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Fed Sticks to Zero, Phantom Companies, Recovery Reversal: Eco Day

Fed Sticks to Zero, Phantom Companies, Recovery Reversal: Eco Day

  • The Federal Reserve looks likely to keep short-term interest rates near zero for five years or possibly more after it adopts a new strategy for carrying out monetary policy.
    • Kansas City Fed President Esther George, who has been among the most hawkish Fed policy makers, doesn’t oppose some overshooting of the central bank’s 2% inflation target and sees more risk of price pressures being too weak than too strong
    • Recent Fed communications suggest average inflation targeting may replace the current inflation approach. Bloomberg Economics provides in insight ahead of Federal Reserve Chairman Jerome Powell’s keynote address at the virtual Jackson Hole on Thursday
  • A federal program meant to help small U.S. businesses hurt by the coronavirus pandemic may have sent more than $1 billion to places it shouldn’t have gone, according to a Bloomberg Businessweek analysis of Small Business Administration data
  • Canadian Prime Minister Justin Trudeau’s selection of Chrystia Freeland to be Canada’s new finance minister signals the most decisive lurch to the left in economic policy in at least four decades
  • The economic rebound in major advanced economies is stalling or even reversing, according to Bloomberg Economicstni gauges that integrate high-frequency data such as credit-card use, travel and location information
  • Lockdowns and coronavirus restrictions pushed the world’s major economies into a near 10% economic slump in the second quarter, according to the Organization for Economic Cooperation and Development
  • Mexico Central Bank Board Member Javier Guzman said further reductions to key interest rate can’t be assured after recent inflationary pressures, in the clearest sign yet that the country’s monetary easing may be heading for a pause
  • Brazil posted a much bigger current account surplus than expected in July on lower imports and travel abroad amid the coronavirus pandemic, with the result driving the country’s currency higher

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