Money supply poses global inflation risks
3 years, 7 months ago

Money supply poses global inflation risks

China Daily  

A bank staff member counts RMB and US dollar notes in Nantong, Jiangsu province, on Aug 28, 2019. The scale of asset purchases ought to shrink somewhat this year, although our baseline forecast still suggests they would add some 4-7 percentage points to broad money growth this year. Add to that our forecasts for private credit expansion, and broad money growth could reach 7-8 percent annually this year. Overall, it's quite possible that broad money growth in the three economies could reach double digits between the fourth quarters of 2020 and 2021 on top of the very rapid expansion last year. So, money growth could stabilize at a double-digit annualized pace－as weekly data suggest is happening in the US, raising inflation risks.

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History of this topic

'Risk of major financial fallout' as IMF sounds the alarm on persistent global inflation
5 months, 1 week ago

'Risk of major financial fallout' as IMF sounds the alarm on persistent global inflation

ABC  

The message seems to have been lost in all the noise. The biggest risk is that higher American interest rates "disrupt capital flows and impede planned monetary policy easing, which could adversely impact growth". Even worse, "persistently high interest rates could raise borrowing costs further and affect financial stability if fiscal improvements do not offset higher real rates amid lower …

US Employment Seen Moderating Along With Wage Growth
5 months, 3 weeks ago

US Employment Seen Moderating Along With Wage Growth

Live Mint  

-- US employers probably tempered their hiring while wage growth moderated in June, another favorable development for Jerome Powell and his Federal Reserve colleagues seeking more confirmation that inflation is slowing. Among central banks, minutes from the Reserve Bank of Australia’s June meeting will draw a lot of attention on Tuesday after Governor Michele Bullock said the board considered a …

What is the outlook on the global economy? | Explained
8 months ago

What is the outlook on the global economy? | Explained

The Hindu  

The story so far: The International Monetary Fund released the latest global financial stability report on Tuesday warning about the risks to the global financial system from persistent high inflation, rising lending in the unregulated credit market, and increasing cyber-attacks on financial institutions. Investors have been pushing up the prices of financial assets such as stocks in recent months in …

Interest rates will have to stay high for years, warns top central bank
9 months, 3 weeks ago

Interest rates will have to stay high for years, warns top central bank

The Telegraph  

Persistent inflation means central banks across the world will be forced to keep interest rates high for years to come as they battle pay demands, warfare and trade disputes, the Bank for International Settlements has said. Price rises in services are proving “stubborn” across much of the world, even as goods inflation has come down following the supply chain chaos …

The world seems headed for a mild output contraction
1 year, 5 months ago

The world seems headed for a mild output contraction

Live Mint  

There are currently four scenarios for the global economic outlook. The most positive is a ‘soft landing,’ where central banks in advanced economies manage to bring inflation down to their 2% targets without triggering a recession. If the effort to tame inflation triggers severe economic and financial instability, a fourth scenario becomes possible: central banks wimp out and allow for …

IMF: Prolonged high inflation dims outlook for world economy
1 year, 8 months ago

IMF: Prolonged high inflation dims outlook for world economy

Associated Press  

WASHINGTON — The outlook for the world economy this year has dimmed in the face of chronically high inflation, rising interest rates and uncertainties resulting from the collapse of two big American banks. The fund said the possibility of a “hard landing,” in which rising interest rates weaken growth so much as to cause a recession, has ”risen sharply,” especially …

Europe scrapes out economic growth by dodging gas disaster
1 year, 10 months ago

Europe scrapes out economic growth by dodging gas disaster

Associated Press  

FRANKFURT, Germany — Europe’s economy scraped out meager gains at the end of last year as galloping inflation fed by high energy prices and Russia’s invasion of Ukraine deterred people from spending in shops and restaurants. He added that “the positive reading could mask underlying weakness in domestic demand” and that “private consumption is likely to have contracted.” “The main …

Dollar’s rise spells trouble for global economies
2 years, 3 months ago

Dollar’s rise spells trouble for global economies

Live Mint  

The U.S. dollar is experiencing a once-in-a-generation rally. “It’s not going to be contained.” A stronger dollar makes the debts that emerging-market governments and companies have taken out in U.S. dollars more expensive to pay back. “Whether the ECB turns more hawkish, whether there’s some improvement on the economic outlook, whatever happens, it’s generally offset by further dollar strength,” he …

