Square’s $29 billion acquisition of Afterpay earlier this month got lots of people talking about the future of finance. One buzzy term that kept coming up: neobanking.

The likes of Square, PayPal Holdings , Robinhood Markets and Coinbase Global are all sometimes talked about as players in neobanking. The basic idea behind the term is that a digital wallet holding cash or cryptocurrency can be linked to payments and other forms of commerce or financial services. It is a playbook used most notably so far in China.

So whether or not fintech companies ever become banks themselves or offer a standard checking account to consumers, many of them are in some way aiming to be a one-stop shop for a host of bank-ish and other services beyond just their financial lives. That can include payments, trading, shopping, discounts, investments, savings, lending and more. PayPal aims to offer a “super app.” Square even acquired a streaming-music service.

The neobank...

Good day. Price pressures and supply shocks will keep inflation above the Bank of Mexico’s 3% target into early 2023, the bank said Thursday as it raised interest rates for a second consecutive meeting. The bank also said it expects Mexico’s economic recovery will continue throughout 2021, although risks persist from a growing number of Covid infections. Meanwhile in the U.S., new applications for jobless benefits declined for the third straight week, showing the labor market continues to heal despite worries about the Delta variant. 

 Now on to today’s news and analysis.

Vaccination is increasingly a requirement to be hired, as employers ranging from accounting and software firms to schools and restaurants are asking applicants to be inoculated against Covid-19.

The share of job postings stating that a new hire must be vaccinated have nearly doubled in the past month, according to the job search site Indeed. The total number remains low, roughly 1,200 postings requiring a vaccination per million in the first week of August. But that is well up from about 600 in early July, and about 50 per million job postings in early February.

Many of the postings don’t explicitly name Covid-19 as the vaccine required for employment, said Indeed economist AnnElizabeth Konkel, who wrote the report, but broader context of the job descriptions suggested most employers were referring to the coronavirus vaccine, as opposed to other shots. Early this year, before Covid-19 vaccines were widely available in the U.S., very few job postings outside of...

The Bank of Mexico raised interest rates for a second consecutive meeting Thursday, citing persistent price pressures and supply shocks that it expects will keep inflation above its 3% target into early 2023.

The board of governors voted 3-2 to increase the overnight interest-rate target by a quarter of a percentage point to 4.5%, in line with market expectations. Deputy governors Galia Borja and Gerardo Esquivel voted to leave the rate at 4.25%.

The...

Good day. It’s looking a lot like the U.S. job market’s gains will be such that the Federal Reserve will soon be able to start paring its $120 billion a month in asset purchases, according to Chicago Fed President Charles Evans. Mr. Evans also said Tuesday he sees the unemployment rate falling to 4.5% by year’s end and the Fed’s preferred inflation gauge, excluding volatile food and energy categories, ending the year around or slightly above 3%. In Washington, the Senate approved a roughly $1 trillion infrastructure package with broad bipartisan support. It will face a more complicated path in the House, where Democrats have yoked its fate to the passage of a broad $3.5 trillion antipoverty and climate effort.

 Now on to today’s news and analysis.

Inflation stayed high in July, with U.S. consumer prices rising 5.4% from a year ago as the economic recovery gained steam.

The consumer price index measures what consumers pay for goods and services, including groceries, clothes, restaurant meals, recreation and vehicles.

Inflation has heated up this year for several reasons. U.S. gross domestic product rose at a rapid 6.5% seasonally adjusted annual rate in the second quarter, powered by consumer spending that climbed at an 11.8% pace as more people received vaccinations, businesses reopened and trillions of dollars in federal aid flowed through the economy.

Prices in categories hit hardest by the Covid-19 pandemic are still recovering to pre-pandemic levels, including for air travel, apparel, entertainment and recreation. Those price increases should slow once prices return to more normal levels, though the outbreak of the Delta variant of the Covid-19 virus could delay that process, many economists...

Inflation likely remained elevated but ebbed slightly in July, as the economy rebounded amid pandemic-related shortages of labor and supplies, economists say.

Economists surveyed by The Wall Street Journal expect the Labor Department to report the consumer-price index rose 5.3% in July from a year earlier, a bit slower than June’s 5.4% surge and still close to the highest 12-month rate since 2008. The so-called core price index, which excludes the often volatile categories of food and energy, likely increased 4.4% from a year before, they estimate.

