Fed’s Interest Rate Message, ECB Latest, EM Firepower: Eco Day

(Bloomberg) --

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

• Federal Reserve Chairman Jerome Powell and his colleagues have been especially chatty since cutting interest rates last month, yet a record of that meeting may still shed light on the strength of conviction among officials that monetary policy is probably poised for a long pause
• European Central Bank watchers who monitor its every signal to gauge the future of rates hope new President Christine Lagarde gives them some clues when she breaks her silence this week
  • Meanwhile, the ECB is warning of potential side effects from its loose monetary policy, highlighting how years of unprecedented stimulus designed to bolster the economy is contributing to an erosion of financial stability
  • Helicopter money could be both the best and worst option for the ECB if the euro-area slowdown morphed into a recession, according to a Peterson Institute paper.
• U.K. Labour leader Jeremy Corbyn’s plan to make the top 5% earners pay more income tax could raise less than the party thinks, according to a leading think tank
• Emerging-economy central banks from India to Brazil still have the firepower to shore up the global economy as their peers from developed markets take to the sidelines
• Take a look inside the People’s Bank of China’s struggle to balance the nation’s slowing economic growth and its eye-watering debt levels
• For the first time this year, the Canadian economy is coming in below analyst expectations

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, Lucy Meakin

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