Fed Nominations, Ida Fallout, Canadian Rate Decision: Eco Day

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Welcome to Wednesday, Americas. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

  • President Joe Biden has a historic opportunity to reshape the Federal Reserve Board, with long-lasting implications for both monetary policy and financial regulation. Here’s a closer look at the package of nominations due in the coming months
    • Hurricane Ida’s disruption to raw materials production in Louisiana is likely to compound global supply-chain issues, further testing the definition of “transitory” inflation and exacerbating the Fed’s policy dilemma
  • The Bank of Canada will likely tread carefully on Wednesday, mutedly acknowledging a weaker-than-expected economy in the midst of a heated election campaign. Policy makers are set to leave the benchmark overnight interest rate unchanged at 0.25%
  • Mexico is seeking to strengthen supply chains and speed up economic help to the south of the country and Central America in meetings with the Biden administration in Washington this week
    • The country’s auto output this year is now expected to be similar to last year’s level amid a worldwide chip shortage that had production plants running at just over 50% capacity in August
  • Chile will introduce a bill that raises state-paid pensions for the poor, as the government tries to head off separate legislation for a fourth round of early retirement fund withdrawals loathed by financial markets
  • El Salvador’s official adoption of Bitcoin as legal tender did not go as well as might have been hoped, with the introduction marred by technical problems and a plunge in the digital token
  • The U.K. is set to take the lead among developed economies by raising new taxes that will help trim pandemic budget deficits, an issue that’s likely to dominate policy debate across the world in the coming years
  • The Biden administration’s move to freeze Afghan government reserves held in U.S. accounts last month would dry up liquidity, force banks to close and push the country into further poverty, an Afghanistan central bank official said
  • Two lawmakers battling to become Japan’s next prime minister both pledged to launch stimulus packages over the short term and to defeat deflation over the longer term

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