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

  • In a clear sign that the Federal Reserve is shifting to tighter monetary policy, Jerome Powell -- who’s spent months arguing that the pandemic surge in inflation was largely due to transitory forces -- told Congress on Tuesday that it’s “probably a good time to retire” the word “transitory”
    • Powell’s testimony reinforced Bloomberg Economics’ view the central bank will announce a faster taper pace at its December meeting
    • Powell and Treasury Secretary Janet Yellen will be back in Congress today, testifying in front of the House Financial Services Committee from 10:00 a.m. Eastern Time
  • The OECD said in its economic outlook that central bankers should hold their nerve as they watch the global economic recovery slowing
    • Omicron is adding to high uncertainty around the outlook and governments must ramp up vaccination efforts, OECD Chief Economist Laurence Boone says
    • The U.K. is headed for the fastest growth in the Group of Seven major economies this year, according to the OECD report
  • Global manufacturing activity stabilized last month, though difficulties in sourcing components persist, according to a final IHS Markit survey of purchasing managers Wednesday
  • The detection of the omicron variant in the U.K. has lowered the chances of the Bank of England lifting interest rates in December, according to Bloomberg Economics
  • Lending in China may be about to pick up as banks rush to raise short-term debt, Bloomberg economics says
    • China’s Vice Premier Liu He said he’s confident about the economy’s outlook next year, pledging enhanced support for small and foreign businesses
    • Cutbacks in investment by China’s property developers could leave 12.5 trillion yuan investment hole in a worst-case scenario, Bloomberg Economics says
  • One of the Bank of Japan’s more dovish board members indicated he would support extending the bank’s special funding program for covid-hit businesses, given the emergence of the omicron variant
  • The Taliban’s move to restrict women from working could immediately cost the Afghan economy up to $1 billion, or 5% of GDP, the United Nations Development Programme

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