Overseas Headlines – February 02, 2021

United States:

Fed Dissent and Bond Volatility Are in Powell’s Taper Future

“Jerome Powell doesn’t want to talk about scaling back massive Federal Reserve asset purchases — at least not yet — but it’s only a question of time before the discussion resumes and that might not be a bad thing. The Fed chair told reporters on Jan. 27 that “the whole focus on exit is premature” — a clear call to his colleagues to focus on the economic damage in front of them rather than the forecast for a recovery.”



Euro-Area Economy Shrank Less Than Forecast at End of 2020

“The euro-area economy shrank less than expected at the end of last year, though it remains on the verge of a double-dip recession amid a slow rollout of coronavirus vaccines. Gross domestic product declined 0.7% in the fourth quarter, compared with estimates for a 0.9% drop. Germany and Spain both posted surprise economic expansions in reports last week. Italy reported a contraction of 2% earlier on Tuesday.”



Diverging Inflation Paths Shape Asian Central Banks’ Room to Act

“Pockets of inflation are flickering across some parts of Asia and fading in others, impacting central banks’ scope to further support economies in a region that’s leading the recovery from the Covid-19 pandemic.”



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