Fed Inflation Split, China Leads U.S., One Hike in 2023: Eco Day

Happy Friday, Asia. Here’s the latest news and analysis from Bloomberg Economics to take you through to the weekend:

  • Fed officials largely stuck to their script that the burst of inflation the U.S. is seeing as the pandemic recedes will prove temporary
  • China’s central bank is a step ahead of its U.S. counterpart in reining in its Covid-19 emergency stimulus, relieving potential market pressure from the Fed’s looming shift in policy
  • Bloomberg Economics’ dive into the Fed’s dot plot suggests the median of 11 voters favors just one hike in 2023 -- not two
  • President Joe Biden celebrated his deal with a group of Democratic and Republican senators on a $579 billion infrastructure plan
  • The Bank of England pushed back against speculation that a surge in U.K. inflation means it’s preparing to boost interest rates
  • Executive Board member Isabel Schnabel pledged the ECB will do everything needed to sustain the recovery, and warned governments not to undermine that by tightening fiscal policy too soon
  • Advanced economies may need to rely more on fiscal spending if they want to avoid Japan’s fate of being trapped with low inflation and an empty monetary toolkit, according to ECB research
  • Australia’s rock lobsters -- a long-prized delicacy among Chinese consumers -- may be finding their way onto mainland menus through a backdoor that circumvents a diplomatic and trading dispute
  • Chinese President Xi Jinping will speak at a celebration of the 100th anniversary of China’s Communist Party
  • Mexico’s central bank wrong-footed economists and boosted the peso by unexpectedly increasing borrowing costs
  • Japan’s Defense Minister Nobuo Kishi said the security of Taiwan was directly linked with that of Japan, as tensions around the island build

©2021 Bloomberg L.P.

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