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Yellen to Confront Cooling Recovery, Uncertain Stimulus Prospects as Treasury Secretary
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Good day. Former Fed Chairwoman Janet Yellen is slated to be nominated as the next Treasury secretary. If confirmed by the Senate, the first woman to head the Fed would become the first woman to lead the Treasury. She also would become the first person to have headed the Treasury, the central bank and the White House Council of Economic Advisers. Ms. Yellen will confront an economic recovery that appears to be losing momentum and uncertain prospects for additional stimulus from Congress.
Now on to today’s news and analysis.
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Janet Yellen Is Biden's Pick for Treasury Secretary
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Former Fed Chairwoman Janet Yellen in 2019. ANDREW HARNIK/ASSOCIATED PRESS
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President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen, an economist at the forefront of policy-making for three decades, to become the next Treasury secretary, according to people familiar with the decision.
If confirmed by the Senate, Ms. Yellen would become the first woman to hold the job. Mr. Biden’s selection positions the 74-year-old labor economist to lead his administration’s efforts to drive the recovery from the destruction caused by the coronavirus pandemic.
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New York City Needs Federal Funds to Recover Footing, Mayor Says
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New York’s latest economic analysis paints a less dire picture than earlier this year, but the city still needs a federal bailout to recover from the crisis caused by the coronavirus, Mayor Bill de Blasio said.
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Key Developments Around the World
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RBA Expects Uneven Recovery Despite Likely Release of Vaccine
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The Reserve Bank of Australia expects the likely release of a Covid-19 vaccine in the coming months to boost confidence and investment across the economy, although recovery will be uneven and monetary and fiscal stimulus will need to remain in place for some time.
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Government, Bank of Canada Helped Avoid Financial System Stress
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Government and central bank policies such as emergency income support and financial market interventions so far have kept the pandemic-induced downturn from creating broad stress across the country’s financial system, a senior Bank of Canada official said.
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China Says It Has Met Its Deadline of Eliminating Poverty
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China claimed extreme poverty has been eliminated nationwide, the capstone of a Communist Party policy to reduce inequities in society, after nine counties in the mountainous Guizhou province were certified as poverty-free.
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Newsmakers Live: Q&A With John Williams
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New York Fed President John Williams will answer questions on the economic situation, the post-pandemic outlook and the response U.S. government officials took this year to avoid a financial crisis, in an online interview at 12 p.m. EST today with Nick Timiraos, WSJ's chief economics correspondent. Sign up here to submit questions in advance.
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Financial Regulation Roundup
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Bank Applications Get a Coronavirus Boost
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Oportun Financial filed paperwork to start its own bank in California, joining a wave of firms that have applied for banking licenses during a recession that has punished banks’ core businesses and forced them to set aside tens of billions of dollars to cover soured loans.
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Trump’s China Blacklist Sparks Reviews at Index Compilers
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Index compilers FTSE Russell, JPMorgan Chase and MSCI are rethinking their stance on securities from companies the U.S. government says supply and otherwise support China’s military, intelligence and security services.
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China Vows to Investigate Bond-Market Misconduct
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The Financial Stability and Development Committee, a body that groups together China’s central bank and other top financial regulators, warned it would show zero tolerance for misconduct in the debt markets, after a series of defaults by state-backed groups.
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Chinese State-Owned Bank Stops Digital Bond Sale Drawing Scrutiny
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China Construction Bank Corp. has decided not to proceed with a sale of up to $3 billion in short-term debt in Labuan, an offshore financial center in Malaysia, after the bank’s role in the deal and the way investors could trade the securities came under scrutiny in China.
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8:15 a.m.: European Central Bank’s Schnabel gives speech at Bank of Finland webinar on monetary policy strategies
9 a.m.: European Central Bank’s Lagarde joins virtual roundtable on global economy and sustainable development organized by United Nations
11 a.m.: St. Louis Fed’s Bullard speaks on economy and monetary policy at Bank of Finland webinar
12 p.m.: New York Fed’s Williams speaks at online Wall Street Journal event
12:45 p.m.: Fed’s Clarida, European Central Bank’s Lane and Bank of Canada’s Wilkins speak on virtual panel at International Monetary Fund event on new policy frameworks
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4:30 a.m.: European Central Bank releases Financial Stability Review
8:30 a.m.: U.S. Commerce Department releases October durable-goods data
8:30 a.m.: U.S. Commerce Department releases second estimate of third-quarter GDP
8:30 a.m.: U.S. Commerce Department releases October advance economic indicators report
10 a.m.: U.S. Commerce Department releases October personal income and outlays
10 a.m.: U.S. Commerce Department releases October new-home sales
10 a.m.: University of Michigan releases final November U.S. consumer sentiment
2 p.m.: U.S. Federal Reserve releases Nov. 4-5 meeting minutes
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What Stays and What Goes in a Post-Covid-19 World
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With any luck, Americans by next summer will be crowding bars and movie theaters once again, but for many merchants there will be no way to put the pandemic genie back in the bottle, Aaron Back, Jinjoo Lee and Dan Gallagher write.
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The U.S. economy expanded at a quicker pace in October, signaling the economy entered the fourth quarter on a stronger footing, according to the Chicago Fed National Activity Index, which rose to 0.83 from an upwardly revised 0.32 in September. (Dow Jones Newswires)
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Canada will present an economic update next Monday, with the country's gross domestic product now at risk of shrinking again in the final three months of 2020 because of exponential growth in Covid-19 cases, Deputy Prime Minister and Finance Minister Chrystia Freeland told lawmakers Monday. (DJN)
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The Turkish lira's declines this week suggest the market remains skeptical about whether the central bank has the authority to target inflation, according to Commerzbank. The currency reached a 13-day low of over eight to the dollar Tuesday. (DJN)
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Mexico received $2.4 billion in preliminary third-quarter foreign direct investment, bringing the amount for the first nine months of the year to $23.4 billion, the Economy Ministry said. (DJN)
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Senior Trump administration officials say they are pushing for new hard-line measures against Beijing, including the creation of an informal alliance of Western nations to jointly retaliate when China uses its trading power to coerce countries.
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Copper prices are at their highest level in almost seven years amid tight supplies, strong demand and vaccine hopes. (DJN)
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This newsletter is compiled by James Christie in San Francisco and Ed Ballard in London.
Send us your tips, suggestions and feedback. Write to:
Jon Hilsenrath, Michael Derby, Nell Henderson, Nick Timiraos, Jason Douglas, Paul Hannon, Harriet Torry, Kate Davidson, David Harrison, Kim Mackrael, Tom Fairless, Megumi Fujikawa, Michael Maloney, Paul Kiernan, James Glynn
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