Fed Plans, Davos on the World Economy, China Concern: Eco Day

(Bloomberg) -- Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to help get your Wednesday started:

• The Federal Reserve’s best laid plan for a below-the-radar rundown of its $4.1 trillion balance sheet has gone awry.
• The U.S. shutdown is depriving the Fed of fresh data, just when it needs it most.
• The global economy news might skew negative these days, but the Davos minds aren’t thinking recession is imminent. A bigger concern is the “new world” of politics.
• Staying in Davos, top business leaders used a rare private audience with one of China’s top regulators to air concerns about Chinese leader Xi Jinping’s economic policies days before crucial trade talks in Washington.
  • That came amid more rumors about the status of U.S.-China trade talks, and as the White House’s top economic adviser said any final deal would depend on verification of changes to a number of structural issues.
  • China also risks being locked out of talks to establish new global rules to govern the $25 trillion e-commerce marketplace.
• In the U.K., a survey indicated manufacturers are more pessimistic than at any time since the Brexit referendum, while officials figures showed more than 40 percent of the U.K.’s services exports go to European Union countries, highlighting exactly what’s at stake if the current impasse in talks continues.
  • Still, one area which aren’t necessarily a cause for concern is the U.K.’s debt levels, according to Bank of England Deputy Governor Ben Broadbent.
• The Bank of Japan opted to hold its policy stance, as expected, while cutting its inflation outlook again.

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Zoe Schneeweiss

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