Interest-Rate Cuts, Fed Policy Debate, ECB Concerns: Eco Day

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

  • It’s proving a dovish week for central banks, with Australia’s Reserve Bank cutting its key rate on Tuesday -- and hinting there could be more. That came hours after U.S. policy maker James Bullard said the Federal Reserve may need to lower rates soon to prop up inflation and counter downside economic risks
  • The Fed is also starting a major debate on its monetary policy and how it manages the economy. Get up to speed with this crib sheet on the papers being presented at the much-anticipated conference in Chicago
  • In the euro area, the European Central Bank has its own problems ahead of a policy decision on Thursday. Euro-area price growth slowed more than forecast in May, and market inflation expectations continue to weaken
    • The focus is on the ECB’s new long-term loans, but Oxford Economics reckons it could also tweak its rate guidance, though all the fresh faces on the Governing Council makes central-bank watching harder for investors
  • On his state visit to Britain, Donald Trump called on the U.K. to throw off the “shackles” of European Union membership and strike a free-trade deal with the U.S.
  • Meanwhile, U.S.-China tensions are moving into new territory. The Trump administration has started taking aim at China’s best and brightest in the U.S. and China issued a travel advisory, warning of dangers in the U.S.
  • South Africa’s economy shrank the most in a decade at the start of the year, news that sent the rand plunging. South Korea’s economy also contracted

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