MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

Aircraft-Led Durables Collapse Masks Rebound In Core Orders

MNI: BELGIUM JUL BNB BUSINESS SURVEY -12.3

MNI: US Q2 GDP +2.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Powell Says Bottleneck Effect Larger Than Anticipated

FED
  • The economic downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been hardest hit.
  • Inflation has increased notably in recent months, 12-month chg in PCE was 3.6% in April and will likely remain elevated in coming months before moderating. Part of the increase reflects very low readings from early in the pandemic falling and passthrough of past increases in oil prices.
  • Beyond these we are seeing upward pressure on prices from the rebound in spending as the economy continues to reopen, particularly as supply bottlenecks have limited how quickly production in some sectors can respond in the near term.
  • These bottleneck effects have been larger than anticipated. As these transitory supply effects abate, inflation is expected to drop back toward our longer run goal and the median inflation projection falls from 3.4% this year to 2.1% next year and 2.2 percent in 2023.
  • The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic. As reopening continues, shifts in demand can be large and rapid, and bottlenecks, hiring difficulties and other constraints could continue to limit how quickly supply can adjust raising the possibility that inflation could turn out to be higher - and more persistent - than we expect.
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