U.S. Inflation Who Done It, Brexit Chaos, Tariff Threat: Eco Day

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

• It’s like a cold case that still baffles investigators. After years of rock-bottom interest rates and with unemployment at 3.8 percent, where is the inflation? It’s a whodunit that hangs heavily over the Fed. Meantime, the latest culprit for weak prices is safer driving
• A delay to Brexit day now looks very likely, keeping economic uncertainty elevated: Dan Hanson estimates a three-month delay could shave 0.2 ppt off U.K. GDP growth and put back a rate hike
• President Donald Trump’s top trade negotiator said the U.S. must keep the option of raising tariffs on China as a way to ensure Beijing lives up to an agreement that could be finalized in a matter of weeks
• Jerome Powell says America’s workforce faces serious challenges as education levels climb slowly; meantime, Wall Street’s abuzz about a new tool Fed policy makers are studying for managing interest rates
• It turns out the ECB’s loan bazooka mightn’t reveal its true firepower to investors for months
• Here’s a QuickTake on how Modern Monetary Theory allows politicians to think big
• Prime Minister Shinzo Abe should abandon a scheduled increase in the sales tax this year as it risks pushing Japan’s economy into recession. Finance Minister Taro Aso’s comments in parliament suggest the government is taking a more relaxed attitude toward defining success in the quest to hit 2 percent consumer-price growth
• Subdued inflation in India is proving to be a dilemma for Prime Minister Narendra Modi weeks before a crucial vote. The good result is driven by falling food prices that hurt the vast farm electorate
• Thailand is advancing same-sex partnership legislation. And one of its biggest industries, tourism, is paying close attention
• Argentina’s central bank seems willing to do whatever it takes to exorcise last year’s currency crisis, even if it means prolonging a recession and risking President Mauricio Macri’s re-election
• In the contest for Iraq’s loyalty, geography is proving irresistible as it builds economic ties with Iran while a sidelined U.S. looks on
• Chinese and Russian hackers are attacking Indonesia’s voter data base in a bid to disrupt the upcoming presidential election, according to a senior election commission official

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Tracy Withers

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