On Tuesday, Fed Chairman Jerome Powell is expected to announce that the recent rise in inflation may last longer than anticipated. During his remarks, he is also expected to say that if inflation does not abate, the Fed is ready to use its tools to lower the pressure on prices. In other news, most of the world is still keeping a close eye on Evergrande and the impacts it could have. NPR has made a list of the five lessons the crisis has taught us about China’s economy.
Fed Chair Powell to warn Congress that inflation pressures could last longer than expected
Federal Reserve Chairman Jerome Powell, in remarks to be delivered Tuesday, cautioned Washington legislators that the causes of the recent rise in inflation may last longer than anticipated.
In a speech that he will deliver to the Senate Banking Committee, the central bank chair said economic growth has “continued to strengthen” but has been met with upward price pressures caused by supply chain bottlenecks and other factors.
“Inflation is elevated and will likely remain so in coming months before moderating,” Powell said. “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors. These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2 percent goal.”
You can read the full story, here.
Five Lessons Evergrande Taught Us About The Chinese Economy
Last week, global markets shook after a Chinese company named Evergrande fell into what looks like a downward spiral into oblivion. Evergrande is — or was — the second-largest real estate company in China. A couple years ago, it was the world’s most valuable real estate stock. It’s also been involved in an eclectic mix of other businesses, from mineral water to electric cars to pig farming. It even owns a professional soccer team. But recently it’s been having a really hard time repaying a mammoth amount of debt, a whopping $300 billion worth.
The Evergrande story is bigger than just one company. It’s about China’s unsustainable model of economic growth, which has relied on endless investment and a mad, debt-fueled development frenzy in recent years. That model helped China soar, but the country is now experiencing some turbulence. Last week, some alarmist observers were calling this China’s “Lehman moment” — a reference to the collapse of Lehman Brothers that preceded the 2008 financial crisis — but China-focused economists argue that’s overblown.
Nonetheless, given how interconnected the global economy is, investors remain worried about the future of the Chinese economy. It’s been a nuclear reactor powering the globe’s economic growth. Troubles there could have ripple effects around the world.
See the five lessons we’ve learned, here.
How to recalibrate your retirement planning during COVID
The pandemic has had serious financial implications for many employees, forcing some to recalibrate their short- and long-term goals when it comes to retirement.
Employees seem torn over the best path forward, with some choosing to retire early while others plan to work longer to make up for lost income during COVID. Employers are left stuck in the middle, working to cater to these disparate groups.
“The biggest challenges that employers seem to be facing is creating educational opportunities for those employees that are approaching retirement,” says Brad Hindman, a financial adviser with Wells Fargo. “If the goal is to make them feel confident and comfortable with their decision to retire, employers should meet them on their terms.”
Continue reading, here.