Terrible Forecasting, Trade Talks, Fed Gauges to Watch: Eco Day

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Welcome to Thursday, Americas. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

• Economists are actually terrible at forecasting recessions
• U.S. trade officials including Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer landed in Beijing Thursday for talks aimed at nailing down a deal with China, as an official there warned there are still many issues outstanding
• The fourth-quarter sell-off in U.S. stocks and credit seems to have accurately presaged a weakening in economic data, along with a dovish Federal Reserve pivot. That may help explain why some market observers are discussing the potential for an interest-rate cut
• President Jair Bolsonaro’s administration bets that overhaul of an unsustainable pension system will unlock Brazil’s economic potential, but sinking growth projections show the country has deeper-rooted problems
• Central banks in Latin America’s two biggest economies have a few things in common. For starters, they may soon begin cutting interest rates, perhaps even simultaneously like they last did during the world recession of 2009
• The European Central Bank’s chief economist says there needs to be a solid monetary-policy case before officials act to mitigate side effects of negative interest rates on banks
• Turkey’s President Recep Tayyip Erdogan revived his unorthodox theory on the relationship between prices and the cost of money three days before municipal elections, saying consumer inflation will slow if Turkey lowers interest rates
  • Here’s a memo from Bloomberg Economics’ Tom Orlik to Turkey on its lira policy: you’re not China

To contact the reporter on this story: Zoe Schneeweiss in London at zschneeweiss@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint

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