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When the central bank chiefs of the US, the euro zone and the UK exchange views in public on Wednesday, the admonishments of politicians may still be ringing in their ears.

Just last week, Federal Reserve Chairman Jerome Powell was warned by Democratic lawmakers not to risk a recession, a message European Central Bank President Christine Lagarde received in Brussels as well. The Bank of England, led by Governor Andrew Bailey, was recently accused of having been “flat footed” on inflation.

The trio will appear together at the ECB’s annual meeting in the Portuguese resort of Sintra, a so-called retreat that’s unlikely to amount to much of an escape.

As each of them attempts to bring prices under control, they know their every move risks an impact on voters that can leave their political counterparts restless.

The trade-off between quelling inflation and cushioning growth is focusing minds at present, and is likely to be a recurring topic at the ECB gathering focused on “challenges for monetary policy in a rapidly changing world.”

Analysis by Goldman Sachs released in the past week suggested that the ECB may be least likely to hesitate about raising rates, even though its officials haven’t even begun. Lagarde assured European leaders on Friday that she and her colleagues will take the steps required.

But confidence in that outcome is mixed. As an example, Ernest Urtasun, a European Parliament lawmaker from Spain, has already warned Lagarde of the risk of failure.

“Our fear is that while the ECB cannot tame inflation with higher interest rates, you could trigger a recession,” he said.

Story continues

What Bloomberg Economics Says:

“With ‘long and variable lags’ between monetary policy moves and real-economy impact, the peak drag from the Fed’s rate hikes will likely occur in the second half of 2023. That’s when we expect a recession to hit.”

–Anna Wong, chief US economist. For full analysis, click here

Elsewhere, a likely pickup in the Fed’s favorite inflation gauge, another record inflation reading in the euro zone, the annual report of the Bank for International Settlements, and minutes of the Bank of Japan’s latest meeting will keep investors on their toes. Central banks in Sweden and Colombia may both hike rates too.

Click here for what happened last week, and below is our wrap of what’s coming up in the global economy.


Data releases will include figures on the Fed’s preferred inflation gauge. Economists estimate the personal consumption expenditures price index accelerated in May from a month earlier, indicating inflation remains heated.

The figures will help shape debate at the Fed’s July policy meeting on whether the inflationary environment requires another 75 basis-point increase in the benchmark rate. The central bank is walking a fine line in trying to tame price pressures without overly suppressing demand and sparking an economic downturn.

San Francisco Fed President Mary Daly, typically a policy dove, on Friday lined up with those who favor a 75 bps increase in July.

The PCE report is also expected to show inflation-adjusted personal spending downshifted in May, indicating high prices may be starting to weigh on household demand. Other data in the coming week, including durable goods orders, consumer confidence and a manufacturing survey, are forecast to show the economy is moderating.

  • For more, read Bloomberg Economics’ full Week Ahead for the US


The Bank of Japan on Monday releases details of discussions from its June meeting, shedding light on the decision to keep rates at rock-bottom levels despite a sharply weaker yen and a wave of monetary tightening sweeping the world.

Figures due the same day are likely to show the central bank edging ever closer to a 50% share of Japan’s bond market as it defends its yield cap.

Tokyo inflation data at the end of the week will indicate if price growth is gaining further traction, while the BOJ’s Tankan report will show how sentiment is holding up within Japan’s boardrooms.

South Korean export figures will offer a pulse check on the health of global commerce, as well as a measure of how the weakening won is increasing the pain of the country’s trade deficit.

Meanwhile, the country’s economic chief said South Korea’s inflation rate may soon reach the highest level in more than two decades. Consumer prices may jump by more than 6% in June, July or August, and may remain elevated for a considerable period of time, Finance Minister Choo Kyung-ho told KBS News in an interview.

Australia’s Treasurer Jim Chalmers also sees the inflation situation worsening, with the “problem” only expected to improve in 2023, he told the Insiders television program on Sunday.

China releases industrial profit numbers on Monday and purchasing managers’ surveys on Thursday.

  • For more, read Bloomberg Economics’ full Week Ahead for Asia

Europe, Middle East, Africa

Inflation in the euro area probably hit yet another record this month, with economists predicting data scheduled for Friday to show an 8.5% reading.

National figures are due earlier in the week, with Spanish and German readings both due to hit — and possibly create more unease — on the final day of the ECB’s Sintra gathering on Wednesday.

Confidence data the same day will likely show a drop to the lowest level since February 2021, as consumers and companies grow increasingly anxious about inflation and the knock-on effects of Russia’s war in Ukraine, now into its fifth month.

Sweden’s Riksbank is likely to deliver a half-point rate increase on Thursday. The focus will be on how much the central bank will speed up its tightening in the months ahead.

A slew of data out of Russia will provide the latest indication of how its economy is faring. Retail sales probably plunged again in May as households become more frugal — and many Western goods are unavailable — and consumer costs rise.

At the same time, current-account readings will likely show that Russia’s balance sheet remains strong thanks to the windfall from higher commodities prices.

Kenyan data on Thursday is set to show inflation in June breached the ceiling of the central bank’s 2.5% to 7.5% target range for the first time in almost five years, amid higher fuel and food costs.

Low inflation in the Seychelles is predicted to see its monetary officials hold the key rate at 2% on Tuesday to support the Indian Ocean island nation’s economic recovery.

Saudi central bank data may hold clues for the distribution of record oil revenues in the world’s largest crude exporter, which is raking in some $1 billion a day.

  • For more, read Bloomberg Economics’ full Week Ahead for EMEA

Latin America

The upcoming week offers the opportunity to take the temperature of the region’s labor market, with unemployment data expected from Chile, Mexico, Colombia and Brazil.

Banxico’s monthly survey of economists will be keenly anticipated for new forecasts of headline and core inflation after the central bank’s 75 basis-point rate hike on June 23.

Chile’s GDP-proxy report for April was consistent with an economy that’s downshifting, so look for further cooling in the May figures.

In Argentina, while growth is also grinding lower, the GDP-proxy report for April isn’t expected to be far off the pace seen in the first-quarter output data. Economists surveyed by the central bank expect the economy to enter a brief recession in the coming months.

Brazil’s broadest measure of inflation likely remained over 10% for a 23rd straight month in June, while Lima’s consumer prices may have drifted up from May’s 24-year high.

Colombia’s central bank is all but certain to extend a tightening cycle that’s already pushed the key rate up by 425 basis points, with a seventh straight hike on June 30. Forecasts are coalescing around a 150 basis-point increase, the biggest since 1998, to put the key rate at 7.5%.

  • For more, read Bloomberg Economics’ full Week Ahead for Latin America

(Updates Asia section with South Korea, Australia inflation warnings)

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