Federal Reserve Vice Chairman Richard Clarida said on Wednesday that the central bank is expected to withdraw the huge support provided to the economy due to the epidemic step by step, first by announcing a reduction in bond purchases later this year, and then raising interest rates for the first time in 2023. Although acknowledging that the rapid spread of Delta virus has brought downside risks to the economy, Clarida on Wednesday described an optimistic outlook for the next few years that the economy will maintain growth while inflation will fall from recent highs.

US Treasury Secretary Janet Yellen said that by the end of this year, the month-on-month price increase will be in line with the Fed's target, even if the year-on-year increase will continue to show disturbingly high levels of inflation. Yellen told reporters after attending several conferences and events in Atlanta on Wednesday that the year-on-year increase in prices will remain high for "a period of time." Explain the consistent level."

With improvements in business activity, new orders and employment indicators, the US service industry grew at the fastest pace since the 1997 record in July. The ISM Service Industry Index rose to 64.1 from 60.1 in June, exceeding the expectations of all economists in the Bloomberg survey. The index higher than 50 represents activity expansion. The data highlights that thanks to vaccination, demand for services such as dining out and traveling has rebounded sharply in recent months. The business activity index jumped nearly 7 points to 67, close to a record high, and new orders accelerated.

The number of new jobs created by US companies in July was less than expected, indicating that despite the overall economic improvement, employment still faces obstacles. According to data released by the ADP Research Institute on Wednesday, corporate employment increased by 330,000 in July, the smallest increase since February. The data for June was revised to add 680,000 people.

In the quarterly issuance of long-term Treasury bonds planned for next week, the US Treasury Department will maintain a record issuance scale to provide funding for the government's continued stimulus spending. At the same time, the Treasury Department will also lay the foundation for future reductions in the issuance scale. The Ministry of Finance said in a statement on Wednesday that there will be no major changes in its mid- and long-term bond issuance strategy in the next quarter, and that it will issue $126 billion in long-term treasury bonds next week. The Ministry of Finance stated that in the context of "strong demand", it will further increase the scale of inflation-preserving treasury bonds.

European Central Bank Management Committee member Martins Kazaks said that investors waiting for the central bank to reveal the future direction of bond purchases in September are likely to be disappointed. In an interview, he said that there is a remaining quota of nearly 600 billion euros. The debt purchase plan will last at least until the end of March next year. It is too early to decide whether to extend or gradually withdraw the purchase operation. The new crown infection rate in most parts of the Eurozone is rising again, which may force countries to introduce new restrictions, thereby threatening recovery.

The Central Bank of Brazil implemented the largest interest rate hike since 2003 and promised to raise interest rates by 100 basis points again at the September meeting, as the country's economic restart and severe drought pushed up the market's expectations that inflation will still be higher than the target next year. The Central Bank of Brazil decided on Wednesday to raise the Selic interest rate by 1 percentage point to 5.25%.

Several people familiar with the matter said that the Biden administration will announce new vehicle emission limits and new electric vehicle sales targets when it hosts an event with Detroit automakers at the White House on Thursday. These tasks are at the core of President Joe Biden's climate plan and are the first major measures his government uses to limit greenhouse gas emissions. These restrictions may be lower than the requirements of environmentalists, but cater to automakers.

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