Korean navy said the training is meant to boost the allies’ military readiness and show “the firm resolve by the Korea-U.S. alliance for the sake of peace and stability on the Korean Peninsula.”

“The commitment of the U.S. carrier strike group operating in and around the peninsula illustrates our commitment to stand together and our desire and focus ensuring that we are interoperable and integrated to face any challenge or threat whenever we are required,” Rear Adm. Michael Donnelly, commander of the carrier strike group, said in a news conference.

The North Korean threat is also expected to be a key agenda when U.S. Vice President Kamala Harris visits South Korea next week after attending the state funeral in Tokyo of slain former Japanese Prime Minister Abe Shinzo.

The Reagan’s arrival in South Korea comes after North Korean leader Kim Jong-un told Pyongyang’s rubber-stamp parliament this month he would never abandon his nuclear weapons and missiles he needs to counter what he perceives as U.S. hostility.

North Korea also passed a new law that enshrined its status as a nuclear power and authorized the preemptive use of nuclear weapons over a broad range of scenarios where the country or its leadership comes under threat.

Sung Kim, the Biden administration’s special representative for North Korea, met with South Korean counterpart Kim Gunn on Thursday in Seoul, where they expressed “serious concern” over the North’s escalating nuclear doctrine spelled out in the new law, South Korea’s Foreign Ministry said.

The diplomats reaffirmed the U.S. commitment to defend South Korea in the event of a nuclear war with the full range of its military capabilities, including nuclear. The allies also maintained their months-old assessment that North Korea is gearing up to conduct its first nuclear test since 2017 and discussed “stern” countermeasures to such an action, the ministry said.

North Korea has dialed up weapons testing to a record pace in 2022, launching more than 30 ballistic weapons including its intercontinental ballistic missiles since 2017, as it exploits a divide in the U.N. Security Council deepened over Russia’s war on Ukraine.

While North Korea’s ICBMs garner much of U.S. attention because they pose a potential threat to the American homeland, the North has also been expanding its arsenal of nuclear-capable, shorter-range missiles designed to evade missile defenses in South Korea.

North Korea’s expanding arsenal and threats of preemptive nuclear attacks have triggered concerns in South Korea over the credibility of the U.S. “nuclear umbrella” protecting its allies in the event of war.

South Korean President Yoon Suk Yeol, a conservative who took office in May, has vowed to enhance South Korea’s conventional missile capabilities and work with the Biden administration to develop more effective strategies to deter North Korean attacks.

Senior U.S. and South Korean officials met in Washington this month for discussions on the allies’ deterrence strategies and issued a statement reaffirming that “any (North Korean) nuclear attack would be met with an overwhelming and decisive response.” The statement said the United States reiterated “its ironclad and unwavering commitment to draw on the full range of its military capabilities, including nuclear,” to provide extended deterrence to South Korea.

North Korea has so far rejected U.S. and South Korean calls to return to nuclear diplomacy, which have been stalled since 2019 over disagreements in exchanging the release of U.S.-led sanctions against the North and the North’s disarmament steps.

North Korea has harshly criticized Yoon for continuing military exercises with the U.S. and also for letting South Korean civilian activists fly anti-Pyongyang propaganda leaflets and other “dirty waste” across the border by balloon, even dubiously claiming the items caused its COVID-19 outbreak.

South Korean  after North Korea last month warned of “deadly” retaliation, triggering concern North Korea may react with a weapons test or even border skirmishes.

South Korea’s Unification Ministry, which deals with inter-Korean affairs, pleaded for activists to stop, citing safety reasons. Lee Hyo-jung, the ministry’s spokesperson, also said Friday that South Korea was prepared to sternly respond to any North Korean retaliation over leafleting.

Additional reporting by The Associated Press.

Source: newsy.com

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U.S. Stocks Fall Broadly Ahead Of Key Fed Decision On Rates

By Associated Press
September 20, 2022

More than 90% of stocks and every sector in the benchmark index lost ground as traders wait to see how far the Fed will raise interest rates.

Stocks fell broadly in midday trading on Wall Street Tuesday ahead of a key decision on interest rates by the Federal Reserve.

