Inflation

The Exchange: Terra incognita

13 Oct 2020

The U.S. faces more uncertainty as 2020 ends, including inflation, antitrust enforcement, and how the next president handles taxes, trade and the post-virus economy. So says Nathan Sheets, chief economist at PGIM Fixed Income. He argues tackling inequality should be a priority.

The Exchange: The long wait for inflation

6 Oct 2020

Charles Goodhart and Manoj Pradhan tackle an issue perplexing policymakers and investors: if, and when, price pressures will rise. The authors of “The Great Demographic Reversal” discuss ageing societies, emerging economies, and why the world won’t follow in Japan’s footsteps.

Corona Capital: Vegan eggs, Target’s online fiesta

19 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: A maker of chicken-free egg products accelerates its IPO plans amid Covid-19, while U.S. supermarket group Target shows that preparedness is everything in e-commerce.

Does $20 trillion buy much inflation?

11 Aug 2020

The market’s answer is a firm no. Global stimulus worth over 20% of world GDP has been unveiled, on Bank of America’s numbers. Future price expectations are rising but have yet to bust central bank targets. These low readings show the continuing mystery of inflation’s causes.

Chancellor: Inflation as the post-pandemic cure

25 Jun 2020

The massive fiscal deficits engendered by the virus should see off deflation. The spectre of rising prices now beckons. While its potential horrors shouldn’t be downplayed, inflation can resolve great imbalances and festering social discontents besetting the global economy.

Hadas: Covid gives monetary extremists false hope

27 May 2020

Those who fear rising prices think anti-pandemic stimulus will surely unleash uncontrolled inflation. Deflation-worriers are just as certain that the global demand shock means their old enemy is lurking. Both disasters are possible, but policy and habit point to price stability.

ECB’s low inflation problem is worse than it looks

30 Apr 2020

Depressed energy costs meant euro zone consumer prices rose 0.4% in April from a year ago. But President Christine Lagarde may in reality be even further away from her just-below 2% goal. Statisticians’ efforts to fill data gaps during lockdown risk overstating price pressures.

Chancellor: Monetary cure carries risk of its own

16 Mar 2020

Central bankers aren’t arguing that slashing rates and printing money will resolve the coronavirus panic. But the experience of the 1970s oil crisis suggests meeting a severe global supply shock with fiscal activism and easy money may bring inflation back in a nasty way.

Turkey set for good year before economic reckoning

27 Dec 2019

More fiscal and central bank stimulus will push growth towards President Tayyip Erdogan’s 5% goal for 2020. Yet inflation will be restrained thanks to lira stability. A credit binge encouraged by Ankara’s policies can last the better part of a year before screeching to a halt.

Hadas: Maybe Paul Volcker wasn’t all that great

17 Dec 2019

The U.S. central banker, who died on Dec. 8, supposedly broke the 1970s inflation with recession-inducing high interest rates. After 40 years of falling inflation worldwide, his contribution looks less certain. He also missed an early chance to criticise financial deregulation.

German weakness gives ECB carte blanche to be bold

14 Aug 2019

Europe’s biggest economy shrank in the second quarter as global trade tensions hurt export-orientated manufacturers. The problems will filter through to other sectors. That will lessen any Teutonic resistance to European Central Bank boss Mario Draghi’s planned monetary easing.

Beer gives a more sober view of African progress

14 Aug 2019

Rwanda and the World Bank have been tweaking poverty numbers to embellish the African state’s post-genocide recovery, the FT says. As in many emerging economies, both have reasons to deliver good news. Cement or beer sales may be more reliable gauges of continental development.

UK and German fiscal activism is just a palliative

9 Aug 2019

Britain’s GDP shrank in the second quarter. Germany may well report the same within the week. Brexit is largely to blame for the former and trade tensions for the latter. In both cases, budget stimulus would merely mitigate the economic slowdown without fixing its root causes.

Brexit makes Carney less of a central bank oddity

1 Aug 2019

Bank of England boss Mark Carney is, like everyone, in the dark about whether Britain will crash out of the EU. Without that uncertainty, he might be tightening policy when peers are either easing or hinting they might. Being odd man out would be better than the current limbo.

Aussie monetary future is everyone else’s past

31 Jul 2019

Australia managed to avoid the ultra-low rates other countries have shouldered for years. Now growth is slowing, and it is up against the limits of conventional policy. An improvement in second-quarter inflation and a cheerier end to 2019 won't change the need for new tools.

Swiss currency ticks towards new showdown

22 Jul 2019

The franc hit a two-year high against the euro. Policy interest rates are already negative so cutting them further may fail to dent its strength. A return to major intervention risks U.S. ire. Traders will take advantage of central bank boss Thomas Jordan’s bind.

New breed of central bankers is harder to read

11 Jul 2019

Jerome Powell at the Fed and Christine Lagarde, nominated to be the next ECB chief, are lawyers by training. Their thinking is more fluid than predecessors whose economic tenets informed a world view. That has benefits, but also means it’s harder to predict how they will react.

Hadas: Bond markets lost in inflation-growth gap

10 Jul 2019

Changing growth expectations explain most daily movements in bond prices, while falling inflation parallels the long-term trend of declining yields. Every so often, however, market gyrations reflect hopes that growth and inflation will reconnect. There’s little sign of that.

African swine fever nudges China towards peak pork

25 Jun 2019

The outbreak has sent prices of the meat up 18% in May from a year earlier. The surge is likely to get worse, even if overall inflation remains stable. It is already encouraging a lasting shift among the world’s top buyers - one that might even complicate a trade war compromise.

Guest view: Halve Bank of Japan’s inflation target

26 Apr 2019

Consumer prices are rising more slowly than the central bank’s 2 percent goal. Aiming for 1 percent is acceptable in a country with a low jobless rate, Koichi Hamada, economic adviser to Prime Minister Shinzo Abe argues. Any resulting yen appreciation will be manageable.