Central banks told not to panic in face of inflation spike
3 years, 1 month ago

Central banks told not to panic in face of inflation spike

Live Mint  

Central bankers should hold their nerve as they watch the global economic recovery slowing, imbalances persisting, and a stronger and longer-than-expected inflation surge cast a shadow over the outlook, the OECD said. “In current circumstances, the best thing central banks can do is to wait for supply tensions to diminish and signal they will act if necessary,” OECD Chief Economist Laurence Boone said in commentary to forecasts mainly compiled before news emerged of the omicron coronavirus variant. The emergence of the new virus strain is adding to difficulties in gaging policy support, with Federal Reserve Chair Jerome Powell warning of “increased uncertainty for inflation” and saying Tuesday that the word “transitory” should be retired when speaking of price growth. Despite the forecasts being largely prepared before omicron rocked global markets and investor confidence, the OECD still put new variants at the top of its list of “significant risks” surrounding projections.

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History of this topic

OECD warns central banks about rate cuts
1 month ago

OECD warns central banks about rate cuts

China Daily  

FILE PHOTO: European Central Bank President Christine Lagarde speaks to reporters following the Governing Council's monetary policy meeting in Frankfurt, Germany September 12, 2024. The Organisation for Economic Co-operation and Development, or OECD, has forecast continued economic resilience globally despite headwinds, while warning central banks against cutting interest rates too quickly amid persistent service-sector inflation. In its latest Economic Outlook …

OECD warns central banks about rate cuts
1 month ago

OECD warns central banks about rate cuts

China Daily  

FILE PHOTO: European Central Bank President Christine Lagarde speaks to reporters following the Governing Council's monetary policy meeting in Frankfurt, Germany September 12, 2024. The Organisation for Economic Co-operation and Development, or OECD, has forecast continued economic resilience globally despite headwinds, while warning central banks against cutting interest rates too quickly amid persistent service-sector inflation. In its latest Economic Outlook …

If inflation is back, protecting against it won’t be simple
1 month, 2 weeks ago

If inflation is back, protecting against it won’t be simple

Live Mint  

With a strong economy and an incoming president promising tax cuts and tariffs, investors and economists are rightly worrying that inflation might make a comeback. Clearly, oil will still protect against one of the most common causes of runaway inflation: a soaring oil price resulting from strikes on oil facilities in the Middle East. Tariffs shouldn’t help oil and industrial …

On monetary policy and financial markets
5 months ago

On monetary policy and financial markets

The Hindu  

Global financial markets may be exhibiting recovery following the dramatic falls in value, but the global economy is still in uncharted waters. The Bank of Japan’s decision to raise interest rates after years of keeping them low has also rattled financial markets, setting off a reversal of equity flows and a collapse in Asian markets. The carry trade On the …

Interest rates will have to stay high for years, warns top central bank
10 months, 1 week 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 Federal Reserve could do what was thought impossible: Defeat inflation without a steep recession
1 year ago

The Federal Reserve could do what was thought impossible: Defeat inflation without a steep recession

Associated Press  

WASHINGTON — It was the most painful inflation Americans had experienced since 1981, when “The Dukes of Hazzard” and “The Jeffersons” were topping the TV charts. Confidence is growing among Federal Reserve officials and many economists that high interest rates and healed supply chains will soon defeat inflation. With inflation cooling, Powell said the 19 officials on the Fed’s policy …

JPMorgan boss Jamie Dimon warns 7% interest rates would cripple the global economy as the Fed holds the line at 5.5%: 'You find out who is swimming naked when that tide goes out'
1 year, 3 months ago

JPMorgan boss Jamie Dimon warns 7% interest rates would cripple the global economy as the Fed holds the line at 5.5%: 'You find out who is swimming naked when that tide goes out'

Daily Mail  

The boss of JPMorgan has warned that the worst of the interest rate pain may still be ahead for businesses and families already scarred by an historic round of hikes. JPMorgan chief Jamie Dimon said that the Fed was forced to hold on another hike at its latest meeting because the effect of a jump to 5 to 7 percent …

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 …

Unclear and present dangers: market predictions for the near future
1 year, 6 months ago

