Fed Now Risks Too-Slow Taper After Too Fast in 2013, Rajan Says
“One of the leading global critics of the Federal Reserve’s 2013 “taper tantrum” episode is now worried that the central bank could fall behind the curve as it gradually removes Covid-era monetary stimulus. “The Fed thinks it has time” to slow-walk the tightening process, especially given longer-term disinflationary forces like aging, automation and globalization, Raghuram Rajan said in an interview with Bloomberg Television’s Kathleen Hays and Haidi Stroud-Watts Tuesday morning in Asia.”
Euro-Area Inflation Jumps to Decade-High 3% in Test for ECB
“Euro-area inflation jumped to the highest in a decade in August, testing policy makers’ insistence that a post-crisis spike in cost pressures should prove temporary. Consumer prices rose 3%, exceeding the predictions of all 37 economists in a Bloomberg survey. A measure of core inflation that strips out volatile items such as energy and food reached 1.6%, the highest since 2012.”
China’s Economy Takes Hit from Delta Virus as Services Contract
“China’s economy took a knock from the delta virus outbreak in August, adding to signs of a slowdown in growth in the second half of the year and fueling speculation of more central bank support. The official purchasing managers surveys showed the services industry contracted for the first time since February 2020 as consumers cut back on spending and travel amid new virus curbs. The manufacturing purchasing managers’ index fell slightly to 50.1 from 50.4 in July, partly due to supply-chain disruptions.”
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