If the Federal Reserve is looking for a way to shape expectations about the future of its monetary policy path, it already holds the keys to a powerful way to do so.

That avenue is via surprise changes in the interest rate outlook laid out in the Fed’s quarterly Summary of Economic Projections, or SEP, according to a new research report from the Bank for International Settlements, an umbrella organization that provides the world’s central bankers a place to meet and coordinate policy actions.

European countries’ economies grew rapidly in July as households and businesses were freed of most of the restraints placed on them in a largely successful effort to suppress the coronavirus, according to surveys of purchasing managers.

The strength of the rebound suggests that the global economy is set to expand in the three months through September, having contracted sharply in the second quarter as lockdowns stilled businesses around the world. However, new outbreaks and the fresh imposition of more localized restrictions...

Economists trying to divine where the economy is headed are finding uneven and sometimes sputtering momentum as coronavirus cases surge in parts of the U.S.

The New York Fed said Thursday its Weekly Economic Index pointed to a 7.08% economic decline for the year. That is little changed from the past few weeks, and is consistent with what many Fed officials expect for 2020.

But...

WASHINGTON—Congress is poised to approve a second round of stimulus payments for U.S. households, and money could reach many Americans faster this time.

The Internal Revenue Service now has procedures, online tools, bank-account information and coordination with other agencies that it didn’t have set up in advance when the first round of payments was approved in the spring.

Now...

ISTANBUL—Turkey’s central bank on Thursday kept its benchmark interest rate unchanged at 8.25% for a second month in a row, saying it aimed to contain upward pressure on inflation amid signs that economic activity continues to recover from the coronavirus blow.

“Keeping the disinflation process on track with the targeted path requires the continuation of a cautious monetary stance,” the Central Bank of Turkey’s policy makers said.

South Korea’s economy fell into a recession as it contracted for a second consecutive quarter, as the global coronavirus pandemic took a heavy toll on the export-reliant country.

Gross domestic product shrank by 3.3% in the second quarter from the prior quarter when it contracted 1.3%, Bank of Korea data showed Thursday.

The latest reading—Korea’s...

Filings for weekly unemployment benefits rose for the first time in nearly four months as some states rolled back reopenings because of the coronavirus pandemic.

Initial unemployment claims rose by a seasonally adjusted 109,000 to 1.4 million for the week ended July 18, the Labor Department reported Thursday. The increase in new applications is an indication of a slowing of improvement in the U.S.’s labor market.

While...

WASHINGTON—The Treasury Department relaxed some tax rules on U.S.-based multinational corporations, issuing final regulations Monday that give relief to companies operating in high-tax foreign countries.

The final rules gave companies some but not all of what they wanted and will reduce the U.S. tax burden on companies operating in places such as Germany and Japan. The change may encourage them to invest more in such high-tax places, according to an analysis by the Treasury Department and Internal Revenue Service.

Canada’s annual inflation rate returned to positive territory in June, led by higher prices for food and shelter.

The stronger-than-anticipated advance followed two months of annual price declines and coincided with the gradual lifting of economic restrictions across the country that were aimed at limiting the spread of the new coronavirus.

Canada’s...

WASHINGTON—President Trump’s monthslong insistence on a payroll-tax cut continues to shape discussions over the next round of economic relief despite a lukewarm reception from economists and lawmakers in both parties.

Mr. Trump’s basic argument—lower payroll taxes reduce hiring costs and put money in workers’ pockets—is correct, economists say. But they add that there are more efficient ways to accomplish the same goals and warn that the coronavirus pandemic, not tax policy, is the main barrier to hiring and growth.

The landmark agreement by EU leaders on a coronavirus recovery fund, coupled with the European Central Bank’s bond-buying programs, should narrow credit risk across the EU for sovereigns and corporates, says Paul Brain, head of fixed income at Newton Investment Management. “A large majority of the €750 billion ( €390 billion) is going to be issued in grants and may not get paid back,” he says, adding that spreads between the periphery and the core countries are liable to shrink over time. If all countries are guaranteeing the new debt then...

WASHINGTON—A controversial Trump administration nominee for the Federal Reserve’s policy-making board cleared a major hurdle in her path to confirmation Tuesday after a Senate panel voted to support the choice.

The candidacy of Judy Shelton, an economic adviser to Mr. Trump’s 2016 presidential campaign, for the Fed’s Board of Governors was approved by the Senate Banking Committee in a party-line vote despite objections from Democrats. Her next and final stop will be a confirmation vote on the Senate floor, where Republicans...

When it comes to managing the Covid-19 pandemic, Europe has left the U.S. in the dust. Infection and death rates in the European Union are a fraction of American levels, even in early hot spots like Italy and Spain.

