Crypto News: Economics Daily: Rate hike week

I'm Enda Curran, a senior economy reporter in Washington. Today we're looking at a key week for the Fed and the ECB. Send us feedback and tips to ecodaily@bloomberg.net or tweet to @economics. And if you aren't yet signed up to receive this newsletter, you can do so here.

Fed Chairman Powell and colleagues look locked in to raise interest rates this week.
China's top leaders signaled they will ease property policies and adopt a plan to resolve local debt risks to help boost the economy as the recovery falters.
Ukraine needs its women refugees to come home to help revive a war-torn economy and prevent long-term damage.

The world's major central banks meet this week to set monetary policy amid continued signs that the worst inflation crisis in decades is easing.

While the Federal Reserve and European Central Bank are each expected to raise interest rates 25 basis points, the greater focus will be on the signaling from policy makers on whether more hikes are likely — or if they plan an extended pause.

Both Fed Chair Jerome Powell and ECB President Christine Lagarde have warned that inflation remains too high, forcing them to raise borrowing costs further. But with neither central bank meeting again until September, economists say the outlook for policy into the back end of the year remains open-ended.

The Bank of Japan remains the outlier with more than 80% of analysts polled expecting Governor Kazuo Ueda to continue pumping support into the world's No. 3 economy even as inflation remains above their 2% target.

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Germany and France kicked off the third quarter with contractions in their private-sector economies. Meanwhile, British companies reported their slowest growth in six months as new orders stalled.
Home prices in the US are on the rise again after a brief dip last year, complicating the central bank's effort to contain inflation.
Italy has long struggled to disburse European Union cash — this time was meant to be different.
China's trying to lure private investors with projects worth $445 billion to revive the faltering economy.
Chrome mining in this South African mining region has become part of an insidious and highly lucrative new illicit economy.
Cheap state-backed loans in Poland may fuel the nation's housing rebound.

Assessing euro membership from the perspective of household wealth, rather than by country, is important in determining winners and losers, according to DIW Berlin.

Taking Germany as a proxy for the euro zone's north, the think tank used the example of a negative supply shock, like a jump in energy prices, to show that poor households there would gain from common monetary policy, while rich households would lose out.

According to the DIW study, such a scenario would prompt the ECB to set interest rates at a lower level than they'd be under an independent German monetary regime. While the wealthier would receive lower returns on investments, the less well off would face a smaller tax bill as the state pays less interest on the debt it issues.

In Spain, which represents the euro area's south in DIW's study and doesn't face the same shock, the opposite occurs. There, richer households gain from interest rates that are higher than they would be if a national body was setting them, while poorer households would be forced to pay higher taxes.

In both cases, the factors influencing the extremities of the wealth spectrum roughly balance out for those in between. That leaves the middle class across the 20-nation currency bloc favoring the euro, helping the currency endure despite the challenges during its 25-year history, DIW said.

Home versus the office...