New Fed Approach, Abe Departure, ECB’s Review: Eco Day

(Bloomberg) -- Welcome to Friday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help take you through to the weekend.

• Fed Chair Jerome Powell unveiled a new approach to setting monetary policy, letting inflation and employment run higher in a shift that will likely keep interest rates low for years to come
• Still, the Fed’s new plan looks easier said than done as the central bank confronts multiple forces holding down inflation
• Japanese Prime Minister Shinzo Abe plans to resign due to health reasons. The initial -- strongly negative -- market reaction suggests investors are worried about challenges a sudden departure of the architect of Abenomics casts on the economy in its deepest crisis in decades, write Yuki Masujima
• The European Central Bank’s review of how it conducts monetary policy will focus on pursuing a credible and symmetrical goal for price growth, according to Governing Council member Francois Villeroy de Galhau
• Sweden’s government is embarking on an historic spending spree as it acknowledges there’s now less scope to look to the central bank to provide crisis support
• China’s economy picked up speed in August on a combination of a strong industrial sector and stock market, better business confidence and home and car sales
• Business activity in India picked up slightly in July as a gradual improvement in services and exports showed the economy possibly moved past its worst-showing in the previous quarter
• Applications for state U.S. unemployment benefits decreased last week following an unexpected jump, indicating the labor market’s gradual recovery is back on track as Covid-19 infections ease
• To gauge how economic factors may shape U.S. voting decisions in crucial swing states, Bloomberg Economics is using high-frequency data to track conditions
• Canada’s economy suffered its worst contraction on record in the second quarter, official data is set to show on Friday, but the country appears to have rebounded strongly since the height of the pandemic

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