U.S. Inflation, Omicron Hit, Europe Energy Squeeze: Eco Day

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

• U.S. data due later Wednesday may show inflation climbing to 7%, a pace that will keep markets’ attention on Fed interest-rate liftoff as soon as March, according to Bloomberg Economics
  • Fed Chair Jerome Powell said the central bank can pull off the tricky task of bringing down four-decade high inflation without damaging the U.S. economy
• Bloomberg Economics’ daily U.S. GDP tracker suggests a short, sharp drop in activity from omicron, followed by a recovery fast enough that a rate hike could still be in play at the FOMC’s mid-March meeting
• Even the ultra-wealthy are finding they’re not immune to Canada’s housing shortage, and nowhere is that truer than in the country’s most expensive major market, Vancouver
• Brazil’s central bank signaled inflation will end 2022 above target while saying a “significantly restrictive” cycle of interest rate hikes will help pull cost of living increases below 5%
• Soaring energy prices are putting the squeeze on European consumers desperate for some relief after two years of coronavirus, lockdowns and job worries
  • That means the coronavirus isn’t going to be public enemy No. 1 for the global economy this year: The biggest dangers will stem from inflation and the risk that policy makers will call the post-Covid recovery wrong, Stephanie Flanders writes
• U.K. households’ perception of their financial wellbeing declined at the fastest rate since the start of the pandemic as savings dwindled and incomes dropped
• An omicron outbreak in China is sending jitters through supply chains as manufacturers and shippers brace for disruption inside the world’s-biggest trading nation if it can’t contain the fast-spreading variant
• Goldman Sachs cut its forecast for China’s economic growth to 4.3%. The Asian country’s inflation pressures moderated in December, giving the central bank scope to cut interest rates

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