Analysts say China’s economy is producing less than it could if labor and capital were fully employed. To close this gap in 2026, China’s economy would need to grow by more than 5.3 percent.—economist.com China’s Real GDP According to the National Bureau of Statistics of China, the country’s annual real GDP reached approximately 140 trillion … Continue reading China’s Output Gap

The Federal Reserve nominee, Kevin Warsh, supports reducing the size of the Federal Reserve’s balance sheet. President Trump prefers lower interest rates to reduce the government’s cost of borrowing.—ft.com  

To end deflation, the Bank of Japan has for years been buying Japanese government bonds. As a result, after many years at zero or below, annual inflation has spent much of the past year above 3 percent. These bond purchases have also kept yields low and reduced the government’s cost of borrowing.—economist.com

China’s economy is expected to grow by 4.8% from July to September, the slowest growth since the third quarter of 2024. The People’s Bank of China is expected to lower the required reserve ratio by 20 basis points.—reuters.com A basis point is one hundredth of one percentage point.  

The Fed lowered the federal funds rate at its recent meeting. The inflation rate rose from 2.7 percent in July 2025 to 2.9 percent in August 2025, and the unemployment rate rose from 4.2 percent to 4.3 percent during the same period.—npr.org  

Yields on 30–year Japanese government bonds climbed to a record high on Monday after the Prime Minister’s resignation. —reuters.com  

In a rare moment of reflection, the European Central Bank (ECB) acknowledged that it had reacted too late to the surge in inflation during 2021–22. At the time, the ECB had committed to maintaining interest rates at record lows while it continued quantitative easing. —reuters.com

The ECB cut its policy interest rate to its lowest since early 2023. The Fed has kept rates steady since December, with predicted rising U.S. inflation preventing cuts. The euro rose following the ECB’s President Christine Lagarde’s statement that the central bank is nearing the end of its rate-cutting cycle.—wsj.com