Inflation

Europe faces dirtier inflation fight than US

6 Sep 2023

The euro zone is trying to emulate the United States by avoiding a recession and hefty job losses, despite raising rates. The bloc may only half succeed. Weak activity, scarce credit and higher borrowing costs all point to a downturn. European workers, though, could be spared.

Capital Calls: Lithium M&A

4 Sep 2023

Concise views on global finance: Albemarle’s $4.3 bln sweetened all-cash offer for lithium miner Liontown has financial merit, as well as offering it a handy hedge against Chile’s plan to nationalise resource assets.

Capital Calls: Temps frayed

1 Sep 2023

Concise views on global finance: Despite adding another 187,000 jobs in August, the number of short-term workers such as event staff kept falling in the United States. It’s a sign of a weakening labor market and, history suggests, a recessionary omen.

Bond rout will amplify Powell’s Jackson Hole words

23 Aug 2023

Yields on 10-year US debt are near a 16-year-high. That’s lifting borrowing costs even though the Federal Reserve is likely done with raising rates. More expensive loans may cause a recession. When he speaks on Friday, the Fed chair needs to calm markets without caving into them.

High food prices put populism on India’s table

22 Aug 2023

The cost of onions and tomatoes are soaring ahead of state elections, ramping up pressure for government relief measures. Modi’s fiscal prudence has helped tame inflation and supports his appeal to global investors. The latest crisis could push everyone out of their comfort zone.

ECB core obsession raises risk of policy mistake

17 Aug 2023

Euro zone inflation excluding energy and food costs is rising 5.5%, faster than the headline number. Frankfurt hawks want to keep rates high until that ‘core’ measure nears 2%. But the narrower gauge can lag the main one: focusing on it raises the odds of excessive tightening.

American price elasticity stretched to the limit

10 Aug 2023

At 3.5%, US weekly wages are steadily outpacing inflation for the first time in two years. PepsiCo and P&G, vendors of staples like soda and diapers, have retained power to charge shoppers more. It may be a while, however, before producers of discretionary goods can do so again.

Capital Calls: Robinhood, Influencers, Inflation

3 Aug 2023

Concise views on global finance: The $10 bln brokerage’s first profitable quarter does little to quell growth fears; Adidas and AB InBev are unexpectedly resilient amid an online storm; the Bank of England has a longer inflation fight on its hands than its peers.

Bank of England rate dilemma holds little mystery

2 Aug 2023

Governor Andrew Bailey must decide on Thursday whether to raise borrowing costs by a quarter or half a percentage point. The choice will make little difference to the long-term path of interest rates. Inflation is falling and monetary policy alone cannot boost sluggish UK growth.

Capital Calls: Sequoia, Heineken, Moneyball

31 Jul 2023

Concise views on global finance: The venture capital firm issues a refund to cryptocurrency investors; the $57 bln brewer slashes its operating profit outlook; Steve Cohen’s New York Mets baseball team and its whopping $364 mln payroll is a mess, but in sports beta is the alpha.

Lagarde hides velvet policy in iron talk

27 Jul 2023

After lifting borrowing costs to a record high, the ECB president sounded tough on inflation to persuade markets interest rates will stay elevated. But she also hinted the central bank could pause. Investors can prepare for a less aggressive monetary stance.

Inflation dip puts central bankers in a pickle

27 Jul 2023

The Federal Reserve and ECB once again hiked interest rates. Yet US price rises are easing with few signs of economic pain. In this Viewsroom podcast, Breakingviews columnists discuss how this phenomenon, dubbed ‘immaculate disinflation’, complicates what policymakers do next.

‘Immaculate disinflation’ places Fed in purgatory

25 Jul 2023

Inflation is falling towards the US central bank’s 2% target without a recession or job losses. History and economic theory suggested such a feat was impossible. Doubts over conventional thinking leave policymakers in a bind over the next stage of their fight to rein in prices.

Unilever new broom’s best sweep is towards Asia

25 Jul 2023

The $137 bln Dove shampoo maker hiked prices without losing many sales in the first half. Yet falling European volumes and limited scope for structural tinkering make it hard for new CEO Hein Schumacher to boost margins. His best hope is to bulk up in his strongest region.

Biden has too much confidence in Bidenomics

20 Jul 2023

The president’s new slogan parades a revival of US manufacturing and jobs. Spreading the word now, however, could backfire. Sticky inflation and slower hiring are out of Biden’s control, and they could leave voters poorer or jobless by the time they reach the ballot box.

UK inflation dip puts Andrew Bailey on the spot

19 Jul 2023

The growth in UK consumer prices slowed more than expected in June, to 7.9%. It’s welcome news for households, and sent British stocks soaring. The Bank of England governor, though, is likely to keep hiking rates, increasing the risk he will go too far.

Gregorian calendar, Fed target spoil inflation dip

12 Jul 2023

New data suggests the US is close to beating inflation. Yet June’s 3% rate was somewhat helped by a yearly comparison that will only get tougher. And with the Federal Reserve sticking closely to its 2% inflation goal, the finish line is probably much further out.

Andrew Bailey’s silence is hurting UK homeowners

12 Jul 2023

Traders’ confusion over the Bank of England’s decisions is sending market interest rates wild. That has pushed the cost of a popular mortgage to a 15-year high. To limit household pain, the governor needs to ditch his usual reticence and tell markets that they are wrong.

The next revolution in monetary policy is underway

30 Jun 2023

Central banks are grappling with rising prices and fragile financial markets, raising doubts about their focus on price stability. Recent interventions by the International Monetary Fund and Bank for International Settlements are signs of a broader rethink, says Felix Martin.

Capital Calls: Digital euro, Thames Water

28 Jun 2023

Concise views on global finance: Brussels is in a new push to convince EU member states and the European Parliament to endorse a digital euro; Britain’s Thames Water could be placed into special administration.