Yellen Clarifies, Inflation Signs Pick Up, Fed Jobs: 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:

  • Treasury Secretary Janet Yellen said she wasn’t forecasting interest-rate rises would be needed to rein in inflation spurred by Biden administration spending, clarifying comments that ruffled markets
  • Signs of inflation are indeed picking up, with a mounting number of consumer-facing companies warning in recent days that supply shortages and logistical logjams may force them to raise prices
  • Yet the biggest uncertainty for investors watching the Federal Reserve in coming months may not be the rate of inflation but turnover at the top of the U.S. central bank

    • The Fed should be more concerned with restoring employment than worrying about inflation with so many Americans still out of work due to the coronavirus pandemic, Minneapolis Fed President Neel Kashkari said
  • While U.S. investment spending could initially slow slightly as a result of higher taxes, the impact would be relatively small as long as business confidence remains ebullient, according to a Bloomberg Economics analysis
  • The years-long U.S. baby drought worsened last year, with births dropping 4% from 2019 to the lowest level since 1979
  • New York City will be free from pandemic restrictions in two weeks. Now it must contend with an unemployment rate that’s nearly double the national average, a jobs shortfall of half a million people, and a tourism industry decimated by months-long shutdowns
    • London is emerging from lockdown bruised by Brexit and a pandemic that hit the U.K. capital harder than other regions, raising questions about its ability to power the country’s economic recovery
    • From New York to Sydney, here’s how Covid-19 -- along with ultra low rates and government spending -- upended real estate markets
  • Commerce Secretary Gina Raimondo called for a major increase in U.S. production capacity for computer chips whose current shortages are causing global manufacturing bottlenecks
  • Brazil’s central bank is set to deliver a second straight increase of 75 basis points to its benchmark interest rate, while weighing how much more monetary tightening is needed to pull next year’s inflation forecasts back down to target
  • The Covid-19 pandemic has sent a wave of poverty racing across Latin America, deepening declines that began over the past decade and consigning millions to lives of deprivation
  • India’s central bank announced new loan-relief measures for small businesses and pledged to inject 500 billion rupees ($6.8 billion) of liquidity to support the economy against a second deadly coronavirus wave
  • At current rates, some rich countries will reach herd immunity by August, but most poorer nations will remain below the threshold through 2024 or later, according to research by Bloomberg Economics

©2021 Bloomberg L.P.

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