Economic data from around the world and fresh insights into the thinking of U.S. Federal Reserve officials drove the narrative this week.
Starting south of the border, Fed policy minutes released Wednesday from its April meeting showed officials want to start discussing a plan to reduce the bank’s massive bond-buying program at a future meeting. That briefly jolted stocks as investors are on edge regarding the bank’s plan to tighten policy measures and the potential jump forward in the timing of an interest rate increase. In Canada, annual consumer prices accelerated to 3.4% in April from 2.2% in March according to Statistics Canada Wednesday. That was the fastest rate in a decade, outpacing estimates and fueling concern Canada may be entering a period of persistent inflation. Turning to China, the economic expansion continued in April with industrial output, retail sales and fixed-asset investment growing. Despite the recent growth, data suggests China’s expansion may have plateaued as each print failed to meet expectations. China’s unemployment rate now stands at 5.1%. The U.K. also released unemployment numbers this week showing its rate fell to 4.8% in Q1. The number of people with jobs is now just 1.4% lower than pre-pandemic. Also in the U.K., it officially reopened Monday giving 65 million people their first taste of freedom after a 4-month lockdown. France, Spain, Portugal and the Netherlands have eased restrictions in recent weeks. In related news, the European Union took steps Wednesday to open all borders in the bloc to vaccinated tourists. The move, if approved by EU nations’ leaders, means North Americans and others who are vaccinated may travel there this summer. In Asia, Japan’s economy shrank in Q1 by an annualized 5.1% after growing in the latter half of 2020. The government-declared state of emergency from January through March in areas including Tokyo and Osaka is leading many to believe the first-quarter downturn is an interruption in the country’s recovery.
source https://richarddri.ca/fomc-meeting-minutes-show-fed-will-revisit-its-policies-soon/
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