The S&P 500 index fell 1% as of 11:46 a.m. Eastern. More than 90% of stocks and every sector in the benchmark index lost ground as traders wait to see how far the Fed will raise interest rates at its meeting that ends Wednesday.

The Dow Jones Industrial Average fell 312 points, or 1%, to 30,706 and the Nasdaq fell 0.5%.

U.S. crude oil prices fell 2.1% and weighed down energy stocks. Hess fell 1.7%.

Bond yields edged higher. The yield on the 2-year Treasury, which tends to follow expectations for Fed action, rose to 3.97% from 3.95% late Monday and is hovering around its highest levels since 2007.

The 10-year yield, which influences mortgage rates, rose to 3.57% from 3.52% and is trading at its highest levels since 2011.

Stocks have been slumping and Treasury yields rising as the Fed raises the cost of borrowing money in hopes of slowing down the hottest inflation in four decades. The central bank’s aggressive rate hikes have been making markets jittery, especially as Fed officials assert their determination to keep raising rates until they are sure inflation is coming under control.

Fed Chair Jerome Powell bluntly warned in a speech last month that the rate hikes would “bring some pain.”

“He has done everything he possibly can to signal that it’s going to be another aggressive move,” said Liz Young, head of investment strategy at SoFi. “He’s been clear as a bell about what they’ve been focused on.”

The Fed is expected to raise its key short-term rate by a substantial three-quarters of a point for the third time at its meeting on Wednesday. That would lift its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%, the highest level in 14 years, and up from zero at the start of the year.

Wall Street is worried that the rate hikes could go too far in slowing economic growth and push the economy into a recession. Those concerns have been heightened by data showing that the U.S. economy is already slowing and by companies warning about the impact of inflation and supply chain problems to their operations.

Ford fell 9.6% after slashing its third-quarter earnings forecast because a parts shortage will leave it with as many as 45,000 vehicles unfinished on its lots when the quarter ends Sept. 30. Last week, FedEx and General Electric warned investors about damage to their operations from inflation.

The U.S. isn’t alone in suffering from hot inflation or dealing with the impact of efforts to fight high prices.

Sweden’s central bank on Tuesday raised its key interest rate by a full percentage point to 1.75%, catching almost everyone off guard as it scrambles to bring down inflation that was measured at 9% in August.

Consumer inflation in Japan jumped in August to 3%, its highest level since November 1991 but well below the 8% plus readings in the U.S. and Europe. The Bank of Japan is set to have a two-day monetary policy meeting later this week, although analysts expect the central bank to stick to its easy monetary policy.

Min Joo Kang, senior economist, South Korea and Japan, at ING Economics noted inflation remained relatively low in Japan. Energy prices were rising, but not as much as in the U.S. or some parts of Europe. Housing prices haven’t risen and household income have remained stagnant.

Rate decisions from Norway, Switzerland and the Bank of England are next.

Markets in Europe were mostly lower, while markets in Asia gained ground

Additional reporting by the Associated Press.

Source: newsy.com

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North Korea Says It Will Never Give Up Nukes To Counter U.S.

By Associated Press

and Newsy Staff
September 9, 2022

“Let them sanction us for 100 days, 1,000 days, 10 years or 100 years,” North Korean leader Kim Jong Un said, accusing the U.S. of raising tensions.

North Korean leader Kim Jong Un stressed his country will never abandon the nuclear weapons it needs to counter the United States, which he accused of pushing to weaken the North’s defenses and eventually collapse his government, state media said Friday.

Kim made the comments during a speech Thursday at North Korea’s rubber-stamp parliament, where members passed legislation governing the use of nuclear weapons, which Kim described as a step to cement the country’s nuclear status and make clear such weapons will not be bargained.

The law spells out conditions where the North would be inclined to use its nuclear weapons, including when it determines that its leadership is facing an imminent “nuclear or non-nuclear attack by hostile forces.” The law requires North Korea’s military to “automatically” execute nuclear strikes against enemy forces, including their “starting point of provocation and the command,” if Pyongyang’s leadership comes under attack.

