U.S.:

Yellen Backs Gradual Rate Rises as Fed Not Behind the Curve
Federal Reserve Chair Janet Yellen backed a strategy for gradually raising interest rates, arguing that the central bank wasn’t behind the curve in containing inflation pressures but nevertheless can’t afford to allow the economy to run too hot. “I consider it prudent to adjust the stance of monetary policy gradually over time,” she said Thursday in remarks to the Stanford Institute for Economic Policy Research in California, while stressing the considerable doubt surrounding that outlook. Yellen’s second speech this week comes just a day before the inauguration of Donald Trump as U.S. president. She said that future alterations in fiscal policy were just one of the many uncertainties that the Fed would have to grapple with as it plots its monetary moves in the months ahead. Not only is the size, timing and composition of such changes unclear, estimates of their impact on the economy by budget experts vary considerably, Yellen noted in a footnote to the speech.
<https://www.bloomberg.com/news/articles/2017-01-20/yellen-says-fed-not-behind-the-curve-backs-gradual-rate-rises>

Europe:

U.K. Retail-Sales Slump Hints at Cracks in Brexit Boom
U.K. Chancellor of the Exchequer Philip Hammond told a Davos gathering on Friday that an inflation pickup will put a damper on consumers this year. The first signs may already be appearing. Less than an hour before Hammond spoke, data showed retail sales fell at the fastest pace in almost five years in December, recording a 1.9 percent drop that far exceeded even the most pessimistic forecasts in a Bloomberg survey. Possible explanations include price increases and consumers scaling back purchases after taking advantage of Black Friday discounts the previous month. Mild weather also probably affected clothing sales — down 3.7 percent on the month — though the weakness in the sector was broad-based, with turnover at food, household goods and department stores all falling.
<https://www.bloomberg.com/news/articles/2017-01-20/u-k-retail-sales-fall-most-since-2012-as-store-prices-rise>

Asia:

China Ends Year of Stabilization on High as Consumers Spend
China’s economy accelerated for the first time in two years in the final quarter of 2016, cementing an economic stabilization that’s giving leaders a buffer as they transition to neutral policy and prepare for potential trade tensions with Donald Trump. Gross domestic product increased 6.8 percent in the three months through December from a year earlier, compared with a 6.7 percent median estimate in a Bloomberg survey. The full-year expansion of 6.7 percent was the slowest since 1990, but still landed right in the middle of the 6.5 percent to 7 percent official target. China powered through a volatile start to the year, propelled by robust consumption from an increasingly wealthy middle class. With manufacturing also rebounding and deflation tamed, the central bank is turning to neutral policy to address a debt binge that inflated asset bubbles and may threaten the long-term outlook.
<https://www.bloomberg.com/news/articles/2017-01-20/china-ends-year-of-stabilization-on-high-note-as-consumers-spend>