U.S. Inflation Surge, China Consumers, Rate-Hike Hopes: Eco Day

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

  • U.S. consumer prices climbed in April by the most since 2009, intensifying the already-heated debate about how long inflationary pressures will last. Rates traders responded by boosting bets that the Fed may be forced to hike interest rates next year
  • China’s economic activity rotated to consumption from production over a string of holidays in early May, writes Chang Shu
  • Canadians are so alarmed by the red-hot housing market that many say they’d like to see the central bank raise interest rates
  • Tesla CEO Elon Musk said his firm is suspending purchases with Bitcoin, triggering a slide in the value of the digital currency
  • The reopening of the U.S. economy is throwing forecasters for a loop
  • The U.S. budget deficit approached $2 trillion with five months left in the fiscal year, amid another wave of pandemic-relief payments
  • The PBOC has been tapping on the liquidity brakes, with credit data suggesting its tapering is working; however, the latest abrupt pullback leads David Qu to think it will slow withdrawal of liquidity
  • The EU’s framework for controlling debt must be changed to help overcome Covid’s economic damage, Italy’s Mario Draghi said
  • Global remittances showed surprising strength in 2020 as heavy government stimulus spending put cash in immigrants’ pockets
  • The Bank of England is pushing for a shakeup of the $6.9 trillion money market fund industry
  • India’s Covid catastrophe shows the danger of complacency

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