Barron’s (July 31)
“The Federal Reserve’s key inflation gauge,” which excludes food and energy “ran just slightly above expectations in June, raising additional doubts about how quickly the bank will be able to lower interest rates.” Rising 0.3% month on month and 2.8% year on year, the core personal consumption expenditures (PCE) price index surpassed consensus expectations. This week, Fed officials indicated the need before lowering rates for “more evidence that inflation is sustainably moving toward the bank’s 2% target,” but the PCE’s “stronger-than-expected result” appears to show the opposite.
Tags: 2% target, Consensus, Doubts, Energy, Evidence, Expectations, Fed, Food, Inflation, Inflation gauge, Interest rates, June, PCE
Reuters (May 15)
“Equity investors took comfort from the lower duty rates, pushing the S&P 500 Index up 5% this week, to higher than where it started the year. Business leaders are clearly less impressed. Sustained gloom from industry titans like Walmart will keep pressure on the president to reconsider his own pricing power.” Though Walmart “is trying to hold the line on food even as the cost of bananas, coffee, avocados and flowers increases,” the retailer disclosed this week that “tariffs would force it to raise prices.”
Tags: Business leaders, Cost, Duty rates, Equity, Food, Gloom, Industry titans, Investors, Pressure, Pricing power, Raise prices, Reconsider, S&P 500, Tariffs, Walmart
New York Times (November 1)
“After shocks from the pandemic and Russia’s invasion of Ukraine, there’s little cushion if the fighting between Hamas and Israel becomes a regional conflict.” An escalation would cloud “the global economy’s outlook, threatening to dampen growth and reignite a rise in energy and food prices.” An escalation would also mark the first time the world has dealt with two simultaneous energy shocks.
Tags: Energy, Escalation, Fighting, Food, Global economy, Hamas, Invasion, Israel, Outlook, Pandemic, Regional conflict, Russia, Shocks, Ukraine
Reuters (August 17)
“Headline inflation in the euro zone has halved in the past nine months and was 5.3% in July. But that’s not good enough for ECB hardliners. They want to see the core number, which excludes energy, food, alcohol and tobacco, come down sharply before putting an end to the unprecedented climb in the bloc’s interest rates. That measure is falling more slowly and was running at 5.5% in July.” The ECB obsession over core inflation increases the “risk of policy mistake.”
Tags: 5.3%, Alcohol, Core, ECB hardliners, Energy, Euro zone, Food, Headline, Inflation, Interest rates, July, Obsession, Policy mistake, Risk, Tobacco
BBC (September 12)
China “is the world’s last major economy attempting to entirely stamp out Covid outbreaks, claiming this is necessary to prevent wider surges of the virus which could overwhelm hospitals.” At present, “tens of millions of people in at least 30 regions have been ordered to stay at home under partial or full lockdowns,” with some of the impacted residents “complaining of shortages of food and essential items.”
Tags: China, Complaining, Covid outbreaks, Food, Home, Hospitals, Last, Lockdowns, Major economy, Overwhelm, Prevent, Residents, Shortages, Stamp out, Surges, Virus
Bangkok Post (September 2)
“Many developing countries are teetering on the edge of a debt crisis, with the Covid-19 pandemic, soaring food and energy costs, and the monetary tightening of major economies all threatening to push them over.” Lebanon, Sri Lanka and some other countries have already teetered. “As of the end of March, 38 of 69 low-income countries were either already in or at high risk of debt distress. Middle-income developing countries’ debt-service burden is at its highest level in 30 years.”
Tags: COVID-19, Debt crisis, Developing countries, Distress, Energy costs, Food, High-risk, Lebanon, Low income, Major economies, Middle-income, Monetary tightening, Pandemic, Soaring, Sri Lanka, Teetering, Threatening
Australian Financial Review (July 17)
“Oil has begun to drop back down this week to pre-invasion levels as traders brace for a sharp drop-off in consumption. But food price inflation remains stubbornly high.” Nevertheless, food prices remain largely off the radar. “The dramatic spikes in oil and mineral prices after Russia’s invasion of Ukraine have distracted investors from the long-lasting and more dangerous impact of food inflation.” This has led BlackRock founder Larry Fink to sound the alarm on food inflation which also has profound geopolitical impacts.
Tags: BlackRock, Consumption, Dangerous, Distracted, Drop-off, Food, Impact, Inflation, Invasion, Investors, Larry Fink, Mineral, Oil, Pre-invasion, Russia, Spikes, Traders, Ukraine
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.”
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
The Economist (May 21)
“By invading Ukraine, Vladimir Putin will destroy the lives of people far from the battlefield—and on a scale even he may regret. The war is battering a global food system.” Russia and Ukraine produce roughly 12% of all traded calories. If “the war drags on and supplies from Russia and Ukraine are limited, hundreds of millions more people could fall into poverty. Political unrest will spread, children will be stunted and people will starve.”
Tags: Battlefield, Calories, Children, Destroy, Food, Invading, Political unrest, Poverty, Putin, Russia, Starve, Stunted, Ukraine, War
