Economy Week Ahead: Inflation, Stimulus and Layoffs - The Wall Street Journal

Economy

Economy Week Ahead: Inflation, Stimulus and Layoffs – The Wall Street Journal

Published

3 years ago

December 6, 2020

Harry Miller

China’s exports, European Central Bank stimulus and U.S. inflation figures highlight this week’s economic calendar.

TUESDAY

Economists expect China’s exports accelerated in November as surges in Covid-19 cases in Europe and the U.S. supported demand for medical and other goods. Already, data from China’s official purchasing managers index show export orders improved in November, supporting growth in the factory sector.

THURSDAY

The European Central Bank is set to offer more support to an economy struggling through another round of restrictions meant to control a new surge of Covid-19 cases. The central bank’s latest stimulus package could include billions more of bond purchases as well as an interest-rate cut and cheaper loans for banks.

U.K. gross domestic product in October may have contracted for the first time since April as the government, businesses and consumers responded to rising Covid-19 cases. Britain is one of the few major economies to report monthly GDP, offering a timely window into economic trends shaping the region.

U.S. initial claims for unemployment benefits are expected to tick higher in the week ended Dec. 5, payback for some seasonal-adjustment issues Thanksgiving week but also a reminder that layoffs remain historically elevated.

U.S. consumer prices are expected to increase only modestly in November, reflecting weak demand and plenty of slack across the economy as businesses and households navigate the coronavirus pandemic.

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Economy

IMF Boss Says ‘All Eyes’ on US Amid Risks to Global Economy – BNN Bloomberg

Published

9 hours ago

April 18, 2024

Harry Miller

(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.

“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.

The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”

The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.

“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”

Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.

Read More: A Resilient Global Economy Masks Growing Debt and Inequality

Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.

“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”

The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.

China Overcapacity

“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.

“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.

A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.

US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.

Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.

(Updates with additional Georgieva comments from eighth paragraph.)

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Economy

IMF Boss Says 'All Eyes' on US Amid Risks to Global Economy – Financial Post

Published

11 hours ago

April 18, 2024

Harry Miller

The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.

Bloomberg News

Jonathan Ferro and Christopher Condon

Published Apr 18, 2024 • 2 minute read

Kristalina Georgieva Photo by Hollie Adams /Bloomberg

“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.

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The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”

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The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.

“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”

Read More: A Resilient Global Economy Masks Growing Debt and Inequality

Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.

“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”

China Overcapacity

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“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.

US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.

(Updates with additional Georgieva comments from eighth paragraph.)

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