The pressure is piling on

<p>Kia ora,</p><p>Welcome to Thursday’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 pandemics, war and now floods are compounding pressures on the global economy.</p><p>In the US, Fed Chairman Powell is giving <a href="https://www.federalreserve.gov/newsevents/testimony/powell20220622a.htm" target="_blank"><strong>testimony</strong></a> to Congress today and tomorrow, and today acknowledged that a soft landing for the giant American economy will be "challenging" and he also acknowledged that a <a href="https://www.bloomberg.com/opinion/articles/2022-06-22/the-us-economy-is-headed-for-a-hard-landing#xj4y7vzkg" target="_blank"><strong>recession is a real possibility there</strong></a>. That dose of realism has put a huge damper on financial markets today, but Wall Street is actually up, presumably on the basis that his comments on the outlook weren't worse.</p><p>American <a href="https://www.mba.org/news-and-research/newsroom/news/2022/06/22/mortgage-applications-increase-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications rose</strong></a> again last week, a second successive weekly gain after a long period of declines. They also reported that the average 30 year mortgage rate is almost touching 6% there. It was just <a href="https://www.freddiemac.com/pmms" target="_blank"><strong>3% at the beginning of 2022</strong></a>.</p><p>In more positive news the US <a href="http://www.redbookresearch.com/" target="_blank"><strong>retail Redbook index</strong></a> shook off its prior week slowdown to return to its 'normal' strong recent year-on-year gain, well above what can be accounted for in inflation.</p><p>There was a US Treasury bond auctions earlier today. <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20220622_3.pdf" target="_blank"><strong>The 20yr one</strong></a> was very well supported and came