But in managing the economic fallout, the U.S. is the exemplar. Its economy probably shrank 10% in the first half of the year, according to J.P. Morgan, about half as much as Spain, Italy and France and less even than Germany, which has been relatively unscathed by the virus.

The housing market came roaring back in June, as low mortgage rates and increased economic activity helped push sales of previously owned homes up 20.7% from the prior month.

Demand was strong from apartment renters seeking more space, young families moving to the suburbs and wealthy city dwellers looking for second homes, brokers and economists say. At the same time, the supply of houses for sale remained low, as the pandemic has made potential sellers cautious about letting people tour their homes.

Federal Reserve officials are set to discuss next week how to provide more economic stimulus, though they have signaled comfort leaving policy on hold until they learn more about how the coronavirus pandemic is weighing on the U.S. economy.

Deliberations at their July 28-29 meeting could determine how soon officials can finalize any plans, which would be unveiled either at their September meeting or later this fall, according to interviews and public statements.

It remains unclear to many central bank observers what kind of a Federal Reserve governor Judy Shelton will be should she make it past a confirmation vote by the full Senate.

A Senate banking committee on a party-line vote on Tuesday approved Ms. Shelton’s candidacy for the Fed’s policy-making board to move to a full vote, with Republicans falling in line behind President Trump’s nominee.

Ms....

Some 25 million Americans are set to lose $600 a week each in federal unemployment benefits at the end of the month, one of the thorniest issues Congress faces when it returns to Washington this week to consider another coronavirus relief bill.

Many people view the payments as a lifeline, and analysts say the $15 billion a week in federal spending has provided vital support to an economy staggering from the effects of the pandemic. But critics say the money, paid on top of regular state jobless benefits, discourages some Americans...

The global economy suffered a severe contraction in the three months through June, and it is becoming clear that the strength of its recovery will depend on authorities’ success in dousing continued pandemic flare-ups.

Countries’ freshest economic-growth figures, to be released in coming weeks, are likely to show the global economy entered a recession in the first half of this year and shrank in the second quarter at the fastest peacetime rate since modern records began after the Great Depression.

U.S. sales of previously owned homes likely turned a corner in June as stay-at-home orders eased and buyers resumed house hunting. Consumer sentiment in the eurozone is expected to pick up again this month, a sign that Europe’s control of the pandemic may lead to economic gains.

There are no major economic data releases on Monday or Tuesday.

...

As part of its efforts to support financial markets, the Federal Reserve is buying bonds issued by oil-and-gas companies. Some critics say that is a mistake.

Policy analysts pushing for action on climate say the central bank shouldn’t provide any form of support for companies directly involved in producing fossil fuels because climate change could hurt financial stability and economic activity in the long run. The Fed’s mandate is to foster stable prices and maximum job creation, and both of those could be affected in a world...

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Let’s Make a Deal

Congress returns to work Monday with just weeks to craft new agreements on aid to households and protections for businesses, urged on by signs of a faltering economic recovery, a resurgent coronavirus pandemic and a looming deadline for enhanced unemployment payments. Both parties appear eager to pass another bill and some early areas of potential compromise have emerged on pulling together what would be the fifth coronavirus package since the beginning of the year, Andrew Duehren reports.

Boston Fed President Eric Rosengren said his outlook for the U.S. economy is more pessimistic than some of his colleagues because of his concerns about an inadequate public-health response to stop the spread of the new coronavirus.

“Community spread in significant parts of the United States, actually, augurs poorly for what’s going to happen in the fall when students are back in school, colleges are back in session and people can’t be outside as much and are inside more often,” Mr. Rosengren said in an interview with Wall...

Dallas Fed President Robert Kaplan said he is receptive to changes the central bank has considered to its policy-making framework that would allow interest rates to remain lower for longer by allowing inflation to rise modestly above its 2% target for some time.

But Mr. Kaplan, in an interview with The Wall Street Journal on Thursday, said he would prefer to be patient and spend a few more weeks evaluating the path of the coronavirus and the U.S. economy before making further changes to the Fed’s policy stance. The Fed’s...

The Federal Reserve formally unveiled terms Friday that will allow nonprofit organizations to borrow through its $600 billion loan program for small and midsize businesses disrupted by the coronavirus pandemic.

The central bank had earlier put forward a proposal to extend the Main Street Lending Program to schools, hospitals and other social-service organizations. The terms announced Friday will open the program to nonprofit organizations with at least 10 employees and as many as 15,000 employees.

Federal Reserve Bank of New York leader John Williams said Thursday the U.S. central bank’s emergency-lending efforts during the coronavirus pandemic helped restore markets to health, adding that financial support for Americans will be essential to navigate the crisis.

“These actions to provide massive liquidity have proven successful,” Mr. Williams said in remarks delivered by video. “They restored market functioning and averted what could have been a much more severe pullback from markets and the flow of credit to households...