Rate Cuts' Dark Side, Fed Urged Go Big, China Struggles: Eco Day

(Bloomberg) -- Welcome to Tuesday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

  • Warren Buffett’s warning that you only learn who’s swimming naked when the tide goes out is hardly heard these days as waves of easy monetary policy wash over the world’s financial markets
  • President Donald Trump renewed his attack on the Fed ahead of this week’s meeting, complaining it “probably will do very little” and declaring “a small rate cut is not enough.” That comes as a new study shows the central bank’s unique structure helps preserve monetary policy independence
  • The Fed should actually raise rates -- not cut -- to keep the economy from overheating, Guggenheim Partners says
  • The drop in China’s June industrial profits should curb any optimism that the surprise rebound in output marked a turning point for the industrial sector, writes Chang Shu
  • The U.S. Treasury Department said it plans to borrow more than twice as much as previously anticipated in the third quarter, assuming lawmakers free up spending by lifting the debt ceiling
  • China and the U.S. talk trade again this week, but the two sides are arguably further apart than they were three months ago. As negotiators prepare for the new round, it’s a good time for an economic reality check, writes Shawn Donnan in Terms of Trade
  • The BOJ is expected to sit tight Tuesday as it waits to assess the impact of the looming Fed decision. Inflation readings suggest the BOJ needs to keep up its monetary stimulus. Throw financial stability considerations into the mix, though, and the case for additional easing weakens considerably, writes Yuki Masujima
  • New Zealand’s reforms of the Reserve Bank will put more responsibility on the board to oversee prudential policy after the government opted not to establish a Financial Policy Committee, documents released by the Treasury show
  • Rising tensions in the South China Sea and fallout from U.S.-China trade war are set to dominate talks this week as top diplomats converge in Bangkok for a key Southeast Asia summit

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