The law also says North Korea could use nukes to prevent an unspecified “catastrophic crisis” to its government and people, a loose definition that experts say reflect an escalatory nuclear doctrine that could create greater concerns for neighbors.

Kim also criticized South Korea over its plans to expand its conventional strike capabilities and revive large-scale military exercises with the United States to counter the North’s growing threats, describing them as a “dangerous” military action that raises tensions.

Kim has made increasingly provocative threats of nuclear conflict toward the United States and its allies in Asia, also warning that the North would proactively use its nuclear weapons when threatened. His latest comments underscored the growing animosity in the region as he accelerates the expansion of his nuclear weapons and missiles program.

“The purpose of the United States is not only to remove our nuclear might itself, but eventually forcing us to surrender or weaken our rights to self-defense through giving up our nukes, so that they could collapse our government at any time,” Kim said in the speech published by the North’s official Korean Central News Agency.

“Let them sanction us for 100 days, 1,000 days, 10 years or 100 years,” Kim said. “We will never give up our rights to self-defense that preserves our country’s existence and the safety of our people just to temporarily ease the difficulties we are experiencing now.”

Kim was combative toward South Korea in Thursday’s speech and urged his country to expand the operational roles of its tactical nuclear weapons and accelerate their deployment to strengthen the country’s war deterrent. Those comments appeared to align with a ruling party decision in June to approve unspecified new operational duties for front-line troops, which analysts say likely include plans to deploy battlefield nuclear weapons targeting rival South Korea along their tense border.

The North is also communicating a threat that it could use its nuclear weapons during conflicts with South Korea’s conventional forces, which would raise the risk of accidental clashes escalating into a nuclear crisis, Cheong said.

North Korea has been speeding its development of nuclear-capable, short-range missiles that can target South Korea since 2019. Experts say its rhetoric around those missiles communicates a threat to proactively use them in warfare to blunt the stronger conventional forces of South Korea and the United States. About 28,500 U.S. troops are stationed in the South to deter aggression from the North.

Kim has dialed up weapons tests to a record pace in 2020, launching more than 30 ballistic weapons, including the first demonstrations of his intercontinental ballistic missiles since 2017.

U.S. and South Korean officials say Kim may up the ante soon by ordering the North’s first nuclear test in five years as he pushes a brinkmanship aimed at forcing Washington to accept the idea of the North as a nuclear power and negotiating concessions from a position of strength.

Additional reporting by The Associated Press.

Source: newsy.com

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Biden To Tell Ohioans His Policies Will Revive Manufacturing

Intel had delayed groundbreaking on the $20 billion plant until Congress passed the bipartisan CHIPS and Science Act.

President Joe Biden wants to put the spotlight on a rare bipartisan down payment on U.S. manufacturing when he visits Ohio on Friday for the groundbreaking of a new Intel computer chip facility.

President Biden heads to suburban Columbus to take a victory lap just as voters in the state are starting to tune in to a closely contested Senate race between Democratic Rep. Tim Ryan and Republican author and venture capital executive JD Vance. They’re competing in a former swing state that has trended Republican over the last decade.

Intel had delayed groundbreaking on the $20 billion plant until Congress passed the bipartisan CHIPS and Science Act. Both Ryan and Ohio Republican Gov. Mike DeWine, who is facing Democrat Nan Whaley in his reelection bid, plan to be at Friday’s groundbreaking.

In his State of the Union address last March, President Biden said he envisioned the Intel plant as a model for a U.S. economy that revolves around technology, factories and the middle class. The plant speaks to how the president is trying to revive American manufacturing nationwide, including in states that are solidly Republican or political toss-ups.

Chipmaker Micron committed $15 billion for a factory in Idaho, Corning will build an optical fiber facility in Arizona and First Solar plans to construct its fourth solar panel plant in the Southeast, all announcements that stemmed from President Biden administration initiatives.

As part of President Biden’s visit, Intel will announce that it’s providing $17.7 million to Ohio colleges and universities to develop education programs focused on the computer chips sector.

