Good day. Federal Reserve Chairman Jerome Powell will field
questions about the central bank's outlook for economic growth,
employment and inflation after next week's policy meeting, but
questions about whom President Biden will name to lead the Fed next
year will persist. Meanwhile, central banks around the world were
busy, with the Bank of Canada saying it will end quantitative
easing, the Central Bank of Brazil raising its benchmark interest
rate and the Bank of Japan lowering its growth forecast. Today, the
European Central Bank releases its latest policy statement.
Now on to today's news and analysis.
Fed Leadership Uncertainty Muddies Rate-Policy Outlook
When Federal Reserve Chairman Jerome Powell steps to the
microphone at a news conference next week, he may be unable to
answer one of investors' most pressing questions: Will he return
for a second four-year term in February?
Uncertainty over whom President Biden will name to lead the Fed
next year hangs over the central bank's looming policy decisions on
what to do if the recent rise in inflation turns out to be more
persistent than anticipated.
Fed Bankers Could Face Penalties for Ethical Breaches
A group of Senate Democrats plans to introduce legislation that
would penalize Federal Reserve officials who fail to adhere to a
new ethics code made public last week. The bill would make the Fed
responsible for administering its provisions.
Orders for Big-Ticket Products Fall Amid Supply Constraints
New orders for products meant to last at least three years
decreased 0.4% to a seasonally adjusted $261.3 billion in September
when compared with August. Orders last fell in April, followed by
four months of gains.
Democrats Drop Paid Leave From $1.75 Trillion Proposal
Democrats abandoned plans for a paid-leave program in their
social spending and climate-change bill, as the White House
attempted to quickly smooth over differences on policy and tax
U.S. Bans China Telecom Over National Security Concerns
The Federal Communications Commission revoked the license
allowing China's largest telecom operator to do business in the
U.S., citing national security concerns, the latest blow against a
major Chinese business in the country.
Key Developments Around the World
Bank of Canada Ends Quantitative Easing
The Bank of Canada said it would end quantitative easing and
could raise its benchmark overnight interest rate sooner than it
previously anticipated as policy makers tried to ward off concerns
about high inflation.
Brazil's Central Bank Raises Benchmark Rate to 7.75%
The Central Bank of Brazil raised its benchmark lending rate by
1.5 percentage points as inflation continues to climb amid growing
concern about government spending, and it expects to raise the
Selic again in December.
BOJ Lowers Outlook for Japan Growth, Inflation
The Bank of Japan lowered its growth forecast, reflecting
supply-chain constraints that have weighed on exports and
production, and said it didn't see significant inflation
U.K., Canada Lead West in Weaning Economies Off Covid-19
The U.K. dialled back government stimulus for the fast-growing
British economy, one of the first big Western economies to step
away from emergency policies put in place to tackle the pandemic as
concerns over inflation intensify.
Singapore Economy to Continue on Expansion Path, MAS Says
Singapore's economy is likely to continue on its expansion path
in the coming quarters as movement restrictions are eased in line
with government reopening plans, the Monetary Authority of
Singapore said. Singapore's economy is expected to grow 6% to 7% in
2021. It is expected to post a slower but still-above trend pace in
2022, barring the materialization of downside risks arising from
the coronavirus or global economic developments. Underlying
inflation is expected to pick up next year on stronger domestic
sources of inflation. Import price pressures could persist into
2022 as supply bottlenecks take time to ease. (Dow Jones
Europe's Push to Loosen Russian Influence on Gas Prices Bites
European energy ministers met to address the gas shortage, which
is stinging homeowners and lifting prices for goods from metals to
fertilizers. But there is little they can do to boost supplies
immediately, and Russia isn't helping.
China's Climate Goals Collide With Reality, Imperiling Global
China's climate pledges are bumping up against realities on the
ground. The world's No. 2 economy is so large and still growing so
quickly it might not be technically possible or politically
palatable for its leaders to move faster.
What Is COP26 and Why Does the Climate Change Summit Matter?
