GLOBAL ECONOMY WEEKAHEAD-Fed rate rise timing back in the spotlight
By Ross Finley
LONDON Feb 22 (Reuters) - Greece's struggles with its euro zone creditors may have grabbed much of the world's attention, but U.S. Federal Reserve Chair Janet Yellen is likely to reclaim the spotlight this week with testimony on a long-anticipated shift in policy.
If the Fed sticks to mid-year for its first interest rate rise in a decade, it will be perceived as a reflection of the world economy's growing resilience.
U.S. core CPI inflation data due next week will also give some idea of just how much the collapse in oil prices which has tamped down inflation globally will work as a counterweight to the Fed's apparent comfort so far with higher rates in June.
But the fretting over Greece -- which makes up less than half of one percent of world GDP -- has underscored the impression that for all of the piles of monetary stimulus over the past few years, much of the troubles remain the same.
While purchasing managers' data for the euro zone in February are pointing in the right direction, Europe is still struggling to create meaningful growth that would generate the kind of strong hiring that might in turn push up wage inflation.
China is grappling with a property market and debt overhang as it tries to rebalance its slowing economy and a purchasing managers' index due on Wednesday is expected to show persistent stagnation in its once-booming manufacturing industry.
Much of Latin America, particularly Brazil, has slipped back even further from a past position of strength and has very little to offer a world economy that the World Bank warns is now running on one engine, made in America.
Minutes to the Fed's latest policy-setting meeting suggested to some analysts that policymakers might be backing off a June rate rise. But the strongest set of jobs data in many years were published after that late January Fed meeting took place. Continuación...