Bloomberg - Evening Briefing - Global housing cooldown

Around the world, soaring borrowing costs are squeezing homebuyers and property owners alike. From Sydney to Stockholm to Seattle, buyers are pulling back as central banks raise interest rates at the fastest pace in decades, sending house prices downward. Meanwhile, millions of people who borrowed cheaply to purchase homes during the pandemic boom face higher payments as loans reset. The rapid cooldown in real estate—a leading source of household wealth—threatens to worsen a global economic downturn. While the slump so far isn’t near the levels of the 2008 financial crisis, how the decline plays out is a key variable for central bankers who want to tamp down inflation without hurting consumer confidence and triggering a recession. Already, frothy markets such as Australia and Canada are facing double-digit house-price declines, but the full impact of aggressive rate hikes may take time to play out. “We will observe a globally synchronized housing market downturn in 2023 and 2024,” warned Hideaki Hirata, a former Bank of Japan economist.  —Natasha Solo-Lyons

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

Goldman Sachs is embarking on its biggest round of jobs cuts since the start of the pandemic. The Wall Street titan is said to plan several hundred terminations starting this month.

Goldman Sachs headquarters in New York Photographer: Michael Nagle/Bloomberg

Russia vowed to regain the initiative in its war as Ukraine drives invading troops in the northeast back toward the border. After the lightning advance by Kyiv’s forces, in which they recaptured huge swaths of Ukrainian territory, the Kremlin hit power plants that caused blackouts.

US stocks rose on the final day of trading before the release of key consumer-price data, with risk sentiment buoyed by speculation that inflation is near its peak. Here’s your markets wrap.

Is the coronavirus on its way out? No. The pandemic is still here and new vaccine-evading strains may yet appear. Moreover, scientists predict the scourge that’s lasted longer than the 1918 flu pandemic will linger far into the future. 

The Biden administration is pressuring labor unions and freight-rail operators to agree on a new contract before a Friday deadline to avert a strike that risks disrupting the US economy.

A freight train carrying shipping containers travels through Cajon Pass in Phelan, California, in 2021. Photographer: Bloomberg

If you want to know where US inflation is heading, look at rents. The Federal Reserve’s attempt to get a clean read on inflation has focused attention on gauges that elevate housing costs. What happens to rental inflation will factor heavily into the future of monetary policy.

Blue Origin aborted a launch of its suborbital New Shepard rocket shortly after takeoff in West Texas, the first major failure for Jeff Bezos’ space company since transitioning to routine commercial flights.

• Bloomberg Opinion: Putin and the possibility of defeat in Ukraine.
• Bloomberg Opinion: China is winning the post-Ukraine game.
• US inflation expectations dropped in August, New York Fed says.
• DOJ short-selling probe eyes bets on Amazon, Microsoft and JPMorgan.
• Trump asks judge who ruled for him in file case to rule for him again.
• Survey shows fuel-shortage risks make investors bullish on energy stocks.
• Wall Street bosses take in “unreal” US Open as Alcaraz makes history.

Rapper and designer Kanye West says he’s done with his corporate partners and plans to branch out solo. “It’s time for me to go it alone,” he said in an interview. “It’s fine. I made the companies money. The companies made me money. We created ideas that will change apparel forever.” He’s sticking with his current contracts but says that’s it: “No more companies standing in between me and the audience.”

Shrink-wrapped limited edition Adidas 'Yeezy' model trainers. Photographer: Hollie Adams/Bloomberg

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