JACKSON HOLE, Wyoming — With the Federal Reserve considered certain to start cutting its benchmark interest rate next month, Chair Jerome Powell’s highly anticipated speech Friday morning at an economic conference will be closely watched for any hints about how many additional rate cuts might be in the pipeline.

Powell is expected to say the Fed has become more confident that inflation is nearing its 2% target, more than two years after it hit a painful four-decade high. Yet the Fed chair may take an overall cautious approach in his remarks at an annual conference of central bankers in Jackson Hole, Wyoming. Economists note that forthcoming economic data, including a monthly jobs report on Sept. 6, will help determine the size of future Fed rate cuts — whether a typical quarter-point cut or a more aggressive half-point drop — and how fast they occur.

“We think he will seek to dampen expectations of [a half-point cut] as well as reiterate that the Fed is data-dependent and does not make decisions in advance,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.

Powell’s speech comes as the central bank is moving toward achieving a much sought-after “soft landing,” in which its rate hikes — 11 of them in 2022 and 2023 — manage to curb inflation without causing a recession. Inflation was just 2.5% in July, according to the Fed’s preferred measure, having tumbled from a 7.1% peak two years ago.

The progress made on inflation has likely made many Fed officials more open to cutting rates several times this year now that elevated borrowing costs have largely succeeded in cooling the economy and taming inflation.

Still, a slowdown in hiring and an uptick in the unemployment rate last month heightened concern that the Fed could soon make a mistake in the other direction — by keeping rates too high for too long, throttling growth and plunging the economy into recession. Powell will likely refer to that balancing act in his speech Friday.

On Wednesday, minutes from the Fed’s most recent meeting, held July 30-31, showed that the “vast majority” of policymakers said at the time that they would likely support a rate reduction at the next meeting in mid-September as long as inflation stayed low. Several of the Fed’s 19 officials even supported a rate cut at that meeting, the minutes showed.

Also Wednesday, the Labor Department revised its estimate of job growth for the 12 months that ended in March: It said that 818,000 fewer jobs were added during that year than it had earlier reported. The revisions, which were preliminary, will be finalized in February.

Hiring over that period was still solid, averaging 174,000 a month rather than 242,000, the government said. Yet because the figures show that hiring wasn’t as robust as was previously thought, a Fed rate cut next month is “a certainty,” Shepherdson wrote.

Economists generally agree that the Fed is getting closer to conquering high inflation, which brought hardship to millions of households beginning three years ago as the economy rebounded from the pandemic recession. Yet few economists think Powell or any other Fed official is prepared to declare “mission accomplished.”

After the government reported this month that hiring in July was much less than expected and that the jobless rate reached 4.3%, the highest in three years, stock prices plunged for two days on fears that the U.S. might fall into a recession. Some economists began speculating about a half-point Fed rate cut in September and perhaps another identical cut in November.

But healthier economic reports last week, including another decline in inflation and a robust gain in retail sales, partly dispelled those concerns. Wall Street traders now expect the Fed to cut its benchmark rate by a quarter-point in both September and November and by a half-point in December. Mortgage rates have already started to decline in anticipation of rate reductions.

A half-point Fed rate cut in September would become more likely if there were signs of a further slowdown in hiring, some officials have said.

Raphael Bostic, president of the Fed’s Atlanta branch, said in an interview Monday with The Associated Press that “evidence of accelerating weakness in labor markets may warrant a more rapid move, either in terms of the increments of movement or the speed at which we try to get back” to a level of rates that no longer restricts the economy.

“I’ve got more confidence that we are likely to get to our target for inflation,” he said. “And we’ve seen labor markets weaken considerably relative to where they were” last year. “We might need to shift our policy stance sooner than I would have thought before.” Several months earlier, Bostic had said he would likely support just one rate cut in the final three months of the year.
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Windhoek, Namibia — Namibia’s minister of agriculture has urged farmers in the Southern African country to look at alternative markets for its charcoal and beef products since the European Union, one of its largest trading partners, has implemented nontariff barriers that came into force in 2023.

A unilateral decision by the European Union to impose regulations on agricultural products from Namibia that come from areas that have been deforested has raised concerns regarding market access for products such as beef and charcoal.

These products will no longer have access to the European market unless they comply with the new rules that Namibian Minister of Agriculture Calle Schlettwein describes as stringent and prohibitive.

“When you want to conduct agriculture, you have to clear lands. We have [the] charcoal industry. We have a number of industries in the agricultural sector where we do have an impact on deforestation. And I said that farmers must be careful that if they do that, they must be in compliance with these regulations.”

