Good day. If confirmed by the Senate as Federal Reserve Vice
Chairwoman, Fed governor Lael Brainard would join the inner circle
of advisers that shape the agenda for monetary-policy deliberations
by the central bank's rate-setting committee. Fed Chairman Jerome
Powell and Ms. Brainard have already underscored the importance of
not raising rates until labor markets are tight. But with inflation
running well above the Fed's 2% target, they are facing questions
over how long they can maintain that stance. Elsewhere,
consumer-price inflation in the eurozone is expected to hit a
record high in November, raising more questions about the
credibility of assertions by the European Central Bank that this
period of high inflation is likely to prove transitory. The
European Union's statistics agency is expected to estimate Tuesday
that prices were between 4.3% and 4.5% higher in November than a
year earlier.
Now on to today's news and analysis.
Top News
Brainard's Nomination Promotes a Powell Ally on Fed
Innovations
President Biden's decision to nominate Lael Brainard to become
Federal Reserve vice chairwoman elevates a veteran policy maker and
economist who has been a strong ally of Chairman Jerome Powell on
the central bank's boldest policy decisions during the
pandemic.
Ms. Brainard was a key adviser to Mr. Powell as the Fed scaled
up emergency-lending backstops last year, and she provided
influential intellectual support for his effort last year to revamp
the Fed's policy-setting framework. Under the new framework, the
Fed set aside its practice of raising rates to pre-empt
inflationary pressures and pledged to keep interest rates low to
foster a faster and broader labor-market recovery.
U.S. Economy
Biden's Economic Plans Collide With Inflation Reality
President Biden is racing to show the public he is taking action
to address rising prices and bottlenecks amid mounting anxiety
among some of his advisers about political fallout heading into
next year's midterm elections.
Biden's Nearly $2 Trillion Spending Bill Is a Boon for
Unions
President Biden's nearly $2 trillion spending bill passed by the
House is stocked with benefits for organized labor, including a
measure aimed at helping unionized companies win billions of
dollars in new green-energy projects.
Democrats Tackle Changes to $2 Trillion Spending Plan as
Deadlines Loom
On the Front Lines of the Supply-Chain Crisis
Supply-chain problems have been a defining feature of the global
economy in 2021. For millions of workers, the global gridlock has
redefined their jobs. Here is a look at the people working at each
link in the global supply chain that moves cargo from a distant
factory to your home.
Supply-Chain Snarls Leave Southern California Swamped in Empty
Shipping Containers
Key Developments Around the World
Eurozone Inflation Likely Hit Record High in November
Consumer-price inflation in the eurozone likely hit a record
high in November, but many economists think that might mark a peak
for now, and don't expect the European Central Bank to raise its
key interest rate next year.
Turkey's Central Bank: Financial System Strong Despite Lira
Crisis
Turkey's central bank said Friday the country's banking sector
remained strong and had enough liquid assets to withstand the
currency crisis, taking some pressure off President Recep Tayyip
Erdogan to change course on economic policies.
On Monday, the Turkish lira fell after Mr. Erdogan ordered an
investigation into potential currency manipulation, Dow Jones
Newswires reported. Mr. Erdogan has tasked the State Supervisory
Council to identify institutions that bought large amounts of
foreign currency and to determine whether any manipulation had
occurred, Turkey's state-run news agency reported Saturday.
Supply-Chain Woes Snarl Attempts to Tame House Prices
Home builders are passing on higher material costs to customers
whenever possible, stoking inflation in countries wrestling with
business closures related to Covid restrictions, higher energy
bills and port congestion.
Financial Regulation Roundup
Evergrande Blueprint Worked for Chinese Developers, Until It
Didn't
China's property boom has spawned numerous developers that, like
industry giant China Evergrande Group, borrowed heavily to fund
breakneck growth. Now they are inflicting unprecedented losses on
international investors.
Jack Ma's Ant Moves Ahead With Credit-Scoring Firm
Ant Group Co. is setting up a credit-scoring company with
state-owned shareholder partners, a key step in its broader
transition to become a financial-holding company, under directions
laid out by Chinese regulators earlier this year.
