Biden’s Asia Vision, ECB Rate Risk, China Inflation: Eco Day

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Welcome to Wednesday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

• President Joe Biden has pledged to step up U.S. engagement in Asia after years of ceding influence to China, but the administration is still struggling to articulate its economic vision for the region
  • U.S. President Joe Biden and his Chinese counterpart Xi Jinping are scheduled to hold a virtual summit next week
• Treasury Secretary Janet Yellen repeated her view that elevated U.S. inflation won’t persist beyond next year and said the Federal Reserve will act if needed to prevent a rerun of 1970s-style price rises
• The European Central Bank would risk exacerbating inequality if it were to raise interest rates before ceasing asset purchases, according to Executive Board member Isabel Schnabel
• China’s inflation risks are building as producers pass on higher costs to consumers, reigniting a debate over whether the central bank has scope to ease monetary policy to support a weakening economy
• Ireland is preparing for a possible trade war between the EU and U.K., its deputy prime minister said
• Britain’s consumers will feel their finances squeezed in the coming years as inflation, interest rates and taxes all increase and welfare payments decline
• The recovery in health and wealth from the pandemic is progressing at an uneven pace in emerging markets, according to a Bloomberg Economics ranking of 75 economies
• Fed Governor Lael Brainard was interviewed for the top job at the U.S. central bank when she visited the White House last week, signaling that Chair Jerome Powell has a serious rival
  • In 2009, Barack Obama took a break from his summer holiday to tap Ben Bernanke for a second term. Joe Biden is more likely to interrupt his Thanksgiving dinner
• The leaders of the U.S., Canada and Mexico plan to meet in-person for the first time in Joe Biden’s presidency as early as next week

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With assistance from Bloomberg