U.S. Inflation Hope, Fed Watch, Canada Rate Fears: Eco Day

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

• U.S. Treasury Secretary Janet Yellen said she continues to forecast inflation falling close to 2% by the end of 2022
• Federal Reserve officials will signal next week they’ll raise interest rates in March for the first time in more than three years and shrink their balance sheet soon after, economists surveyed by Bloomberg said
• The era of historically low interest rates, which inflated Canadians’ wealth and facilitated their spending, is coming to an end
• Argentina sharply reduced its budget deficit in 2021 as President Alberto Fernandez tries to cut down on spending amid talks with the International Monetary Fund
• Chilean central bank chief Mario Marcel is set to resign so he can be named finance minister in the incoming administration, according to La Tercera, a local newspaper
• China’s central bank will further ease monetary policy in the first half of 2022 to stave off headwinds and ensure economic stability, according to a Bloomberg survey of economists
  • The People’s Bank of China’s pledge to open its monetary toolbox has economists suggesting the bank could cut deposit rates or even start intervening in the FX market in a meaningful way for the first time since 2017
  • Authorities are urging commercial banks to boost lending as growth weakens and investment in the troubled property sector remains weak
• Finally, as if the global economy needed another complication, a surge in the price of crude oil to the highest level since 2014 has emerged as a fresh potential headwind to the recovery

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