Jerome Powell Ditches ‘Transitory’ Tag, Paves Way for Rate Hike
“In a clear sign that the Federal Reserve is shifting to tighter monetary policy, Jerome Powell — who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces — told Congress on Tuesday that it’s “probably a good time to retire that word.” The Fed chair, tapped last week for another four-year term, still thinks inflation will ebb next year. But in testimony before the Senate Banking Committee, he acknowledged that it’s proving more powerful and persistent than expected and said the Fed will consider ending its asset purchases earlier than planned.”
U.K. Headed for Best Growth in G-7 This Year and Next, OECD Says
“Britain is headed for the fastest growth in the Group of Seven major economies this year and next but will suffer a setback if supply shortages are allowed to worsen, the OECD said. A lack of workers to fill open jobs and persistent disruptions in the flow of goods across borders could force companies to reduce output, damaging the pace of recovery in the economy, the Paris-based researcher concluded in a report on Wednesday.”
Asian Factories Show Strength Heading Into Omicron Headwinds
“Asian factories outside of China stabilized last month, putting the region’s export-heavy economies on solid footing to face possible new challenges from the omicron variant of the coronavirus. In northern Asia, the PMIs out today showed Taiwan and trade bellwether South Korea staying in expansionary mode. Japan’s gauge reached its highest since January 2018. With Asia’s manufacturing sector showing durability, “we expect most central banks in the region to maintain pro-growth policy stances, even as tightening front-runners look to balance other risks,” Bloomberg’s Chief Asia Economist Chang Shu wrote in a note.”
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