U.S. Divergence, Productivity Gains, Biden Tax Plans: 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:

  • The U.S. economy is on a multi-speed track as minorities in some cities find themselves left behind by the overall boom in hiring, according to a Bloomberg analysis of about a dozen metro areas. The varying speeds matter because the Federal Reserve and the White House vowed to look beyond aggregate figures before adjusting their monetary and fiscal policies
    • Fed Chair Jerome Powell said that while the U.S. economic recovery is “making real progress,” the gains have been uneven following a downturn that cut hard along lines of race and income
    • The key benchmark that the Fed targets to control monetary policy dropped to its lowest level in more than a year on the final day of April, raising further questions about whether the central bank might need to tinker with some of the tools it uses to control it
  • The fate of President Joe Biden’s $4 trillion economic vision for the U.S. now rests with the lawmakers turning his infrastructure and social-spending plans into legislation. Here’s what to watch for as Congress starts the debate
    • Biden tax rule would rip billions from the biggest fortunes at death
  • The Covid-19 crisis is accelerating a technology boom that has the potential to boost productivity across much of the world, spurring growth even in mature economies such as those of Europe and the U.S.
  • Argentina’s strategy putting political decisions above everything has squashed any plan to boost exports, lower inflation and kick-start growth. Exacerbated by the pandemic and too few vaccines, a rudderless economy is having its revenge
  • Mexican workers abroad sent home a record amount of cash in March, aided by stimulus checks from the Biden administration
  • Colombia’s Finance Minister Alberto Carrasquilla resigned Monday after days of bloody street protests pushed the government to shelve his plan to raise taxes
  • Australia’s central bank said it expects to keep interest rates on hold till 2024 even as it upgraded its economic outlook as it tries to reassure investors it won’t follow Canada in withdrawing stimulus just yet

    • Economists see the Bank of England having to grapple with similar questions this week too as the U.K. rebounds.

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