Fed Bond Losses, China Trade Damage, RBI Newcomer: Eco Day

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

  • The Federal Reserve is piling up unrealized losses on its $4.1 trillion bond portfolio, raising questions about its finances at a politically dicey moment for the independent central bank
    • President Donald Trump has urged the Federal Reserve not to proceed with an expected interest-rate increase when it meets next week, continuing his public campaign against further hikes
    • That’s not the first time Trump has made his feelings about Fed Chairman Powell known
  • The damage to China’s economy from the trade war with the U.S. can’t be immediately made good even in the case of a resolution, Citigroup economists say
    • It’s good news for Vietnam though. In the race to lure companies looking for alternative manufacturing sites, it wields a slew of advantages over its rivals
  • In a big week for the European Central Bank, the biggest prize for bond investors when it makes its final monetary policy decision of the year might be a clearer plan for its 2.6 trillion-euro asset-purchase portfolio
  • President Recep Tayyip Erdogan’s silence on interest rates is doing little to soothe market worry that Turkey’s central bank could act too soon to loosen policy
  • European Union leaders are set to mandate the design of a controversial budget for the euro area as part of a plan to shore up the common currency
  • India named a former bureaucrat who oversaw Prime Minister Narendra Modi’s controversial cash ban program as its new central bank chief. His predecessor, Urjit Patel, left with scarcely a whimper
    • The new RBI chief is an active user of Twitter, a sharp contrast to Patel who was publicity shy and rarely gave interviews
    • Unless politicians let the RBI do its job, the economic setup will fall short of the nation’s aspirations, Bloomberg Opinion’s Daniel Moss writes

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