Overseas Headlines: March 15, 2021

United States:

Fed to Hike Rates in 2023 But Dots Won’t Show It, Economists Say

“A strong recovery from the Covid-19 recession is likely to prompt Federal Reserve Chair Jerome Powell and his colleagues to lift interest rates in 2023, but that isn’t going to show up in their forecasts this week, a survey showed. Economists surveyed by Bloomberg News see two quarter-point hikes in 2023. But they also expect the U.S. central bank’s own forecast, released at the same time as its policy statement at 2 p.m. in Washington on Wednesday, will show the median Fed official projecting rates staying on hold near zero throughout that year.”



Bailey Says Market Rate Rise Reflects Optimism in U.K.

“Bank of England Governor Andrew Bailey said an increase in interest rates in financial markets reflects optimism that the U.K. economy will bounce back shortly. The remarks sidestep the concern that policy makers in continental Europe and parts of Asia have expressed about rising bond yields as a threat to a recovery. It suggests the BOE’s Monetary Policy Committee will maintain its current pace of stimulus when officials announce their next decision on Thursday.”



China’s Soaring Economic Activity Masks Uneven Recovery

“China’s economic activity surged in the first two months of the year compared with a year ago, though the figures showed an uneven recovery with strong industrial output fueled by exports but lagging consumer spending. The official data released Monday show unprecedented growth rates of more than 30% for key indicators, largely due to distortions when compared to last year’s shutdowns. Industrial production growth of 35.1% beat economist’s expectations of 32.2%, reflecting a shorter Lunar New Year holiday this year as the government encouraged workers to remain in factories rather than return to their hometowns.”




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