Overseas Headlines – October 22, 2021

United States:

Bidenomics Risks Inflation Push With Spend-Now, Pay-Later Draft

“In negotiating a slimmed-down, front-loaded version of his Build Back Better agenda, President Joe Biden could end up worse off on two fronts: The 10-year program will likely be less economically transformative than he once hoped, while still running the risk of stoking inflation in the shorter term. Much of the legislation is still being worked out, but the ultimate package looks set to clock in around $2 trillion, rather than the $3.5 trillion Biden had previously sought. While some planks are primed for the chopping block — two free years of college education, for instance — a preponderance will probably be retained, with their costs curtailed through means-testing, or, more likely, by having them end sooner.”



Europe’s Recovery Stumbles Over Supply Squeeze Driving Inflation

“Euro-area businesses are reporting a sharp slowdown in activity caused by an aggravating global supply squeeze that’s also producing record inflation. French manufacturing output declined at the steepest pace since stringent coronavirus lockdowns were in place last year, while growth momentum deteriorated sharply in Germany, purchasing managers report. Private-sector activity in the euro area slowed to the weakest since April, though it remained above a pre-pandemic average.”



Japan’s Prices Rise for First Time in 18 Months on Energy Costs

“Japan finally has an inflation pulse and the gains are much stronger than they first appear, a factor that could start to influence speculation over the Bank of Japan’s policy path. While the first rise in key consumer prices in 18 months was just 0.1% in September, once the impact of slashed mobile phone fees is removed, core inflation is closer to 1.4%, according to a Bloomberg calculation.”




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