U.S Inflation, China’s Labor Pains, Omicron-Absenteeism: Eco Day

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Welcome to Thursday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

• U.S. consumer prices are likely to extend their eye-popping gains after soaring last year by the most in nearly four decades
  • The December CPI will keep the FOMC focused on upside risks to its preferred inflation measure, and the need to start winding down policy accommodation in short order
  • Fed Governor Lael Brainard said tackling inflation and getting it back down to 2% while sustaining an inclusive recovery is the U.S. central bank’s most pressing task
  • Bank of Cleveland President Loretta Mester said the central bank should shrink its balance sheet as fast as it can
  • Bank of Kansas City President Esther George said she favors reducing the Fed’s $8.77 trillion balance sheet early
• China’s steady jobless rate is masking pain in the labor market
  • China’s inflation pressures moderated in December, giving the central bank scope to cut interest rates
  • China’s slowdown probably extended into end-2021, with growth falling below 4%, Bloomberg Economics says
• The omicron surge -- triggering absenteeism across offices and factories -- means things may get worse before they get better
  • Australia was already facing a record shortfall of workers before spiraling omicron cases triggered the widespread absenteeism that is causing the country more acute pain
  • Yet, the coronavirus isn’t going to be public enemy No. 1 for the global economy in 2022, writes Stephanie Flanders
• The Bank of Korea will likely consider raising rates again this week
• The Reserve Bank of New Zealand said Deputy Governor Geoff Bascand left his role earlier than planned after breaching protocol
• The Bank of Japan is expected to stand pat on policy, but adjust its view of inflation risks for the first time since 2014
  • Japan needs to significantly increase its carbon tax in order to get on track for meeting its climate goals, a former senior official at the Ministry of Finance said
• There are few signs of a new-year reset for a global economy dogged by a supply crunch, soaring energy costs and ongoing disruptions in the strange conditions spawned by the pandemic

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