Chinese Tech Giants, Under Pressure From Regulation, Now Face
Economic Drag
Macau Casino Stocks Slide After Arrest of Junket Boss Alvin
Chau
Casino stocks fell and share trading of junket operator Suncity
Group Holdings was suspended Monday morning after its chairman was
held by police over allegations of illegal gambling and money
laundering.
Australian Regulator Finalizes New Bank Capital Framework
Australia's regulator of financial institutions won't require
the country's banks to raise extra capital as part of its finalized
new system to strengthen financial system resilience. The
Australian Prudential Regulation Authority on Monday released its
well-flagged new bank capital framework. It said it had the goal of
embedding "unquestionably strong" levels of capital and aligning
Australian standards with internationally Basel III requirements,
which are due to come into force around the world from 2023.
Australian banks must implement APRA's capital framework by Jan. 1,
2023. (Dow Jones Newswires)
Forward Guidance
Monday (all times ET)
12:15 p.m.: European Central Bank's Lagarde speaks at Lincean
Academy event
2 p.m.: Bank of Canada's Macklem gives opening remarks at
symposium on indigenous economies
3 p.m.: New York Fed's Williams speaks at event to introduce the
New York Innovation Center
3:05 p.m.: Fed's Powell gives prerecorded comments at event to
introduce the New York Innovation Center
5:05 p.m.: Fed's Bowman, Bank of Canada's Schembri speak at
symposium on indigenous economies
Tuesday
8:30 a.m.: U.S. Commerce Department releases October advance
economic indicators report
10 a.m.: Fed's Powell testifies on coronavirus and Cares Act at
Senate Banking Committee hearing
10:30 a.m.: New York Fed's Williams speaks at webinar organized
by his bank on combating food insecurity
1 p.m.: Fed's Clarida gives speech on Federal Reserve
independence at Cleveland Fed event, followed by discussion with
Cleveland Fed's Mester
Commentary
U.S. Economy Could Enjoy Post-Holiday Glow
Many people coming off holiday jobs will be looking for work
again and available to hire, getting supplies will be easier with
holiday goods no longer clogging up transportation networks, and
many businesses might look at it as a good time to secure necessary
labor and rebuild inventories. As a result, Justin Lahart writes,
some of the seasonal swoons in activity that typically occur when
the calendar flips might be diminished -- translating into gains
after they go through the seasonal adjustment.
Basis Points
The World Trade Organization decided to postpone a ministerial
meeting that was scheduled to start Tuesday in Geneva, after dozens
of nations restricted travel from southern Africa to prevent the
transmission of a new coronavirus variant.
South Africa's warning of a new coronavirus strain walloped the
energy sector on Friday, leading to the sharpest declines in oil
prices since the global economy locked down early last year to slow
the spread of the deadly virus.
The new Covid-19 variant that has unsettled financial markets
would need to have a dramatic economic impact to deter the Reserve
Bank of New Zealand from continuing to raise interest rates, its
chief economist said. (Dow Jones Newswires)
U.S. online retail sales over the Thanksgiving holiday weekend
didn't increase from the prior year for the first time in nearly a
decade, showing shoppers embraced stores on Black Friday and
supply-chain concerns pulled some purchases earlier, according to
some industry estimates.
Mexico posted a $2.7 billion trade deficit in October, its
fourth consecutive monthly deficit, as imports grew while exports
were unchanged from a year earlier. Imports increased 25.1% to
$44.66 billion and exports were flat at $41.96 billion, the
National Statistics Institute said. (DJN)
Confidence among businesses and households in the eurozone fell
in November amid rising inflation, supply-chain constraints and a
surge of coronavirus cases. The European Commission said that its
economic sentiment indicator, an aggregate measure of business and
consumer confidence, fell to 117.5 in November from 118.6 in
October. (DJN)
German companies are putting more effort into recruitment this
month, according to Ifo, which said its employment barometer rose
from 103.7 points in October to 103.8 points. (DJN)
German import prices rose 21.7% on year in October, marking the
highest increase since January 1980, Destatis said, noting energy
imports were 141.0% more expensive than a year earlier. (DJN)
(END) Dow Jones Newswires
November 29, 2021 08:56 ET (13:56 GMT)
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