They say every top central banker faces a “test,” and this may be it for Federal Reserve Chair Janet Yellen.
The Bank of Canada is hoping the average Canadian continues to do the heavy lifting for the economy and gets it out of its rut from the first half of the year, even with dangerously high household debt levels. That may be a big ask.
Delaying its first rate hike in nearly a decade after taking a pass in June and July means the U.S. central bank may have stepped further away from an escape from zero rates and $3.7 trillion of asset purchases bloating its balance sheet.
British workers have hit a sweet spot with wages rising much faster than near-zero inflation, suggesting the economy could gain further momentum as consumers spend their spare cash.
Inflation may be far off target but economists are convinced the United States Federal Reserve and the Bank of England will soon begin raising rates from near zero – with the Fed poised to act as soon as Thursday.
The Japanese yen has strengthened unexpectedly by about 4 percent over the last month and it could rise further if the U.S. Federal Reserve delays a rate hike and the dollar weakens.
That the European Central Bank will have to soon add to its massive stimulus programme is fast becoming the consensus view among economists, although how it will do that effectively is far from clear.
For months, Latin America’s inflation has been surprisingly steady given the steep drop of their currencies. Weak growth helped curb prices – but that may be about to change.