Financial Regulation Roundup
Regulators Back Tougher Rules to Keep Criminals From Using
Cryptocurrency firms could be forced to take greater steps to
combat money laundering under new guidelines released on Thursday
by the Financial Action Task Force, an international body that
coordinates government policy on illicit finance.
CFTC Chief Says Recent Crypto Cases Are 'Tip of the Iceberg'
The acting head of the Commodity Futures Trading Commission said
he plans to continue aggressively policing cryptocurrency markets
and called on Congress to consider expanding his agency's authority
to do so.
SEC Won't Approve Leveraged Bitcoin Fund
The Securities and Exchange Commission asked at least one asset
manager not to proceed with plans for a leveraged bitcoin
exchange-traded fund, according to a person familiar with the
Justice Department Probes Visa's Relationships With Fintech
Antitrust investigators are looking into financial incentives
Visa gave Square Inc., Stripe Inc. and PayPalHoldings Inc. to see
if the deals kept the payments firms from using other card networks
or money-movement technologies.
Libor Transition Vexes Collateralized Loan Obligations
The global $1 trillion market for collateralized loan
obligations is lagging behind in the transition away from the
London interbank offered rate, the scandal-marred interest-rate
U.K. Audit Regulator Says Companies Need to Improve
The U.K. audit and accounting regulator said it questioned
nearly 100 companies about their reporting in areas including
revenue and cash flows and asked 15 of them to restate their
accounts as part of an annual review of financial filings.
Thursday (all times ET)
7:45 a.m.: European Central Bank releases policy statement
8:30 a.m.: European Central Bank's Lagarde holds press
conference; U.S. Commerce Department releases first estimate of
8:30 a.m.: U.S. Commerce Department releases September personal
income and outlays
10 a.m.: University of Michigan releases final October U.S.
American Appetites Power Through Inflation
Strong earnings from McDonald's, Kraft Heinz and Coca-Cola
reported Wednesday show America's food and beverage giants have
what it takes to overcome inflationary pressures, Aaron Back and
Charley Grant write.
The Risks and Rewards of Playing Chicken With China
A little arm-twisting here and there could help slow the cycle
of speculation and contagion, and buy time for some of Beijing's
own modest property easing measures to take effect, Nathaniel
U.S. steelmakers said demand for steel will remain strong deep
into next year, keeping prices high for customers such as auto and
appliance makers and stoking continued investments in new
This U.S. holiday shopping season is expected to post record
activity, with sales for November and December, excluding
restaurants, gas stations and auto dealers, forecast up to between
8.5% and 10.5% over 2020 and reaching between $843.4 billion and
$859 billion, the National Retail Federation said.
Oxford Economics's eurozone recovery tracker rose 0.5 points to
87.7 during the two weeks ending Oct. 10, remaining close to its
highest point during the pandemic as financial and labor market
conditions improved, offset slightly by weaker mobility. (Dow Jones
The Belgian economy grew in the third quarter thanks to the
easing of coronavirus restrictions, and exceeded its precrisis
levels of economic activity, the National Bank of Belgium said. GDP
grew 1.8% compared with the previous quarter. Compared with the
third quarter of 2020, the economy grew 4.7%. (DJN)
The surprise 1.6% drop in Mexico's August economic activity
makes it "almost a given" GDP will have contracted in the third
quarter from the second quarter, Bank of Mexico Deputy Governor
Jonathan Heath said, adding that 6% growth for the full year is
still feasible. (DJN)
Mexico ran up a $2.4 billion trade deficit in September with
imports up sharply from a year earlier and export growth limited by
supply problems in the automotive industry. Exports rose 8.2% from
a year earlier, with petroleum exports up 64% on higher crude oil
prices and manufactured goods exports up 6.1%, the National
Statistics Institute said. (DJN)
Brazil's unemployment rate declined in the three months through
August to 13.2% from 13.7% in the three months through July as
employers, including households, rehired many workers shed during
the worst part of the coronavirus pandemic, the Brazilian Institute
of Geography and Statistics said. (DJN)
(END) Dow Jones Newswires
October 28, 2021 09:44 ET (13:44 GMT)
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