Fed Seen Signaling Taper as Powell Plays Down Liftoff Countdown
“Federal Reserve Chair Jerome Powell will this week face the challenge of convincing investors that plans to scale back asset purchases aren’t a runway to raising interest rates for the first time since 2018. “You have two tools,” said Michael Gapen, chief U.S. economist at Barclays in New York, referring to bond buying and interest rates. “If you are making progress to start using one of your tools, that means you are making progress toward using the other.”
U.K. Economic Headaches Pile Up From Inflation to Energy Crisis
“Britain’s economic difficulties are multiplying, threatening to erase the euphoria that accompanied the end of coronavirus lockdowns and leave policy makers with a delicate balancing act. Households are facing painful price increases as a growing energy crisis collides with labor and goods shortages caused by Brexit and the pandemic. That’s putting the pinch on family budgets at the moment the Treasury is scaling back support put in place to help those out of work during the crisis.”
BOJ’s Kuroda Reaffirms Policy Mix Need Ahead of Leadership Vote
“Bank of Japan Governor Haruhiko Kuroda reaffirmed the importance of a concerted policy mix that supports the economy, ahead of a key ruling party election that is almost certain to determine the country’s next prime minister. Speaking after the BOJ left its policy unchanged and fleshed out more details of its green lending program, Kuroda emphasized the need to keep supporting the economy amid ongoing risks from the pandemic, including supply-side constraints.”
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