The Federal Reserve’s two-day policy meeting highlights a week of central-bank statements and fresh data to help investors and economists gauge the pace of recovery from the pandemic.

Tuesday

China is set to release August data on industrial output, fixed-asset investment and retail sales. Retail sales are expected to turn positive after...

Good day. There's a good chance we'll hear more calls for more aggressive fiscal policy at the Fed's policy meeting this week. The U.S. economy has rebounded and the ranks of temporarily laid-off workers have fallen by around 12 million since the spring, but officials are uneasy because more than two million Americans have permanently lost their jobs. Meanwhile, economists are divided on how much new information Fed officials are set to reveal about changes to their inflation-targeting framework. 

Now on to today’s news and analysis.

Some economists at major banks believe the Federal Reserve soon will shift toward outright stimulus of the economy, but they aren’t sure whether it will happen at this week’s policy meeting.

Fed officials who spoke in advance of the two-day meeting concluding Wednesday haven’t signaled any new action. Instead, a number of central bankers have said continued aid from the rest of the government remains critical, with the economy still under pressure from the coronavirus pandemic.

...

WASHINGTON—The cost of servicing the nation’s growing debt load continued to shrink through the first 11 months of the fiscal year, suggesting the U.S. still has room to borrow to fight the coronavirus pandemic.

Demand for safe Treasury assets has kept interest rates near historic lows this year, pushing net interest costs down by 10% from October through August, the Treasury Department said Friday. “That’s despite a significant increase in the level of debt outstanding,” a senior Treasury official said on a call with reporters.

...

Federal Reserve officials forged an agreement last month on a new framework governing how they will conduct policy over the long run. In preparing for a September meeting, they are debating how exactly to implement this strategy for an economy recovering from a severe and unusual downturn.

Central bank officials are likely at coming meetings to provide more specific guidance about what conditions would justify continued low interest rates, according to public speeches and interviews.

...

U.S. consumer prices rose in August due to higher costs for a range of items, a sign of firmer inflation as demand for goods continues to rebound from a coronavirus pandemic-induced downturn earlier this year.

The consumer-price index—which measures what consumers pay for everyday items including groceries, clothing and electricity—climbed a seasonally adjusted 0.4% in August, the Labor Department said Friday. That marked the third straight month of gains for consumer prices, after sharp declines at the pandemic’s onset.

...

The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey.

Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.

“I...

The European Central Bank’s chief economist, Philip Lane, has sounded a cautious note on Europe’s stuttering economic recovery and weak inflation rate, leaving the door open for a fresh burst of stimulus in the coming months.

Mr. Lane’s comments came a day after ECB President Christine Lagarde surprised investors by signaling optimism in Europe’s economic recovery, which sparked a rally in the euro.

The...

The most important stories, explained through the lens of business. A podcast about money, business and power. Hosted by Kate Linebaugh and Ryan Knutson. The Journal is a co-production from Gimlet Media and The Wall Street Journal.

TD Securities sees a case for higher inflation, but still thinks price pressures are unlikely to surge in a damaging way. Higher inflation could come from supply chain disruptions, strong money supply growth fueled by central bank stimulus, the Federal Reserve’s move to tolerate inflation over its 2% target, higher commodity prices and a possible rise in expected inflation. TD Securities, however, in a note to its clients says that “our base case sees the deteriorated labor market as a key driver of inflation dynamics: we look for inflation across many key economies to remain firmly entrenched below 2% by the end of next...

Federal Reserve officials have sought to move attention to what the government can do for the economy and away from possible action by the central bank, which already has responded with aggressive support during the coronavirus pandemic. With key fiscal support efforts ended, Fed officials have warned of new headwinds to growth unless legislators offer more aid to an economy struggling to emerge from the pandemic. Central bankers haven’t hinted at any new action on their part as they head into their Sept. 15-16 policy meeting, which comes in the wake of the Fed’s announcement that it would officially allow inflation to...

Good day. European Central Bank President Christine Lagarde sounded an optimistic note on the eurozone’s economy and played down concerns over the recent strength of the euro, sparking a rally in the common currency and stirring questions as to whether the bank will provide a fresh round of stimulus to support the region’s stuttering recovery. The ECB's chief economist sounded a more cautious note in a blog post published today. In the U.S., a top official at the New York Fed said the Fed aims to broaden who can take part in its efforts for providing pandemic-related emergency support. 