World could face recession next year: World Bank report
2 years, 3 months ago

World could face recession next year: World Bank report

Hindustan Times  

The world could face a recession next year amid simultaneous tightening of monetary policy by central banks around the world, the World Bank has said in a new report that called for boosting production and removing supply bottlenecks to ease inflation. World Bank president David Malpass said global growth is slowing sharply. READ | World Bank warns of global recession, …

Supply-side steps also needed to fight inflation
2 years, 5 months ago

Supply-side steps also needed to fight inflation

China Daily  

Shipping containers are unloaded from a ship at a container terminal at the Port of Long Beach-Port of Los Angeles complex, in Los Angeles, California, US, April 7, 2021. Higher interest rates will dampen demand, but supply-side measures must also play a large role in strategies to tame inflation. Productivity gains could counter the contraction of labor supply relative to …

Economists See Up To 40% Chance of US Recession Within A Year; Check Details
2 years, 6 months ago

Economists See Up To 40% Chance of US Recession Within A Year; Check Details

News 18  

Goldman Sachs economists have now revised upward the chances of entering a recession in the next one year. It had earlier planned a 50-bps hike for the June meeting but the US consumer inflation came higher than expected in May, at a four-decade high of 8.6 per cent. According to the latest data, consumer price inflation in the US increased …

Dollar winning in messy global economy—that matters in fight against inflation
2 years, 7 months ago

Dollar winning in messy global economy—that matters in fight against inflation

Live Mint  

Despite signals of economic trouble in the US, such as soaring inflation, falling stock prices and wavering consumer confidence, one important indicator is flashing American strength: the dollar. That, in turn, makes the Federal Reserve’s job a little bit easier, potentially diminishing its impulse to raise interest rates aggressively to restrain demand and stop the upward move of consumer prices. …

Developing countries face growing risks from financial fragility: World Bank
2 years, 10 months ago

Developing countries face growing risks from financial fragility: World Bank

India TV News  

Highlights Developing countries face growing risks from financial fragility created by Covid crisis World Bank urged policymakers to focus on creating healthier financial sectors WB chief said it's critical to work toward broad-based access to growth-oriented capital allocation Developing countries face growing risks from financial fragility created by the Covid-19 crisis and non-transparent debt, the World Bank has said in …

Explained
2 years, 10 months ago

Explained

The Hindu  

The story so far: The U.S. Bureau of Labor Statistics reported last week that inflation in the United States hit a 40-year high in January. The prices of goods and services have generally risen over time as governments, with the cooperation of their central banks, have tended to inflate the overall supply of money in the economy. The rate at …

Inflation fears are sparking a big drop in markets. Here are 3 things to know
2 years, 11 months ago

Inflation fears are sparking a big drop in markets. Here are 3 things to know

NPR  

Inflation fears are sparking a big drop in markets. Here are 3 things to know Enlarge this image toggle caption Spencer Platt/Getty Images Spencer Platt/Getty Images It's been a rough start of the year for Wall Street – and it keeps getting worse. The Federal Reserve has projected it will raise interest rates three times this year, which could raise …

Money supply poses global inflation risks
3 years, 7 months ago

Money supply poses global inflation risks

China Daily  

A bank staff member counts RMB and US dollar notes in Nantong, Jiangsu province, on Aug 28, 2019. The scale of asset purchases ought to shrink somewhat this year, although our baseline forecast still suggests they would add some 4-7 percentage points to broad money growth this year. Add to that our forecasts for private credit expansion, and broad money …

Mark Mobius says inflation threat won’t go away anytime soon
3 years, 7 months ago

Mark Mobius says inflation threat won’t go away anytime soon

Live Mint  

The world’s largest money managers may be underestimating the durability of inflation after a record wave of money printing to combat the Covid-19 pandemic, according to veteran investor Mark Mobius. This will pose a particular problem in the U.S., where a rising inflation rate will weigh on the global reserve currency, said Mobius, who set up Mobius Capital Partners after …

Opinion: Why we shouldn’t be so worried about runaway inflation in the US
3 years, 8 months ago

Opinion: Why we shouldn’t be so worried about runaway inflation in the US

CNN  

Editor’s Note: Dana Peterson is an executive vice president and chief economist at The Conference Board. So, as households shift spending away from goods and back to in-person services when the pandemic subsides later this year, these supply chain woes — and the high costs associated with them — should fade. Meanwhile, industries employing many low-wage workers, including hotels, restaurants …

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