| Hello. Today we preview the Fed chief's upcoming grilling, explore the latest foray in the U.S.-China economic rivalry, and look at how work from home is affecting productivity in America. Summer GrillingFederal Reserve Chair Jerome Powell is about to head into two days of testimony on the economic and policy outlook, hearings that are bound to feature questioning from both sides of the political aisle about an array of risks confronting the world's largest economy. While U.S. GDP is forecast to have grown more than 9% last quarter, employment levels remain more than 7 million below the pre-pandemic peak, and Democratic members of the congressional committees where Powell will be testifying Wednesday and Thursday are bound to seek assurance the Fed isn't about to start reining in monetary stimulus soon. Democrats are also likely to press the Fed chief — who was vocal in 2020 about the need for large-scale fiscal support to counter the pandemic — on his view of President Joe Biden's $4 trillion worth of longer-term economic proposals, Craig Torres writes.  Some of the Democrats' programs are very much in line with the Fed's new priorities, adopted last year, targeting a much broader definition of full employment than in the past. On the other side of the dais, Republicans on the House Financial Services and Senate Finance committees are almost certainly going to push Powell to share their concerns about the biggest federal debt burden in the postwar era. The surge in U.S. inflation, with the latest figures due on Tuesday set to show consumer prices rose near 5% in June from a year before, is also likely to be a theme, with GOP members testing the Fed chief on whether this acceleration is truly transitory. Claudia Sahm, a former Fed economist who used to brief Powell, says he's accomplished at talking to Congress and can find a way to "thread the needle" amid partisan jockeying, but may align more with Biden and his double push on infrastructure and social spending programs. "Jay has been friendly to 'let's go fix the economy' views," especially in ways that would promote more equality, says Sahm, now a senior fellow at the Jain Family Institute. "The two fiscal plans that are being discussed are about getting to some place better than February 2020. Frankly, the Fed needs those packages, too."
—Chris Anstey The Economic Scene The battle for supremacy between the world's two largest economies is increasingly being waged in the digital realm. In the latest salvo, White House officials are discussing proposals for a digital trade agreement covering Indo-Pacific economies as the administration seeks ways to check China's influence in the region, according to people familiar with the plans. Details of the potential agreement are still being drafted, but the pact could potentially include countries such as Canada, Chile, Japan, Malaysia, Australia, New Zealand and Singapore, according to one of the people, who asked not to be identified because the process isn't public. The deal could set out standards for the digital economy, including rules on the use of data, trade facilitation and electronic customs arrangements, according to another person. Today's Must Reads - China trade | China's exports unexpectedly surged in June, helping to underpin the economy amid signs the recovery is starting to slow.
- Opening up | Boris Johnson's decision to ease remaining coronavirus restrictions in England is prompting growing fear and calls for caution, fueling worries that a surge in infections will strain hospitals and undermine Britain's economic recovery.
- Vaccine plea | Emmanuel Macron turned up the pressure on the French to get themselves immunized against Covid-19 as he raised the country's growth outlook and pledged an economic reboot before next year's elections.
- Violent protests | Looting and unrest have dealt a body blow to South Africa's efforts to rebuild the economy in the wake of the pandemic and pose a test to President Cyril Ramaphosa's authority.
- Jabs needed | Vaccinations of seafarers are going too slowly to prevent outbreaks on ships from causing more trade disruptions, endangering maritime workers and potentially slowing economies trying to pull out of pandemic slowdowns.
- Moon shot | Japan needs to take commercial development of the moon more seriously if it's to be competitive in the budding space economy, according to a group of Japanese companies.
Need-to-Know Research The Covid-19 pandemic is fueling a productivity boost for the U.S. economy by speeding up workplace digitization, according to an analysis by Goldman Sachs. Since the crisis began, annualized growth in output per hour has risen 3.1%, compared with 1.4% in the previous business cycle, Goldman economists wrote in a note. "Stronger productivity growth has been one of the silver linings of the pandemic," they said. Those gains are most visible in sectors that can take advantage of virtual meetings, and where in-person expenses such as travel and entertainment have scope to decline. The gains are being led by sectors including information technology, professional services and wholesale trade, while online shopping has lifted productivity in the retail sector. On #EconTwitterFor flow chart fans:  Read more reactions on Twitter Enjoy reading the New Economy Daily? -
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The fourth annual Bloomberg New Economy Forum will convene the world's most influential leaders in Singapore on Nov. 16-19 to mobilize behind the effort to build a sustainable and inclusive global economy. Learn more here. | 
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