Yellen on Inflation, Euro Zone Woes, Asia’s Expansion: Eco Day

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Welcome to Monday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the week.

  • The Biden administration’s economic plan is unlikely to create inflation pressure because the boost to demand will be spread over a decade, said Treasury Secretary Janet Yellen. Yet inflation bulls are seeing a green light from Federal Reserve chief Jerome Powell to double down on wagers
  • Europe’s economy is finally turning the corner from its worst crisis in the postwar period after a devastating double-dip recession
  • Warren Buffett delivered a clear verdict Saturday on the state of the U.S. economy as it emerges from the pandemic: red hot
  • Euro bulls are out in force this week, after Powell poured cold water on bets the Fed was poised to withdraw its aggressive support for the U.S. economy
  • In Denmark, commercial banks have had to absorb negative rates since they were first introduced by the central bank in 2012. By 2019, the industry started sharing the cost of that policy with retail depositors. Today, Danes are the world champions in bearing the burden of negative rates together with their banks, with 35% of deposits affected
  • Asia’s manufacturing activity remained robust through April even as a gauge of factory output in China, the region’s top economy and industrial powerhouse, showed signs of cooling
  • Companies are hiring and unemployment is falling across most advanced economies on hopes that vaccines will eventually contain the coronavirus. But not every job is coming back
    • The U.S. economy probably notched up another bumper month of hiring in April, tallying with other reports that suggest growth momentum is building in the wake of the coronavirus crisis
  • Australia’s central bank will maintain its highly supportive policy settings despite surging growth and falling unemployment, as it faces up to the challenge of record-low wages and inflation. Meantime, the budget deficit will be $23 billion narrower than a December forecast
  • Hong Kong is finally turning the corner, with the economy expected to expand for the first time since 2019 as it slowly recovers from the pandemic and social unrest before that

©2021 Bloomberg L.P.

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