Unclear and present dangers: market predictions for the near future

The Independent  

This being the time of year when teachers prepare their reports and make predictions, I thought it might be worth doing the same for the markets. Some 56 per cent of respondents expect a global recession and unemployment in the US – always an underlying economic health barometer – to climb. They remain, “highly ambivalent about the prospects for the …

Cautious but steady consumers buoying hopes for US economy
1 year, 10 months ago

Cautious but steady consumers buoying hopes for US economy

Associated Press  

WASHINGTON — Call it the Goldilocks consumer. “Decreasing inflation expectations,” Ball said, “are unambiguously good for the inflation fight.” He added, though, that he’s still concerned about the robust jobs market and how sharp pay raises may still keep inflation elevated. She feels the impact of inflation every day, she said, in “everything we eat at home, everything we need …

US economy sending mixed signals: Here’s what it all means
55 years ago

US economy sending mixed signals: Here’s what it all means

Associated Press  

WASHINGTON — The U.S. economy is caught in an awkward, painful place. Here’s a look at the economic vital signs that are sending frustratingly mixed signals to policymakers, businesses and forecasters: ___ THE OVERALL ECONOMY As measured by the nation’s gross domestic product — the broadest gauge of output — the economy has looked positively sickly so far this year. …

US economy sending mixed signals: Here’s what it all means
2 years, 5 months ago

US economy sending mixed signals: Here’s what it all means

Associated Press  

WASHINGTON — The U.S. economy is caught in an awkward, painful place. Here’s a look at the economic vital signs that are sending frustratingly mixed signals to policymakers, businesses and forecasters: ___ THE OVERALL ECONOMY As measured by the nation’s gross domestic product — the broadest gauge of output — the economy has looked positively sickly so far this year. …

Supply-side steps also needed to fight inflation
2 years, 6 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 …

US president Joe Biden says recession is 'not inevitable'
2 years, 6 months ago

US president Joe Biden says recession is 'not inevitable'

Firstpost  

In an interview, the president emphasised the battered economy that he inherited and the lingering psychological scars caused by a pandemic had disrupted people’s sense of identity Washington: President Joe Biden said on 16 June, 2022, the American people are “really, really down” after a tumultuous two years with the coronavirus pandemic, volatility in the economy and now surging gasoline …

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 …

China's Xi Jinping sounds alarm over inflation threat to global recovery
2 years, 11 months ago

China's Xi Jinping sounds alarm over inflation threat to global recovery

The Telegraph  

Surging inflation is threatening the global recovery and putting China’s economy under “tremendous pressure”, President Xi Jinping has warned. The leader of the world’s second-biggest economy told the Davos summit that the world is “emerging from the depth, yet it still faces many constraints” after the low inflation backdrop “notably changed”. “If major economies slam on the brakes or take …

Inflation is back. Biden should be worried
3 years, 7 months ago

Inflation is back. Biden should be worried

CNN  

New York CNN Business — It’s time to sound the inflation alarm inside the White House. It’s not clear it will be.” former Dallas Fed president Richard Fisher The return of inflation also undermines Biden’s efforts to ease inequality. The former Obama official said the Fed may need to begin to tighten policy and urged the Biden administration to “move …

Opinion: Why we shouldn’t be so worried about runaway inflation in the US
3 years, 9 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 …

Why Covid-19 aid, inflation fears hold the key to the dollar’s future
3 years, 9 months ago

Why Covid-19 aid, inflation fears hold the key to the dollar’s future

Live Mint  

The U’s economic prospects look brighter than those of many other countries—and that has driven an unexpected dollar rally this year. “This latest relief bill is really quite extraordinary: We’ve become numb, almost, to these very large numbers," said William Dinning, chief investment officer at Waverton Investment Management. Chris Brightman, chief investment officer of Research Affiliates, believes the current Fed …

The world economy gets an inflation checkup this week
5 years, 10 months ago

The world economy gets an inflation checkup this week

Live Mint  

Hong Kong/Singapore: The world economy is set to get fresh insight into whether inflation is turning sluggish again as the US and China publish price data that’s set to endorse the decision of central banks to steer away from tighter monetary policy. “We don’t see inflation picking up any time soon and central banks’ persistently too-high forecasts are credibility-draining,” said …

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