Inflation Watch, Powell Grilling, Digital Trade Deal: Eco Day

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

• Prices paid by U.S. consumers probably climbed in June at a solid pace as higher commodity and labor costs associated with the reopening contribute to inflationary pressures
  • Reopening categories will again dominate in the June CPI report, leaving the headline at a red-hot 5.0% year-over-year, according to Bloomberg Economics’ Andrew Husby
• U.S. Democratic lawmakers this week will invite Federal Reserve Chair Jerome Powell to support another big round of government spending -- testing him just months before President Joe Biden is expected to consider his renomination
  • The U.S. central bank’s purchases of Treasury and mortgage-backed securities are both contributing to lower housing costs, New York Fed President John Williams said, alluding to an ongoing debate among policy makers over whether or not to scale back MBS buying faster than Treasuries when the time comes to taper
• Sentiment among U.S. small-business owners rose to an eight-month high in June as a larger share expected the economy to improve while more said they plan to expand and hire
• The Covid-19 pandemic is fueling a productivity boost for the U.S. economy by speeding up workplace digitization, according to an analysis by Goldman Sachs
• White House officials are discussing proposals for a digital trade agreement covering Indo-Pacific economies as the administration seeks ways to check China’s influence in the region, according to people familiar with the plan
• Mexico’s nominee for central bank governor, Arturo Herrera, said he doesn’t expect the bank to start a monetary tightening cycle until next year

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