The Daily Update: Fed Presidents / Super Mario

Charles Evans, the Chicago Federal Reserve Bank President, predicted that the US economy will rebound aggressively this year, however warned that monetary policy will need to remain super-easy to boost ‘too low’ inflation, even if prices were to show a temporary spike this spring. In remarks to the Oakland University School of Business Administration, Evans said ‘It will be critical for monetary policymakers to look through temporary price increases and not even think about adjusting policy until the economic criteria we have laid out have been realized’. Evans is confident that December's USD900bn pandemic relief package from the FED and the rollout of vaccinations will power the economy to grow between 5% and 6% this year. He forecasts that the new US administration will get about half the USD1.9tn fiscal package that Biden is pushing for.

James Bullard, the St. Louis Fed President, also reiterated his belief that it is too soon for the Federal Reserve to begin talking about the timing of a reduction in the central bank's monthly USD120bn asset purchases, despite strong prospects for a second half economic rebound. ‘We are still in the middle of a crisis, so it’s too early to initiate that discussion’ Bullard told reporters. He said he would ‘look for leadership from the chair as to when we would want to initiate a discussion about that’.

Plus, what do you do when you can see no way out and all seems hopeless, well of course you call for a superhero. Exactly what has happened in Italy where Super Mario accepted a mandate to try to form a new Italian government as the country seeks a way out of (yet another) political crisis, triggered by the collapse of its most recent coalition. Mario Draghi, the former European Central Bank chief who got his nickname for his role in saving the European single currency. He will have to be on his game to galvanise support in parliament and quickly build an administration needed to cope with the ongoing pandemic and revive Italy’s battered economy. With the country being one of the hardest hit by the virus in Europe, youth unemployment running at nearly 30% and forecasts for debt to GDP to soar to nearly 159%, he certainly is going to have his work cut out.