Robert Kaplan, president of the Dallas Fed, said the US economy may reach the threshold for the Fed to scale back its asset purchases sooner than expected, and he expects to raise interest rates next year. "as we make significant further progress, I think it will happen sooner than expected-sooner rather than later-and we are fending off the impact of this pandemic. I think it will be much easier for us to start adjusting our purchases of Treasuries and mortgage-backed securities from a risk management perspective, "Kaplan said on Wednesday. 

The use of the Fed's overnight reverse repo tool set an all-time record for the third day in a row on Wednesday. The 73 participants spent a total of $813.6 billion on overnight reverse repurchase, surpassing the record of $791.6 billion set on Tuesday. The Fed pays an interest rate of 0.05% against the repo agreement overnight, helping to temporarily reduce the reserve balance of the banking system.

A measure of US manufacturing activity expanded in June at the fastest pace on record since data were available in 2007, driven by loosening epidemic restrictions and a stronger domestic economy. The IHS Markit manufacturing purchasing managers' index released on Wednesday rose for the fourth month in a row, to 62.6 from 62.1 the previous month. The services index fell to 64.8, but is still close to a record high. 

Sales of new homes in the United States fell unexpectedly in May as rising house prices limited sales in the market. Government data released on Wednesday showed that sales of new single-family homes fell 5.9 per cent in May to an annualised rate of 769000, compared with a downward revision of 817000 in April. Economists surveyed by Bloomberg had a median expectation of 865000 sets. Transport bottlenecks and rising input costs are a drag on housing construction, leading to a surge in limited housing prices on the market. The optimistic thing about the report, however, is that the inventory of new homes continues to rise, although 1/3 of them have not yet begun construction.

Us Treasury Secretary Janet Yellen said she implored Congress to raise or suspend the US debt ceiling before the current debt ceiling expires on July 31, otherwise the US could default as early as August. At a hearing before the Senate Appropriations Committee on Wednesday, Yellen said that if no action was taken, it would have "disastrous" economic consequences. 

Saudi Arabia's energy minister said the OPEC+ coalition played a role in "taming and containing" inflationary pressures. The price of Brent crude rebounded to more than $75 a barrel just a few hours ago. The comments came as OPEC+ countries weighed whether to increase production further in the coming months. The group, which has already increased production from May to July, is scheduled to hold an online meeting next week to decide on production policies for August and beyond.

"We expect very significant growth in the eurozone in the second quarter and the second half of this year," Luis de Guindos, vice-president of the European Central Bank, said at an online event. With the reopening of the economy, the service industry is recovering and the gap between the service industry and the manufacturing sector is narrowing. The rise in inflation is caused by some temporary factors. Fiscal and monetary stimulus should eventually be withdrawn cautiously. 

Russian Deputy Foreign Minister Sergei Ryabkov said at the Renaissance Capital Russian investor conference that major countries and Iran are close to reaching an agreement to restart the nuclear deal, but that political decisions are needed before negotiators can complete the agreement. "We are very close to the final step," Ryabkov said during the online discussion. But as always, the last step is the most difficult, and all major political decisions have to be made in the capital.

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