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Welcome to Tuesday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help you start the day.

  • The U.S. heartland has become an inflation hotbed, highlighting how difficult it will be for policy makers to cool decades-high price rises
    • Bloomberg Economics says that even as the Fed speeds toward a March rates liftoff, some loud voices suggest policy makers remain deluded about the threats
    • U.S. business activity was close to stalling in early January
    • Equity-market selloffs have portended economic trouble, but the current tumble just isn’t enough to cloud the sunny consensus for strong U.S. growth this year
    • Inflation hawks are about to get what they want from the Fed -- which means emerging markets are about to get what they’ve traditionally feared
  • Global supply chains are nearing a turning point that’s set to help determine whether logistics headwinds keep restraining growth
  • The impact of costlier imports on inflation in Asia will peak “in the near future,” say economists from Goldman Sachs
    • Consumer prices in Singapore rose more than expected again last month, adding enough uncertainty for the government to review its 2022 forecasts
  • The landmark trade deal signed in 2020 between the world’s largest economies failed to reduce the bilateral trade deficit
  • China posted strong foreign exchange inflows last year, thanks to record exports and high returns on domestic assets
    • Chinese authorities are ramping up support for the economy, Bloomberg Economics’ policy dashboard shows
  • Euro-area economic activity rose at its slowest pace in almost a year
    • A nascent easing of supply bottlenecks helped drive manufacturing activity in Europe’s two largest economies
    • The ultra-low interest rate on the ECB’s targeted longer-term refinancing operations will be the next pandemic-era stimulus measure to be pared back
    • The ECB will raise its deposit rate as early as December 2022, Deutsche Bank economists predict, arguing that inflation will prove stickier than policy makers think
  • Bloomberg Economics’ dashboard of high-frequency data is sending mixed signals on the impact on Brazil’s economy from surging Covid
  • The low interest rate loans that are helping propel one of the world’s frothiest property markets could also be what make it burst

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