Americans’ expectations for inflation over the next few years hit their highest levels last month since March 2014, with expectations of surging costs for housing, the Federal Reserve Bank of New York said on Monday.

In the bank’s Survey of Consumer Expectations for March, those polled said they see inflation at 3.2% a year from now, and at 3.1% three years from now. Both readings were up 0.1 percentage point from February.

Amid...

OTTAWA—Business sentiment in Canada improved in late winter as firms reported less uncertainty and strengthening demand, according to a Bank of Canada survey that was conducted before the latest surge in Covid-19 cases.

The central bank’s quarterly business outlook survey found that domestic and foreign sales prospects had picked up compared with the weak levels that were reported last year, when the pandemic was beginning to affect Canada. Still, the outlook remained very difficult for businesses linked to high-contact services,...

Federal Reserve Bank of Boston leader Eric Rosengren on Monday said monetary policy is in the right place for the challenges now facing the economy.

“I expect a return of the economy to pre-pandemic levels will likely take longer than many private forecasters expect,” Mr. Rosegren said in the text of a speech. “With labor-market slack still significant, and inflation still below the Federal Reserve’s 2% target, my perspective is that the current highly accommodative stance of monetary policy is appropriate.”

Mr....

The U.S. federal budget deficit widened 454% in March from a year earlier, as the government issued a third round of stimulus checks to help Americans ride out the economic fallout from the Covid-19 pandemic.

The budget gap rose to $660 billion in March, the Treasury Department said Monday, from $119 billion in the same month last year. Revenue rose 13% to $268 billion in March, while spending increased 161% to $927 billion.

The government’s spending surge has provided some cushion to the economy from the pandemic’s devastation, but it has also sent deficits soaring to levels not seen since the end of World War II as a proportion of the economy. Weaker tax revenue has contributed to the shortfall.

For the first six months of fiscal 2021, the deficit widened 130% to a record $1.7 trillion. Outlays from October through March rose to $3.4 trillion, an increase of 45%. Receipts rose 6% to $1.7 trillion.

Budget deficits are likely to remain at the...

A little over a year ago, Chanee McLaurin was a few weeks into a new job selling insurance when she began to hear coughing in her office.

Co-workers, one after another, stopped showing up. Then she overheard a colleague whispering into her phone that she had been diagnosed with flu-like symptoms.

“I was like, ‘You know what? I’m going to go home. And I’m probably not going to come back,’” said Ms. McLaurin, who is 29 and lives in a suburb of Dallas.

When her employer, after letting staff work from home, called them back to the office in early May, Ms. McLaurin didn’t go. Although she wasn’t aware of any outbreak at her office, her job involved going door to door at businesses, and she feared what would happen if she caught Covid-19 and grew too ill to take care of her two-year-old daughter or infected her wife, an essential worker with a warehousing job.

A year after the pandemic burst onto the U.S. economy, 8.4 million fewer Americans hold...

China’s March exports are expected to rebound sharply from a year earlier when Covid-19 depressed economic activity at home and abroad. Economists surveyed by The Wall Street Journal are forecasting a 40% annual increase, a sharp reversal from the 6.6% contraction in the year-earlier period. Similar to the exports, the country’s import sector is expected to see 25% growth in March, reversing a year-earlier decline of 0.9%.

U.S. consumer prices are expected to pick up in March, a potential signal of building inflation pressures amid a big dose of fiscal stimulus, rising consumer spending and supply-chain bottlenecks. Most policy makers and many economists, however, are forecasting that relatively strong consumer-price gains will be short-lived.

Ronald Reagan was in the White House, “Return of the Jedi” was in theaters, and economic growth hit an astonishing 7.9%.

The U.S. has produced many more Star Wars films since 1983, but growth has never approached that level—until this year, if economists are right. Those surveyed by The Wall Street Journal boosted their average forecast for 2021 economic growth to 6.4%, measured as the change in inflation-adjusted gross domestic product in the fourth quarter from a year earlier. If realized, that would be one of the few times in 70 years that the economy has grown so fast.

“We had an incredible shock, but look how fast we’re bouncing back,” said Allen Sinai, chief global economist and strategist at Decision Economics Inc. “We’re in the early stages of recovery, and we’ve got three to five years to go. I think we’re going to end up in a boom.”

Economists expect growth to slow to 3.2% next year, which would still make 2021-22 the strongest two-year...

Federal Reserve Chairman Jerome Powell said the U.S. economy appears to be at an inflection point, with output and job growth poised to accelerate in the months ahead as long as the Covid-19 pandemic retreats.

“We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming much more quickly,” Mr. Powell said in an interview to be broadcast Sunday evening on CBS’s “60 Minutes.” He said the Fed’s forecast is that the economy could produce close to one million jobs a month for “a string of months.”