Now on to today’s news and analysis.

The global economy is set to regain lost ground in the three months through September, but there are indications that its recovery is likely to slow from there, with the novel coronavirus still weighing heavily on consumer services and other businesses.

The global economy contracted for a second straight quarter in the three months through June, with widespread lockdowns and individual efforts to avoid infection dealing a severe blow to activity.

...

FRANKFURT—European Central Bank President Christine Lagarde sounded an optimistic note on the eurozone’s economy and played down concerns over the recent strength of the euro, sparking a rally in the common currency and stirring questions as to whether the bank will provide a fresh round of stimulus to support the region’s stuttering recovery.

Following a meeting of the ECB’s governing council, Ms. Lagarde said the 19-nation currency union was experiencing a strong economic rebound from the deep contraction caused by the coronavirus...

The Canadian economy will continue to require extraordinary support, including ultralow interest rates, to get back to pre-pandemic levels of growth and employment despite a faster-than-expected rebound during recent months, the Bank of Canada’s top official said.

In a virtual speech to the Canadian Chamber of Commerce on Thursday, Gov. Tiff Macklem said low interest rates are supporting consumer spending and business investment, and repeated a commitment to keep them near-zero until the central bank’s 2% inflation target...

Federal Reserve officials have sought to move attention to what the government can do for the economy and away from possible action by the central bank, which already has responded with aggressive support during the coronavirus pandemic. With key fiscal support efforts ended, Fed officials have warned of new headwinds to growth unless legislators offer more aid to an economy struggling to emerge from the pandemic. Central bankers haven’t hinted at any new action on their part as they head into their Sept. 15-16 policy meeting, which comes in the wake of the Fed’s announcement that it would officially allow inflation to...

Federal Reserve officials forged an agreement last month on a new framework governing how they will conduct policy over the long run. In preparing for a September meeting, they are debating how exactly to implement this strategy for an economy recovering from a severe and unusual downturn.

Central bank officials are likely at coming meetings to provide more specific guidance about what conditions would justify continued low interest rates, according to public speeches and interviews.

...

A top New York Fed official said the Federal Reserve is trying to broaden who can take part in its pandemic emergency support efforts.

“Now that the facilities are operational, our focus is on extending access to the facilities,” New York Fed Executive Vice President Daleep Singh said Thursday. Mr. Singh leads the bank’s markets group, which implements monetary policy and monitors financial markets for the regional bank that is the Federal Reserve’s main point of contact with the financial sector.

...

While the Trump administration has torn up regulations and U.S. international agreements aimed at limiting climate change-related damage, U.S. financial regulators are slowly moving in the opposite direction.

On Wednesday, the Commodity Futures Trading Commission released a first of its kind report calling for action to change the financial system so it promotes investment that doesn’t harm the environment.

“As...

FRANKFURT—European Central Bank President Christine Lagarde sounded an optimistic tone on the eurozone’s stuttering economic recovery and the strength of the euro, sparking a rally in the currency, as the bank left its policy mix unchanged while it monitors the impact of Covid-19.

ECB President Christine Lagarde said the bank is paying close attention to the currency, highlighting its recent gains against the dollar and others as a drag on inflation, and adding that the eurozone economy is experiencing a strong rebound from...

The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey.

Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.

“I...

FRANKFURT—The European Central Bank left its large monetary stimulus unchanged Thursday, as policy makers wait to see how a resurgence in Covid-19 cases across the continent and a jump in the value of the euro might affect the region’s economy.

ECB President Christine Lagarde said the bank is paying close attention to the currency, highlighting its recent gains against the dollar and others as a drag on inflation, and adding that the eurozone economy is experiencing a strong rebound from its sharp contraction.

...

Democratic presidential candidate Joe Biden wants to raise taxes to pay for an agenda that includes fighting climate change and expanding child care, pushing federal revenue about 9% above what it would be without any policy changes in the next decade.

What does that mean for individual households?

An analysis by The Wall Street Journal and...