U.S. Outlook Cut, Democrats’ Divisions, Rate Puzzle: 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:

  • Goldman Sachs economists revised down their forecast for growth in the U.S. economy this year, pointing to a “harder path” ahead for the American consumer than previously anticipated
    • Standard measures of wage inflation are now clearly above the average for the last decade, according to the latest version of Bloomberg’s inflation indicators
    • What happens to emerging markets if U.S. inflation turns out to be a bigger problem than the Federal Reserve thinks and rates have to move higher in a hurry? Experience suggests there will be a broad negative effect on currencies
  • President Joe Biden needs Democrats in Congress to give him a political boost by passing his $4 trillion economic agenda, but deepening divisions in the party threaten the chances of that happening any time soon
  • Global central bankers trying to gauge the threat posed by surging inflation have another puzzle to solve too: whether the pandemic has shifted their policy bearings
  • Argentina needs a long-term plan to stabilize its battered economy and a decade-long program with the International Monetary Fund can help achieve that goal, according to one of the country’s main opposition leaders
  • China’s export growth unexpectedly surged in August as suppliers likely boosted orders ahead of the year-end shopping season, offsetting any port disruptions due to fresh outbreaks of the delta virus
  • Investor confidence in the German economy declined for a fourth month in September after global supply disruptions worsened and infection rates surged, threatening to disrupt Europe’s strong recovery
  • The Reserve Bank of Australia pushed ahead with a cautious winding back of its bond-buying program, underlining its confidence in the economy’s recovery prospects once a longer-than-expected virus wave abates
  • U.K. retail sales growth lost momentum in August, with both shops and consumers pointing to concerns over higher prices. House prices meanwhile picked up momentum

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