Barron’s (June 27)
“Russia’s first default on its foreign debt in more than 100 years is the latest sign that the sanctions… have consequences,” but it’s a “symbolic win.” Energy prices remain the biggest impact of sanctions. “Oil prices aren’t coming down as long as Western powers are working to wean themselves off Russian supply. Faster inflation and rising interest rates, meanwhile, are bringing the global economy to its knees.”
Tags: 100 years, Consequences, Default, Energy prices, Foreign debt, Impact, Inflation, Interest rates, Oil prices, Russia, Sanctions, Supply, Symbolic win
Market Watch (June 27)
“Stock futures are inching higher at the start of the week as investors seemingly cling to newfound optimism that a bond rout is ending, and the Fed’s rate-hike plans will get pruned due to a global slowdown.” There are, of course, no shortage of issues like surging inflation, but Brynne Kelly suspects “the next black swan for markets could be failing power grids and electricity shortages.” These could prove “catastrophic” as we move into the “height of the summer cooling season amid rising temperatures.”
Tags: Black swan, Bond rout, Catastrophic, Electricity, Fed, Inflation, Investors, Kelly, Markets, Optimism, Power grids, Rate hike, Shortages, Slowdown, Stock futures, Summer
Wall Street Journal (June 27)
“Workers throughout the economy are demanding bigger raises to compensate for soaring prices. This could push inflation higher as companies pass along higher wage costs in the price of goods and services.” Though bond markets haven’t determined “how serious the Fed is about controlling inflation… workers aren’t waiting to find out as they seek higher pay.”
Tags: Bond market, Compensate, Demanding, Economy, Fed, Goods, Inflation, Pay, Raises, Services, Soaring prices, Wage costs, Workers
Investment Week (June 22)
“UK inflation has hit another 40 year high of 9.1% in May, up from 9% in April. The slight increase from already record high inflation rate came largely from rising food and non-alcoholic beverage prices,” while gas and diesel prices rose to “the highest on record.” The “top financial priority” for 58% of UK adults is now “day to day costs, like paying bills and for food.”
Investment Week (June 16)
“The industry has labelled the Bank of England a ‘timid cat’ following its interest rate rise of 0.25% in its bid to tackle inflation on Thursday (16 May), with many stating it was simply prolonging the time till they take the necessary action.” Following the 25-basis-point hike, UK interest rates stand at 1.25%, with the BoE expecting inflation “to peak at 11% in October.”
Tags: 0.25%, 1.25%, Action, BOE, Inflation, Interest rate, Necessary, October, Peak, Prolonging, Rise, Timid cat, UK
Wall Street Journal (June 16)
The Federal Reserve Board’s 75-point increase “was supposed to signal shock and awe, and it was the Fed’s first move of that magnitude since 1994.” Though the Fed is “front-loading its rate increases,” it does not realize the need to “go all that high to beat inflation.” The current forecast calls for a fed-funds interest rate of only 3.4% by year end. “That means increases will taper off through the rest of the year, and the Fed predicts a peak of only 3.8% in 2023.”
Tags: 1994, 2023, 3.8%, 75-point, Awe, Fed, Forecast, Front-loading, Inflation, Interest rate, Peak, Rate increases, Shock, Signal, Taper
Bloomberg (June 8)
“It’s not like inflation is out of control in Japan. Far from it. Consumer prices rose 2.1% in April from a year earlier, finally reaching the BOJ’s target.” Nevertheless, “after a generation of ultra-low prices, Kuroda may not have appreciated how hard it is for Japanese to embrace something they haven’t had to deal with.” In April, fresh fish and vegetables rose by 12%, “including a nearly 100% increase in the cost of onions. Talk about eye watering.” The BOJ has worked for nearly three decades “to crank up inflation from dangerously low levels. How galling that Japan may not even want it.”
Tags: BOJ, Consumer prices, Dangerously low, Eye watering, Fish, Galling, Inflation, Japan, Kuroda, Onions, Vegetables
Northern Trust Advisor Perspectives (June 8)
“Inflation across advanced economies has increased to rates not seen in multiple decades. Japan, where the headline consumer price index rose by only 2.5% for the twelve months ending in April, stands as an exception.” Though this “appears moderate… it is very high for a country where a generation has never seen sustained price increases. Japan’s inflation has averaged only 0.3% in the past three decades.”
Tags: Advanced economies, CPI, Exception, Generation, Increased, Inflation, Japan, Moderate, Price increases, Rates
Reuters (June 6)
“Even though supply disruptions in many parts of the world are severe and policy solutions are challenging, Western governments do have the opportunity to reverse the rising cost of food through the simple scrapping of biofuel mandates. This would remove a very large non-food demand for crops and turn the current grain shortage to a surplus, easing the pressure on inflation.”
Tags: Biofuel mandates, Crops, Demand, Disruptions, Food, Governments, Grain shortage, Inflation, Opportunity, Solutions, Supply, Surplus
MarketWatch (May 15)
“A big bounce for stocks on Friday still leaves the main U.S. stock market benchmark close to entering a bear market as investors fret over the Federal Reserve’s ability to get a grip on inflation without sinking the economy stokes fears of stagflation — a pernicious combination of slow economic growth and persistent inflation.”
