Fed Cuts Again

Federal Reserve policymakers lowered their main interest rate for a second time this year and Chairman Jerome Powell said that “moderate” policy moves should be sufficient to sustain the U.S. expansion. He left the door open to “a more extensive sequence of cuts” if needed, but stressed this was not what officials expect. “We took this step to help keep the U.S. economy strong in the face of some notable developments and to provide insurance against ongoing risks,” Powell told reporters Wednesday after the Fed cut its benchmark rate by a quarter percentage point to a range of 1.75% to 2%. “Weakness in global growth and trade policy have weighed on the economy.” President Donald Trump took to Twitter within minutes of the FOMC’s announcement to say policy makers had failed again by not cutting more and had “No ‘guts,’ no sense, no vision!”

Market Open

Asian equity futures are higher and U.S. stocks erased losses after the Federal Reserve policy makers cast doubt on the need for further easing. The dollar rallied and Treasuries pared gains. While a rate cut was widely expected, investors were more focused on the outlook for further cuts this year. The S&P 500 Index wiped out a drop that at one point reached the biggest in four weeks, as financial companies that benefit from higher rates rallied. Oil ticked lower after tumbling Tuesday and gold retreated. The focus in Asia will shift to the Bank of Japan Thursday. Though most expect rates and asset purchases to remain unchanged, investors will be on high alert after Governor Haruhiko Kuroda said the central bank was “more positive” about adding stimulus.

Hong Kong Momentum

Momentum is building in Congress over pressuring China to back off any crackdown on pro-democracy protesters. Legislation is moving through the House and Senate that would put Hong Kong’s special trading status with the U.S. under scrutiny. Annual assessments of whether the city is sufficiently autonomous from Beijing would be required. It also would require the president to report to Congress and impose sanctions on the individuals responsible for “abducting and torturing” human rights activists. The measure has bipartisan support in both chambers, but the Trump administration hasn’t said whether it would support the legislation while it’s engaged in trade negotiations with China. Chinese trade officials are due to visit the U.S. this week.

Project $5 Trillion

Indian Prime Minister Narendra Modi wants a $5 trillion economy by 2025. But the country’s slowdown and a simmering shadow banking crisis mean that target is at risk and global investors are heading for the exit. Growth hit 5% in the three months to June: The weakest since March 2013, and well below the 8% plus annual expansion needed to achieve Modi’s 2025 goal. Unemployment at a 45-year high has hurt demand for everything from soaps to 7-cent cookies, while external shocks from trade wars to surging oil prices are exacerbating the economy’s woes. “For the economy to reach $5 trillion, it will take the types of reform that were long promised: massive reductions in regulations, streamlining of labor laws, privatization of state entities, investments in infrastructure,” said Vivek Wadhwa, a distinguished fellow and professor at Carnegie Mellon University’s College of Engineering at Silicon Valley.

Rugby Reboot

Eight years after the earthquake and tsunami that caused the meltdown of the Fukushima Dai-Ichi reactor, the only sign of the devastation at the nearby J-Village sports complex is a radiation monitor showing levels lower than in Tokyo. But residents and businesses in the region – once known for its seafood and abundant fresh fruit – are still struggling to persuade the world that their towns and produce are safe. Some hope the use of J-Village as a training ground ahead of the Rugby World Cup will help rebuild the region’s image. The problem is that the facility is only about 20 kilometers (12 miles) from the Dai-Ichi plant and 7 kilometers from the remaining exclusion zone. As workers and robots continue the long process of dismantling the reactors and decontaminating the site, even the world’s athletes may struggle to undo the damage to a region that became synonymous with nuclear peril.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

• The repo market has calmed, but the Fed plans to intervene again.
• Venture capital is the new buzz word for Australian pension funds.
• A rush of foreign money pushes Taiwan stocks close to a record.
• The political will to avert a no-deal Brexit is ebbing fast.
• Critics challenge the health benefits of meat alternatives.
• Thailand’s tuk-tuks are getting a cutting-edge makeover.
• Take a look around Amazon’s newest and largest office, thousands of miles from Seattle.