Factory work is one of the few issues going into November’s midterm elections that has crossover appeal at a time when issues such as abortion, inflation and the nature of democracy have dominated the contest to control Congress.

Ryan had largely been hesitant to share a stage with President Biden, as appearing with the country’s top Democrat could hurt his chances in a state that backed Republican Donald Trump by eight points in both 2016 and 2020.

Ryan skipped the president’s July 6 visit to Cleveland to plug his administration’s efforts to shore up troubled pension programs for blue-collar workers. President Biden nonetheless referred to him as the “future Senator Tim Ryan” and thanked him for his “incredible work” on the legislation.

The Youngstown-area congressman committed to appearing with President Biden this week because of the importance of the Intel facility in a state that has long defined itself through its factories, mills and working-class sensibilities.

“This is a huge opportunity,” Ryan told CNN on Sunday. “The CHIPS Act that we passed is all about reshoring high-end manufacturing jobs.”

Yet in a Thursday TV interview with Youngstown’s WFMJ on the eve of President Biden’s visit, Ryan said he is “campaigning as an independent.” When asked if President Biden should seek a second term, Ryan said, “My hunch is that we need new leadership across the board, Democrats, Republicans, I think it’s time for like a generational move.”

The open Senate seat in Ohio, currently held by the retiring Republican Sen. Rob Portman, is one of several hotly contested races that could determine whether Democrats can hold their slim majority in the chamber for the second half of President Biden’s term.

Several Democrats in competitive races have at moments sought to maintain some distance from President Biden, whose public approval ratings have ticked up in recent weeks but remain underwater.

A spokesman said DeWine also plans to attend the groundbreaking, making him among the few Republicans on the ballot this year who are willing to share a stage with the president. President Biden has in recent weeks said that extremist Republican lawmakers who refuse to accept the results of the 2020 election are a threat to democracy, a charge that has only intensified partisan tensions with control of the House and the Senate on the line.

Vance, the Republican Senate candidate in Ohio, hailed the Intel plant in a statement at as “a great bipartisan victory” for the state. He specifically applauded the “hard work” of GOP lawmakers including DeWine and Portman, but Vance pointedly made no mention of President Biden.

The shortage of semiconductors has plagued the U.S. and global economies. It cut into production of autos, household appliances and other goods in ways that fueled high inflation, while creating national security risks as the U.S. recognized its dependence on Asia for chip production.

The mix of high prices and long waits for basic goods has left many Americans feeling disgruntled about President Biden’s economic leadership, a political weakness that has lessened somewhat as gasoline prices have fallen and many voters have grown concerned about the loss of abortion protections after the Supreme Court overturned Roe v. Wade.

The new law would provide $28 billion in incentives for semiconductor production, $10 billion for new manufacturing of chips and $11 billion for research and development. The funding follows similar efforts by Europe and China to accelerate chip production, which political leaders see as essential for competing economically and militarily.

President Biden has pitched the legislation as a “once-in-a-generation investment in America” that could reduce U.S. dependence on Taiwan and South Korea at a time when China is seeking to expand its presence across Asia and its shipping lanes.

Lawmakers crafted the semiconductor investments to favor areas outside the wealthier coastal cities where tech dominates. That means change will be coming to the Ohio city of New Albany, where the Intel plant is being constructed, as well as nearby Johnstown.

Don Harvey, a sporting goods store owner and longtime Johnstown resident, likes the idea of a company making things again in the United States, and also providing potentially high-paying jobs for his five grandchildren down the road. Intel has said pay will average $135,000 for its 3,000 Ohio workers.

“What an opportunity in my eyes for Ohio and the United States as a whole,” said the 63-year-old Harvey.

Elyse Priest lives in a subdivision just up the road from the plant, and received a firsthand taste of the construction recently as she watched a huge cloud of dust roll up from the 1,000-acre site currently being leveled. Priest, 38, also knows the road-widening and added traffic will affect her commute to downtown Columbus where she works as a legal assistant.

“I’m concerned about losing the small town feel I’ve always had and loved about Johnstown,” Priest said. “But I know it’s going to be a greater good for the whole state.”

Additional reporting by The Associated Press.

Source: newsy.com

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