The chairperson of the Namibia Biomass Industry Group, which represents over 150 members in the sector, Colin Lindeque, says the European Union Deforestation Regulation (EUDR) will not negatively impact exports to the EU.

He said the EU is only asking for additional information. It wants geographic location tags that show that the charcoal they are exporting does not come from areas that have been deforested, but rather areas that are regarded as savannah, an argument with which Schlettwein disagrees.

Lindeque told VOA the regulations are fair, and the members of the Bio-mass Industry Group are compliant and meet the new EU requirements.  

“There was a consultant here recently from the EU looking at EUDR, and they specifically said Namibia’s bush encroachment is definitely not a forest in their opinion. But one of the challenges is our government hasn’t made the distinction, and that is actually the bigger point of interest, because we in the current Forest Act of 2001 do not even define what a forest is.”

Director of Forestry at Namibia’s Ministry of Environment, Johnson Ndokosho, says the ambiguities in the country’s law regarding what is considered a forest, woodlands and savannah are being dealt with in the new Forestry Act, which is being revised.

He cautioned that Namibia is at the mercy of the EU when it comes to whether Namibia’s beef and charcoal will still be able to enter their market.

“If they found that maybe this beef is coming out of an area where deforestation is occurring, then that may affect our exports.”

Last year, Namibia exported 270,000 tons of charcoal worth $72 billion (1.3 billon NAD) mainly to South Africa, which then exports it to other markets, including Europe. Europe is the top destination for Namibia’s beef, with the union consuming about 80 percent of the country’s total exports valued at roughly $23.5 million (420 million NAD).

Namibia is not the only country affected by the new EU regulations. Other countries include Brazil, Cameroon and Nigeria.

Products that are affected by the new EU regulations include cocoa, soy, palm oil and coffee.
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Seoul — Women’s accessories sold by some of the world’s most popular online shopping firms contained toxic substances sometimes hundreds of times above acceptable levels, authorities in Seoul said Wednesday.   

Chinese giants including Shein, Temu and AliExpress have skyrocketed in global popularity in recent years, offering a vast selection of trendy clothes and accessories at stunningly low prices that has helped them take on U.S. titan Amazon.   

The explosive growth has led to increased scrutiny of their business practices and safety standards, including in the European Union and South Korea, where Seoul officials have been conducting weekly inspections of items sold by online platforms.   

In the most recent inspection, 144 products from Shein, AliExpress and Temu were tested, and multiple products from all companies failed to meet legal standards.   

Shoes from Shein were found to contain significantly high levels of phthalates — chemicals used to make plastics more flexible — with one pair 229 times above the legal limit.   

“Phthalate-based plasticizers affect reproductive functions such as sperm count reduction, and can cause infertility and even premature birth,” an official from Seoul’s environmental health team told AFP.   

One such chemical “is classified as a human carcinogen by the International Cancer Institute, so special care should be taken to avoid long-term contact with the human body,” they added.   

Formaldehyde, a chemical commonly used in home building products, was detected in Shein’s caps at double the allowable threshold.   

Two bottles of nail polish from Shein were found to have dioxane — a possible human carcinogen that can cause liver poisoning — at levels more than 3.6 times the allowed limit and methanol concentrations 1.4 times above the acceptable level.    

Lead in sandals 

Shein told AFP that they “work closely with international third-party testing agencies… to regularly carry out risk-based sampling tests to ensure that products provided by suppliers meet Shein’s product safety standards.”   

“Our suppliers are required to comply with the controls and standards we have put in place as well as the product safety laws and regulations in the countries we operate in,” the company added.   

Seoul authorities found sandals from Temu contained lead in the insoles at levels more than 11 times the permissible limit.   

“Upon receiving notice from the Seoul city government, we immediately launched an internal investigation,” a spokesperson from Temu told AFP.   

“We have swiftly removed these product listings from our global marketplace and are enhancing our systems and guidance to merchants to ensure they comply with safety standards and local regulations.”   

Seoul officials asked for all the products to be removed from sale, according to a government statement.   

“Products that exceed the legal limit are products that directly contact the body, such as leather sandals and hats, so citizens should pay special attention,” said Kim Tae-hee, an official in the capital.   

“The Seoul Metropolitan Government will continue to conduct safety tests periodically and disclose the results.”   

The European Union in April added Shein to its list of digital firms that are big enough to come under stricter safety rules — including measures to protect customers from unsafe products, especially those that could be harmful to minors. 
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Bangkok — Ethnic and resistance forces in Myanmar have completely blocked a key trade route to China, halting cross-border commerce and further damaging Myanmar’s already struggling economy.