The central-bank chief urged Americans to continue socially distancing and wearing masks, saying a resurgence of Covid-19 remains the primary risk to the economic outlook.

The U.S. seven-day average of newly reported Covid-19 cases has been climbing in recent weeks after a steady, monthslong decline following a deadly fall surge. Daily cases exceeded 75,000 on April 7, down from a peak of 300,000 in early...

Federal Reserve forecasts released Wednesday show officials have no worry inflation will take off at any point over the next few years despite hoping price pressures will rise from low levels. But new research from the Council on Foreign Relations warns that data on bank reserves points to higher inflation. “We know that when our balance-sheet-to-reserves gap measure began rising in 2010 it took eight months for inflation to rise 1 percentage point from the time it subsequently bottomed out,” Benn Steil and Benjamin Della Rocca write. “If inflation should rebound at the same pace now, we are looking at 2% Core PCE inflation,...

New Federal Reserve guidance over the future path of interest rates fell short of what was needed, Minneapolis Fed leader Neel Kashkari said Friday.

“I strongly support” the new guidance, Mr. Kashkari said explaining his vote. But he also said, “while I believe the statement is a positive step forward…I would have preferred the Committee make a stronger commitment to not raising rates until we were certain to have achieved our dual mandate objectives.”

The central banker was one of two regional bank presidents who voted against the outcome of the rate-setting Federal Open Market Committee on Wednesday. Then, officials held their short-term rate target steady and said that they would keep their short-term target rate very low until the job market had reached its maximum sustainable level, and inflation had risen to 2% and was on a path to moderately overshoot that goal.

The FOMC statement said Mr. Kashkari instead would have preferred for the Fed to...

WASHINGTON—The Federal Reserve will analyze large banks’ ability to withstand two coronavirus-related recession scenarios as part of a second round of stress tests later this year, the central bank said Thursday.

Unlike an earlier round of stress tests this year, the Fed will release the results of the tests for each bank, rather than providing aggregate results for the group. That means investors and the public will have a better understanding of the health of each of the 33 lenders when it comes to lending through the downturn.

By delivering new forward guidance when Federal Reserve officials were also marking up their near-term growth outlook, the central bank avoided a potential communications mishap on Wednesday.

In 2011 and 2012, the Fed strengthened its forward guidance regarding the path of interest rates at times when its economic outlook was also growing darker. This carried the risk of communicating that the economic outlook had grown so awful that the Fed was being forced to provide more stimulus, something that could hinder rather than...

The Federal Reserve Bank of New York said its second-in-command, Michael Strine, will retire early next year, capping a period of change in the bank’s leadership.

Mr. Strine, 54 years old, is the New York Fed’s chief operating officer and first vice president and serves as an alternate member of the interest-rate-setting Federal Open Market Committee. The bank said he would step down Feb. 28, at the end of his five-year term. The bank also said he would stop day-to-day work at the bank in early November to facilitate a smooth...

Federal Reserve Chairman Jerome Powell said Wednesday the central bank’s new way of conveying guidance about the future of interest rate policy is powerful.

But right out of the gate, two of his colleagues were somewhat at odds with how the central bank consensus thinks about the matter.

On Wednesday, the rate-setting Federal Open Market...

Federal Reserve Bank of St. Louis leader James Bullard said higher inflation is coming to the U.S. economy, but didn’t indicate that would be a worrisome development.

The veteran central bank official said a host of forces were joining to put upward pressure on today’s weak price growth, in a virtual appearance Friday. He didn’t say how high he expects inflation to go and whether the shift would require a monetary policy response to keep the increase contained.

The Federal Reserve’s March commitment to deploy billions of dollars to prop up the economy was a boon for the company the Fed hired to help execute its plan: BlackRock Inc., the world’s largest asset manager.

In response to the pandemic-induced market collapse, the Fed promised to buy corporate bonds and exchange-traded funds that invest in collections of corporate debt.

The...

The Federal Reserve issued new guidance to banks Friday in an effort to improve access to new business loans through its $600 billion Main Street Lending Program.

The central bank is relying on banks to underwrite loans to qualified small and midsize businesses under the novel effort to reach firms that aren’t large enough to access corporate funding markets, which the central bank has also backstopped.

The...

Large states in the Northeast and West logged some of the highest unemployment rates in the nation in August, while many of their Southern and Midwestern neighbors saw lower rates of joblessness despite significant coronavirus outbreaks over the summer.

The jobless rate in more than half of states was below the national average of 8.4% in August, according to a Labor Department report that provides details on the job market in all 50 states. Many of those states—including Arizona, South Carolina and Texas—recorded a surge...