The CPI measures what consumers pay for goods and services, including groceries, clothes, restaurant meals, recreation and vehicles. Economists also estimate it rose a seasonally adjusted 0.5% in July from June, a cooler pace than its 0.9% increase in June from May.

Aneta Markowska, chief financial economist at Jefferies LLC, expects a monthly increase of 0.6%. “That would be a little less than we’ve seen but...

The economy is on track to later this year satisfy the Federal Reserve’s threshold to begin reducing its $120 billion in monthly asset purchases, a top central bank official said Tuesday.

Chicago Fed President Charles Evans said he expected recent employment gains to continue, which would allow the Fed to declare that the economy has achieved the “substantial further progress” it laid out last December.

“I’d like to see a few more employment reports” before making that determination, Mr. Evans told reporters during an online news conference. “We’re coming upon a time where it’s definitely going to be appropriate to start” reducing the pace of asset purchases.

“There’s a sense in which you want to be careful that you don’t start prematurely [and] you don’t start too late,” said Mr. Evans, who is a voting member of the rate-setting Federal Open Market Committee this year.

Mr. Evans said he expects the unemployment rate to fall to 4.5% by...

Policy moves in Beijing are hitting Chinese corporate bonds and rippling across global markets through the U.S. and European money managers who loaded up on the securities in recent years.

Emerging-markets investors have long been subject to such shocks, but Chinese bonds are now so widely held that swings in their prices are affecting even bond funds that don’t specialize in developing countries, including funds managed by firms such as Pacific Investment Management Co. and BlackRock Inc.

Global bond funds with the most Chinese corporate debt lagged behind their benchmark indexes over the month that ended last Thursday, according to a Wall Street Journal analysis of data from Morningstar Inc. The underperformance coincides with declines in stocks and bonds of Chinese private education, technology and property companies, triggered by regulatory and policy changes.

Chinese authorities recently disclosed plans to make private education companies such as...

Good day. Some progressives are unhappy with Fed Chairman Jerome Powell and think the central bank should have someone at its helm who is more in sync with Democratic politics. But some inside the Biden administration see reappointing him as the safest option given a host of vexing economic issues, including coming votes on an infrastructure spending bill, higher-than-expected inflation and rising Covid-19 cases from the Delta variant, Nick Timiraos reports. Meanwhile, Boston Fed leader Eric Rosengren joined with others inside and outside the Fed who say it is time for the central bank to soon start reducing its aid for the U.S. economy.

 Now on to today’s news and analysis.

The number of available jobs since May has outnumbered Americans looking for work. One factor is a mismatch between where people want to work and which industries are hiring.

The hardest-hit industries have yet to recover to prepandemic levels, when 63% of Americans were in the labor force. In July, there were 5.7 million fewer jobs, on a seasonally adjusted basis, than there were in February 2020, according to Labor Department data.

The number of people trying to get back into the workforce has rebounded since the early days of the pandemic. The share of adults working or looking for a job has increased slightly from a low of 60.2% in April of last year to 61.7% in July.

Leisure and hospitality workers have seen the highest hiring rates and a boost in weekly earnings as easing restrictions allowed restaurants to reopen and travel to resume. However, the rise in cases from the Delta variant could loom over the rebound.

Hiring in manufacturing...

Members of President Biden’s economic team generally support nominating Federal Reserve Chairman Jerome Powell to a second term, but growing resistance from prominent Democrats including Sen. Elizabeth Warren (D., Mass.) could lead to his replacement, according to people familiar with the matter.

Mr. Powell, who was appointed to his first term by former Republican President Donald Trump, has received high marks from some Democrats for steering the central bank toward a paradigm shift that has placed greater attention on reducing unemployment. That coincided last year with a forceful response to the coronavirus pandemic.

But some progressives are unhappy with his bent toward easing financial regulations that were put in place after the 2008 crisis and think the central bank should have someone more in sync with Democratic politics in charge.

If Mr. Powell isn’t given a new four-year term next February, when his current term expires, the leading contender...

Available jobs in the U.S. rose to another record high at the end of June, pushing openings above the number of unemployed Americans seeking work, a sign of an unusually tight labor market.

Unfilled job openings rose by 590,000 to a seasonally adjusted 10.1 million in June, the highest level since record-keeping began in 2000, the Labor Department said Monday. The increase was driven by industries such as professional and business services, retail and the accommodation and food services, as pandemic restrictions continued to ease that month and consumers were more willing to dine out and travel.