The Mandalay-Lashio-Muse Road is considered the most strategically important road in the country’s northern Shan State.

Formerly known as the “Burma Road,” locals commonly call it the “pearl necklace,” as it connects Myanmar’s second largest city of Mandalay with the Chinese border. The string of pearls of trade towns already captured by rebel forces include Nawnghkio, Kyaukme, Lashio, Hsenwi, Kutkai and Muse near China’s southern border of Yunan province.

Lway Yay Oo, spokeswoman for the Ta’ang National Liberation Army, or TNLA, told VOA that right now “there are battles all along the trade route.” That has increasingly been the case, she said, since the second phase of operation 1027 began several weeks ago.

The TNLA is part of the “Three Brotherhood Alliance,” along with the Arakan Army, AA and the Myanmar National Democratic Alliance Army, or MNDAA.

The first phase of the 1027 rebel offensive, which is named after the date it began, began on October 27, 2023.

The recent capture of several key towns along the trade route in a relatively short span of time has been widely seen as a potential turning point in the resistance as rebels look to cement control and further loosen the grip of junta forces the region.

The military government isn’t giving in easily, however, with intense battles along the route making trade nearly impossible.

“The TNLA and joint forces control the entire border trade route with the cities of Kutkai, Lashio, Kyaukme and Hsipaw, except for Muse,” Lway Yay Oo added. “Although we are prepared to keep businesses operating, we’ve had to stop border trade due to fierce fighting.”

Myanmar’s trade crisis deepens

The ongoing conflict and capture of key trading towns is already having an impact.

“Myanmar’s trade sector depends mostly on border trade,” said one Yangon-based businessman, who requested anonymity due to security reasons during a phone interview with VOA. “Air trade is very expensive now, and maritime trade takes a long time, so we must rely on border trade routes.”

With main trade routes closed, businesses are looking to find alternate routes.

“Trade flows are slower than they should be, and we are spending more on transportation, leading to further losses,” the man said. There is also an impact on consumers as the ripple effect of higher transportation costs, currency fluctuations and slower trade spreads to the general population.

“When these things happen, consumers also suffer,” he said, adding that right now “with demand so low, our revenue has dropped by about 50%.”

Earlier in June, the World Bank downgraded Myanmar’s economic growth forecast to just 1% for the 2024-2025 fiscal year, citing the intensifying conflict, labor shortages and a depreciating currency as key challenges. And that was just as the second phase of operation 1027 was beginning.

Impacting the junta

According to the Ministry of Commerce’s statistics, the border trade value between Myanmar and China totaled US$416.867 million in the first two months of the current financial year 2024-2025, which began on April 1.

It is a significant decline from the $640.43 million recorded during the same period last year, and a decrease of $223.564 million.

So far, for its part, Myanmar’s military rulers are playing down the impact the conflict is having.

“Despite the challenges posed by recent conflicts, we continue to facilitate trade with our neighboring countries, especially China,” a representative from Myanmar’s Ministry of Commerce said in June, according to state media. The ministry has not commented on the impact fighting has had on the economy since then.

Opposition forces disagree and say the success of the resistance has significantly weakened the junta’s ability to manage the economy, including trade.

“The revolutionary forces have grown stronger militarily and now control more territory,” said Min Zayar Oo, the NUG Deputy Minister of Planning, Finance, and Investment, in an interview with VOA.

Min Zayar Oo added that part of this is because of the junta’s mismanagement.

“Stability and clear policy are essential for business, but the military council has failed to provide this,” he said.

Commodity prices are soaring due to inflation and recent efforts by the junta, such as printing new currency notes, have only worsened the economic situation, he adds.

“Cross-border trade routes are disrupted, foreign currency is scarce, and the junta is struggling to provide basic services. The economic front, like the military front, is already collapsing,” he said.

The economic downturn is also impacting military funding, former army Major Naung Yoe told VOA in a telephone interview.

“No matter how much the junta increases the military spending budget, if the country doesn’t have foreign currency, the military spending will also be affected,” he said.

Border trade stalls, Kyat at record low

As fighting continues and trade stalls and the value of Myanmar’s currency the Kyat plummets, many business owners are hoping a resumption of stability will come soon.

“Every day that the fighting continues, our businesses suffer,” one medium-sized entrepreneur based in Yangon told VOA, who requested anonymity for security reasons. “We rely on cross-border trade, and with the current situation, it feels as though we have been cut off from the rest of the world.”

In late June, the Kyat hit a record low in foreign exchange markets, exacerbating the financial crisis faced by many in the country.

