Bear market growls grow louder

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the reasons your mortgage payments are rising sharply are all in today's global news roundup here.</p><p>The US equity markets are lower today, but by less than yesterday. That leaves them well in bear-market territory. And American bond markets are still haemorrhaging losses. Both are waiting for tomorrow's US Fed rate decisions. Markets have priced in a +75 bps rise to 1.75%.</p><p>The Fed seems sharply focused on fighting inflation, prepared to take the risks of triggering a recession.</p><p>Meanwhile, American <a href="https://www.bls.gov/news.release/ppi.nr0.htm" target="_blank"><strong>producer prices rose sharply again</strong></a> in May, but the rate of annual increase was unchanged from April at just over +10%. But as high as that is, it is actually its least acceleration of 2022. And the underlying rate rose its least since October 2021. So perhaps some sting is going out of the inflationary impulse in business activity. But that doesn't hide the fact that a +10% increase rate is damagingly fast.</p><p>Still holding up however are American <a href="http://www.redbookresearch.com/" target="_blank"><strong>retail sales gains</strong></a>. Last week's survey shows them little-changed from the year-on-year rise of about 11%. Much of this will be inflation however.</p><p>In Japan, an unexpected remark by the Bank of Japan Governor has made waves, as some consider it <a href="https://asia.nikkei.com/Economy/Inflation/Gaffe-or-message-Kuroda-remark-on-prices-hints-at-BOJ-s-plans" target="_blank"><strong>a subtle message</strong></a> that the central bank may be starting to explore an eventual end to its large-scale monetary easing.</p><p>Japanese <a href="https://www.meti.go.jp/statistics/tyo/seidou/result/ichiran/08_seidou.html" target="_blank"><strong>industrial