Economists rang in the year debating whether the Federal Reserve’s aggressive interest-rate increases would steer the highflying U.S. economy into a hard or soft landing—forcing inflation down through either a painful recession or a gentler slowdown in growth.

Surprising strength in hiring and consumer spending last month, together with signs that demand for autos and housing might be stabilizing after a decline, now have some economists pointing to a third scenario that seemed improbable just a few weeks ago: an economic growth upturn.

“A ‘no-landing’ scenario is a present-day reality,” said Neil Dutta, an economist at the research firm Renaissance Macro. While many Fed officials said they still expect the economy to slow this year, Mr. Dutta said he sees “a huge reluctance to admit the obvious, which is that the economy is reaccelerating, full stop.” (Continue Reading – WSJ)

British employers expect to raise wages for their staff by the most in at least 11 years but the 5% pay deals for workers would still fall well below expected inflation, a survey published on Monday showed.

With the Bank of England fearing the surge in inflation could be harder to tame if pay deals keep rising, the Chartered Institute of Personnel Development (CIPD) said 55% of recruiters planned to lift base or variable pay this year as they struggle to hire and retain staff in Britain's tight labour market.

Expected median annual pay awards in 2023 rose to 5% - the highest since CIPD records began in 2012 - from 4% in the previous three months. (Continue Reading – Reuters)

China’s central bank will probably increase the amount of cash it pumps into the money market this week to rein in funding costs.

The People’s Bank of China will offer 450 billion yuan ($66 billion) of one-year medium-term loans to banks in February, 50% more than the amount maturing, according to the median forecast of economists surveyed by Bloomberg ahead of the Feb. 15 announcement. That’s after a gauge of overnight borrowing costs climbed to a two-year high last week.

An increase in cash injection would add to evidence that China is continuing to ease monetary conditions to revive an economy handicapped by years of tough Covid restrictions. A rapid rebound in demand and consumption since the curbs were dropped in December had tightened liquidity and left some economists questioning the need for more stimulus. (Continue Reading – Bloomberg)