“We are struggling to keep our operations afloat,” another entrepreneur noted. “The depreciation of the kyat is making imports prohibitively expensive, and we cannot raise prices without losing customers.”

As the conflict rages on, the future of Myanmar’s economy remains uncertain, with many calling for an urgent resolution to restore stability and revive trade. “We need peace to rebuild our businesses and our country,” the Yangon based entrepreneur added. “Without it, we are all at risk.”
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Washington — Federal Reserve officials have said they’re increasingly confident that they’ve nearly tamed inflation. Now, it’s the health of the job market that’s starting to draw their concern.

With inflation cooling toward its 2% target, the pace of hiring slowing and the unemployment rate edging up, the Fed is poised to cut its benchmark interest rate next month from its 23-year high. How fast it may cut rates after that, though, will be determined mainly by whether employers keep hiring. A lower Fed benchmark rate would eventually lead to lower rates for auto loans, mortgages and other forms of consumer borrowing.

Chair Jerome Powell will likely provide some hints about how the Fed sees the economy and what its next steps may be in a high-profile speech Friday in Jackson Hole, Wyoming, at the Fed’s annual conference of central bankers. It’s a platform that Powell and his predecessors have often used to signal changes in their thinking or approach.

Powell will likely indicate that the Fed has grown more confident that inflation is headed back to the 2% target, which it has long said would be necessary before rate cuts would begin.

Economists generally agree that the Fed is getting closer to conquering high inflation, which brought financial pain to millions of households beginning three years ago as the economy rebounded from the pandemic recession. Few economists, though, think Powell or any other Fed official is prepared to declare “mission accomplished.”

“I don’t think that the Fed has to fear inflation,” said Tom Porcelli, U.S. chief economist at PGIM Fixed Income. “At this point, it’s right that the Fed is now more focused on labor versus inflation. Their policy is calibrated for inflation that is much higher than this.”

Still, how fast the Fed cuts rates in the coming months will depend on what the economic data shows. After the government reported this month that hiring in July was much less than expected and that the jobless rate reached 4.3%, the highest in three years, stock prices plunged for two days on fears that the U.S. might fall into a recession. Some economists began speculating about a half-point Fed rate cut in September and perhaps another identical cut in November.

But healthier economic reports last week, including another decline in inflation and a robust gain in retail sales, have largely dispelled those concerns. Wall Street traders now expect three quarter-point Fed cuts in September, November and December, though in December it’s nearly a coin-toss between a quarter- and a half-point cut. Mortgage rates have already started to decline in anticipation of a rate reduction.

A half-point Fed rate cut in September would become more likely if there were signs of a further slowdown in hiring, some officials have said. The next jobs report will be issued on Sept. 6, after the Jackson Hole conference but before the Fed’s next meeting in mid-September.

Raphael Bostic, president of the Fed’s Atlanta branch, said in an interview Monday with The Associated Press that “evidence of accelerating weakness in labor markets may warrant a more rapid move, either in terms of the increments of movement or the speed at which we try to get back” to a level of rates that no longer restricts the economy.

Even if hiring stays solid, the Fed is set to cut rates this year given the steady progress that’s been made on inflation, economists say. Last week, the government said consumer prices rose just 2.9% in July from a year ago, the smallest such increase in more than three years.

Bostic noted that the economy has changed from just a couple of months ago, when he was suggesting that a rate cut might not be necessary until the final three months of the year.

“I’ve got more confidence that we are likely to get to our target for inflation,” he said. “And we’ve seen labor markets weaken considerably relative to where they were” last year. “We might need to shift our policy stance sooner than I would have thought before.”

Both Bostic and Austan Goolsbee, president of the Fed’s Chicago branch, say that with inflation falling, inflation-adjusted interest rates — which are what many businesses and investors pay most attention to — are rising even as inflation has slowed. When the Fed first set its key rate at its current 5.3%, inflation — excluding volatile energy and food costs — was 4.7%. Now, it’s just 3.2%.

“Our policies are getting tighter with every moment in that type of situation,” Bostic said. “We have to be concerned” that rates are so high they could cause an economic slowdown.

Still, Bostic said that for now, the job market and the economy appear mostly healthy, and he still expects a “soft landing,” whereby inflation falls back to the Fed’s 2% target without a recession occurring.

With the economy’s outlook unclear and the Fed focusing heavily on what future data shows, there may be only so much Powell will be able to say Friday about the central bank’s next steps.

Given the Fed’s focus on how the economic data comes in, “it will be difficult for Powell to pre-commit to a particular trajectory at Jackson Hole,” Matthew Luzzetti, chief U.S. economist at Deutsche Bank, said in a research note.
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