Financial Times (April 16)
“More than a third of Russians cannot afford to buy two pairs of shoes a year, and 12 per cent use an outdoor or communal toilet at home,” according to Russias statistics agency, Rosstat. These and other findings underscore “deepening economic gloom as tepid growth, five years of falling real incomes, high inflation, rising taxes and cuts to social handouts squeeze people.”
Tags: Afford, Economic gloom, Handouts, Inflation, Real incomes, Russia, Shoes, Statistics, Taxes, Tepid growth, Toilet
The Economist (April 13)
Though relatively new, Central Bank independence has become sweeping. “In a single generation billions of people around the world have grown used to low and stable inflation and to the idea that the interest rates on their bank deposits and mortgages are under control.” Increasingly, it looks like that independence may be a short-lived. Today, the success of central banks “is threatened by a confluence of populism, nationalism and economic forces that are making monetary policy political again.”
Tags: Bank deposits, Central banks, Independence, Inflation, Interest rates, Mortgages, Nationalism, Populism
Wall Street Journal (October 3)
“Investors propelled bond yields to multiyear highs Wednesday as robust economic data and an easing of trade tensions across North America sparked fresh optimism about the global growth outlook. Wednesday’s bond rout sent the yield on the 10-year U.S. Treasury note, a closely watched barometer of investors’ sentiment toward growth and inflation, to its highest level since July 2011.”
Tags: Bonds, Economic data, Growth, Highs, Inflation, Investors, Optimism, Sentiment, Trade tensions, Treasuries, U.S., Yields
Equities (September 13)
In the U.S., many dismiss inflation because it’s “only about 3%,” a big mistake. In real life, it’s actually “closer to 10%” as revealed by the Chapwood Index, a real-time inflation monitor. “Most cities are seeing inflation at or above 10% per year!” This “stealth inflation” is overlooked “because nobody really sees it unless they are paying attention… Packages of pretzels and chips and snacks contain less than they used to, yet their prices are rising…. Those 16-oz packages may be only 13-oz. now.”
Tags: Chapwood Index, Inflation, Packages, Prices, Real time, Stealth inflation, U.S.
The Economist (August 25)
“America’s bull market in equities turned 3,453 days old” on August 22. “Since hitting a low of 666 in March 2009, the S&P 500 index has increased more than fourfold, driven by strong corporate profits, low inflation, stable economic growth and a boatload of central-bank stimulus. Despite five corrections of at least 10%, the index has never entered bear territory, defined as a drop of at least 20%. Most commentators are declaring this to be the longest bull market in history.”
Tags: Bear, Bull market, Central bank, Economic growth, Equities, Inflation, Profits, S&P 500, Stimulus, U.S.
Reuters (April 23)
“For investors, the key question is whether the ECB’s carefully calibrated exit plan from its ultra easy policy could be scuppered by trade tensions, especially if the dispute between the United States and China sucks in the euro zone. The ECB would have to alter its march towards a more normal policy stance if growing risks from protectionism, exchange rates or market swings end up depressing inflation.”
Tags: China, ECB, Euro zone, Exchange rates, Exit plan, Inflation, Investors, Market swings, Protectionism, Risks, Trade tensions, U.S.
Barrons (December 30)
“Largely absent during the economy’s eight-year recovery from the financial crisis, inflation is on track to pick up in 2018—and it might just catch investors off-guard.” Even a return to modest inflation, e.g. 2.5%, would be a jolt that “could reshuffle the market.”
Investment Week (November)
The recent 0.25% increase “in interest rates announced by the Bank of England leaves us with no more clarity about the direction of monetary policy than we had before the micro-adjustment. Indeed, the increase raises rather more questions than it resolves.” The cut may simply reverse “the rather ill-judged post referendum cut,” Or it could be one off “nod to those worried about inflation becoming more embedded.” Or it could be “the start of a sequence that will see regular increases in rates along a path towards normalisation.”
Tags: Adjustment, BOE, Clarity, Direction, Inflation, Interest rates, Monetary policy, Normalisation, Referendum
The Economist (November 2)
“On some measures, Japan’s labour market is as tight as it has been since the 1970s. America’s jobless rate, at 4.2%, is the lowest for over 16 years. Inflation has nevertheless been surprisingly weak. In other words, the trade-off between unemployment and inflation, known as the Phillips curve, has become less steep.”
Tags: Inflation, Japan, Jobless rate, Labor, Phillips curve, Surprising, Tight, Trade-off, U.S., Unemployment, Weak
Reuters (August 22)
Deflation “has hobbled Japan’s economy for nearly two decades, bedevilling policymakers despite drastic measures aimed at engineering a sustainable recovery.” For the sixth time, the Bank of Japan (BoJ) has delayed its 2% inflation target. This time until March 2020. Still, two-thirds of respondents in an August 1-16 Reuters Corporate Survey “saw the inflation goal as unrealistic,” with many of their responses further illustrating the complexities involved in overcoming deflation.
Tags: BOJ, Complexities, Deflation, Delay, Economy, Hobbled, Inflation, Japan, Policymakers, Recovery, Respondents, Survey, Unrealistic