The June increase in job openings came ahead of an uptick in cases tied to Covid-19’s Delta variant. Private measures of job postings through July showed openings remained elevated, though they began to plateau as hiring improved. The continued high number of openings indicates that the variant, so far, isn’t affecting hiring plans.

The number of job openings in...

The biggest wildcard for U.S. inflation over the next year doesn’t come from used cars or airline fares. Instead, it is housing.

Officials at the Federal Reserve and the White House have highlighted what many forecasters expect will be the temporary nature of elevated price readings stemming from the reopening of the economy following pandemic-related restrictions.

But the degree to which 12-month inflation readings fall back to the central bank’s 2% goal could rest on the behavior of rents and home prices. In recent months, housing-cost trends point to more persistent, rather than transitory, upward price pressures in the coming years.

Core inflation, which excludes volatile food and energy costs, rose 3.5% in June from a year earlier, according to the Fed’s preferred gauge, the personal-consumption expenditures price index. That was the highest rate of growth in 30 years. Rising prices over the April-to-June quarter largely reflected disrupted supply...

An unusual surge of short-term lending by cash-rich companies is raising concerns on Wall Street that a period of unrest may lie ahead.

Investors such as money-market funds and banks are parking over $1 trillion in spare cash overnight at the Federal Reserve. That is the most on record since the Fed opened its facility for these reverse repurchase agreements in 2013.

The scale of the moves has some analysts warning that the markets for short-term funding are vulnerable to disruption. The cause for this summer’s rush into the Fed’s reverse repo facility appears to be the central bank’s decision in June to nudge up the amount of interest it pays, from 0% to 0.05%—though usage had already been rising in the spring.

Repurchase agreements, or repos, are the market’s main mechanism for moving cash from those who have it to those who need it. The Fed also uses them to influence short-term interest rates; the flood into reverse repo means banks and investors...

A little more than a month ago, Zhiwei Ren pared back his bet that strong growth and inflation would cause bond prices to fall and their yields to rise—even though he still believed in his economic forecast.

A fixed-income portfolio manager for Penn Mutual Asset Management, Mr. Ren had positioned his funds since late last year so that they held, in effect, a smaller amount of 10- and 30-year bonds than their benchmark index, leaving them less vulnerable to rising long-term interest rates. This stance paid off when U.S. Treasury yields soared in the first quarter of the year but started to drag on returns in subsequent months, as yields fell sharply and, for many on Wall Street, unexpectedly.

Mr. Ren and his colleagues stuck for a while with their conviction that yields would bounce back but eventually decided to bend to the market tide. Their funds are now still positioned for higher yields but not as aggressively as they were previously.

“It’s not a...

China’s producer-price index is expected to remain elevated in July after rising at its highest pace in nearly 13 years in May. Economists polled by The Wall Street Journal are forecasting the PPI, a gauge of factory-gate prices, will increase 8.8% from a year earlier, the same as the prior month. The consumer-price index is expected to drop 0.8% on year due to plunging pork prices, compared with June’s 1.1% expansion.

WASHINGTON—The bipartisan infrastructure bill is unlikely to have a big impact on growth in the next few years, economists say. Longer term, though, investments in highways, ports and broadband could make the economy more efficient and productive.

The short-term boost to growth will be relatively limited for two reasons, economists say. For one, the bill represents just $550 billion in new spending—compared with nearly $6 trillion that Congress has approved in the past year-and-a-half to battle the Covid-19 pandemic and its economic fallout.

Second, the infrastructure spending will take place over five to 10 years starting in 2022, a longer timeline than pandemic-era initiatives like stimulus checks, extra unemployment benefits and small-business support programs. That will make its direct effects on employment and demand less noticeable.

Alec Phillips, chief political economist for Goldman Sachs Research, said the infrastructure bill could add around...

Good day. Housing is emerging as the biggest wildcard for inflation in the U.S. over the next year, and in recent months housing-cost trends point to upward price pressures. While landlords lost any pricing power during the pandemic as vacancy rates jumped, that began to change earlier this year as demand for new leases soared. And, of course, home prices never missed a beat. Meanwhile, spare cash keeps piling overnight into the Fed’s reverse repo facility, and that has many portfolio managers on edge and some analysts warning the markets for short-term funding appear to be vulnerable to disruption.

 Now on to today’s news and analysis.

The biggest wildcard for U.S. inflation over the next year doesn’t come from used cars or airline fares. Instead, it is housing.

