U.S. Inflation, Debt Ceiling, Chip Funding Rules: Eco Day

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

• Already-hot U.S. consumer price inflation is expected to have accelerated to 6.8% in November
  • The data has become the most important monthly economic release, with the rapid rise in prices weighing on consumer sentiment, and remains critical for gauging the pace of Federal Reserve’s accommodative policy unwind
  • There were signs of investor nerves about today’s number in yesterday’s weak 30-year Treasury auction
  • The data will be the last major release for policy makers to digest before next week’s Fed meeting. That gathering is expected to announce the end of asset purchase as early as March, opening the door to a rate hike in the middle of next year
• The U.S. Senate passed legislation creating a fast track to raising the nation’s debt ceiling, paving the way for Congress to act next week to eliminate the risk of a U.S. default
• The Biden administration aims to sign an economic agreement with Asian nations, with Commerce Secretary Gina Raimondo saying it could become “very powerful”
  • In an interview with Bloomberg, she also said legislation to spur domestic semiconductor manufacturing needs rules to prevent funds from going toward production in China but deferred to Congress on the details of such provisions
• The Fed’s wordsmiths at the FOMC face a bigger task than usual in refreshing the language of the policy statement they will issue after next week’s meeting, according to Bloomberg Economics
• China’s top leaders are set to convene this week to decide the economic agenda for 2022, and analysts are expecting the focus to shift to supporting growth from deleveraging and regulatory crackdowns
• The Bank of Canada will maintain its 2% inflation target in a mandate review that will be announced in coming days, according to a person familiar with the matter
• Finally, progress in repairing global supply snarls has proved to be a mirage

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