Officials at the Federal Reserve and the White House have highlighted what many forecasters expect will be the temporary nature of elevated price readings stemming from the reopening of the economy following pandemic-related restrictions.

But the degree to which 12-month inflation readings fall back to the central bank’s 2% goal could rest on the behavior of rents and home prices. In recent months, housing-cost trends point to more persistent, rather than transitory, upward price pressures in the coming years.

Core inflation, which excludes volatile food and energy costs, rose 3.5% in June from a year earlier, according to the Fed’s preferred gauge, the personal-consumption expenditures price index. That was the highest rate of growth in 30 years. Rising prices over the April-to-June quarter largely reflected disrupted supply...

BEIJING—China’s factory-gate prices rose at an unexpectedly fast clip in July, matching the highest level in more than 12 years as crude oil and coal prices soared—though economists say the price pickup is unlikely to last.

China’s producer-price index rose 9.0% from a year earlier, the National Bureau of Statistics said Monday—faster than June’s 8.8% year-over-year increase and the 8.8% gain forecast by economists polled by The Wall Street Journal.

July’s increase matched May’s 9.0% year-over-year jump, which marked the biggest surge in producer prices since September 2008.

On a month-over-month basis, China’s producer prices rose 0.5% in July, faster than June’s 0.3% advance.

The price increases came despite measures taken by Beijing in recent months to cool soaring commodity prices, including restricting steel exports and cracking down on speculative behavior.

A report from the Federal Reserve Bank of New York says there has been a “steady outflow of borrowers in forbearance as the pandemic has begun to wane, with just 2.7 percent of mortgages still in forbearance at the end of June 2021.” Texas and Oklahoma ranked highest in forbearance participation, largely because of extreme weather conditions, the report notes. Over the last 15 months, 9.3 million mortgages were in forbearance at some point, and with forbearance leniency nearing a close in the coming three to four months, it is unclear how mortgage borrowers across different income and credit score groups and geographic...

A strengthening U.S. labor market added cushion to the economic recovery in July ahead of the Delta variant threat, with employers creating jobs at the best pace in nearly a year and the unemployment rate falling sharply.

Nonfarm payrolls rose by a seasonally adjusted 943,000 in July, the best gain in 11 months, the Labor Department said Friday.

The unemployment rate, derived from a separate survey of households, fell to 5.4% in July from 5.9% in June to touch the lowest level since the pandemic took hold in the U.S. in March 2020. The latest data also showed some additional workers were drawn off the sidelines, and wages rose at a strong rate.

Friday’s report shows that the U.S. economy is facing any threat posed by the Delta variant with a strong tailwind. The economy has recovered rapidly this year with availability of vaccines, business reopenings, pent-up consumer demand and aid flowing from multiple rounds of government stimulus legislation. So...

Leave it to Joe Manchin to know which way the wind is blowing.

A day before Friday’s monthly jobs report, the West Virginia senator urged the Federal Reserve to pare back stimulus to avoid overheating the economy. Variously described as the most powerful man in the Senate and even the most powerful Joe in Washington, the conservative Democrat wields unusual power in a chamber where his party controls exactly half of the seats.

His case was strengthened by the data. The U.S. added 943,000 jobs in July, about 100,000 more than economists surveyed by The Wall Street Journal had been expecting, and the unemployment rate fell to 5.4% compared with a consensus estimate of 5.7%. The prior two months saw upward revisions, adding nearly 120,000 more jobs in total.

With the Fed still committed to holding overnight interest rates near zero, where they have been since last March, and to purchasing $120 billion a month in Treasury and mortgage securities, Mr....

WASHINGTON—Sen. Joe Manchin (D., W.Va.) raised alarms about inflation in a letter to Fed Chairman Jerome Powell on Thursday, calling on the central bank to start reversing the emergency support it has provided during the coronavirus pandemic.

“With the recession over and our strong economic recovery well underway, I am increasingly alarmed that the Fed continues to inject record amounts of stimulus into our economy,” he wrote.

Mr. Manchin wrote in the letter that he was concerned the Fed’s easy money policies and additional spending legislation in Congress could exacerbate recent spikes in inflation. The Senate is currently working on both a roughly $1 trillion bipartisan infrastructure bill and a $3.5 trillion bill of Democratic priorities, for which Mr. Manchin’s support will be pivotal.

“I am deeply concerned that the continuing stimulus put forth by the Fed, and proposal for additional fiscal stimulus, will lead to our economy overheating and to...